Japan..tide goes out
Wednesday, June 1, 2011 at 06:59AM A slew of eco data knocked the US market off it’s lofty gap open all the way back to SP1334, but a late 45minute flourish made for an impressive comeback. This spree had a lot of Bears complaining (manipulation cited again) as to how possibly a market can run off such disappointing data. In some ways, they are right as it was mostly ES driven and probably a function of window dressing as well to close off the worst month since August’10. But, if there is an underlying reason besides the Greek overnight bailout news, it’s the fact Japan showed remarkable momentum in its recovery when they issued ‘IP’ manufacturing guidance. This could be a better eco data point indicator to growth for the summer and second half of the year. This could dispel all the recent ‘growth’ fears and might be why all “Global’ markets rallied together seeing this as a leading indicator.
In all, it comes to a technical picture to tell the truth as US markets are now hovering near the May channel top and over 20ma. If this Japan story gets some steam and/or some US eco data surprises later this week, the markets may penetrate this ‘R ‘for good. Still, unless investors see hope and buy individual stocks, we’ll stay in a lateral trading formation. All in, a more positive bias should emerge after today.