Running Out Of Steam?

Stocks slumped to a mixed finish Monday as the dollar posted its second day of gains over concerns that Europe is on the edge of another bailout. The rising value of the dollar, which hurts U.S. exports, resulted in stocks paring their gains late in the day. Stocks had risen for most of the day following a spike in corporate dealmaking and news that retail sales in October jumped to the highest level in seven months. Yields for Treasury bonds rose for the third straight day, lifting interest rates to their highest level in four months. The 10 year Treasury bond's yield rose to 2.95 percent, the highest since before the Federal Reserve announced that it would spend $600 billion to buy bonds in an attempt to spur the economy.

Our software subscribers have had a great run from our early September (market) buy signals and using our proprietary support and resistance levels, we have rode this move all the way up. Stepping back and reviewing our daily SPX chart, our support levels are still holding and if the SPX can remain above 1180, we feel there is a good shot at new highs this year.