It’s a pretty sad market state when the Q-end/month end/into a holiday weekend factor is about all ‘longs only’ have going for themselves heading into the week of June 27th. On Friday, once again the market came up against, “Now the Hard part” premised during the week of not being able to hold gains as “austerity’ news’ was shrugged off as should have been done the previous day. Any rally is a sell into strength and dip buying is elusive with only 200ma bringing out a few souls nibbling.
Now with a close below 1280 the Bulls have lost the agenda once more with an inevitable short term visit of Fukishma lows and likely new lows in the cards. It may not happen this Q end week( if Greece does not provide any more shocks), but eventually it’s a summer necessity as lower prices may only change the dynamics of the present underlying market where buyers are non-existent.
All in, a few positives from last week. May Q end earnings had been quite robust early in the week (FDX,BBBY), but a few blow ups from US tech Thursday night and some European blow ups have turned the tide some making for a murky picture ahead. This is not giving any clarity overall into what we’ll see from June end earnings which only start mid–July. PMI flash numbers from China and Europe point to weak numbers for Global July 1 official announcements, but markets held up showing market expectations are likely baked in and it’s looking forward to the July numbers in August already. The performance of Asian markets was the biggest positive, notably China as a soft landing was likely orchestrated. Crude capping intervention was something we alluded to in DJIM#24 as a positive if it came and still see it that way now that it’s here for the markets as it will give some relief to the consumer. Just call it another stimulus. Now give us a tax repatriation holiday for some real ‘stocks’ stimulus!. Another positive was R2K outperformance and this shows up in a few DJIM’s flirting with fresh highs, FTNT QLIK MSTR , including some of our consumer linked names noted last week. Unfortunately, all of this is in the backseat, if not the trunk, as long as Greece (2 votes this week) and potential fallout is in the mix.