Contrarian Commentary-  S&P 500 and US Steel Update


The rallying cry to today's pre- market action is optimism in Europe about banks pre-paying some loans.The Euro is rallying in the pre market which should bode well for the markets especially commodity names but as a warning I must point out the bearish action of X yesterday of which we are long. We saw resistance at the $25.00 per share level. The positive is that Thursday was the third straight down day yet the down volume bars declined.
As to the markets the S&P 500 hit the psychologically significant 1500 level and they will most certainly attempt to close the market above that level to get people excited about next week. Across the market spectrum we saw topping tails on Thursday which is an ominous for a market continuation. Do we add to shorts? Not just yet but soon.

What are my concerns about this market? Where is the “wall of worry”? There is none. Of course that in and of itself isn't a catalyst for a sell off but as the markets continue higher with complacency building the inevitable sell off will be magnified. Keep and eye on bond prices. The chart attached is a monthly chart of th 10 Year Treasury which is firming up as the month comes to a close. If bonds begin to rally you an bet that the stock market will be adversely impacted.