The markets surged higher today and right into a major resistance area.  As seen on the chart below, the SPDR S&P 500 ETF (NYSE: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 (NYSE: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) (NYSE: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) (NYSE: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