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Here is a question for you to ponder, if the banks are public enemy number 1, why is it that we the people have been funding their fun? Are we the people making money on the spread or a piece of the spread on lending that the banks are making and if not, why not? Remember, we the people helped them out of their financial crisis so; we the people should enjoy some of the prosperity that these banks are enjoying. Here is a quote from THINK GREECE, IT'S FRIDAY by Michael Santoli, Barron's Magazine May 17, 2010. "Goldman Sachs (GS), JP MORGAN Chase (JPM) and Bank of America (BAC) - disclosed in filings that their trading operations were profitable each and every day in the first quarter." After all, how many of us could say that we made money every day on our investments? Where is our dividend or piece of the American pie?

Here is a fact that every investor must understand. Your computer is slower than the big computers you are trading against. You cannot be faster at scalping than they are so, you answer must be to develop a trading plan and a strategy. We are not saying buy and hold, but rather know where you want to buy and where to take profits or where to sell and where to cover. Would you walk across the street without looking to see if traffic is approaching so why buy without understanding or, at the very least looking at the chart to make sure you are pricing your long or short appropriately.

Which markets have too much agreement to one side of the trade? There are several that jump out of the pages when you look; one is the US Dollar index. There are simply too many US Dollar bulls in the market. Can this continue? Well of course it can and likely will, but there will come a time when, the US Dollar will have enough of a drop to scare the weak handed bulls out of the trade. The same trade goes for gold, which is acting more like a currency and fear trade than an inflation hedge. Crude oil and the Euro have too many bears and will have the opposite problem. No, we are not telling you to buy crude oil and Euros but we are telling you that these trades are lopsided and will likely reverse.

Tuesday: April housing starts are released at 8:30 and April PPI is released a t8:30.
Wednesday: April CPI is released at 8:30 and the minutes of the FOMC two day meeting are released at 2:00.
Thursday: April leading indicator index is released at 10:00 and the May Philly Survey is released at 10:00.

The US Dollar index has been on an upside tear in recent days. We have a 9-count on the chart and signs of exhaustion. The problem with this is that the market can and likely will continue on its upside blow off for a while longer. Seriously, with the euro under fire, the Greek debt crisis not yet resolved and the other problems waiting in the wings, there seems to be good reason to either buy gold or the US Dollar. That said, we noticed that the boat is getting lopsided and there are far too many euro bears crowding the side of the boat. When too many agree, it may be time not to agree. That doesn't mean jumping on the opposite side but rather removing your short position on the euro. The 5-day moving average is at 85.097. The top of the Bollinger band is at 86.324 and the lower edge is seen at 79.927. Although we are overbought as measured by all the indicators that we follow herein, all indicators remain on a buy. Naturally, we are above the Ichimoku Clouds for the daily, weekly and monthly time-frames. We are overbought on the weekly time-frame and heading there on the monthly time-frame. The next targets are 87.22, 87.84, 89.47 and 89.71.

The S&P 500 futures contract retreated in the Friday session broadcasting the markets fear of something bad happening over the weekend when a trade could not be made. Naturally, we should see a relief in the Monday session. The downtrend line is at 1178.48 and we must close above that level to resume the bullish view of this market. Not one of the indicators that we follow herein is issuing a buy-signal. The stochastic indicator, the RSI and our own indicator are all issuing a sell-signal. The Thomas DeMark Expert indicator is going flat at overbought levels. We closed inside the Ichimoku Cloud on the daily time-frame; we are above the clouds for the weekly time-frame and are below the clouds for the monthly time-frame. We are entering an options expiration week, which could bring with it increased volatility. It will be important for the S&P 500 to remain above 1125 or risk a return trip to the 1100 area.

The NASDAQ 100 retreated in the Friday session but fell more than the S&P 500 did. The NASDAQ 100 must stay above 1887.40. We closed inside the Ichimoku Clouds for the daily time-frame. We are above the clouds for the weekly time-frame and just at the lip of the clouds for the monthly time-frame. The 5-day moving average is at 1940.90. The top of the Bollinger band is at 2093.97 and the lower edge is seen at 1870.84. The stochastic indicator, the RSI and our own indicator are all issuing a sell-signal. The Thomas DeMark Expert indicator is going flat at over bought levels. It really looks as though this index has some work to do rebuilding confidence. The downtrend line is at 1991.27. The weekly chart does not look as awful as the daily chart does. We closed up on the week but we have signs of exhaustion. The indicators are curling to the upside and will likely issue a buy-signal by the end of the week.

The Russell 2000 declined in the Friday session. The 5-day moving average is at 699.90. The top of the Bollinger band is at 755.32 and the lower edge is seen at 666.24. The stochastic indicator, the RSI and our own indicator all are issuing a sell-signal on the daily chart. The Thomas DeMark Expert indicator continues to issue a buy-signal at overbought levels. We are above the Ichimoku Clouds for the daily and the weekly time-frames. The market must stay above 685 or risk a return to 678, 670 and 667. If we don't remove 703 in short order, we could be setting ourselves up for another spill. Time will tell on this one.

