Sunday, June 10, 2012

Stocks Reverse Prior Week's Losses

MARKET SUMMARY:

- Stocks not dead after Thursday reversal, post a steady come from behind move to reverse prior week's losses.
- Friday's fears not that fearful and investors comfortable holding stocks over the weekend.
- Gold suffers a down week but ends it looking as if it wants to bounce.
- Best weekly move of the year, lowest volume of the year.
- SOX, NASDAQ sport small island reversals as all indices complete two-thirds of a potential inverted head and shoulders.
- 'The economy is fine' and other incredible statements of the week.
- Already in recession?: part 2. Others coming around to ECRI's wage evaluation . . . finally.
- Trucking fuel usage jumps in May.
- Big weekend: Eurogroup meeting, China economic data, and Spain, after hours Friday (and 11p.m. Spanish time), balks at bank bailout conditions.
- Weekend data will help set the stage as indices try to continue the rebound, but the patterns just don't look great.

Stocks finish strong, just in time apparently.

Stocks proved that they are not dead after the Thursday reversal. Indeed, they posted a straight-ahead, come-from-behind move early to reverse last week's losses and post a very nice upside bounce on the week. Stocks finished strong, apparently just in time. Bear Grylls is the "Man vs. Wild" guy. My sons and I like him. His motto, which his grandfather taught him, is "Finish strong and finish five minutes early." It looks as if it was just in time for the market. After the close, Spain announced that it had issues with some of the requirements necessary for its bank bailout. That may be a problem come Monday. We will see how the weekend handles it because a lot of news is coming out between now and then. That includes a boatload of Chinese data as well as more news from the EU as they meet on further plans.


Bear Grylls: Finish strong, finish 5 minutes early . . .
Bear: Hard worker, risk taker, dream pursuer. The antithesis of the current administration.

Bear is quite a guy. He is a hard worker and a risk taker. He is a dream pursuer. He is kind of the antithesis of the current administration.

There were some worries on Friday, but they were not enough to stall the recovery for the week.


McDonald's missed same store sales estimates on a weak Europe and China.

The arches of MCD were a bit battered as it missed its same store estimates on a weak Europe and a weak China. Imports and exports declined, and that is not a good sign for the economy. Why? Historically, when we import a lot of goods, that means the economy is doing fine. We are an exporting economy now as our President wanted. The problem is, as MCD found out, China and Europe are not that strong. If you throw in India and Brazil, as I have said all week and in weeks past, if those go down, we do not have anyone to sell our goods to. That is the heartache of being an export economy: when your buyer does not want to buy. Australia is finding that out as a big commodities producer. It sells, a lot of them to China, but China is canceling contracts before they ship or even when they are already on the boat and headed their way. It seems all d that China is interested in buying is gold right now. It bought 100M pounds from Hong Kong in the past month. It looks like it will have to take further advantage of the drop in gold price over the past few weeks.

Imports/Exports both decline, not a good sign for our economy.



On the upside . . .

On the upside Friday, there was apparently hope for Spain. I do not know what prompted it other than there is talk of the bailout. We find out after hours that Spain has some issues with that. There are more discussions to be had this weekend to help figure out what they will do with the Spanish economy. It looks to be falling as well.

Perhaps we need to think bigger picture. Maybe Alberto Contador (Spain) after his two-year dope suspension ends in August -- the suspension that stripped him of his 2010 Tour de France title --maybe he will be back in the saddle in August and provide Spain with its true hope. Remember, in bad economic times we smoke cigarettes, we drink liquor, and we look for releases whether it is in movies or sporting events. Looks like Spain might be taking a look at Alberto.

Hope for Spain?

Alberto Contador's (Spain) 2-year doping suspension that stripped him of his third Tour de France title ends in August. Looking at Spain's issues, he may be the only hope the country has.

U.S. wholesale inventories rose. That is not bad news either because sales rose 1.1% as well. The 0.6% increase can be disturbing if it is because no one is buying. But a 1.1% increase is almost three times the rate in March. It looks like a pretty good number. We have a couple of decent economic reports on the week after a string of misses. Inventories go into the beat side of the category as well.

