On the off-chance you've forgotten, today is the tax-filing deadline.... at least in the United States. I'm going to guess most of you have already filed, but if not (and depending on when and where you read this e-mail) you may still be able to get your documents postmarked in time. Either way, April 15th tends to by a fairly dreary day for most of us, knowing a big chunk of our hard-earned money is just being given away to some people who don't always spend it wisely. On the other hand, I know at least a few of you have already had your tax-based gloom wiped away this week by the nice trading gains on stocks John Monroe recommended as trading ideas on Monday and Tuesday. Bank of America (BAC), Intel (INTC) and JP Morgan (JPM) all behaved as expected earlier this week after announcing earnings, leading to some nice swing-trading profits for Elite Opportunity subscribers who took action. SanDisk (SNDK) and Netflix (NFLX) were also examined by John and his team, and they may have reported last quarter's results by the time you read this. In any case, since John and the Elite Opportunity crew are on a roll - going three for three - he went ahead and ran American Express (AXP), Goldman Sachs (GS) and UnitedHealth Group (UNH) through the same trading wringer. All three report earnings on Thursday morning. It's too late to do anything about those picks now, as the market's closed and those earnings results will be posted before the market opens tomorrow morning. But, like I mentioned yesterday, earnings season lasts six weeks and John Monroe has made it pretty clear he's interested in taking advantage of the trading opportunities that earnings news creates. I like the way John explained it in today's EO newsletter: "The bottom line is, these markets as a whole have yet to prove they want to break to new highs yet. The continued grinding volatility from one week to the next has most stocks pretty much stuck in a range for the time being, so until the major indices provide some sort of definitive move, we're simply going to continue to be selective with respect to adding any new long-term ideas. And, since the earnings season often offers some potentially rewarding returns when in the right ideas, we'll continue to do our best to exploit some of the more high profile liquid names for profits." He's right - there's just not a lot going on now worth worrying about in a bigger-picture sense. We need to think small, capitalizing on the opportunities we have rather than the opportunities we wish we had. More on that below. Anyway, while you and I (not to mention John) know nobody's ever perfect forever, there's no denying going three for three right out of the gate is a great sign the Elite Opportunity staff has a good bead on how things are playing out on the earnings front. If you're not tapping into that wisdom, it's like leaving money on the table. Here's how to put that money in your pocket instead. Or, you can cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ The Red Flags Nobody Sees Waving Most of the time when we look at economic data it's just a passing glance, simply to let you update your feel for the true shape of things "out there". It's usually nothing we have to immediately respond to. Just for today, however, I want to slow our economic review down a bit and really take some time to underscore a big red flag I see starting to wave.... a red flag not too many other people seemed concerned about (which is worrisome in itself). It's the nation's industrial productivity and capacity utilization (of factory manufacturing potential). Though neither is cratering yet, we learned today both slumped in March. I've always said one bad month does not make a trend. Thing is, it's not just been one bad month. Industrial productivity has been sliding lower since December, and capacity utilization has been shrinking since November. Take a look. Admittedly, these are small ebbs. All major dips start out with a first small step though. The ebbs started out small in early 2008 too, and look what that led to. Now, I'm not saying we're headed for a nasty recession like the one we saw in 2008 (though I never rule anything out). I'm just saying, there's a reason factory output is slumping, and there's going to be an inevitable impact. Eventually, it will all trickle down to corporate bottom lines, even if it's only a short-term stumble. These two pieces of data are near and dear to me primarily because they show such a strong correlation to the broad market's bigger-picture performance. Heck, you can see how they walk in-step with the S&P 500, with little to no lag. I've yet to find any other economic data this well correlated to stock values. So, when capacity utilization and productivity start to taper, we've got good reason to start asking questions. That said... At the Fork in the Road .... while investors should be asking questions here and balking at some crazy valuations in the shadow of what's only been a mediocre start to earnings season, they sure didn't do so today. Instead, investors decided to shrug off the factory productivity data and buy stocks just because they can. To heck with the S&P 500's ridiculous trailing P/E of 18.7 and forward-looking P/E of 17.2. Stocks never lose ground, right? Geez. Thing is, we can't get too bogged down by the way things should be. Otherwise we might miss out on profiting from the way things are. Although the market can't justify its current valuation, until traders actually notice or care about this excessive valuation, the trend could remain bullish indefinitely. With that as the backdrop, thanks to today's solid gain the S&P 500 as well as the NASDAQ Composite are both within reach of hitting new highs. This will either be very catalytic in a bullish way, or could spur the meltdown we're actually due. I'll wait until it happens before I place any new bets. Given the peel-back from today's highs though, it seems investors collectively know the bulls have already pushed their luck a little too far. Yes, for a brief moment today the S&P 500 cleared a key falling resistance line (dashed) and looked like it was going to make a run on the ceiling at 2117, where the upper Bollinger band now happens to be. Take a good close look at today's bar though. When push came to shove near the end of the day, the bears beat the index back under that falling resistance line. Interestingly, once again the VIX was only able to test its floor at 12.7 without actually breaking under it. It certainly seems like there's a floor there, which indirectly means the S&P 500 is also at a ceiling... an idea confirmed by the S&P 500's chart itself. Here's the NASDAQ Composite. Looks about the same, for better or worse. The big line in the sand here is 5044. Folks, this is a judgment call, though not necessarily one you have to make (at least not yet). A move above the key resistance levels mentioned about could be bullish, and under most other circumstances would be decidedly bullish. In our current situation of an overvalued and overbought market though, there's a very good chance this is once again the market's way of toying with us, trying to make us believe a breakout is nigh only to pull the rug out from underneath us when we least expect it, forming a triple top. In fact, that's the direction I'm leaning, though I'm not willing to pull the trigger in either direction right now. We've got time and room. We may as well use it. That's the long way of saying check back in tomorrow and/or Friday. We're getting near the point where one side of the table or the other is going to have to commit. In the meantime, here's an updated chart of crude oil. The resistance line at $54.70 has now been obliterated, and the U.S. dollar didn't have to get absolutely crushed to make it happen (though the greenback was down a little today). Like it or not, it's a technical breakout. We'll talk more about oil's specifics soon.