Thursday Market Wrap

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spx

This was the third  up day in a row and today the SPX hit the pivot that I mentioned in yesterday mornings blog post. The pivot was 1614 and guess what? It closed at 1613 today.

Short term support now is at SPX 1593-1599 and then 1576 , with resistance at the 1614 and 1628.

What is VERY interesting about today, 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.

It 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 and growth slowing again, these sectors will have difficulty keeping up. Look at their daily charts.

XLF 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.

They may goose this thing a little more, but don’t get complacent.

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