Good morning traders. I am sitting here going through the charts and various research reports we get and starting to come up with more questions than answers. Some key points to consider:

DXC has exhibited a 5-wave impulsive move higher off the last weeks low's and the subsequent pull-back was only in 3, thus the current push higher is likely another impulsive push higher towards 76.74. This is certainly not expected by the market and honestly we too had become suspicious of the rally but as of now it would be foolish to discount it - caution is required though.

- The sell-off in the S&P's on the heels of the Japanese earthquake rattled the markets but based on our count it was only a 3-wave push lower and thus not the start of an impulsive move lower. The push back above 1294 confirms this outlook. The problem though is the move higher is tough to count as impulsive and that does not fit in well with calling last weeks low Wave (4). Again, patience and objectivity must prevail.

- VIX: investors have generally shown a great deal of complacency towards some pretty scary geo-political events this year. This is reflected in the low level of the VIX, a popular ‘fear gauge’ of the implied volatility of the S&P 500 index options. With the VIX closing at 18 last week, it marked a 40% decline from its closing level of 29.4 seen on March 16. Based solely on this, all of the world's problems appear to have been alleviated.

- EUR/USD remains somewhat resilient - however, if this is the case then why are Portugal, Ireland and Greece paying roughly 8%, 10% and 12% respectively for 10-year money? Accident waiting to happen?

One of my favorite market observers is Bill Fleckenstein , a trader/hedge fund manager who is been pretty much spot on for the last decade in his market calls. The optimism in the face of such large issues makes sense from his perspective:

"Markets and investors have learned in Pavlovian fashion that trouble means a bailout is coming, and now they don't even bother to panic and sell on bad news, but go straight into party mode, as demonstrated by a recent Bloomberg headline: "Portugal Bonds Fall, European Stocks Gain, On Bailout."

If markets can celebrate serious solvency issues because they are a harbinger of more free money, why should citizens be willing to stand by in any democratic country and let their leaders impose discipline and, ultimately, tough times on them when they can just be rescued by a policy that seemingly has no downside. Thus, not only is austerity a short sale, but the printing press has been raised to an even higher level of worship than it was before."

So, in sum, this posting is not about making any forecasts. However, taking a few moments to reflect on what markets are doing is always a useful exercise. Ultimately the charts will lead us to our next trade and certainly the charts have really started to loosen up and provide good insights to future price action.

For more from Dave, visit Aspen Trading for more updates.