It looks like the Fed training wheels came off Friday, and life without The Fed started to resonate with traders….in a good way. We saw a decent jobs number, and although the U.S. Dollar ripped higher and treasury yields went higher, the market also went higher. This is good because the sooner the market can put Bernanke in the rear view mirror, the better for stocks. It’s probably a win win for the market, as Bernanke and the Fed will still be data dependent ( backstop), but if the economy can firm up, the market now showed that it is accepting of the notion of new policy. Remember though, that this is still the worst recovery since the Fall of Pompeii.
The $SPX did finally close above its 50 day moving average, but the Nasdaq printed its lowest volume of the year.
The Dollar ($USDX) is in a serious up channel on the weekly chart and looks like 90 to me. As you can see below, the dollar is now above all of its moving averages on the daily and the weekly, and is breaking out of a downtrend on the weekly. It could stall a bit here, but the trend is higher.
The 10 year note ($TNX) broke out and closed above its weekly 200 day moving average last week. It would hit a 3% yield right around the downtrend line.
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