Oil Spikes Import Prices

SUMMARY:
- Lackluster close for a market that was mixed on the week.
- Market has to digest news re the G8, bond auctions, and some plain old retrenching.
- Dollar bounces to end the week, trying to keep its attempted trend reversal intact.
- Tired NASDAQ trying to lead but receiving no support.
- Rising oil spikes import prices
- Oil spikes import prices.
- EU industrial production falls at a record pace. Remove the stimulus?
- Nothing fundamental has changed in the inflation and liquidity trades, just some tired leaders after pulling the train.

Market manages to come back from selling after giving up gains on Thursday.

Friday was a lackluster close for a market that was mixed on the week. Friday was the mirror image of Thursday where the market rallied higher early but was unable to hold the moves and reversed with SP500 giving up a breakout over 944. Friday, the market was weak early but then managed to rally back late and cut the losses, actually turning positive on the Dow and SP500. The entire week was choppy - a series of advances and a series of declines (or declines and then recoveries) as the market digested some actually new news that it had not considered up to this point during the inflation and liquidity rally higher.

There were several factors impacting the market's trade this past week. The G8 talked of removing the stimulus and investors suddenly realized that the Federal Reserve may have to raise interest rates much sooner than anticipated - that bears directly on the inflation trade. After surging higher, all of the inflation sectors (such as commodities, precious metals and energy) retrenched, digesting that news. They have been riding high on the trillions of dollars printed by the central banks' printing presses, but if they are going to pull back some of that stimulus, there will not be as much inflation impetus, at least that is the initial hope - investors had to adjust to this change in the landscape.

The specifics on the inflation trade: Oil sold some on Friday but still closed the week at $72.19. It was down, but just a modest $0.49. It closed near the high for the week even with pulling back due to a stronger dollar on the Friday session. Gold was down as well, closing at $939.66, off $22.40. Gold rallied up near $1K over the past three weeks, but it came back this week doing some retrenching on its own.

A better 30 year bond auction was another reason that some of the inflation trades retrenched. Wednesday, a weak 10 year auction jumped interest rates much higher. The 2 year Note finally got in on the action and it broke sharply higher. The 10 year Note, which has been leading the move higher, hit 4% on Wednesday though it backed down to end the week. It had to pull back; nothing can run that high that sharply and maintain the moves. It came back as the dollar gained a little strength on Friday, closing at 3.79%. The 2 year surged all week, hitting the zenith at 1.43% on Wednesday after that poor 10 year bond auction. Friday it closed at 1.27%, but this is still a huge move for the 2 year that was basically holding just over 1% - and indeed right below 1% - before this latest move started.

The third factor was just some plain old retrenching and backfilling after some great moves in commodities. We saw the steel stocks continue to move up through Thursday but take a little bit of a hit on Friday. It was a small hit because there were no major trend breaks or downturns by those stocks; indeed, many of the energy and commodity stocks, while they have pulled back a little bit from their recent runs, have just pulled back inside of continuing uptrends. This is not a break of the trend because really nothing has changed on the landscape. Investors were digesting the news that there could potentially be some stimulus withdrawal from the G8 countries. They are a long way from reaching that point, however, and so the moves back were basically taking some gain off the table after a good rally higher. Another way of saying that: profit taking.

All of this allowed the dollar to bounce in relief. It hit 1.389 Euros on the session Friday. That was a nice drop compared to trading well over 1.4 Wednesday after the 10 year bond auction. Another reason that the dollar rallied was that Japan came out on Friday and said that it had 100% confidence in the US Treasury - that is the only vote of confidence the Treasury has received over the past several months. China, Brazil, Russia, even our ally South Korea, are all bad mouthing the dollar. They want some world currency that they can have more control over. Of course we do not want that as it is not in our best interest - as every administration has said over the past 20 years, a strong dollar is in our best national interest. Some had more force behind them than others, though the last two executives appear to have the same problem with just lip service to a strong dollar. We are not standing up for it and we are paying the price.

There are also some very weak output numbers from the European Union (EU) helping strengthen the dollar. When major economies show weakness, investors around the world run to the dollar. Even with those gains, the dollar could not hold. It is struggling; it is not a relief bounce. It hit to 1.389 - much stronger, but it closed Friday at 1.4007. The dollar is choppy and volatile just as the commodities are at this point.