US Wholesale inventories rise but sales also rise.



The market performed pretty well the session. With a low-to-high move starting soft, starting negative, but reversing and rallying to the upside. It is interesting see investors still ready to buy before a weekend session and a week of upside moves, particularly after they threw back the gains from Thursday. Then it looked as if the market was ready to reverse to the downside.

SP500, +0.81%; NASDAQ, +0.97%; Dow, +0.75%; SP600 +1.09%; SOX, +1.43%.

Solid gains. Not breakneck, but very solid and a great way for the upside to cap a week of gains. These are gains that recovered most of the losses from the prior week. SP500 was higher, but it just gave them all away. Nonetheless a very credible recovery. As I will talk about in the technicals, there were issues with the move, but that has been this market all along. Of course, looking at the action you can understand that weak internals have not led to continued gains of late.


OTHER MARKETS.

Dollar. 1.2499 versus 1.2600 euro. The DXYO chart shows the dollar down, but that is against a basket of roughly 25 currencies. It is not just euro-centric. Nonetheless, the euro plays an important role, and the dollar was up against the euro on Friday. Overall, the dollar is taking a nice week-long pullback to the 20 day EMA. It looks very solid. At least solid in terms of continuing the move higher. Why would it do that? Simply because the Fed did not opt to be any more dovish with respect to stimulus. Bernanke basically parroted the same statement he has had of late: "We have a gun and we are ready to use it if necessary. But now is not the time to use it." We see a nice pullback to support by the dollar. It broke out of the December-May pattern. It did so in mid-May. It has come back to test. It is in perfect position to rally yet again.


Bonds. 1.64% versus 1.65% 10 year U.S. Treasury. Premarket the 10 year bond was at 1.57% and showing a very solid gain on the session. The week saw bonds give back the move from the prior week's worries about the jobs report propelled bonds to the upside. This week they came back to test. When Bernanke did not offer any more stimulus or reasons to buy bonds, they kind of stalled out. They tried to move and bounce off a test of support. They just could not close it out on the day. Still in position to move higher, however.


Gold. 1,591.70, +3.70. Gold is very interesting. It was down big on the day. It was again down big premarket after that huge 40+ point drop on Thursday. That drop resulted from Mr. Bernanke's lack of any new stimulus or hope of any new stimulus offers. It was down on the week thanks to Thursday, but it looks as if it wants to bounce right back up. A big reversal with a doji with tail from the midpoint of its second range where it tapped resistance. This was in the form of the week-long lateral move in the third week of May. It held and bounced to the upside. It acts as if it wants to move right back up.

Maybe it is anticipating some European intervention over the weekend. After all, what is going on in Europe? The U.S., thanks to Mr. Giethner, is encouraging Europe to adopt a TARP-like rescue package. Of course we did not really follow our TARP that was outlined in Congress. We just gave the banks the money and told them to use is as they saw fit versus buying toxic assets. Maybe that would have worked better. It is what we did back in the savings and loan crisis in the 1980's and early 1990's. Perhaps it would not have been a bad idea to do the same thing here because they worked pretty well. We recovered much more rapidly than we have now. Sorry, Mr. President, but your comments this week were totally off base, incorrect, and out-and-out misrepresentations. Of course we also had a President who had implemented recovery economic plans that actually work. Historically they show they work, and of course they worked again. We are in a different situation, but we still have a poor recovery, and gold is anticipating some stimulus to bounce is back to the upside yet again.


Oil. 84.09, -0.73. Oil fell on the session. A rough week. It was up later, but, as with gold, it appears to want to bounce off of the recent selloff. It has been a long, ugly way down. Where are those speculators when you need them? We have had a drop from $110 down to $84. That is a significant drop, and a relief bounce would be normal. The problem that oil will have is China, Europe, India, and Brazil. Weaker economies overseas and a lot of oil in the U.S. because private production -- in areas that were started years before this President took office -- are now producing nicely. We have a glut of oil. That is good for us as consumers and as a country because at least we do not have to push all of our money down the gas tank and burn it. We can use it for other things and maybe spur a bit of economic activity.