Crude oil has been declining with the continued fear of an economic slowdown re-emerging as caused by the austerity programs needed to resolve some of the euro-worries. This is further amplified by the worries that the Asian communities are trying to slow down their growth to a manageable number. All of this is weighing on the crude oil market. Actually, until or unless we break much below 69 +/- there should be no worries about crude oil. We are just in a pronounced trading range. Of course should be break below 69, we will move out of that trading range and could be in a wilder ride. The daily chart is below the Ichimoku clouds. We are above the clouds on the weekly time-frame but in the clouds for the monthly time frame. We are oversold on the daily and weekly time-frames. We do not see even a bend in the indicators that would lead us to believe that we are at a bottom. We are grossly oversold. The 5-day moving average is at 74.96. The top of the Bollinger band is at 89.41 and the lower edge is seen at 72.03. We closed below the lower band and likely will not be able to stay there for very long. This should be an interesting week for crude oil.

It would appear that everybody loves gold. When this occurs, we get somewhat uncomfortable about our long gold stance. This could be a good time to remove some of the profitable positions in gold. The 5-day moving average is at 1224.24. The top of the Bollinger band is at 1180.49 and the lower edge is seen at 1116.88. All the indicators that we follow herein are issuing a sell-signal. We certainly would not go short this market but would consider removing some profits. We are above the Ichimoku Clouds on the all time-frames. If we trade above 1250, this market will have no resistance overhead and will likely cause the shorts to cover and the market to whoosh to the upside. After the initial piling into the trade, the market will likely return to the breakout level allowing the more conservative investor a chance to enter this market.

Are we all having fun yet? Don't you just love the volatility? As an option seller, we do. If you are a call writer this environment is your dream. As a put sell, you have to love those premiums.

Fat finger......we don't think so. Most systems will not let you enter orders in the billions without a second review like to say "is this what you really want to do?" Good excuse... but it's only slightly better than "my dog ate my homework" in its credibility. Part of the reason for the free fall in the Thursday session can be attributed to mob mentality. The original stops placed in the markets caused, upon their election, a whoosh to the downside but then computers, or quants, noticing the downdraft piled into the trade accelerating the downdraft further. This was further complicated by NYSE stocks that were electronically halted compelling the market makers on the NYSE floor into action to make an orderly market, a slower market but orderly nonetheless. This caused some of the electronic sellers, looking for an exit, to abandon their NYSE platform and place those exit trades on the NASDAQ which, took full advantage of the situation and accommodated the trades.

A major problem causing this market meltdown is the extinction of trading floors, where some of this craziness was controlled. Machines just trade because of triggers, people actually think. True we can teach machines to think but they have difficulty reversing and adjusting as fast as the human can. The swings on Thursday are proof of this. The computers sold bought sold and when it was all over, a plunge of nearly 1000 points was reversed and the market gained back about 600 points by the end of the session. We need to obliterate trading halts or have all exchanges, including NASDAQ respect the same trading halts. On another front this Thursday accident speaks volumes to the value of the trading pit and the exchange floor market makers. When standing in the pit, you know who is selling and you know who is buying. True there are shenanigans always but they are a small price to pay for true price discovery and a true auction market. Electronics certainly have their place but to the credit of the people in the ring and on the floor that trade and fill our orders, the execution might be a tad slower but the results will be less chaotic. We have been both an electronic trader and pit trader. Both work well together but not to the exclusion of the other. Both should have the same rules of the road. We know that many who bought the Thursday low of the market had their fills canceled. This is another question which needs to be sorted out. If we cancel trades in this manor why would buyers step in? Wouldn't they be afraid of a subsequent cancellation and thus not provide the bid that the market needs to stabilize. If we remove those bids, where would the market stop if it would stop before a limit trading halt would be enforced? These are good questions and ones that need to be answered. The answer is a level playing field with uniform rules for all, not just for NYSE or whatever exchange has made a rule but for all exchanges.

We are sure that you would like to know where the market is going to go next week. Monday's have been up days in the market because the world survived the weekend and nothing major happened to cause the markets to blow up. That said, a relief rally appears and the all clear signal is sounded. This week, we don't expect to see a repeat of last week's craziness. We do expect to see a rally to at least 1117.03 and more probably 1136.12. The markets will remain nervous and the monthly expiration of options will add some increased concern. That said, we expect to see calmer waters in a sea of manic behavior.

Monday: the Bank of England releases its interest rate decision.
Tuesday: March wholesale inventories are released at 10:00.
Wednesday: March international trade is released at 8:30.
Friday: options expire at the end of the day, April retail sales are released at 8:30, April industrial production / capacity utilization are released at 9:15, May Michigan sentiment is released at 9:45 - 10:00 and March business inventories are released.

The US Dollar index retreated in the Friday session removing some of the excesses seen in the Thursday session leaving an inside day on the chart with signs of exhaustion. We are grossly overbought as measured by the stochastic indicator, the RSI and our own indicator. The Thomas DeMark Expert indicator is flat and slightly above neutral levels. The chart shows that the US Dollar index is forming a pole, the question is will the pole resolve into a bear or bull flag, or perhaps a pennant. In other words, the future direction is not clear from the recent trades. We would expect to see the US Dollar retreat in the coming sessions. A return to 82.87 and the uptrend line at 82.380 is likely. The 5-day moving average is at 83.945. The top of the Bollinger band is at 84.691 and the lower edge is seen at 79.325. During this past week we saw the US Dollar index trade above the upper Bollinger band for four of the five trading days. Friday, the index closed just below the upper Bollinger band. We are above the Ichimoku Clouds for all time frames. Euro fear is a wonderful thing for the US Dollar bulls. Remember as the dollar rallies, dollar based commodities will decline, making commodities more expensive for importers. Likely this will all smooth out. We have gotten used to seeing these sorts of extremes. This time is not different just the location is different.

