DIA -.16%, SPY, -.14%, QQQQ +.39%
The 10-year Treasury -1/16, yielding 4.12%.
A day of profit taking on the NYSE as traders booked profits from the weeks rally. The DIAs were up 2.96% for the week and the SPY's were up 2.95%. This is one of the best weeks in the market in about 6 months. Trader's only concern about the week's rally was its weak volume. The QQQQ's (NASDAQ) continued its week-long rally, indicating traders are getting more comfortable with shifting assets out of the energy sector and into technology. This could indicate a turn of events for the summer, possibly leading to a summer tech rally.
The 10-year Treasury lost 1/16 to close at 4.12%. Today, the market moved within a narrow trading range between 4.1125 and 4.13. A narrow trading range usually indicates little underlying action, with traders instead square positions instead of making long-term bets. The main news for the Treasury market occurred earlier this week, when the government released CPI and PPI numbers. So today was essentially a "call-in day", where traders could have just as easily called in their actions as opposed to going into New York. Looking at the daily and monthly yield charts, the 10-year is still in very oversold territory, indicating some type of sell-off is warranted over the next week or so.
Oil dropped 12 cents to close at $46.80/bbl. OPEC stated they would increase production if world demand increased. This statement reassured traders of OPEC's future intentions. From a technical perspective, oil's price is very oversold, implying a rally might be in the cards next week.
The dollar gained .5% versus the Euro and Yen. The dollar is in full rally mode versus the Euro, as traders are expecting the Fed to continue its measured pace of interest rate increases. In addition, the economic news out of Europe indicate slowing economic conditions, making the US' higher GDP more attractive. However, the dollar is getting a bit overextended versus the Euro, so a possible pullback from these levels for technical reasons may be possible next week. Regarding the Yen/dollar trade, the dollar still has some upward movement before it approaches technically oversold conditions. If the dollar breaks through the 109 level, the rally may move into high gear.