The support is rising quickly but right now it looks like 1320, 1310, and the 1290-1300 area look like potential pullback targets.  I wouldn't complain if it happened, and I am still fully invested, but the overnight futures are actually pointing toward a strong open.  Those on the sidelines can't seem to catch a break.

The dollar has risen back up to the old support levels and is struggling to get any further.  This is typical action after a breakdown.  I would be surprised if it is able to close above 78.75 for more than a day, but the dollar always seems to surprise me.

                         

Of course the I-fund is the concern here.  When the dollar is rising the I-fund tends to lag.  The I-fund was up yesterday, but that was a little fair value payback. 

Bond yields have been consolidating since the breakout a week or two ago.  Like the dollar breaking down and now struggling to get back above the old support lines, the yields have pulled back and should find support at the old resistance lines.  That goes for both the yield on the 10-year T-note and the 30-year bond.

                         
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

If bond yields turn back up after testing the old resistance line, that would be bearish for the F-fund.  That would also likely initiate another move higher in stocks.

I would look for a upward reversal in the yields within the next 2 to 3 days.

Thanks for reading!  We'll see you tomorrow!

Tom Crowley