Stock Indicators; Also: Correlated Markets

Our oversold/overbought indicators remain bullish. In addition, our short-term and long-term indicators are bullish. This caused us a little pain last week when the market declined, but we're riding this upward leg right now...

Correlated Markets

Recently, we mentioned how many markets had started to move together as stocks continued to move straight up from the March lows. Most commodities were generally moving higher (including energy, metals, grains, softs) as were risk-related / high-interest currencies such as the Aussie and Canadian Dollars.

When markets become correlated, traders must be careful and monitor their overall portfolio risk. Last week's markets were a wake-up call as currencies, gold and other markets followed the stock market's lead downwards.

Oversold Indicator likes long side

Quick blog post. As mentioned on our Twitter, we currently have a gap fade (going short) trade on right now.

However, as of the close on Friday, our Overbought / Oversold indicators switched from short to long. There has been chatter that the market is due for a big fall -- but contrarian investors often like to see "the markets climbing a wall of worry." The fact that there are some big-time bears out there gives us some comfort with the bullish indicator.

Our long-term and short term stock market indicators are both currently long -- so we are looking to enter the long side soon.

In other futures markets:

• The Japanese Yen has been wildly strong as traders believe that Japan will not intervene to slow the rise.
• The Gold rush has slowed for now -- but depending on market action, our systems will look to re-enter the long side at some point.
• Bonds continue to rally.