Cautiously floating

Cautiously floating

Stocks are on the move higher again after Initial Jobless Claims fell lower than expected and PPI was reported to be in line with expectations.  The Dow is trading over 14,500 and the S&P 500 is at 1560, which is only 5 points away from its all-time high.  You can pretty much bet that it’s going to happen, but the real question is will there be a significant pullback after?  One can argue that the stimulus money has been the only diversion from the state of the economy and all the political dysfunction going on.  Even so, you never really win when you argue with the markets.  mortgage bonds were pushed lower, but remain above an area of price support.  As long as we stay above current support we will maintain a cautious floating bias.  However, any break below here, and we will shift to a locking stance.