TECHNICAL

INTRADAY. The action was not bad for half of the market and it was not great for the other half of the market. Friday showed a soft start, a recovery to flat, and then a run higher in the last hour and a half. It almost squandered that move as well. On Thursday the buyers did not come in and finish the job. They did not hold the breakout and when stocks fell back late, they did not have the buyer support and surge back up as seen over the last several weeks. Friday the buyers almost abandoned the late rally as well. The gains in the last hour and a half were lost, and it took a late rally right into the close to retake those gains and mitigate the losses on NASDAQ and close the Dow and SP500 positive. There was nothing strong about this move, but that was in character with what the market showed late in the week. A good break, a continued move higher by NASDAQ, but it ran out of gas because it was getting no support. It was no surprise to see the market limp on into the weekend given the 'no decision' with respect to SP500's consolidation.

INTERNALS. Very flat breadth on the session. Volume dried up to the extent that it was a veritable dustbowl, particularly on NYSE. Trade did not even touch 1B shares, closing at 858M. That is as low as you would find on Christmas Eve. Terrible volume, even beyond typical low volume for the summertime. What this tells us is the action was totally untrustworthy on Friday. When volume is this low you cannot trust the moves because there are too few players. Perhaps we will see more when the new week starts, but recall that the past Monday volume was very low again. Down here in Texas this week, summer really hit. Last week was beautiful, but this week a high pressure system moved in and it is oppressively hot. We are already in the dog days of summer here in Texas, and it sure looks as if the market hit the dog days of summer and it is only mid-June.


CHARTS. NASDAQ continued its rally on the week though Friday it came back some. It was 25 points lower intraday from where it closed, so there was a substantial move back up from the selling in big-name techs and semiconductors. On Thursday it was the flipside, giving up a chunk of its move - 2/3 of its upside move - by the close. On Friday it was able to recover most of its losses and almost close flat-to-positive even though it had the look of a tired hound dog. Since breaking higher, NASDAQ has rallied over the November peak to take a look at challenging the October gap-down point. It came within 30 points but then it has stalled without really giving it a go. Again, NASDAQ is acting tired as it simply is not getting any help from the other indices. Doesn't' mean it is in serious trouble or in bad shape in any way. It is looking for a pullback after a breakout, and it looks like a rather typical pullback.

SP500 was flat, and the other NYSE indices are all showing the same pattern - a two-week, flat-as-a-board move, very tight ranges and low volume. Thursday it looked like it would make the breakout but it couldn't keep it up. It gave it up, and did soon a little higher volume. It turned what was really a good, positive consolidation (with all the leadership and NASDAQ leading the way) into a consolidation that is back to the 50/50 range as to which way it is going to break. When you see these tight consolidations, the break is typically sharp. What the trade and action to end the week showed was that SP500 is a coin toss at this point. I know no one likes hearing that, but that is what it is giving us. We are seeing erosion in the strength of NASDAQ given its run, and the financials refuse to participate in any move.


LEADERSHIP. With the dollar rising, we saw the same old leaders - commodities, energy, techs, chips and industrials - lag toward the end of the week. There were no breakdowns, and indeed many are fading and already setting up for another potential move higher. Several of them, even Friday, looked to be in position to make the break higher, but we always say it is just a pretty picture until they make the move. We have had liquidity under the market and the inflation trade to drive things higher. There has been a small monkey wrench thrown into the works this past week with the G8 talking about removing some stimulus. We had some retrenching, but we still saw good enough patterns to take positions in BJS in the oil services sector into the close. It is at a very good risk-reward position: if the trade works, we make a lot of money, and if it does not work and breaks down below its pattern, we get out with a minimal loss. Great risk-reward, and worth taking the position going into Monday when we could see the dollar start to weaken further as it did weaken intraday on Friday.

The chips stocks remain somewhat of a worry. They held their latest breakout - and I do mean latest. They broke higher, they gave it up, they broke higher again, and now they are waffling. They managed to hold the breakout over the late October peak with the late comeback, but they were struggling. A lot of the semiconductor stocks had to fight their way back, and some did not make it. We had to take NSM off the table because it did not recover from its early breakdown. Chips were playing a little game with us. They goose us, look great, but then crawl back into the bottle and stew for a bit.

Health stocks were stronger again. They have been playing a cat-and-mouse game with us as well. They look better, their patterns are developing better, but every time they start to look good when the dollar and the inflation trades weaken, then the dollar weakens once more, the inflation trades come back to life and the healthcare stocks fade away and fritter back into their bases. We will keep watching them because there is something building there (which we see in the biotechs as well), but they just have not made serious moves yet.