The S&P 500 futures retreated this past week. The Thursday hysteria neared the February low of 1040.75 and came within a cat's whisker of electing the circuit breaker trading halt. The Thursday low was 1056. The action in the Friday session was far more subdued than the Thursday session and left a resulting inside day on the chart. We are oversold by all the indications and measures that we follow, yet we are getting mixed signals. Our own indicator is curling to the upside and could, in the next session, issue a buy-signal. The Thomas DeMark Expert indicator is flat at the oversold line, the stochastic indicator is curling over and could issue another sell signal at slightly above oversold levels. We expect to see the S&P 500 futures trade to the 1117.03, 1136.12 and possibly 1155.21 levels. Things are not going to return to the upside until some of this fear is worked off. We below the Ichimuko clouds for the daily and the monthly time-frames and remain above the clouds for the weekly time-frame. The 5-day moving average is at 1152.90. The top of the Bollinger band is at 1241.05 and the lower edge is seen at 1132.81. This should be a very interesting week.

The NASDAQ 100 retreated in the Friday session with a lot less volatility than seen in the Thursday session leaving an inside day on the chart. The indicators that we watch are giving us the same signals as that seen in the S&P 500 futures contract. The signals are mixed some showing that we will likely rally and some saying that we will not. It is our opinion that we will try to stabilize this week and we will likely rally into options expiration. Resistance will be found at 1855.39, 1894.12 and at 1932.85. The 5-day moving average is at 1937.90. The top of the Bollinger band is at 2101.37 and the lower edge is seen at 1899.47. We are inside the Ichimuko clouds for the daily and the monthly time-frames but are above the clouds for the weekly time-frame. When market suffers the damage seen this past week, they need to take some time to repair themselves. Thus most rallies will be met with seller and most retreats with buyers, but the buyers will be willing to take only limited risk on their trades. Thus we should see the S&P outperform the Russell 2000 as risk is removed from the market. We expect to see stabilization return to these markets in the coming week. Be prepared for the worst and hope for the best.

The Russell 2000 continued to slide in the Friday session. We continue to see mixed signals as generated by the indicators. The Thomas DeMark Expert indicator is trying to turn to the upside. We are getting a sell-signal from the stochastic indicator and our own indicator looks as though it might issue a buy-signal tomorrow or perhaps on Tuesday. The RSI continues to point lower. There is resistance at 763.23, 689.90 and at 700.56. Still we believe that if the market is going to take a less risky approach to the market, this index will underperform the rest of the market that is until the all clear signal is sounded. The 5-day moving average is at 691.92. The top of the Bollinger band is at 756.34 and the lower edge is seen at 671.63. The waterfall spill that occurred last week paints a picture of panic. When cooler heads prevail, the market will likely adjust its downdraft to a less sever waterfall pattern. We closed inside the Ichimuko clouds on the daily chart and above the clouds for the weekly chart. Both the weekly and the monthly charts are overbought and continue to issue a sell-signal.

Crude oil closed below the Ichimuko clouds in the Friday session leaving a large red candle on the chart. Crude oil has been down four out of the five trading days this past week. As to the indicators, crude oil is grossly oversold but shows no signs of reversal. Much of crude oils recent problem stems from the strength in the US Dollar. Some of the concern about the fragile global economies is bleeding into the crude oil market which is dependent on a certain amount of growth to continue its upward movement. There is also some concern about a possible slowdown in the expansion seen in China. The 5 day moving average is at 80.224. The top of the Bollinger band is at88.75 and the lower edge is seen at 77.52. We closed below the lower edge of the Bollinger and will likely move back inside the band.

Gold seems to have an evening star at on its daily chart. Gold is grossly overbought and continues to point to higher levels. The 5-day moving average is at1187.04. The top of the Bollinger band is at 1201.6 and the lower edge is seen at 1124.20. Although we have been somewhat of a gold bug for a while, we believe that gold has gone a bit further than it should have and will likely retreat in the coming week. We continue to buy gold on reasonable dips.

The US stock market is resilient and seems to want to rally. The only thing that will prevent this market from returning to the April highs will be an event that will cause fear to return to this euphoric market. We have seen European downgrades and an attack on Goldman Sachs, neither of which was bad enough to send some fear into this market. We need to see an event like a failed Treasury Auction. That is not going to happen anytime soon because money is flowing back into our currency and our markets. The yield starved investor is taking more risk daily just to get some returns on their portfolios. At the current money market rate, you are losing money and not keeping up with costs.

