Looking for SP500 to Fall

SUMMARY:
- Wednesday to Friday bounce didn't change a thing.
- Expiration comes and goes rather quietly.
- Some interpret economic data as a recovery in process, but borrowing is still negligible.
- Looking for the SP500 to fall but for money to continue flowing toward healthcare.

Market bounces in relief but that still leaves SP500 vulnerable for a further fall.

Friday the market bounced, but it was a bounce that did not change anything. Indeed, Wednesday through Friday the market bounced and it did not change anything either. The prior Thursday SP500 tried to break through its January peak. It did, but then it failed and rolled over. Since then, the market sold off back to next support level and mid-week it tried to bounce. That bounce did not change the market character or our outlook on what will happen next.

There was not a whole lot of news Friday. RIMM announced its earnings on Thursday night and they were a bit disappointing, but as usual they impacted RIMM the most - the rest of the market was relatively immune. AAPL, its main competitor, actually enjoyed a good day as it released its next generation of faster iPhones.

Iran said no to the vote. It put its foot down and said the vote is going to stand as it is, and we will see what happens in the streets. Early on that news helped bump oil higher, but by the end of the day, even with Nigerian rebels attacking once more, oil closed down below $70 after hitting over $72 during the week. Oil closed at $69.64, down $1.73. It was expiration Friday and there was some volatility on the session, and certainly volume was up just as you would expect on a good, solid, quadruple expiration day. All in all, an ordinary expiration session.

The 10 year bond closed at 3.78% versus the 3.82% Thursday. During the week, the 10 year fell as low as 3.5%. There is been a lot of volatility in the yield. It was up to 4% the prior week, falling 0.5% this week before recovering somewhat to close things out. It still remains at an elevated level, but that sharp surge higher has mitigated for now. The dollar closed a little bit weaker Friday at 1.3948 Euros versus 1.3893 Euros Thursday. During the week it hit a low of 1.3791 Euros, and that was after hitting over 1.4 the prior week. Big moves and plenty of volatility in the dollar -there has been talk last week and this week about the G8 removing some of the stimulus, and that impacts the currencies as they have traded on the fear of debasing the world currencies. The key point for the week is that the dollar index remained over 80. It tested that level after breaking its downtrend and looked as if it might try to break back down. It closed out the week holding that support, trying to make a higher low and continue its move to the upside starting next week.

Gold was flat at $935. It got within 20 dollars of $1000 just a couple of weeks back, but it has come upon hard times. There has been a retrenchment of the inflation and liquidity trade after those strong surges higher. The market is somewhat in transition - in fact all of the markets are in transition, trying to figure out just where they want to shake out, and then either continue with the uptrend or start a new trend.


TECHNICAL

INTRADAY

The market was somewhat volatile as you would expect on expiration. A nice, higher open as the bounce off of the near support tested on Wednesday continued. The indices double-topped intraday and then they gave back all their gains on the Dow and on SP500. In the afternoon, they managed to recover again showing that expiration Friday volatility, moving positive. Only the Dow managed to close lower on the session, however, though it was just fractionally lower, down 15.87 points or 0.19%. No big loss, just a late fade took it out of positive territory. This was in character with the entire Wednesday through Friday move. The action didn't change anything as the indices trade in a narrow range around support.


INTERNALS.

Breadth came in at 1.4:1 on NASDAQ and 1.7:1 on the NYSE. Volume shot higher - definitely expiration trade. Wednesday saw it bump higher as well, but it was really not a blowout session. Thursday was light, and Friday saw 2.7B shares on NASDAQ and 2.1B on NYSE. Congratulations. That is the first time the NYSE volume has traded above average since June began. Until Friday, very thin trade, typical for a summer, was the rule on NYSE.


CHARTS.

The NASDAQ continued to exhibit the solid action shown after breaking out over the November high and challenging, to some extent, the October gapdown point. It touched down on its test Wednesday, tapping at the November peak and then rebounded through Thursday and Friday - very much a market leader, very much a continuing uptrend picture. It is showing solid action: the breakout, the test, and rebound; very solid thus far. With the other indices still weak, however, we have to see how NASDAQ will handle this short, small bounce off of resistance - its first test of the breakout. There was no great surge higher, just a bounce, and now it is looking around wondering "What next?" The important thing is that even though there was not a strong bounce, no one is selling NASDAQ. NASDAQ has not broken back through any support as have the other indices, which is a very key point. NASDAQ is showing excellent strength, and it is going to be one of the X factors in the market moves in the immediate future.

