Cautiously Floating

Cautiously Floating

Markets opened with stocks under pressure from European markets moving noticeably lower.  Spain and Italy have elections coming up and apparently popularity has shifted to some of the candidates that are not supporters of the bailout agreements.  This is a very light week for economic reports, so stocks might just be worn out after the break above 14,000 on the Dow and 1,500 on the S&P.  mortgage bonds are receiving the benefits of stock pressure and are currently trading at resistance just under the critical 200 DMA.  Stocks may be lacking the catalyst to push higher for now due to the lack of economic reports, and the overbought condition of stocks might be enough to push mortgage bonds above the resistance.  We will maintain a cautiously floating bias.  However, as long as we remain below the 200 DMA, a locking stance is the safe play.