Markets Rally Into Key Daily Resistance Area

The markets surged higher today and right into a major resistance area. As seen on the chart below, the SPDR S&P 500 ETF SPY has gone directly into the 20 and 50 moving averages on the daily chart. This acts as a major resistance point in the short term and should keep the markets flat tomorrow if not with a small pull back. Friday the Unemployment and Non Farm Payrolls will be out at 8:30am ET. This should cause some wildness for the first few hours until the holiday kicks in and volume dries up. The dollar, PowerShares DB US Dollar Index Bullish UUP is getting pounded today. The market seems to think more Federal Reserve easing is coming down the pipe. They are most likely right. The United States Oil Fund LP (ETF) USO is surging today, erasing yesterdays decline as the China PMI numbers show China is expanding once again, though at a slower pace. The drop in the dollar also helps push oil higher. Gold, SPDR Gold Trust (ETF) GLD is flat on the day. While the dollar dropping dramatically would indicate a commodity like gold should move higher, keep in mind gold is a fear trade. There is no fear in this market today. The dollar drop and the lack of fear negate each other in regards to gold and a flat day is what is in store. Gareth Soloway Chief Market Strategist www.InTheMoneyStocks.com