Although the VIX rallied from a low of 17.47 to a high of 22.39 this past week, we believe that we could see the VIX at 29 or 30 in the near term. Investors and traders alike would love to see some volatility return to this market. Volatility helps the options sellers get the returns they need. Meanwhile the US 10 year treasuries are comfortably below 4% and will not compete with returns achievable in the market. It is thought that once the treasuries yields above 5% or 5.25% that they will compete for dollars earmarked for the US equities markets. For right now, we seem to be miles away from that competition.

Another factor that needs to be considered is; should the dividend preference treatment be removed, money will again flow into the debt market. At the moment that tax benefit has encouraged investors to buy high yielding securities rather than debt instruments whose income is ordinary income and taxed as such. Should the Congress neither pass nor not renew that preference item it would help make the case for investors to invest in bonds rather than stocks.

Monday: March personal income/consumption is released at 8:30, March construction spending is released at 10:00, and April ISM is released at 10:00.
Tuesday: March factory orders are released at 10:00.
Wednesday: Challenger Gray & Christmas April job cut announcements, and ISM nonmanufacturing index for April is released at 10:00.
Thursday: 1st quarter productivity and Federal Reserve Chairman Bernanke speaks.
Friday: April nonfarm payrolls and unemployment rate are released at 8:30 and March consumer credit is released at 3:00.

The US Dollar index retreated in the Friday session with some of the money flowing to the Euro. The uptrend line for the Monday session is at 81.77, we remain above the uptrend line. The 9-day moving average is 81.799, which is very close to the uptrend line for the Monday session. The top of the Bollinger band is at 82.553 and the lower edge is seen at 80.224. We are above the Ichimuko Clouds for the daily time-frame but are in the clouds for both the weekly and the monthly time-frames. All the indicators that we follow are issuing a sell-signal on the daily chart of the US Dollar index. For the weekly and monthly charts, the indicators continue to issue a buy-signal.

The S&P 500 futures contract lost 1.8% of its value in the Friday session. The 5-day moving average is at 1193.60. The top of the Bollinger band is at 1215.32 and the lower edge is seen at 1174.50. There is a resistance line at 1208.15 which should serve to stop most rally attempts. There should be some support at 1176.25. Further support will be seen at 1151.67 and at 1146+/-. At the moment, the chart pattern looks like a head and shoulders top. We need to see 1176.75 removed to confirm that pattern. The stochastic indicator, RSI and our own indicator are all issuing a continued sell-signal with plenty of room to the downside. The Thomas DeMark Expert indicator is issuing a buy-signal. The long-term uptrend line is at 1054. Look at the point and figure chart. You can see the head and shoulders formation. There is a downtrend line at 1204.44 and an uptrend line at 1184.36. Remember Bob Farrell's Market Rules; "Markets tend to return to the mean over time. Excesses in one direction will lead to an opposite excess in the other direction. The public buys the most at the top and the least at the bottom." These are just three of the ten "rules of the road." We are above the Ichimuko Clouds for both the daily and the weekly time-frame but are below the clouds for the monthly time frame. Both the weekly and the monthly oscillators are overbought and curling over to the downside. Once the weekend is over, expect to see some of the buyers return to the market as the weekend fear is removed.

The NASDAQ 100 has a bearish engulfing candle on the chart. The 5-day moving average is at 2020.45. The top of the Bollinger band is at 2058.85 and the lower edge is seen at 1962.97. The stochastic indicator, the RSI and our own indicator all continue to issue a sell-signal. The weekly and monthly indicators, except for the flat DeMark, are issuing a sell-signal. The Thomas DeMark Expert indicator is going sideways a little below neutral for all time-frames. We are above the Ichimuko Clouds on all time-frames. We have signs of exhaustion on all time-frames. We will have some concern if the market trades below 1991.50 because we will be in the Market Profile single print area.

The Russell 2000 has a bearish engulfing candle on the chart as a result of the Friday trading session. All the indicators that we follow herein are issuing a continued sell-signal on the daily and the weekly charts. Only the stochastic indicator is issuing a sell-signal on the monthly chart, the other indicators continue to point higher at overbought levels. We have signs of exhaustion on the chart for both the weekly and the monthly time-frames. The chart indicates to us that we need to see a defense of the 708 level. The 5-day moving average is at 726.76. The top of the Bollinger band is at 743.10 and the lower edge is seen at 687.77. We closed the Friday session at the 20 day moving average.

Crude oil rallied in the Friday session. The downtrend line for the Monday session is at 86.65. We have an important high just overhead, that high is at 87.59. Should the market remove that level we will likely see a run to 90 and then to 93. We are above the Ichimuko Clouds on all time-frames. All the indicators that we follow herein are uniformly issuing a continued buy-signal. We will likely see some resistance at the 50% retracement level (from the high of 147.27 and the low of 32.48) of 89.96. The 5-day moving average is at 84.23. The top of the Bollinger band is at 87.34 and the lower edge is seen at 81.78. We have a long-term target of 105 for crude oil.

Gold rallied in the Friday session removing the previous month's high of 1169.00. All the indicators followed herein are issuing a continued buy-signal albeit at overbought levels. The 5-day moving average is at 1167.20. The top of the Bollinger band is at 1178.56 and the lower edge is seen at 1127.00. With all the global chaos, the PIIGS, Goldman Sachs and the oil spill in the Gulf, what would you expect? Naturally gold went on a trip to the upside of the chart. Naturally, we are above the Ichimuko Clouds.

