***Executive Summary***

• Stock Market Stance Remains Neutral
• Geithner and Bernanke Speak Today
• QQQQ Holds Triangle Breakout
• SPY and IWM Stall at January High
• UUP Tests Medium-term Support
• GLD Stalls in Resistance Zone
• USO Fails in Resistance Zone - Again
• TLT Firms in Support Zone (video link)

***Stock Market Stance*** Neutral on 29-January. Last week's price action was constructively bullish. Not overtly bullish though. Upside volume was above average, but well below the levels seen in September, October and November. Breadth was strong, but AD Net% and AD Volume Net% did not produce positive breadth extremes with last week's rally. QQQQ (tech) broke above its January highs and shows relative strength, but IWM (small-caps) has yet to breakout and shows relative weakness. The stock market could continue to limp higher as it goes after the carrots offered by government (TARP, stimulus package, bank bailout). Treasury Secretary Geithner speaks this morning and Fed Chairman Bernanke speaks before congress this afternoon. Stimulus politicians speak every day. There will be no shortage of market moving news today. I consider the medium-term trends up, but I am focused on the short-term swings to control risk. The current swings are up, but stocks became short-term overbought after last week's surge. This could produce a consolidation or correction before the rally resumes.

Market moving events for the next few trading days:

• Tuesday: Geithner Speaks, Bernanke Speaks
  -Earnings: Elan, MolsonCoors, NVIDIA, Web.com
• Wednesday: Crude Inventories
  -Earnings: Agrium, Level3, PF Changes, Cymer
• Thursday: Retail Sales, Jobless Claims
  -Earnings: Aetna, Borg Warner, Marriott, Dryships
• Friday: Consumer Sentiment
  -Earnings: Abercrombie, PepsiCo, Cognizant Tech
• Monday: Presidents Day Holiday
  -Earnings: --

***Technical Highlights***

***Major-index ETFs***

***Medium-term Trend*** QQQQ remains the only major-index ETF with a clear breakout. Even so, I still consider the medium-term trends up for IWM and SPY. QQQQ simply shows relative strength with upside leadership. All three charts show triangle patterns. QQQQ broke triangle resistance with the surge last Friday, but SPY and IWM have yet to break above their January highs. With both remaining just below their late January highs, smaller triangles could be forming over the last few weeks (pink lines). Follow through breakouts above the January highs would put SPY and IWM on equal footing (bullish) with QQQQ. I would then look for a move towards the November highs over the coming weeks and months. Key support levels are based on the early February lows. Failure to hold last week's gains and a break below these lows would reverse the current uptrends.

***Short-term Trend*** The swings continue to dominate on the 60-minute charts and the current trading environment. QQQQ led the market with a breakout on Thursday. SPY and IWM followed suit with breakouts on Friday. All three became overbought after big moves last week. As a result, consolidation patterns formed on Monday. IWM formed a falling flag, while SPY and QQQQ formed flat flags. Flag breakouts would signal a resumption of the short-term uptrends. However, the futures are weak this morning and this could produce a support test. Broken resistance levels turn into support. In addition, there is support from the Thursday afternoon lows (5-Feb). Combined, broken resistance and the Thursday afternoon lows mark support zones that hold the key to the current upswing. With the medium-term and short-term trends up, it is time to look for pullbacks that improve the risk-reward ratio for long positions. A move to the upper end of these support zones could offer a second chance to establish long positions.

***Inter-Market Charts***

***Dollar*** The US Dollar Index Bullish ETF (UUP) moved lower on Monday to test triangle support. The trend remains up, but UUP failed to break above resistance at 26 three times in the last three weeks. Further weakness below triangle support would reverse the medium-term uptrend and target a move towards the 24-24.5 area. Such a move could be bullish for oil. On the 30-minute chart, UUP broke support at 25.6 for a short-term bearish signal. However, this signal occurred within the triangle and uptrend on the daily chart. A move back above 25.75 would negate this signal. A break above 26 would be bullish for UUP and signal a continuation of the medium-term uptrend. The Euro Trust ETF (FXE) attempted to break above minor resistance at 131, but fell back by the close. 131 remains the first level to watch. A break above this level would be positive, while a break above 133 would fully reverse the medium-term downtrend.

***Gold*** The Euro and gold moved in the same direction on Monday. These two have enjoyed a positive relationship since mid December. As such, I would cue off the Euro for clues on gold. In addition, it is possible that strength in the stock market is zapping gold allure as a safe-haven. On the daily chart, the streetTRACKS Gold ETF (GLD) continues to consolidate near resistance. The ETF became overbought after the January surge and this consolidation is working off these overbought conditions. On the 30-minute chart, GLD broke support at 88.5 to negate last week's flag breakout. Even though the ETF has been directionless since 23-Jan, it looks vulnerable to a pullback towards the mid 80s. This support zone stems from the mid January consolidation (20-23 Jan).

***Oil*** For the second time in two days, the United States Oil Fund ETF (USO) surged and fell back. These failed surges reinforce resistance around 30. While the double bottom remains a possibility, USO has yet to produce a convincing advance off support. The medium-term trend is still down and the pattern at work looks more like a descending triangle (pink lines). On the 30-minute chart, the 29-30 zone is proving tough resistance over the last six days. The ETF has been turned back at this area at least six times - almost once per day. A break above this resistance zone would be something to write home about. Such a move would bring the double bottom back to life on the daily chart and reverse the short-term downtrend. Look for help from a falling Dollar and rising stock market. Barring a breakout at 30.3, the bears rule the roost.

***Bonds*** What's this? The iShares 20+Yr T-Bond ETF (TLT) opened weak, found support and then surged in the afternoon. The ETF actually filled the morning gap down. While this is not enough to forge even a short-term reversal, it is a start towards establishing support. On the daily chart, TLT formed a small while candlestick within the support zone. For the prior three days, TLT formed indecisive candlesticks that resemble doji (plus signs or crosses). These show little change from open to close and represent indecision, which is the first step towards a trend reversal. On the 30-minute chart, TLT broke above the trendline extending down from mid January with the afternoon advance. This is a start, but we need to see follow through with a break above resistance at 104 to actually reverse this short-term downtrend. There are three ways to play. One: pick a bottom now with a stop-loss just below 101. Two: buy the breakout at 104 with a similar stop-loss. Three: wait for the breakout and then look for a pullback or retracement on the 10-minute charts.

Good day and good trading -Arthur Hill

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Disclaimer: Arthur Hill is not a registered investment advisor. The analysis presented is not a solicitation to buy, avoid, sell or sell short any security. Anyone using this analysis does so at his or her own risk. Arthur Hill and TD Trader assume no liability for the use of this analysis. There is no guarantee that the facts are accurate or that the analysis presented will be correct. Past performance does not guarantee future performance. Arthur Hill may have positions in the securities analyzed and these may have been taken before or after the analysis was present.
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About: The Daily Swing is posted every trading day around 6AM ET and focuses on short-term strategies for QQQQ, SPY and IWM. In addition, at two stock setups are featured every day with a detailed trading strategy. As warranted, coverage extends to broad market topics, key sectors and industry groups and inter-market securities (gold, bonds, the Dollar and oil).
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Sources: Data from Bloomberg.com, CBOT.com, Kitco.com and ino.com; Charting from Metastock (equis.com). Closing data from Reuters.com, eSignal.com, MS QuoteCenter and Yahoo! Finance.