SP500: To recap, SP500 could not hold the lateral consolidation that it formed in June after breaking the December peaks. It failed its attempt to move through the January high at 944, but it reversed and has come back down on that reversal; indeed, now it has broken through the December peaks, the next support level. It managed to bounce up to end the week, but that bounce took it right back to the December peaks. The bounce was off some significant support at 900 - not the most important, but significant. It made it back up to the prior support, and when you break support it often becomes resistance. After Friday the chart has the look of stalling out at that resistance point. This is a textbook setup for more selling that could take it down back to 900, then on toward the bottom of this consolidation range at 875. That is what we have been anticipating once it rolled over two Thursdays back. It does not mean it will not make that break higher, but just that it failed its initial attempt to do so, and now it is back down in its former consolidation range. Typically that means it heads down for a test of that bottom again before it sets up, makes a higher low, and then makes another run at resistance.

SOX is out there on its own, closer to the SP500 than to the NASDAQ in its action. Usually NASDAQ and SOX go more hand and hand, but SOX made two attempts to break out and it failed both times. It is back down in its former range, trying to bounce off the 50 day EMA. It looked pretty good on Wednesday with that bounce, but Thursday and Friday it sputtered and stalled very similar to the action on SP500. There are some semiconductors that look very good and are continuing their uptrends. They look solid and may even present new buy points. The problem is a lot of the chip equipment stocks - those that make the equipment that makes chips - are not doing that well and are holding the index down. It is very much a bifurcated sector right now. As we noted last week, there are some people who are actually starting to like semiconductors. We have liked semiconductors ever since the bottom in the market, and even before that as they were leading higher before the rest of the market figured it out. Now that other people like them, they are having some trouble. Is that not the way it usually is? When the word gets out and they finally get the official sanction, they are getting close to the point where they will struggle, and that is what we are seeing from the semiconductors right now.


LEADERSHIP.

It was a tough week for the stocks that had been leading the market. There were not a lot of breakdowns from key stocks, which was good to see, but there were some in the commodities, energy, and industrial leadership groups. Those are the inflation trades, and as the dollar strengthened, the G8 talked of reducing stimulus, and the economic data was better than expected, the inflation trades sold back. The theory is that central banks around the world will not have to produce so much currency in order to fund their woeful economies. If there is economic improvement there are more jobs and more goods and services bought and sold, and that creates tax revenue and lessens the need to run the printing presses and continue massive spending in the name of stimulus. We are a long way from that kind of recovery, but that is what the market has been digesting over the past week - this idea that maybe there is an economic recovery, maybe there will not be as much money printed and that the Fed might have to hike rates. That is not going to be the case in all likelihood, given the policies - both monetary and fiscal - that we have in place right now, and the fact that we are talking about huge national healthcare program. It is going to be very hard to avoid printing money, especially when you have the kind of policies that echo the Great Depression era and the 1970's - policies that tend to prolong the malaise that occurs after these recessions.

The dollar was not strong, but it did not help all of the dollar trades. The dollar actually weakened as the week progressed, but the dollar trades still struggled. That was a telling factor and why we closed out some of those plays on Friday; indeed it is why we have closed these positions all week. Financials were interesting in that they actually bounced higher into the weekend. They have not gone anywhere over the past six to seven weeks, inclusive of the bounce into the weekend. Not all of them bounced, but some key names were moving up after selling off earlier in the week. This was likely just an expiration move as positions are rolled out on expiration. That is likely why financials sold down through Wednesday and then the bounce toward the end of the week. We are not putting too much into it, but this is another group that is an X factor ahead: will they participate, will they sell off, or will they do just what they have been doing - move sideways?

Steel was an aberration for the commodities. It held up nicely during the week, testing the surge higher, holding near support, and starting to bounce. Several tested back to the first Fibonacci level (38%) and held and are trying to bounce from there. It is not all doom and gloom for the commodities, but it is very selective as to which ones prosper.

The China stocks held up well. The consensus - and I hate following consensus because once something becomes a consensus, it is usually old news - is that China is doing well with its stimulus and is recovering. On top of that, you add the new interest in the US and around the rest of the world in medical and healthcare stocks - there is money flowing their way now. There are also interesting plays in the Chinese medical stocks, and we bought into some of those this week.

