1st quarter review

For the first quarter (12/31 close to 3/31)
SPY +5.4%
TLT -2.1%
GLD +0.8%

SLV +21.8%
EEM +2.2%
IWM +7.6%

So again risk was rewarded with the more volatile IWM (Russell 2000) and SLV (silver) outperforming. Treasuries (TLT) were down, Emerging markets (EEM) trailed.

For stock traders the previous SPY top just a bit higher is a line in the sand for the bears. How many will cover if that is broken with conviction? How many are positioning short with the top only a point or so away (6 month chart). Support at 125, 123 and then 118 and that's why I am using those strikes to sell puts around and below.

For TLT support at 88/87 (two year chart). Observant readers might see that I recently sold TLT puts for the first time all year, after focusing exclusively on TBT (inverse bonds). I did so because of chart support, sentiment and seasonality.

The two year GLD chart (link3) is forming a base at the highs. The gold chart looks more exciting on the 6-month view, but the previous long base at 120 just below, the current basing behavior is not as exciting. We may get a bit of pop breaking out from this base, but there is not a lot of fuel, at least not yet.