Into the trading week, (May 29- )

A dreadful May luckily ends in a shortened 4 day trading week.  So far in May, the market has closed in the green maybe 4-5 times at best, but with a holiday week this number may grow 50%.  If Friday’s trading volume is any indication, liquidity will remain thin and market may use ‘window dressing’ as catalyst of sorts working off Thursday’s trade where  a ton of ‘bad news’ was shrugged off. This allowed  SP ~1310 support to hold to close off the week.   Also, (Monday) Spain’s yields spike to mid 6%, yet European markets seemingly shrugged it off for now as have ES futures.  At this point, it seems markets have priced in their depressed sentiment momentarily using a favorable new Greek Poll as a market driver instead.  (China chat of a larger stimulus package helping).   Simply put, while there are many reasons to be generally short risky assets, it may no longer appear attractive to get shorter at current levels.  Late last week, dismal Global PMI’s, U.S tech earnings, a ‘building block only’ summit and the ‘shrugging off’ mentality of these events suggests near term negativity is likely running dry.  Don’t forget the JPM/Facebook debacles are still background negatives in the daily market narrative.

 

Still, as discussed days ago, any lift to SP 1340 levels will likely be sold into ahead of Greek elections. Any policy response prior may probe this level as you never know how hard the market will squeeze, so 1340 level can easily turn to 1350’ish.

 

Part of the quiet week ahead is the lack of corporate news and Friday’s Global PMI’s will mean little as “flash” PMI’s are enough this time around. Focus will turn back to NFP#, eventually putting the June 20 FOMC meet up into the spotlight.