After watching today's action in the market you really start to believe you are living in bizarro world where up is down and black is white. The ISM services report came out below expectations (signalling a slowing in the economy) and that is credited with spurring a rally in the markets. Sell the dollar, buy the euro, sell gold and we are off to the races. Technically this rally does not change anything. The market is still below its 200 DMA and as long as it does we have to consider this a bear market. The only thing that would reverse this situation is if the market closed above the 200 DMA on a weekly basis.
Meanwhile what stands out today is the poor action in gold. At the time of this writing it is down approx. $15 and is below $1200. In a previous article I mention that weakness in gold is probably due to the unwinding of the long gold/short euro trade. How long will it last? Who knows. If you remember Marc Faber's comments he thought gold could be susceptible to a decline into July and August, but said it would represent a buying opportunity. Personally I am hoping it falls to around $1050.