This week we took note of something rather interesting; specifically there was a great deal of chatter going around regarding the current rally. As the mortal investor begs the question of divergences seen in the recent rally a veritable chorus of gurus and talking heads responds yes, this rally was good and that yes, a new bull market hath commeth; one we mortal investors must respect. While we will agree in so much that a one-day retreat will not be viewed as a returning bear market, it must be remembered this story is not dictated by the media gurus or seers but by the tape. We merely are observers of the markets, noting past behavior and patterns that we may observe. We do not tell the market where to go or how to go; basically we observe and report thus making observations of current behavior and similarities to past behaviors.

We noted in last week's letter that the market was primed for a retreat and further, while we knew that it was coming, we didn't know when it was coming. This past week our dear friend Hendrik pointed to the VIX chart highlighting a 13 count using the Demark indicator. Further observation of the VIX chart showed a very clear morning star formation. As you might imagine, this event made the hairs on our neck stand at attention and indicated that within a few days it was likely some event would take the market downward. The excuse was Goldman vs. the SEC, go figure.

Perhaps the only way to stop the sort of poor behavior demonstrated by Goldman et al, is to hold them accountable for their actions beyond a fine. Give them a black mark on their record, note for all to see that they are violating the streets code of ethics and make an example out of them. This sort of punishment is frequently seen for small broker/dealers, but the big guys slide by with a slap on the wrist and a few bucks to be paid out. They never learn because they are never hurt.

More importantly, what was done to punish the banks and mortgage companies who phantomized applications, messaged the figures and awarded mortgages based on fictitious valuations to people who couldn't afford them. What of the banks? Yes, Wall Street took full advantage of these loan obligations and packaged them into units to sell, but they weren't the loan originators just the resellers. Where were the regulators during this loan selling frenzy and, more importantly, where are they now? The banks had to be bailed out and in effect held harmless? Wall Street was bad but they only took the mortgages and repackaged them, they did not make the loans. Oh, by the way, we are back to 3% down and you too can be a proud home owner.

Today, the banks (which were brokerage houses just a couple of years ago and banks that were always banks) are enjoying almost zero percent interest rates when they borrow from the federal government. They then loan that money back to the government via Treasuries at a profit. Banks also lend money to the public via loans at a spread of about four/six points and they enjoy charging interest rates on credit cards from about 6% to 29% (and remember, all of this on money that they are borrowing at near 0% from the government). That is some punishment for having been a party to a near collapse of the financial markets. Can we get a piece of that action?

Monday: March leading indicators are released at 10:00 and Federal Reserve Board Governor Duke speaks. IBM, Citi and Lily just a few of the earnings to be released.
Tuesday: Earnings continue with Apple, J&J, Coke etc.
Thursday: March PPI is released at 8:30, March existing home sales are released at 10:00 and the earnings parade continues.
Friday: March durable goods are released at 8:30 and March new home sales are released at 10:00

The US Dollar index rallied in the Friday session moving above the 5-day moving average which is at 80.627. We remain below the downtrend line of 81.44. All the indicators that we follow herein are uniformly issuing a buy-signal. We gapped lower in the April 12, 2010 session and stepped into that gap on Friday closing that gap. The US Dollar remains below the downtrend line of 81.44 and must close above that line to turn this chart bullish. The top of the Bollinger band is 82.37 and the lower edge is seen as 80.213. We are above the Ichimoku clouds for the daily time-frame but are in the clouds for the weekly and the monthly time-frames. Both the weekly and the monthly charts look toppy. On the upside, there is almost no resistance above 82.17 and single prints on the Market Profile chart. This tells us that should we get to that level, we will likely melt up.

The S&P 500 futures contract remains above the uptrend line which is at 1182.51. The 5-day moving average is at 1198.15. The top of the Bollinger band is at 1207.42 and the lower edge is seen at 1151.37. The stochastic indicator finally broke below the support level of 68.05 and posted the lowest level seen since mid February. This indicator continues above the neutral level but is pointing lower. The RSI also broke to the lowest level seen since February when it closed the Friday session at 57.22, which is still above neutral but pointing lower. Our own indicator is issuing a sell-signal, but the Thomas DeMark Expert indicator is going sideways at overbought levels. We are above the Ichimoku clouds on the daily and the weekly time-frames but are below the clouds for the monthly time frame. We are overbought on both the weekly and the monthly time-frames. The point and figure chart tells us that so long as we stay above 1185, we should be fine.

The NASDAQ 100 looks to be in better shape than does the S&P 500. Why you ask, look no further than the stochastic indicator and the RSI. Neither the stochastic indicator nor the RSI broke below previous levels seen in this bull run that began in February. We noted last week that "the daily stochastic breaks below 57 and the RSI breaks below 65" would be needed to make us uncomfortable. Well, the daily stochastic indicator is pointing lower but closed the Friday session at 71.13 and the RSI closed the session at 65.73. We note that the RSI is getting very close to making a new low, one not seen since the beginning of the bull run, but it isn't there at this time. The 5-day moving average is at 2012.95. The top of the Bollinger band is at 2026.81 and the lower edge is seen at 1924.48. The uptrend line is at 1986.33. We are above the Ichimoku clouds for the daily, weekly and monthly time-frames.

