The market has pulled away from the 50 day and since March it has tested the 100 day three times. As I mentioned in my May 17 market direction call, I believed the indexes would test the 100 day and they have. Each time the S&P 500 has pulled away from moving lower and continued higher. The Ultimate Oscillator is pretty well neutral with a slight bullish bias and MACD while at a divergence of -0.93 which is quite negative, appears to actually be turning back up. The market could rally for a few sessions or even a few weeks. The market direction presently is no longer down but seems to be up. While it is always difficult to trade the market, what this picture actually provides to me is comfort in continuing with my selling puts on the large cap, multi-national companies that I follow.

Meanwhile though the sentiment remains poor. The US economy remains in trouble. Case-Shiller home price index dropped 3.6%, which is joined by consumer confidence moving lower to 60.8 and the Chicago PMI falling to 56.6. Basically the economy is plodding along and shows no real signs of robust activity. Multi-nationals continue to make money due to the US dollar remaining low.

Today the US dollar moved lower and commodities moved higher. Any significant rise in the US dollar is met with lower stock prices and often commodity prices. I have written a number of articles about the coming end to the Federal Reserve's stimulus in June. The first I wrote Feb 11 2011 entitled Market Trend: Still Up - But Watch For June and the second I wrote Apr 16 2011 entitled Dance Near The Exit. You may want to read them as I believe once the stimulus package is over, we could see some volatility or some pullbacks in equities, bonds, commodities or all three, as your guess is as good as mine when it comes to what may happen next.

In Europe I still believe it is just a matter of time before Greece defaults and restructures. Who knows they and the smaller Euro members like Portugal, Italy and Ireland may even leave the Euro Union. If they do, it will be a calamity for stock markets around the world. Don't believe anyone who tells you that the Greek sovereign debt issue is already priced into the market and the Euro, because it isn't.