Markets gained ground for the second consecutive week padding solid gains from the previous week. Volume was understandably timid due to holidays. Both the Nasdaq and S&P 500 finished with almost identical weekly gains of 1.3%. Given the robust gains last week by those aforementioned indexes of 2.4 and 2.6%, that has to be construed as bullish. On a YTD basis the S&P 500 moved past the 30% gain with Fridays move up 30.5%, and the Nasdaq is knocking on the 40% door with a gain of 39.3% going into the final two days of 2013. The benchmarks solid moves must also be mentioned in the face of rising bond yields, with the 10 year now at 3%. That added competition could begin to put a cramp into the markets stamina, which has been practically inexhaustible all year. Looking at the 20 year ETF via the TBT and TLT, the latter fell below the 102 handle which acted as decent support in August, September, November and early this month. The 50 day on the TLT has been nagging resistance the last couple months too. It has the look of a bearish head and shoulders, but those patterns work best near recent highs. This ETF is down almost 20% from its 124.26 52 week high made on 5/1, putting it in bear market mode. It has been in a nasty downtrend and its path to least resistance is lower. The TBT which acts in an inverse fashion has carved out a bullish double bottom with handle pattern with a 80.27 pivot point. The handle found support at its 50 day and occurred in light trade. Is this taper trade a bit to obvious? As always just concentrate all your attention to the price and volume action of whichever instrument you intend to trade.

This article requires a Chartsmarter membership. Please click here to join.