The Russell 2000 looks the best of the financial indices. The 5-day moving average is at 712.72. The top of the Bollinger band is at 721.27 and the lower edge is seen at 664.87. We do have signs of exhaustion on the daily chart but we remain above the uptrend line at 709.42 and one at 707.85. We are above the Ichimoku clouds for all time-frames. The stochastic indicator, the RSI and our own indicator continue to issue a sell signal on both the daily and the weekly charts. The Thomas DeMark Expert indicator is going sideways at overbought levels. Our advice is to stay very nibble and defensive. This market and the NASDAQ 100 have out-performed the S&P 500. One reason for this underperformance to the downside is that there are no large financial companies in this small cap index or in the NASDAQ 100. This has helped keep both the NASDAQ 100 and the Russell 2000 from participating to the extent that the others did on the downside.

Crude oil closed below the uptrend line in the Friday session. The uptrend line is seen at 83.50. The 5-day moving average is at 84.59. The top of the Bollinger band is at 87.84 and the lower edge is seen at 79.23. All the indicators that we follow continue to issue a sell-signal and have room to the downside. We are above the Ichimoku clouds for the daily, weekly and monthly time-frames. The Market Profile chart shows lots of support as we retreat. On the upside, we will find ourselves in unstable areas above 87.09. Above that level, we will likely see a melt up. There should be good stability found in the 79.92 to 82.87 area.

Gold met with lots of selling in the Friday session leaving a very large bearish candle on the chart. The uptrend line has been broken. The 5-day moving average is at 1153.88. The top of the Bollinger band is at 1177.37 and the lower edge is seen at 1077.92. All the indicators that we follow herein are pointing lower with plenty of room to the downside. We are above the Ichimoku clouds for the daily, weekly and monthly time-frames. Unless and until we can close above 1164.80 we will probe the downside finding support all the way down to1086.40. The point and figure chart tells us that we need to close above 1137.80.

Mr. Market has cancer and although it seems to be in remission at the moment, it appears that it is complete denial of; the disease, the treatment necessary to rid the disease or hold the line against further progression of the disease. How can we say that? Well, it appears that with the infusion of mass amounts of liquidity the Federal Reserve has helped the market get off life support systems and actually regain some strength. As we have stated in the past, this will work for a time and then another Black Swan event will cause the weakness in the repaired system to give way to chaos. Are we calling for the demise of the system as we know it today? No, we are urging those who are in charge to take off their blinders and finally fix what is wrong in the system.

We fear that much of what is wrong has been inspired by those who are in charge of fixing the system. Mass liquidity led to the last bubble which was a result of trying to avoid a recession. Here we are again at very similar points. A jobless recovery, stagflation and no solution. We have averted a catastrophe but haven't fixed the problem.

We entered this new century after a massive bubble leading us to a high in 2000. Massive liquidity was pumped into the system to avoid a millennium meltdown. From that high the market retreated until 2002-2003 when, it took off, pausing briefly in 2004 consolidating with an upward tilt until 2006, and then like a bird flew skyward until the crack up in 2007 beginning with Bear Stearns and ending with Lehman Bros. Today we are approaching the 0.618% retracement number for the previous 2007 to the low of 2009. Do you think we will correct or go sailing towards the moon without a refueling stop? Better yet, why do you suppose the real-estate bubble followed the high tech bubble and what is the new bubble going to be? Was it the Feds objective to avert a recession that caused the initial bubble, was it the fact that the government wouldn't do anything to avoid the initial bubble and then fueled the housing bubble again refusing to see the bubble. Seriously, we have a problem here and we are not acknowledging that problem nor are we fixing that problem. We certainly don't know how to fix the problem, but we believe the first step in any solution is to acknowledge that a systemic problem exists.

Today, we are back to the "put 3% down" for a purchase of a new house, so what we learned from the housing bubble? While interest rates are low, the banks are not lending money (why lend if you can make the spread without risk). We have learned nothing from the previous melt-down. Shame on us.

Monday: Many markets remain closed for the Easter Holiday and March ISM non manufacturing index is released at 10:00. Tuesday: The FOMC minutes of the recent meet will be released. Wednesday: Consumer credit is released at 3:00. Thursday: Retailers release same store sales, the European Central Bank and the Bank of England issue their interest rate decisions and offer comments regarding their decisions. Friday: March wholesale inventory is release at 10:00.

The US Dollar index enjoyed a rally in the shortened Good Friday session rallying from the low of the session seen at 7:35 to a session high at about 10:05, closing the session just off that high. There was a strange print which, we are sure, was an error at 7:25 or so. Must have been a bad tick, if not, it truly was strange taking the market to 80.52. You might say it was our data source but we have checked more than one source and use more than one source for our charting. There is an important downtrend line at 81.597 that the US Dollar index needs to remove before we will return to the "bullish" posture of the past. The 5-day moving average is at 81.617 and, so long as we are below both that line and the trendline we will remain cautious. It is interesting to note that the 20 moving average is at 81.58. Combine these three numbers; the 5 day moving average, the 20 day moving average and the downtrend line and the number becomes very important. Thus, any move above 81.61 or so should bring buyer into this market. The top of the Bollinger band is at 83.763 and the lower edge is seen at 79.397. The stochastic indicator and the RSI are both issuing a fresh buy-signal. Our own indicator will also issue a buy-signal within a day. The Thomas DeMark Expert indicator is issuing a continued sell-signal and is oversold. We are in the Ichimoku clouds for the daily time-frame and below the clouds for the weekly and monthly time-frames.