I will say, however, that gasoline prices are not falling nearly as rapidly as oil prices. Perhaps we need to have an investigation now. Oil prices are dropping. They wanted to have an investigation when they were rising, so why not have one when they are not dropping as fast as oil prices? After all, where I am located on the Gulf coast of Texas, we have a 14% drop in gasoline prices. But oil, as judged by WTI has dropped roughly 27%. Where is the investigation? Let us appoint a special prosecutor for this. It seems important enough. After all, the most serious internal intelligence leak in decades, as both sides of the aisle are calling it, apparently does not warrant a special prosecutor according to our President. When Valerie Plume was supposedly outed several years ago, no one was really put in danger and no big secrets were revealed, but we needed a special prosecutor on that. But we do not need one now. Not in the most serious breach in decades. We can just push it behind the doors and not worry about it. It is an election year after all, and we do not want to face those tough issues and questions. But I digress as usual.


TECHNICAL SUMMARY

Volume. NASDAQ -15%; NYSE -19%. This as stocks bounced to solid gains.


Breadth. NASDAQ 1.85:1; NYSE 2.3:1. Breadth was less than spectacular. Very anemic internals for this move. We can say it was just Friday. This was the best week of the year to the upside for stocks. It was the lowest volume of the year for stocks, and that is true even when taking out holiday weeks. Very low volume is accompanying the best move of the year. That is not encouraging. Even though the charts are somewhat suggestive of improvement, the internals are not very encouraging right now.


THE CHARTS

SP500. We had the selloff, the three week move, a bounce to the 20 day EMA, and then a selloff the prior week. We had a good bounce off of a solid support level. A nice reversal doji and a rally back up. Looked like things were reversing on Thursday with that tombstone doji, but stocks rebounded to positive after selling early. There was no volume, so you cannot put a lot of faith in this move. On the other hand, MACD is trying to put in a higher low even as stocks put in a lower low. That is a positive indication. Not really a higher low, just a bit lower, but it did not blow out this mid-May low and MACD. There were some positives there. Looking at the chart, you have support and a pretty serious selloff. It went down to next support and then bounced as you would anticipate. There was two-thirds of an inverted head and shoulders. Left shoulder, head, and now maybe it fades and forms a right shoulder. We will have to see what that means. SP500 held where it needed to, and it bounced and has a decent pattern.


DJ30. Very similar action from the Dow. It sold lower the prior week, held near a support level from late 2011, and it has bounced as well. Maybe a left shoulder, maybe a head, and a right shoulder to come? We will see.


NASDAQ. NASDAQ is more instructive. There was a gap lower on the big selloff two weeks back. The index sold and held above support, similar to what we saw on SP500, the next range of support. It showed a doji, bounced, and then gapped higher on Wednesday. A bit of an island reversal. Maybe we get an inverted head and shoulders as well. MACD did put in a higher low as NASDAQ put in a lower low. Historically this is not a good time of year to buy tech stocks, but they are acting as if they want to move up. There was a gap lower, a gap back up, and a little island reversal. It was not an extreme selloff, but it was a pretty good selloff. It bounced to the upside, and we may get an inverted head and shoulders at the bottom of a selloff. Those are bullish patterns. How many times have we seen those perform well for us?


SP600. SP600 showed similar action as well. The potential head holding in that range from late 2011. Kind of a left shoulder, maybe the head. We will see.


SOX. SOX is interesting. We had a pretty ugly selloff. It cut well into its mid- to late 2011 range. Indeed it is at the lower half of the bottoms from late November and December of that year. We had a gap down one day, we had a doji, it moved back up the next day and then a gap. Three days and a gap is an island reversal as well, and a potential inverted head and shoulders here.