Technology continues to look solid, as you would expect given the action on NASDAQ. AAPL had a great day coming back after a nice, easy test. It could easily run to those prior highs. It may need a deeper test after that, but you cannot argue with the strength it has been showing. It is hard to get on the other side of that trade right now until it shows something else.

Again, healthcare in the US is looking better. ESRX and ISRG did well, and others are setting up. The problem they have had thus far is they are trying to set up but they take one stop forward and a couple of steps back. We are starting to see breakouts now as money gets moved in those areas. We will continue to look that way for some upside plays even as the market continues to struggle a bit. There is leadership out there, but it is not nearly as broad as it was. The commodities and energy have pulled back and scrapped their good patterns and uptrends for now, but maybe they can regroup, rebase, and break higher once more down the road. There is technology that looks decent, some healthcare looks good, and you've got other miscellaneous sectors that are doing quite well such as the Chinese areas. Overall, leadership has taken a hit and it needs to regroup at this juncture.


THE ECONOMY

Economic data shows improvement, but borrowing and credit continue to decline.

There was some data this week that some are suggesting shows that there is either an economic recovery in process or just around the corner. The Philly Fed was up, showing improvement after the Chicago Index and New York Regional Index started to show backsliding. There is a little conflict between the regional manufacturing indices - I have to say Chicago is more important. Philly was down for a long time, but there is some weight to the fact that Philly is making a reversal.

The continuing jobless claims on Thursday fell for the first time since January. That was viewed as a positive, although likely it is people just going off of the rolls (the chronically unemployed) that is bringing that number down. Nonetheless, you have to look at what the market is interpreting it as, and what people - the big money movers - are interpreting these signs to mean.

The Leading Economic Indicators improved as well and were better than expected. Many are taking this to mean that the economy is turning the corner, and it is hard to argue with improvement. The question, however, is what kind of improvement have we had? We were going into what everyone thought would be the Great Depression II, and now we are 'just' in recession. What we have seen are numbers factoring in a recession versus a depression. That is reason for some improvement, and that prompted some spending after the panic in October shut everything down - now at least they are trying to conduct business and spend some money. Hence, you are getting improvement in the numbers - not great numbers, but improvement.

Credit Issues Remain a Serious Problem.

As we have noted before, the economy cannot recover unless the credit picture gets better. We have to see borrowing and lending ongoing again. There were some serious signs this week and some hard data suggesting that is just not the case. The banks are quick to tell Capitol Hill that they are lending as much money as they can. They want to pay back the TARP and get out from under the thumb of the government, so they are saying that they are lending a bunch of money. After all, the TARP was designed to help repurchase assets, but then when that was scrapped, the money was given to banks in order to loan to businesses so they could conduct their business given the credit freeze-up. That is one of the reasons that the federal government wanted to keep some banks with TARP funds: so there would be ample liquidity to go out and lend. Now, however, they are starting to pay it back - there were some paybacks Thursday and Friday. The problem is that the numbers are showing that borrowing and credit is still an issue.

The numbers that came out showed that from Q4 2008 to Q1 2009, there was net negative borrowing; in other words, borrowing is still declining. Month-to-month and year-over-year it is declining as no new money is coming into the system- or at least not to the extent to where it is reversing the declines in lending. Either the banks are not loaning, or consumers and businesses are not borrowing. It is likely a combination of both. Recall there has been $121B in tax rebates through payroll deductions. Savings are $131B. There is net negative spending with respect to the money that people are getting back from the government, and thus it makes sense there is no borrowing. What also makes sense is that when times are bad and consumers and companies fear for jobs and their business they do not spend, opting to cut back and save. That is why I always say that tax rebates or tax cuts alone are insufficient. You have to give people and businesses a reason to spend the money when there is no reason to spend the money. That is one thing we have learned - or should have learned - in the past, but when we spent this $800B in stimulus we did not include nearly enough of the "use it or lose it" kind of stimulus.

What does this mean for an economic recovery? There are those that say the data shows that this is a recovery in process. We will recover... at some point. The problem is the government has policies in place, both fiscal and monetary, that history shows only promote slow growth or slow recovery while at the same time igniting inflation. The policies that the Fed has adopted not only promote inflation but they debase our currency, ramping up the inflation impact. It is that double whammy I keep talking about with respect to what happens when you debase your currency and most world commodities are priced in your currency.

How long will it take to improve? Look back to the 1973-1974 recession after the Arab Oil Embargo and the resulting economic shutdown. It took ten years to get out of that economic crisis. There was a regulatory crisis, a spending crisis, and an oil crisis; there were a lot of crises thrown into one mix and it took us ten years to crawl out of the hole.