The S&P 500 futures contract traded briefly on Good Friday following the March monthly "Job Report" release. This abbreviated session was positive until the final numbers were posted when, a strange thing happened, we saw the numbers adjusted downward without explanation. The session actually closed at 1178.50 and later was posted at 1173.70. We are not sure why therefore, this data skews our chart and makes us question the validity of the indicators that are drawn from these numbers. We can tell you that the S&P 500 closed above the Ichimoku clouds for the daily and the weekly time-frames, but remains below the clouds for the monthly time-frame. The 5-day moving average is at 1167.91. The top of the Bollinger band is at 1182.13 and the lower edge is seen at 1139.13. The Friday session probed to the upside posting another higher high in this bull move. We are still far below the 0.618% retracement level from the 2007 high of the market. When we look at the Market Profile chart we note that we are in single print area with no overhead supply. We should have little trouble making progress to the upside. Should we stall at this level it is likely that we will retreat to the 1164 level and possibly lower to 1132. The market is grossly overbought but has been overbought for months, thus the condition is being noted and probably is of little value at the moment. This will be valuable because the longer we stay overbought the worse the downdraft will be when it begins.

The NASDAQ 100 futures contract which traded briefly in the Friday session actually closed the session at 1962.50 and was adjusted downward at 12:06 PM to 1952. Again we see the downside adjustment with no explanation. Thus, we will not regard this bogus close as factual until some reliable source explains this adjustment. This will affect the moving average and other calculations so take them as possibly needing adjustments. The 5-day moving average is at 1955.61. The top of the Bollinger band is at 1980.64 and the lower edge is seen at 1899.00. Naturally the market is above the Ichimoku clouds on the daily, weekly and even the monthly time-frames. The stochastic indicator and our own indicator both continue to issue a sell-signal. Both the RSI and the Thomas DeMark Expert indicators are going sideways. Even with the adjustment to the closing prices, the NASDAQ 100 did not challenge the highs, or even come close to those levels seen in the Thursday session. The chart looks to be rolling over to the downside. Should this market retreat below 1940.75 the door will be open to 1919 and 1900.

The Russell 2000 on the CQG system was not adjusted as both the S&P 500 and NASDAQ 100 futures contracts were and therefore shows a gain in the Friday shortened session. Strange, it was adjust on e-signal but not on CQG which is the platform we prefer. This chart is forming a wedge, or pennant. It certainly looks as though in about three or four days we will have a resolution to that consolidation. The downtrend line is at 683.90. Should we close below 675.40, expect to visit 664.10. The 5-day moving average is at 681.03. The top of the Bollinger band is at 688.25 and the lower edge is seen at 667.80. We are above the Ichimoku clouds for the daily and weekly time-frames. When looking at the Market Profile chart you will notice that we are at the upper edge of insecurity, should we trade above 690, there will be little resistance and we could melt higher. As to the indicators, we have a mixed bag, with the Thomas DeMark Expert indicator giving us a buy-signal and the RSI and stochastic indicator both going sideways our own indicator is just issuing a sell-signal. So here we are a signal for any mood. This tells us to be careful and alert. On the downside, a move below 660 will inspire the bears to return for a feeding session with support returning at 637.

Crude oil rallied in the Thursday session removing the high seen on January 11, 2010. This tells you that somebody out there believes the recovery story enough to be buying the crude oil that will be needed to supply any kind of global expansion. While it is true that the weakness in the US Dollar seen on Wednesday and Thursday helped, the fact is that crude seems to want to rally. The 5-day moving average is at 81.94. The top of the Bollinger band is at 84.10 and the lower edge is seen at 79.40. Naturally, we are above the clouds for the daily, weekly and monthly time-frames. If we do a Fibonacci retracement from the highs of 2008 we notice that we are not even at the 50% retracement levels and have lots of room to run to the upside. That is bad news for the users of crude oil and for those that see no inflation in the future. The Market Profile charts warn us that should crude oil trade above 85.50 there is little overhead resistance.

Gold is moving to the upside and looks as though it is getting ready for another run to 1133.9 1145.8. All of the indicators that we follow herein are pointing higher with room to the upside. We are above the clouds for all time-frames. The 5-day moving average is at 1104.71. The top of the Bollinger band is at 1135.53 and the lower edge is seen at 1087.37. Gold had broke above the downtrend line and seems to be heading higher. Until we trade above 1145.80, this move will be no more than trading range activity. We continue to bullish gold but will wait to see how it behaves as we approach the overhead resistance levels.

