Gap Fill Stalls Markets For Now... (NYSE:SPY), (NYSE:DIA), (NASDAQ:QQQQ)

The markets are showing an amazing amount of resiliency today. At noon they are just slightly lower after a sharp gap down was triggered by strength in the dollar after China announced they would be upping reserve requirements for banks. This essentially means China is trying to dampen growth to avoid a bubble. The fear that initially struck the U.S and global markets was due to a slowing China ultimately means a slowing global recover. This causes a rush to safety in the U.S Dollar and puts pressure on commodities like oil.

While this was the initial reaction, the dollar has faded nicely from the highs and the markets have roared higher going all the way to gap fill. Note the chart below. The volatility of the markets continue to keep Wall Street and the world on its toes.

The Diamonds Trust, Series 1(NYSE: DIA) hit a low this morning of $99.99 and has soared back, just recently hitting a high of $101.34. Much the same, the SPDR S&P 500 ETF (NYSE: SPY) which went to gap fill resistance around $108.00 from a low this morning of $106.51. Technology seems to be strongest today with the PowerShares QQQ Trust, Series 1 (NASDAQ: QQQQ) hitting yesterday's highs of $43.80 for a classic double top resistance point. That double top seems to coincide with the gap fill on the SPY.

So far the gap fill on the SPY and the double top on the QQQQ are holding up nicely. As we trade this market into the afternoon, watch the dollar closely. Any move in the dollar will have the opposite impact on the markets.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com