This time things are similar yet different. We have had an oil crisis- no one can say that we have not with oil going up to $140 a barrel last summer and on the rampage once again with gasoline prices surging. We have had a credit crisis, a lending crisis, and a housing crisis. We have had a lot of crises once again, but these are ten times worse than the ones we had in 1973 and 1974. This credit crisis dwarfs everything since the Great Depression. If it took us ten years to get out of the 1973 and 1974 slowdown and malaise that followed, who knows how long it will take us to get out of this. I hope I am wrong, but the economic policies that we are using (which are the same ones we used in the 1970's and the Great Depression), historically (and according to the most recent research) prolong the agony. That does not sound too promising at all, but that is the reality that we have to deal with. Economic recovery? No. Economic improvement? Yes. We will never (or not nearly as quickly) get to what our potential is as long as we keep these types of spending and monetary debasing policies in place.


Healthcare Video to come

Healthcare was big in the news today. Actually it was big all week because there is a real push to get the healthcare plan passed before the end of the summer. All of a sudden we had no time and we had to do it quickly. We have heard this story before: they say we have to get the stimulus passed quickly and no one even reads it. Something so important definitely needs to be laid completely on the table so we know what we are getting into, and we do not get into one of these $1T-over-ten-years plan that turns into a $10T plan over ten years (similar to Medicare).

One of the interesting exchanges today was when Senator McCain and Senator Dodd were talking about the cost. Essentially what Senator Dodd said was that we will pass it and then find out what the cost is after that. Of course, these are the same people railing against the free-and-easy mortgage lending. If you say people can go out and buy huge mansions and then worry about whether or not they can afford them and where the money would come from later, well - that is the kind of logic that, I am sorry, the head of the committee is using with respect to healthcare. It is illogical and we are all going to pay seriously for it. I will do a special video that I will post sometime this weekend or next week where I will talk about this healthcare issue in more detail. It is important because it impacts all of the economy and thus impacts the market.



THE MARKET

MARKET SENTIMENT

VIX: 27.99; -2.04
VXN: 28.3; -1.73
VXO: 26.54; -1.99

Put/Call Ratio (CBOE): 0.86; -0.08

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 doesn't have the cash to drive it higher.

Bulls: 44.8%. Fading from 47.7%. The pullback has culled the herd a bit after the rally spiked the reading from 42.5%. Broke free from the 40.9% where it hung around for three weeks. Steady rise from 36.0% just 6 weeks back. Has passed 43.2% hit mid-April before anticipation of stress tests. Over the 35% threshold, below which is considered bullish, but this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.

Bears: 26.4%. Bears growled a bit more, up from 23.3%. Still well off the 37.2% and the 37.1% in mid-April as the rally continued higher. As with bulls, below the 35% threshold considered bullish and starting to approach bearish levels (for the overall market). Now far from off the high on this run at 47.2%. 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: +19.75 points (+1.09%) to close at 1827.47
Volume: 2.732B (+33.98%)

Up Volume: 1.733B (+897.039M)
Down Volume: 1.171B (-71.142M)

A/D and Hi/Lo: Advancers led 1.44 to 1
Previous Session: Advancers led 1.14 to 1

New Highs: 33 (+6)
New Lows: 6 (0)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

As noted, NASDAQ is the other X factor for the market, and for now it is acting in a very healthy manner. It is not showing the double-top-time action of SP500 and more poignantly SOX. It is acting quite healthy. The question is, what happens when SP500 tests further? Will NASDAQ be able to hold its support at the November peak? That makes it a very important week for NASDAQ. If SP500 continues to fall NASDAQ is going to test its November peak again. It did not have much of a bounce, so it would be putting in a lower high, and lower highs are never really technically positive. We will have to watch how NASDAQ responds once more at the November high. As an aside, some ask why November is such a key level. The reason is it was the initial high hit after the October selloff. Thus, it represented an over head supply point that NASDAQ had to show it could break back through to show that all of the supply had worked itself out and people still wanted to own Technology Stocks.

