DJIM #22 2010
Tuesday, June 1, 2010 at 07:00AM Just because we get to flip the calendar page from May to June come Tuesday, it doesn’t mean much in and to the trading world. It`s not a new dawn!. One thing we’ve always alluded to is bad news is usually saved post - holidays, notably Thanksgiving and Xmas, but it’s just as possible this holiday as well to keep in mind. Despite all the turmoil early last week with possible capitulation occurring, it seems things have gotten a bit to quiet end of week. (especially on the European front). Hopefully, the quietness is a sign of some kind of stability and sanity beginning, but it’s not going to be a 360 turnaround immediately in June. We must understand money is unwilling to step in so quickly, so we maintain the same premise from last week as in putting in toes in the market, but not diving in to be soaked from head to toe with holdings. Let’s give the market another week and than be the judge. What we saw last week 5/26 lows and/or from flash crash, if capitulation, it needs time to work through. This is just a historical fact, that markets don’t go V shape after such corrections.
Another reason for the week wait is something we noted to start last week and it deals with the possible ‘slowing growth’ factor. Last week, we said the market would have an oppy’ to use the lull week in eco’data as an advantage and it clearly did not. This week is the important data.. a few ISM’s (may data starting Tuesday), China PMI`s, auto sales, retail updates, NFP#!. Weakness will likely mean a step back in all respects for the market.