Yesterday the 30 stocks in the DJIA index made another new high, the 10th in a row for the index, yet the broader market as measured by the more significant S&P 500 index still can't push to a new high. Yesterday the index closed at 1563.23, the high close is 1565.15, so close but not even the most bullish could generate enough interest to break through. This morning the stronger Feb industrial production and factory use were much better than expectations but didn't influence the markets so far. Today options expire that at times can increase volatility through the day.

We still have a bearish interest rate market based on all of our technical models, however the strength of the bearishness has waned in the last week after rates exploded last Friday on the Feb employment report. The level to watch now is 2.06% on the 10 yr note, a close above it will imply more increases. On the other side, there is very strong resistance at 1.95% for the note. Next week the FOMC meets on Tuesday and Wednesday, after the strong Feb employment data and other better than expected reports on the economy what will the Fed think when the FOMC policy statement is released Wednesday afternoon? We expect trade early next week to be rather flat ahead of the FOMC meeting.