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: +2.86 points (+0.31%) to close at 921.23
NYSE Volume: 2.128B (+95.5%)

Up Volume: 1.353B (+668.243M)
Down Volume: 758.61M (+363.861M)

A/D and Hi/Lo: Advancers led 1.67 to 1
Previous Session: Advancers led 1.37 to 1

New Highs: 23 (+8)
New Lows: 43 (+3)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP500 bounced modestly back up to the December highs it broke early in the week. That former support now may become resistance. One failure, however, is not fatal; the fact that it was not able to break through the January peak and sold off is not a large concern in the bigger picture. No serious breakdown, just back in its consolidation range that it formed before it made the breakout attempt. It is not a collapse - what we will probably have is continuing trading in the range, and the odds are it will sell to 875 before it is all over. So, we look for a failure at the December highs, then a fade back to 900, followed by a move back down toward 875.

The financials are one of the X factors that could change the entire story. They are not breaking down but they are not helping either - they are just holding the line as they have been doing. If they get in the game either way, that will change the entire complexion of what SP500 is doing. They are not lending, they are mainly focused on getting out from under the TARP. What will happen when they do and lending does not pick up? That will be the issue. Can they still make money given the environment that they are in? I would say yes given the interest rate situation where the longer term is jumping up but the Fed is holding down the short end - or trying to at least.

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: -15.87 points (-0.19%) to close at 8539.73
Volume: 528M shares Friday versus 220M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


NEXT WEEK

The headliner for the week is the FOMC rate decision Wednesday. The Fed is not likely to do anything because the economic recovery is just not there yet and we know the Fed always responds late to any economic recovery or slowdown. The statement will be the focus. Are they talking about inflation? Are they talking about the need to back off on stimulus and thus raise rates in the future? I doubt they will be that explicit in any respect. Change with the Fed comes very slowly - it telegraphs its moves long before it puts anything in writing. At this point we have not heard the usual "We will have to start thinking about taking back some of the stimulus." That has been coming through outside sources such as the G8 but not the Fed, and when the Fed starts talking about that, that is when the ball is being set in motion. Of course the market will sniff this out earlier and move accordingly. For now it is still weighing all of the factors, including the G8's comments. While the market is waffling right now, it has not rolled over or broken down. The interesting thing is the market might actually LIKE the idea of the Fed hiking interest rates because it is worried about inflation and wants to get the long and short end more aligned with each other.

In addition, there is the durable goods orders, existing and new home sales, personal income and spending - those are all important factors that gauge economic health. Earnings season is also coming. We saw RIMM's results this past week and we are seeing more and more come out with the ever-expanding season. Warnings season will start soon as well. The period is coming where companies have to come out and start saying whether they will miss, hit, or that they will make it but things do not look good in the future. They want to get it all out there so there are no surprises - Regulation FD; you know the story.

Our view of what will happen this week is, unless the financials join in on the upside, we are looking at SP500 coming back to test 900 and then working its way down to 875. That 875 will be an important test at the bottom of the prior consolidation range. The market is in a transition phase thanks to SP500 and the NYSE indices. SP500 failed the first test at the January peak and now it is coming back and has to consolidate and set up again. It is also going to have to pick up the financials along the way, again that is the X factor that determines SP500's movement or at least the magnitude. The dollar will continue its bounce - no pressure from oil and the related stocks that are tied to the dollar. The rest of the market will pause and likely come back. Again, NASDAQ is going to be the other X factor - what is it going to do at the November high? Up to this point, it has looked fantastic with respect to its technical action. Will it be able to fend off a lower high and still bounce or consolidate along that November peak?

Given NASDAQ's strength and growing strength in healthcare, we are still looking at some upside positions. There is leadership to the upside in those areas discussed earlier such as China and healthcare. They keep showing up and you cannot ignore them. Liquidity is still out there and is still going into areas that it thinks will return big gains long term, such as technology. Attention will be paid to the exchanges also - whether it is ICE or the CME. They are looking very good still and are setting up new buys. China still looks good and healthcare as well is improving.

With our anticipation of SP500 going down to test some more, we are looking at making some more plays to the downside based on that SP500 decline. It might be some more SPY positions, it might be related positions, maybe the OEX - those that we can take advantage of. There are also individual stocks that have set up in bearish patterns that, even after this pullback, can still break lower (particularly if SP500 is going to head lower as well). We are still looking for both upside and downside. What we need to do is, since the market is in somewhat of a transition and test phase, is take smaller positions on the upside. We need to limit our target somewhat and take smaller positions so if things turn against us, it will not hurt that much. For the downside, if it breaks as we think it will, we will get more exposure to the downside, play that move, and see how it handles support. We button them up when it gets there, and if it breaks through we can let part of our position ride.

