We see the FED still trying to play up the QE2 talk for Wall Street. Huge bets have been placed in long bonds, gold, commodities, and speculative stock market positions which will unravel if the FED does not help them out.
At the same time real data points indicate that the economy is mending, all be it slowly. To me it seems that this would be the time to let the real economy work and ignore the Wall Street crowd.
We continue to watch the SHY ETF, (short term interest rate issues). So far the belief remains that the Fed will hold short-term rates down, remember it usually is not smart to fight the FED. As mentioned yesterday a close below 84.37 would be the first confirmation of higher short-term rates and a trend change on our computerized program would be confirmation. Since April 6th 2010 the technical trend has been higher on this ETF.