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Gold rallied above the February highs, but then reversed and is now testing the short-term uptrend. A failure to rally soon will be a short- term negative. There is key support for the April contract at 1044. A drop below this level will suggest a decline to the recent lows below 1050, if not the 127.2% extension target and the 50% support in the 1000-1020 area. Daily OBV did confirm the December highs, but is still in its trading range. A breakout should lead prices. Breakout level at 1146.

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Cisco overcame major weekly resistance at $25.25 ahead of a big announcement scheduled for mid-day Tuesday. Volume was very heavy on the breakout with next resistance at $27.50 and then in the $29.50 area. The NASDAQ regained leadership just a few days after the lows, and unlike the other averages, has made new highs. The A/D line is rising sharply and is above its previous peak, but still below the October 2009 highs. New highs for the A/D line would be quite positive.

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The number of NYSE stocks making new highs peaked at 496 on January 11, which confirmed the price highs. This was one of the key reasons that I viewed the decline into the mid-February lows to be a correction within the intermediate-term trend and not the start of a major new downtrend. On Friday, the new highs jumped to 449 and therefore could confirm new highs in the NYSE Composite. This would be positive for the next few months. The A/D line is still leading prices.

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That is the message from the strong action of the retailers as the Dow Jones Retailers broke out above resistance a week ago. Many were skeptical over the economic recovery based on their pessimistic view of the consumer, but many of the high- and low-end retail stocks look quite strong. Family Dollar (FDO) surged Thursday on heavy volume with next major resistance at $40-$44. FDO was picked up in this recent S&P scan and has good support at $32-$34.

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The global markets have been diverging now for some time, but only recently has it become more pronounced. The iShares MSCI Germany ETF (EWG) peaked in October, then failed to make new highs in January and remains well below these highs as it has not rallied alongside the US market. EWG has key support at $19.20. Meanwhile, the iShares MSCI Canada ETF (EWC) is one of the strongest as it is approaching the January 2010 highs and is well above its rising 50- and 200-day MAs. If the current rally tops, ETFs like Germany should decline more sharply.