We may have room for some upside just looking at the technical pattern. Do not get me wrong, this is not a strong pattern. We have a tremendous amount of overhead supply in these indices. SOX has a very rounded top. The SP600 has a head and shoulders. NASDAQ has a very rounded top as well. They held at logical support, the next major support to the downside. They have bounced; as we have seen, NASDAQ and SOX put in something of an island reversal look and rallied on the week. Weigh that against the internals: Very low volume. Summertime. Maybe that is the question. There has been low volume for a long time, although it did pick up over the past several months. Maybe we can just blame it on summertime. The dog days drying up the volume. When you do have dried-up volume, obviously stocks can be moved easier by just a few big players stepping in and pushing things around. Perhaps that is what we are seeing here.

Does that give you much confidence? Not really. This topping pattern is much large than this little bottoming attempt that is being put in over the past three weeks. Nonetheless, we have some upside out of it. We will see if it can push higher. We are not convinced, and thus we have downside plays in position. We still have more downside plays we are looking at, and we have upside plays that are performing. As long as they are performing, I think we will just let them do that.


LEADERSHIP

Technology. Some old names are trying to come back around. AAPL has been working on a base ever since peaking in early April. It has the makings of an inverted head and shoulders. If AAPL will be a leader to the upside, you would expect it to be ahead of the overall market. Indeed it is. It was up on Friday. It looks like it is past the midpoint of its new base. It could very well lead the market to the upside. It could. We will have to see it, but we are more than happy to let our positions run. There is interest in GOOG as well. It was up on the week although it had an ugly reversal on Thursday. It managed to come off the gap lower on Friday. In terms of support, it is holding at an old support level and is trying to make a bounce there. GOOG is also proving interesting.

It is not really the time of year for techs in general. But leaders show themselves, and right now you have to be playing leaders to the upside with great patterns and decent fundamentals. Downside, you want to play the stocks that are just in bad patterns. Even good stocks sell back and present downside opportunity. We are seeing movement in some of these just as we have all along. This is no mystery. There is not a lot of leadership, but there are very good patterns in good stocks that warrant buys if the move unfolds and gives us the buy indication.

Internet. There are some strong groups. I have noted that Internets are performing well over the last several weeks. EXPE made a good move on Friday, and we picked up some more positions there. WWWW has broken out, and it put in a test. A good entry point.

Retail. AMZN is performing well. It has a nice bounce and a very test to end the week. Even AEO is set up well to make a break higher. A lot of retail leaders have come under fire, but there are still areas in retail, specific stocks that you can move into on upside plays.

Healthcare/Drugs. The health care plans are moving upside. It looked like they might be in some trouble, but they have put in some moves and look decent. AET and HUM both had good moves on Friday. The drug stocks have also performed. There are moves to the upside.

Industrial. There are a lot of stocks that are weak as well. They are bouncing but still need more work such as the industrial equipment and CAT. There is even hope here, although they are ugly patterns. Perhaps they are due a bounce. If the market overall can build off of this week's move, maybe it will test back and form a right shoulder and put in an inverted head and shoulders at the bottom of the May selloff. That would be a bullish indication for a better bounce to come.


THE ECONOMY

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:

Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.html

A week of incredible statements from the White House.

Lowest spending administration in 60 years, 3 million 'green' jobs, more jobs created than the previous recession and recovery, and the economy is fine. Does the President really believe that? Really?


As President leaves the WH Briefing Room Friday it doesn't look as if even he believes what he just said.

"The economy is fine." You could see everyone's jaws drop when the President made that pronouncement during a long, rambling, and 40 minute late statement on the economy. He had to walk it back later in the day as aides rushed him onto television after the republicans and others ripped into him for that statement. It is "absolutely clear" that the US economy is "not doing fine" the President said later in the day as he pulled a 180 on his first statement, shifting to blame Congress for the lack of real recovery.

What is his argument? That if the Congress enacted his jobs plan many months ago we would have another million or two jobs now. Really? We spent over $800B in his first stimulus/jobs program and as we reported last week, those jobs cost anywhere from $554K to $4.1M EACH, depending upon what CBO numbers you use. And do you remember it went from created jobs to saved or created jobs? It was fiction, but of course the President wants to spend more money on more of the same because he can just make up numbers, just as he did this past week.

