What an odd (and wonderful) price shock for bears on Friday. The news from Ukraine and Russia appeared to darken the recent clouds over the exuberant equity markets. The added drama that this event arrived on OpEx day created a significant reversal and scalping opportunities in the options markets. Furthermore, Friday was a re-balancing day for the $SPX. Clearly, there was a lot going on (mostly underneath the surface) in the equity markets. Here are some charts.

Dow Update (Dow retracement remains questionable)

S&P 500 ($SPX rejecting its 50 MA so far)

Nikkei and Dow (watching the Nikkei for its Sunday echo to $INDU price action)

Past Bubbles (NASDAQ is back in bubble mode – see blue line)

NASDAQ Weekly (NASDAQ big picture)

Overall, in the equity markets, until the the $SPX can close above its 50 MA (which it rejected twice this last week), I continue to question the resumption of the 2014 rally. This move up remains a retracement until proven otherwise. Even with the obvious volume boost of OpEx and the Friday re-balancing, the SPX could NOT close above and reclaim the important 50 MA level.

Generally, the 2014 trends have been challenged and broken now on the $INDU, $SPX and $RUT (as noted by 17-43 MA crossovers). The tech sector, in its obvious parabolic pattern this year, continues to lead the markets most days with its unbroken trend. And I would guess that the tech sector will continue to do that – until it rather dramatically can't (e.g., requiring another shock event).

Break Out In The Bond Markets

I wanted to quickly note a change in the commodity market (its pull back), which is good news for the US bond markets. This is the type of change that could kick the bond markets chart into a formal break out (which began happening this last week).

Inter-Market Relationship (the relationship of commodities and the US bond market)

10 Year Yield BIG Picture (10 year yield breaks KEY support level)

Also related to this, I noted last weekend that the bond yields were looking ready to seek lower 13 month lows. Well, that happened for the both the 10 year and 30 year yields. In fact, the 10 year yield closed below the IMPORTANT support level I noted last weekend (23.80).

Namaste!