U.S. stock indices soared to the upside and finished sharply higher driven by greater demand for higher yielding assets. Tuesday’s decision by the FOMC to keep interest rates low for an extended period was the catalyst behind Wednesday’s rally. Because of the low interest rates the world is using the Dollar and the Yen as funding currencies. Without competition from other investments, look for the trend to continue. Overbought conditions may be the only reason this market breaks over the near-term, but traders should pay attention to the Euro. Fear that the fiscal problems in Greece may flare up could encourage traders to take a little risk off the table.

News that interest rates are going to remain low for quite some time helped to boost June Treasury Bonds. This market continues to remain strong despite the abundance of new supply hitting the market each month. The only negative factor that I foresee is the possibility China may cut back on its purchases of our debt due to conflicts over the value of the Yuan. The charts indicate more upside if this market can break through the pair of tops at 118’02 with conviction. The ensuing acceleration to the upside could trigger a further rally to 118’17.

The weaker Dollar helped to push April Gold prices higher early in the session. Profit-taking weakened gold near the mid-session however, but it still managed to close slightly better. Gold was up on increased demand for higher risk assets, but fell once the Euro began to weaken. . This market may encounter resistance at a 50% price at $1138.00, but upside momentum could trigger an acceleration to the upside once the main top is crossed at $1145.80.

June Crude Oil moved higher and closed in a position to breakout over the most recent top at 83.80. This could trigger a further rally to the January top at 85.95. The catalyst behind Wednesday’s rally was greater demand for higher risk assets. Gains were limited this morning by an inventory report which showed supply increased by 1M barrels. Bullish speculators looking for a better return, however, took control of this market driving it higher into the close.