***Executive Summary***

• Stock Market: Medium-term Bullish, Short-term Neutral
• A Weak Open and Strong Close Boost Stocks
• Short-term Support Zones Hold
• UUP Stalls Below Broken Support
• GLD Remains With Falling Wedge
• USO Firms in Support Zone
• TLT Hits Range Resistance
• ETF and Stock Setups Video around 8AM (video link)

***Big Changes Afoot*** As many of you know, I also provide analysis for the Market Message (John Murphy) at Stockcharts.com on Wednesdays and Thursdays. Starting 20-April, I will write exclusively for Stockcharts.com. It is a great opportunity to be part of the web's premier charting site. Commentary will not be exactly the same as on TDTrader.com, but I will still cover the major index ETFs, intermarket charts and stocks on a regular basis. We will also be producing regular videos.

Before starting this new endeavor (20-Apr), I will grab a little vacation time and the last commentary/video at TDTrader.com will be on Monday, 6-April. Remaining subscription time from TDTrader.com will be transferred to the Stockcharts.com Market Message. 

What if you currently subscribe to both TDTrader.com and the Stockcharts.com Market Message? Where possible, I will process refunds for the remaining time at TDTrader.com. If this is not possible, then we will issue a subscription credit through stockcharts.com. Let me know if you already subscribe to the Stockcharts.com Market Message. Click here for the form.

***Stock Market Stance*** Medium-term Bullish and Short-term Neutral. While I still think we are in or will soon enter a corrective period, the bulls are showing resilience with yesterday's recovery and I am turning short-term neutral. In addition, we could see a surge in volatility as a lot of news hits the market in the next two days. Today we have the G20 statement and the FASB (mark-to-market) vote. Friday we have the employment report and Bernanke speaking. Earnings season gets under way in mid April and there is often a market lull around tax time (15-Apr). With stocks still near overbought levels, I consider risk of a correction to high at this point and will exercise restraint.

Market moving events for the next few trading days:

• Thursday: Jobless Claims, Factory Orders, Money Supply, Mark-to-market vote, G20 Communiqué
  -Earnings: CarMax, Monsanto Micron, RIMM
• Friday: Employment Report, ISM Non-Mfg Index, Bernanke Speaks
  -Earnings: AZZ Inc
• Monday: No economic reports
  -Earnings: Apogee, Immucor
• Tuesday: Consumer Credit
  -Earnings: Bed Bath Beyond, Alcoa, Mosaic, Ruby Tuesday
• Wednesday: Crude Inventories, FOMC Minutes
  -Earnings: Constellation Brands, Shaw Group, WD-40

***Major-index ETFs***

***Medium-term Trend*** The major-index ETFs opened weak and closed strong to form long white candlesticks. While the ability to reverse after a weak open is quite positive, it does not change the medium-term picture. First, the major-index ETFs became overbought after advancing 22-29% in March. Second, SPY and IWM hit resistance near the 50-62% retracements and in the middle of the triangle consolidations. QQQQ hits resistance from the Jan-Feb highs. The combination of overbought conditions and resistance make conditions ripe for a flat consolidation or a correction that could last 1-3 weeks. As the chart now stands, the major-index ETFs have been trading flag for 3-4 days. This is not much of a consolidation or correction. Even if the major-index ETFs surge to new highs, there is likely to be a decent pullback or correction at some point. I will continue to exercise restraint and wait for a correction.

***Short-term Trend*** The major-index ETFs declined to support (S2) on Friday-Monday and then rallied on Tuesday-Wednesday. This two day rally filled Monday's gap and the bulls are showing resilience. The immediate recovery after yesterdays gap showed strong underpinnings. The pink trendlines extending up from Friday's lows define the current bounce. I am marking my first support level based on the afternoon low (S1). Should this bounce peak below last week's high, I would view the two day advance as a rising flag or bearish consolidation. A break below the first support would signal a continuation of last week's decline. The downside target would be towards the second support zones. A move into these zones may provide a low risk opportunity to partake on the long side.

***Inter-Market Charts***

***Dollar*** No change. I am impressed with the Dollar's ability to recover its losses from 18-March. It was Wednesday 18-March when the Fed made its bold policy statement that caused the US Dollar Bullish ETF (UUP) to decline sharply. The ETF opened at 25.87 and closed at 25.25 to form a long black candlestick. With a big move on Friday-Monday, the ETF recovered most of these losses and showed resilience. While there are plenty of reasons to be bearish the Dollar, I think there are more reasons to be bearish the Euro and the Yen. Moreover, the sharp recovery over the last three days shows strength, not weakness. UUP has resistance around 25.9, but I expect a break above this level and challenge to the Nov-Mar highs. Translating this to the Euro ETF (FXE), I would expect a move towards the 129-130 support zone. The Japanese Yen Trust ETF (FXY) fell sharply on Tuesday and the head-and-shoulders pattern remains in play. A break below 100 would target further weakness into the mid 90s. This would be bullish for the Dollar.

***Gold*** No change. On the daily chart, the medium-term trend is up with the Gold SPDR (GLD) testing support around 90. However, the inability to follow through on the 18-Mar surge shows hesitation among the bulls. A break below 90 would be medium-term bearish and argue for a move towards the low 80s. On the 30-minute chart, the decline over the last seven days looks like a falling wedge, which could be a bullish consolidation. GLD also has support around 90-91 from last week's low and the 62% retracement area. This is a good spot for a bottom pick with a stop-loss just below 90. A break above the wedge trendline would be positive, while a break above resistance at 92.5 would argue for a continuation of the breakout surge. Careful here.

***Oil*** There may be a short-term bullish setup working for the United States Oil Fund ETF (USO). On the daily chart, the ETF established support around 28-30 in late December and January. USO broke this support zone in February, but rallied back in March. I think this support zone could extend and the ETF is currently trading in the zone again. Also notice that RSI(2) dipped below 10 to become oversold three days ago. USO firmed over the last two days and could be ripe for another bounce. On the 30-minute chart, broken triangle resistance turns into support around 28-29 and USO firmed in this area over the last 2-3 days. Also notice that the four day decline retraced 62% of the prior advance. This is a good spot for a reversal and move higher. I am also showing the chart for Oil Service HOLDRS (OIH) as it firms near its 62% retracement mark.

***Treasuries*** When will the trading range trade end? Buying at support and selling at resistance has been the only way to trade the 20+ Year T-Bond ETF (TLT). There will be a range break one day, but the risk of a pullback is above average while TLT trades near range resistance. There is no signal here, just a top picking opportunity for a pullback towards range support. While TLT trades flat, the UltraShort T-Bond ETF (TBT) sports a downward drift. This is probably due to leverage, extra fees and rebalancing. Despite drifting lower, TBT is trading near the bottom of its channel and RSI(2) is oversold. This could give way to a bounce towards the 47-48 area. Keep in mind the underlying themes working in the bond market. The bulls are inspired by the Bernanke buy program. The bears are driven by the US government debt needs and Chinese reluctance to buy more Treasuries.

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.