We have already discussed the 'lowest spending administration in 60 years' misrepresentation as well as the 3 million green jobs created. More accurately, those jobs were not created; they were just reclassified. The bike shop personnel, bus gas pumpers, bus drivers, janitors in 'green businesses, etc. were already there. They just changed the classification and voila, jobs are created. Green jobs at that.

The fine economy, however, as incredible as it was, was not the biggest misrepresentation of the day. The President, complete with straight face, stated that this recovery, the slowest since the Great Depression in every metric as we have detailed from many studies of this recovery versus past recoveries and indeed averages of the 10 past recoveries, had created more jobs than the prior recovery. They say you can make charts and numbers say anything you want them to. Apparently the President feels he can say anything he wants about any set of data.

We have gone from a President who could not construct and utter a complete sentence to an eloquent President who, particularly this last week, cannot be honest with the citizenry regarding the state of the economy.


Others coming to ECRI's recession conclusion as incomes negative.


HERE WE GO AGAIN???

A couple of weeks back I detailed ECRI's argument for recession and that the final factor was in place: income. Incomes adjusted for inflation have rolled over.

Friday The Consumer Metrics Institute and Trim-Tabs Charles Biderman issued a report that has the groups 'really worried' that the economy, adjusted for inflation, is already in a contraction. Three years into a recovery and we get 1.9% GDP? Trend GDP is over 3%. Oh yes, the economy is fine so no need to worry.

The duo notes per-capita income, i.e. money available for households to spend, is negative. A modestly rising GDP driven mostly by consumer spending (retail sales are the only leading economic group). That leaves CMI and Biderman asking 'where is the money coming from?' From one-time increases: refinancing mortgages added $50B; savings rates, after a jump early in the crisis, are diving, adding an estimated $200B annually; student loans to the tune of $100B; $50B from 'strategic defaults'. Those have kept the spending up, but as noted, they are one-hit wonders; once gone they don't come back. Incomes are negative and cannot support this level of spending. Falling oil prices help but not enough.

The conclusion: the US may ALREADY be in the first quarter of a recession. That would almost perfectly jibe with ECRI's call for a recession this summer, a call made last September. ECRI was roundly criticized and even ridiculed by some, but it stuck with its guns and we look as if we are heading that way IF not already there as CMI and Biderman fear.

Oh, and if this does happen or is happening, no way the administration can blame others. Well, no. I should say there is no credible way of blaming others. The administration is already laying the groundwork for its claims: 'if only Congress had passed our jobs plans we would be out of this buy now.' Make book on it.

One more thing: ECRI's annualized growth rate of the US leading index has turned negative again. Moreover, Germany's imports plunged 4.8%, the biggest drop in 2 years. Exports fell 1.7%. As with the US and the 'decoupling' cadre, it appears that Germany cannot withstand the decline of the rest of the EU either. Both the US and Germany saw imports and exports fall, and that does not speak well of foreign economies or domestic.



THE MARKET

SENTIMENT INDICATORS

VIX: 21.23; -0.49
VXN: 22.55; -1.26
VXO: 20.18; -0.78

Put/Call Ratio (CBOE): 0.96; -0.02


Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 34.0% versus 39.3% versus 38.3%. Plunging as expected though with this week's move they may bounce right back up. Below 35% on the move, however, and that puts it below the threshold and is a bullish indicator. Seems to be working as the market bounced. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 26.6% versus 24.5% versus 26.6%. Right back up but nowhere near a 35% high reading that would really start things upside, or at least set a better foundation. It is always the best signal of bulls and bears cross paths so to speak. Not bad given the bulls action, but not the best signal. Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +27.4 points (+0.97%) to close at 2858.42
Volume: 1.375B (-15.28%)

Up Volume: 1.08B (+674.29M)
Down Volume: 279.24M (-910.76M)

A/D and Hi/Lo: Advancers led 1.85 to 1
Previous Session: Decliners led 1.5 to 1

New Highs: 36 (-6)
New Lows: 34 (+5)


SP500/NYSE

Stats: +10.67 points (+0.81%) to close at 1325.66
NYSE Volume: 623M (-18.77%)

Up Volume: 2.55B (+800M)
Down Volume: 839.4M (-1.401B)

A/D and Hi/Lo: Advancers led 2.36 to 1
Previous Session: Decliners led 1.2 to 1

New Highs: 76 (-5)
New Lows: 36 (+11)


DJ30

Stats: +93.24 points (+0.75%) to close at 12554.2
Volume DJ30: 111M shares Friday versus 131M shares Thursday.



