The quarter is over in a about eight hours.
Right now the $SPX is working on its fourth consecutive up day in a row. What is VERY interesting about yesterday’s action, is that the SPX tagged the 20 day simple moving almost to the penny and was turned back. The SPX has had a helluva time staying above the 20 day going all the way back to May 30, (only one close above it). By the way, the 50 day number is identical to the 20 day for the most part.
I see short term support now is at SPX 1592-1599 and then 1575 , with resistance at the 1614 and 1628.
It does looks like the dip buyers showed up, and portfolio window dressing did occur this quarter. The question is what happens in July?
Materials ($XLB), energy ($XLE), and metals and mining ($XME) look awful through this rebound, and I would stay away. With a firming dollar, these sectors will have difficulty keeping up. Look at their daily charts.
$XLF has had a nice rebound, but many of these sectors have had V shaped bounces which can be susceptible to failure. I like rounded bottom bases (U shaped), but who can blame me for that?
Be careful here guys. What I see is just a nice dead cat bounce so far. Most of the stocks and etf’s I follow have just rallied to the underside of trendline and moving average resistance areas. I’m talking all the major indexes too.
One takeaway though, is that I think the trading action should be great for the rest of the summer, and it wouldn’t surprise me to see the market find its way back to those 200 point intraday moves.
The 10 year note ($TNX) has eased from a high yield of 2.65% on Tuesday to around 2.48%. Funny how stocks started their rally around the same time.
I still love stocks, but being nimble will probably be more important than ever. Give yourself the luxury of being able to change your mind fast. It’s that type of market right now.
Have a great weekend.