It is never easy when the market transitions, but what we have overall is a continuing uptrend at this point and we cannot forget about that. There are a lot of people who are negative on the market and with good reason, given the potential for economic recovery. Is this going to be a great recovery? Probably not. Expect the market to come back and test, then if it holds that uptrend it should continue on up. We will play that, of course, because that is what the market gives us. Have a great weekend. We will be camping out - it will be hot - quite a Father's Day, but we have a Boy Scout event for the kids. See you next week.


Support and Resistance

NASDAQ: Closed at 1827.47
Resistance:
1880 is the June peak
1897 is the October post gap intraday high.
1947 is the October gap down point
1984 from late September
2099 is the mid-September low
2169 is the March 2008 double bottom low

Support:
1786 is the November intraday high
1780 is the November 2008 closing peak
1773 is the May peak
1770 is the mid-October interim peak
The 50 day EMA at 1734
1673 is the prior April peak
1666 is the intraday January 2009 peak
1664 is the May 2008 low
1661 is the April 2009 prior peak
The 200 day SMA at 1659
The January closing peak at 1653 (intraday)
1623 is the early April peak
1620 from the early 2001 low
1603 is the December peak
1598 is the February 2009 peak, the last peak NASDAQ made
1587 is the March 2009 high is getting put to bed again
1569 is the late January 2009 peak
1542 is the early October 2008 low
1536 is the late November 2008 peak
1521 is the late 2002 peak following the bounce off the bear market low
1505 is the late October 2008 closing low.
1493 is the October 2008 low & late December 2008 consolidation low



S&P 500: Closed at 921.23
Resistance:
919 is the early December peak is bending
The 10 day EMA at 925
930 is the May peak
935 is the January closing high
944 is the January 2009 high
1000
1050

Support:
The 200 day SMA at 902
899 is the early October closing low
The 50 day EMA at 897
896 is the late November 2008 peak
888.70 is the April intraday high.
882 is the early May low
878 is the late January 2009 peak
The prior April peak at 876
866 is the second October 2008 low
857 is the December consolidation low; cracking but not broken
853 is the July 2002 low
848 is the October 2008 closing low
846 is the April peak
842 is the early April peak
839 is the early October 2008 low
833 is the March 2009 peak
818 is the early November 2008 low
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
800 is the March 2003 post bottom low


Dow: Closed at 8539.73
Resistance:
8588 is the May high
The 10 day EMA at 8602
8626 from December 2002
8829 is the late November 2008 peak
8934 is the December closing high
8985 is the closing low in the mid-2003 consolidation
9088 is the January 2009 peak
9387 is the mid-October peak
9625 is the October closing high

Support:
8521 is an interim high in March 2003 after the March 2003 low
8451 is the early October closing low
8419 is the late December closing low in that consolidation
The 50 day EMA at 8383
8375 is the late January 2009 interim peak
8315 is the February 2009 peak
8307 is the April 2009 intraday high
8221 is the May 2008 low
8197 was the second October 2008 low
8191 is the prior April peak
8175 is the October 2008 closing low. Key level to watch.
8141 is the early December low
The early April intraday peak at 8113
The early April peak at 8076
7965 is the mid-November 2008 interim intraday low.
7932 is the March 2009 peak
7909 is the early January low
7882 is the early October 2008 intraday low. Key level to watch.
7867 is the early February low
7702 is the July 2002 low
7694 is the February intraday low
7552 is the November closing low. KEY Level.


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

Jun 23 - Tuesday
Existing Home Sales, May (10:00): 4.83M expected, 4.68M prior

Jun 24 - Wednesday
Durable Orders, May (08:30): -0.9% expected, 1.9% prior
Durable Orders, Ex-T, May (08:30): -0.5% expected, 0.8% prior
New Home Sales, May (10:00): 360K expected, 352K prior
Crude Inventories, 06/19 (10:30): -3.87M prior
FOMC Rate Decision, (2:15)

Jun 25 - Thursday
Initial Claims, 06/20 (08:30): 608K expected,
Q1 GDP - Final, Q1 (08:30): -5.7% expected, -5.7% prior

Jun 26 - Friday
Personal Income, May (08:30): 0.2% expected, 0.5% prior
Personal Spending, May (08:30): 0.4% expected, -0.1% prior
PCE Core, May (08:30): 0.2% expected, 0.3% prior
Michigan Sentiment-Rev, June (09:55): 69.0 expected, 69.0 prior

By: Jon Johnson, Editor
Copyright 2009 | All Rights Reserved

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

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