MONDAY

There is a tremendous amount of data to come over the weekend and in the coming week. There is a lot of scheduled data. After the trade deficit on Friday, we have import and export prices on Tuesday. Retail sales on Wednesday. PPI is out and business inventories. Thursday brings continuing jobs claims and CPI. On Friday there is empire manufacturing and Michigan sentiment. Not to mention production and utilization. Important data again kicking up, and it is not just the U.S., of course. It never is anymore.

We have the Eurogroup meeting this weekend to discuss what to do about Greece, Spain, Italy, you name it. We will see if some accord can be reached there. As noted, after hours Spain said they are not comfortable with the requirements for the bank bailout. That news would have very much impacted the market if it has come out before the close, but it did not. We will see if the market can forget about it over the weekend. Futures were not pulverized after hours. They faded a bit, but they were recovering later in the session.

We also have China's economic data, and a lot of it is coming out over the weekend. That is something that people were already looking to this week as weaker numbers came out of that country. That will play a big role. We will see what comes out of the big-boy economies. Of course that will be the impact on U.S. manufacturers, producers, wholesalers and retailers. That is obviously important with respect to the stock market and future earnings.

There are still a lot of issues. There is still the fact that we could already be in a recession in the U.S. and just do not want to admit it. Of course there is all the election rhetoric. The administration will never admit that things are as bad as they are while the Republicans are probably overplaying the way things are. Although Romney has been pretty fair with it. He has not said the economy stinks. He has been accused of talking the economy down. How? How is he being accused of talking the economy down? He is just stating facts about how bad it is and how pathetic the recovery has been despite the President's lofty discussions of how they have spent less than any other administration in 60 years, et cetera. That rings rather hollow. But it is an election year, and that is the kind of nonsense and crapola you get.

We have to look at what we will do about the problems. The Fed is looking to the Congress and administration to get something done. It feels is cannot do anything more. On June 20th, we will see that the Fed will likely not do anything. It would have to change its talk, and maybe it will. Perhaps it will say something to the effect of "We do not want to do anything, it is up to Congress and the President to get something done. But if they do not do something, we will do what we can." That would be the change to indicate stimulus at the August meeting, or perhaps sooner if things deteriorate. Remember that we could already be in a recession or close to tripping into one.

In any event, the market held up well. It will try to continue the rebound. The patterns overall do not look great. We do not have a lot of leadership. We did not have a lot of volume on the move to the upside. All of those mitigate and lean against some continued move. Nonetheless, the indices are trying to set up and move higher. If we get leadership or at least upside bounces from some key stocks such as AAPL and GOOG, and maybe some manufacturing stocks continue their rebound off of their selloffs, we get another nice rally. The indices held at a key support level, and they have reversed. They showed more strength than anticipated, bouncing almost all the way back up to take out the prior week's losses. With that kind of move, we could see a pullback and a break higher.

What will we do about it? We play the good stocks as we have been doing. If we see good downside plays, do not shy away from those. As we have seen, those can be quite lucrative, and they made us some very good money over the past few weeks. We will keep looking for those as we did on Wednesday and Thursday to see if they set up and then if they give us the move. Friday's move was encouraging that the move did not sell off ahead of a weekend that holds a lot of question marks about China and the eurozone. And who knows what other geopolitical mess might arise.

It showed a bit of backbone. With that, it could very well try to bounce further. If so, we will play good quality patterns to the upside and get what we can from them. Use bounces to get rid of stocks that are not performing to the upside as well as we want. Focus on the ones that are doing well, and then just be ready when this runs out of gas. I think it will. I think there are too many troubles for the U.S. to avoid it. Then again, you take what the market gives.

Enjoy the weekend, and I will see you on Monday.