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DATA RESULTS 04/02/10
8:30 AM US NONFARM PAYROLLS (190K/162K)
8:30 AM US UNEMPLOYMENT (9.7 %/9.8%)

DATA RESULTS 04/01/10
US WEEKLY JOBLESS CLAIMS (436 K/440 K)
ISM MANUFACTURING INDEX (59.6/56.3)
US CONSTRUCTION SPENDING (-0.3/-0.0)
EIA INVENTORY-NAT GAS (12 BCF)
US TREASURY AUCTION ANNOUNCEMENT US 3YR ($40B), 10YR ($21B), 10YR TIPS ($18B), 30 YR ($13B)

US DEBT REVIEW AND OUTLOOK

US Treasuries continued their sell off on Thursday and Friday after the US payroll number came in relatively strong, particularly after revisions to the January and February figures boosted the overall job growth and helped to shine a light on potential jumping of points of sustained revenue and job growth (example would be manufacturing)

Treasuries continue to fall in the overall wake of dependence on record levels of sovereign debt supply supporting capital needs for government stimulus (Federal Tax revenues are currently providing only about half of the perceived capital needed to fund current stimulus) Adding in future liabilities such as changes to the US health care systems and the sales pitch for buying Treasury debt will need to be an energetic one at best. Next week will offer some initial value perceptions of Treasury as a safe & long term investment with auctions on US 3, 10, 10 year TIPS, and 30 years. Whether this jobs report is a turning point for the perceived influence of record stimulus remains to be seen, this could be the beginning of new focus for perceived value-the importance of sustainability of revenue both in the US and Globally. This shift in focus may ramp up another level of concern regarding the effectiveness of sovereign debt as a risk reward tool.

Technically, June 30 year Treasuries have move back down to test the low end of its range at 114-28. Continued downside momentum may set up test of 114-18. Market appears uncertain of breaking out of recent trading range and should continue to form a range based on the formation of lower lows. Initial recovery should take place with market supported by possible recovery back up to 115-09.

US EQUITIES REVIEW AND OUTLOOK

Equity futures posted stronger gains by the end of the week as the US employment data posted the best jobs gains in nearly three years. With the cash stock markets closed around the world for the Good Friday Holiday, it won't be until next week that market participants will be able to digest the data completely. The positive sentiment may have some more carry through as some many will be viewing the moment to moment action on their new Apple I Pads, which officially goes on sale Saturday.

Thursday as global risk sentiment received a shot in the arm. China, Great Britain, and the US had better than expected reports on manufacturing to boost risk tolerance. A better than expected reading on US weekly jobless claims also helped to boost risk tolerance

Thursday: Technically, June S&P futures outlook remains the same- a degree of cautious optimism that remains vulnerable to selling into strength for the time being-though expecting an upward bias for early part of this week. Market should retest 1173.00 resistance levels; with 1178.00 and 1183.00 as near term top of range. 1156.75 should remain as a strong support.

Friday: June S&P futures closed at 1178.00, the second tier of resistance. Continued momentum should set up test of 1183.00, though a pullback to 1168.00 appears likely.

Prepared by Rich Roscelli & Paul Brittain.
Please voice your market opinions, thoughts and questions. Email to: rich@binvstgrp.com

Additional Information can be found at www.whitehallvegas.com

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Whitehall Investment Management, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

As a swing trader I've been whipped around of late as markets slog back and forth. What I've been forced to do is trade against core positions. By this I mean if you want to be long corn for example (our client's biggest position) some times you may have to trade options or futures of a different month against your core position. Oil failed to get above yesterdays levels and as of this post just went negative. We expect prices to drift lower but would advise cutting losses on any open shorts on a settlement above $82 in May; our target remains $77/78. Now that natural gas has seen a trade below $4 will buyers enter the market? We are expecting the long Crude/short natural gas unwind to help natural gas find a bottom. Additionally check out the inverse correlation with natural gas to stocks. A top in stocks may equal a bottom in natural gas. We have advised clients to cut half their position on May longs at a loss on a trade below $3.90. We still like purchasing June 50 cent call spreads.

Surprise equities higher on the day! June ES puts are the only way I'd suggest having exposure speculating on indices coming off. Cotton lost 1.5% today putting May just above 80 cents; our targets remains 78 and then 76.Coffee prices perked up today gaining 2% closing above the 50 day MA the first time since mid-January. We have started to price out July 10 cent call spreads for clients...stay tuned.

Treasuries broke a key trend line today and look to be heading lower. We would refrain from being out right short but a possible idea would be a pair trade; short 30-yr/long 10-yr or short 10-yr/long 2-yr. Agriculture came under pressure today. We advised clients who were long December corn futures to sell May futures 1:1. Those who have held back or only have a small position we would advise lowering your cost basis and buying more corn ahead of next weeks USDA. Bear in mind you may need to take some heat but we view this as temporary. The KCBOT/CBOT wheat spread picked up a few pennies today; again we are expecting December KCBOT wheat to be at a premium to December CBOT wheat. Both cattle and hogs were lower on the day; continue to sell rallies.

Metals were sideways today but the fact that they were able to remain positive in the face of a stronger dollar does show some resiliency. We are expecting gold and silver to trade down before we see any substantial upside; $1075 then $1045 in gold and closer to $16 in silver. As long as the dollar stays above 82 we should see pressure in foreign currencies. If the Loonie was to trade to .9600-.9650 we would start looking for an exit door on shorts.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.