Three months into the big 40% surge and the market has stalled out. However, we are yet to see it rollover. Curious, isn't it? How come sellers haven't come out yet? Who could blame them, right? Many names are up 100% or more in that short timeframe. The last two weeks have seen such little movement, and intraday moves have a very tight range. Remember those days when the markets would move 200+ points with ease? Well, with volatility being smashed over the head with a giant club those days may be gone for now. With the markets at the top of the range for now we'll have to see if buyers are still willing to pay up.

The Strange Bond Market

I find the action with bonds quite interesting. First, the yield curve is as steep as you'd like to see it from an inflation standpoint. How so? The steep curve displays a future growth rate exceeding 4%, and with all this being the result of an inflationary impact. The increased money supply is washing around the markets and finding a home. Call it commodities. We've seen bonds sell down recently and weekly auction seem to be scrutinized with a fine tooth comb. However, yields still are under 4%, hardly a bad number historically. So, while gold and the greenback may be screaming inflation, bonds are not. I tend to get better reads from the paranoid bond market about the future.

10-Year Bond Yield Chart


Dollar Weakness Can't Be a Good Thing

Much like last year the dollar is the sacrificial lamb of the economy. For better or worse, the dollar has been trashed over and over and gets sold repeatedly. This cannot continue if our country is to be considered first rate and a flight of safety. A strong currency is a sign of a solid economy. Oh sure, exports will benefit, so long as demand is there. The stimulus from around the world may be providing a shot in the arm for multinational companies, but will that be enough? And what of our trading partners? The currency side of a transaction is a big negative for them.

U.S. Dollar Index Chart


Time Is on the Market's Side

Time can be a good thing. The more time passes from last fall's debacle the better. Distance and space away are critical. As we find ourselves recovering in this economy, jobs coming hopefully back and a better market maybe we'll have seen the worst of it. Anniversaries are upcoming, and the less impact they have will give everyone a better trading opportunity.

Price Headley is the founder and chief analyst of BigTrends.com.