Lovely Close...
Wednesday, June 16, 2010 at 07:41AM Above 200 ma, enough said to the Bears! As we pointed out yesterday following late day slide, there was nothing to fret about as the Bears had you to believe. Notably today, we moved through a bunch of technical’s between 1106-1114, not just 1108(200ma). Today's action reminds us of those rosy days in March, potentially with a lot of positive action to look forward to. Also, we are imagining people are asking themselves why they weren’t buying when the market on the most recent dip to 1040’s, especially after the ECB calmed the markets and China export figures.
For the most part, today's action is more on the ETF side than the individual plays. Most of the plays on our list are tracking Index performance with a few percent gains. This is a sign of sidelined money not yet chasing stocks. Thus, we feel the individual stocks will play a wait and see mode to see if the index can go stay over 200 ma. It's possible that we can force a short covering leg right through 1125 and all the way to 1150 soon. Of course, it's possible any bad news can derail the recent bullishness, but you can’t sit around and not trade asking what if we get bad news. Again, we also have to point out that market was able to shrug off BBY's missed EPS report with tech(semi>5%) leading the charge. Also importantly, all integral sectors to the market were in the leaders pact.
In the coming days, we have some Eco data and a report from FDX. Even though they aren't the game breaking reports that markets are waiting for, it will still be interesting to see how market reacts to them. More EPS reports this month can potentially set the stage for a lazy drive to the 1150 area. Maybe it's just us, but the action from the World Cup celebration seems to shift the market participants' emotional behaviour away from the market. To us, this is awesome. Maybe, three more weeks of footy action and we'd eventually forget about the recent correction, for good!