Support and resistance

NASDAQ: Closed at 2858.42

Resistance:
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak and PRIOR post-bear market high
2900 is the March 2012 low
The 50 day EMA at 2905
2910 is the recent March 2012 low
3000 is the February 2012 post-bear market high
3026 from 10/2000 low
3042 from 5/2000 low
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
2841 is the February 2011 peak
2816 is the early April 2011 peak.
The 200 day SMA at 2767
2754 is the October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2555 is the mid-August 2011 peak
2535 is the November island reversal gap point
2441 is the November 2011 low


S&P 500: Closed at 1325.66

Resistance:
1332 is the early March 2011 peak
1340 is the early April 2011 peak
The 50 day EMA at 1341
1344 is the February 2011 peak
1357 is the July 2011 peak
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
The 200 day SMA at 1288
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1099 from the mid-July interim peak
1075 is the October 2011 intraday low


Dow: Closed at 12,554.20
Resistance:
The 50 day EMA at 12,688
12,716 is the April 2012 closing low
12,754 is the July intraday peak
12,876 is the May high
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,391 is the February 2011 peak
The 200 day SMA at 12,286
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak


Economic Calendar

June 4 - Monday
Factory Orders, April (10:00): -0.6% actual versus 0.1% expected, -2.1% prior (revised from -1.9%)

June 5 - Tuesday
ISM Services, May (10:00): 53.7 actual versus 53.1 expected, 53.5 prior

June 6 - Wednesday
MBA Mortgage Index, 06/02 (7:00): 1.3% actual versus -1.3% prior
Productivity-Rev., Q1 (8:30): -0.9% actual versus -0.8% expected, -0.5% prior
Unit Labor Costs-Rev, Q1 (8:30): 1.3% actual versus 2.3% expected, 2.0% prior
Crude Inventories, 06/02 (10:30): -0.111M actual versus 2.213M prior

June 7 - Thursday
Initial Claims, 06/02 (8:30): 377K actual versus 375K expected, 389K prior (revised from 383K)
Continuing Claims, 05/26 (8:30): 3293K actual versus 3250K expected, 3259K prior (revised from 3242K)
Consumer Credit, April (15:00): $6.5B actual versus $12.7B expected, $12.4B prior (revised from $21.4B)

June 8 - Friday
Trade Balance, April (8:30): -$50.1B actual versus -$49.7B expected, -$52.6B prior (revised from -$51.8B)
Wholesale Inventories, April (10:00): 0.6% actual versus 0.5% expected, 0.3% prior


June 12 - Tuesday
Export Prices ex-ag., May (8:30): 0.2% prior
Import Prices ex-oil, May (8:30): 0.1% prior
Treasury Budget, May (14:00): -$125.0B expected, -$57.6B prior

June 13 - Wednesday
MBA Mortgage Index, 06/09 (7:00): 1.3% prior
Retail Sales, May (8:30): -0.2% expected, 0.1% prior
Retail Sales ex-auto, May (8:30): 0.0% expected, 0.1% prior
PPI, May (8:30): -0.7% expected, -0.2% prior
Core PPI, May (8:30): 0.2% expected, 0.2% prior
Business Inventories, April (10:00): 0.2% expected, 0.3% prior
Crude Inventories, 06/09 (10:30): -0.111M prior

June 14 - Thursday
Initial Claims, 06/09 (8:30): 375K expected, 377K prior
Continuing Claims, 06/02 (8:30): 3275K expected, 3293K prior
CPI, May (8:30): -0.2% expected, 0.0% prior
Core CPI, May (8:30): 0.1% expected, 0.2% prior
Current Account Balance, Q1 (8:30): -$130.9B expected, -$124.1B prior

June 15 - Friday
Empire Manufacturing, June (8:30): 13.5 expected, 17.1 prior
Net Long-Term TIC Fl, April (9:00): $36.2B prior
Industrial Production, May (9:15): 0.1% expected, 1.1% prior
Capacity Utilization, May (9:15): 79.1% expected, 79.2% prior
Michigan Sentiment, June (9:55): 77.0 expected, 79.3 prior



By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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