The SPX has been in a strong, sure footed uptrend since late Nov. last year. The dips
have been bought aggressively and this has caused the conventional, momentum based
indicators to whipsaw in merciless fashion, all to the benefit of daytraders and buy-and
hold players. The driving premise has been: QE is good for stocks; slow growth keeps
the Fed committed to QE, so a sluggish economy helps the case. There is also the "TINA"
school -- "There Is No Alternative -- a thought which builds off the Fed's ZIRP policy.
Whatever the longer term merits of this strongly Fed policy centered strategy may be, the rally
to new highs is overbought on a number of measures. Even so, since the trend has been
so well drawn, the wiser course at this point for many traders might be to watch the
action of the market against its 10 and 25 day moving averages since the interactions here
have not whipsawed like the conventional indicators. SPX
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