Financials are still a big zero, and as a result the leadership is very mushy. They are still holding the gains but there is some top-heavy action going on late in the week - more accurately, there are patterns that could easily turn. This is not the case in a lot of the leadership, but in some of them. For instance, OPLK held up very well when the NASDAQ was waffling somewhat after its initial breakout move in June. OPLK kept moving up and volume was solid, but it has not been able to follow through. It is angling ever so slightly upside with small moves and waning momentum. It is flagging a bit, and I am not referring to the flag pattern. It is "getting tired" flagging - when you see that pattern and the momentum runs dry, you can see breakdowns. Pull up the stops and be ready on that one. If it does not improve, we likely take it off the table.

At this juncture that is the kind of diligence we have to have on positions that have not built in a cushion of gain yet. We have to be careful - if they start to show signs that they are not going to be able to continue the move they started, then we need to consider taking them off the table and then seeing how things shake out. We have built some great gains on these moves, so we want to protect that. We have also taken some beautiful gain off the table, including this past week. We can let some of those positions ride back because we have a nice cushion. If we let them ride back, correct, test, and then move forward, that is where we get the big gains - the 3:1, 4:1, 5:1 moves on our option plays and the 2- to- 3:1 moves on our stock plays. If the market starts to sell on heavy volume, however, that changes the picture and we need to lock them down.

For the leadership and for the market overall, it is time to be patient and time to be a bit careful and pick our shots. That is why we sold positions on the week as they were moving up. We saw some stocks this week fail to make any headway (what we called "on the bubble" stocks), so we took them off the table. We were not going to take the chance that they would run out of steam and gap down on us. We were basically involved in a little tidying up in case SP500 breaks down from this consolidation instead of breaking out.


SUMMARY.

At the end of the week, we were left with NASDAQ continuing its two-week breakout, but struggling late. To start June, NASDAQ broke sharply higher and has rallied up toward the October gap-down points. It cleared the November high on that move, which was a very important point that had held it in check until the start of June. It finished positive for the week, but it was backsliding. It simply looks tired at this point. It is the one that made the breakout and rallied, but it is getting absolutely no support from any of the NYSE indices. SP500 has been flat lining for the past two weeks and SOX, though it did break out and support NASDAQ, is once again having a hard time maintaining the breakout. So it is understandable that NASDAQ is a bit tired and is coming back some. A test back down of the breakout would not be atypical at this point.

SP500 continued to its two-week, pancake-flat move, and it can break either way from this. When you have a flat move up against some resistance, it is a good consolidation if there is leadership build to support the move. The problem we have now with SP500 is that NASDAQ is looking a bit tired, as is the SOX, and there is no help from the financials. If NASDAQ and the semiconductors come back to retrench then we could very well get a shakeout or a pullback in SP500 as well. In other words, SP500 could fall back from the 944 level and move down more toward the 925 or even the 875 level if NASDAQ decides to take a significant rest after a significant breakout.


THE ECONOMY

Import prices spike gratis oil.

Import prices rose 1.3% and it was all thanks to oil. Oil prices have been spiking which is no secret, and it is no secret that we import tremendous amounts of oil every day. Oil makes up the bulk of the products that we import, and thus has the largest impact on pricing. This was the largest monthly jump in import prices since July of 2008. Since then, oil has made its biggest jump because we all know oil ran up to $140 last summer. Now the same thing is happening and voila, another spike in prices.

If you take out oil, it was a 2% rise in prices. There you go - cannot be much clearer than that as to the impact of oil on our wallets. Once more we are importing inflation; as the dollar declines, oil goes up. So we have a double whammy here in that we have to pay more for the oil, and the inflation is eating away at other aspects of our life as well. Even at a time when our wages are down due to the recession you also have inflation eating into wages, even inflation adjusted. So it is really a triple whammy when you add on the recession. We are struggling and it is very hard for the American citizen to get off the mat when gasoline prices are now running over $2.66 a gallon, well on their way to $3.00. They may not hit the $4.00 of last summer, but the speculation is already working on driving them higher, and it would not take much of a shock to send them up.


EU industrial woes make one wonder about removing any stimulus anytime soon.

The EU posted some very disappointing numbers. The industrial production for the entire region fell 21.6% and of course that was a record. The EU's bank bailouts have now topped $6.8T. That is greater than Germany's GDP. Germany is the largest EU economy; similar to the United States, the EU is mortgaging everything it owns. I said similar to the United States, but we are actually following the EU. I suppose those who want us to be more like Europe can take heart since we are having the same debt problems that Europe has always has. Those debt problems always help kill every advance their economy tries to make.


THE MARKET

MARKET SENTIMENT

VIX: 28.11; -0.35
VXN: 29.73; -0.04
VXO: 27.16; -0.01

Put/Call Ratio (CBOE): 0.77; -0.09

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: 47.7%. Bulls are running on Wall Street, spiking 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: 23.3%. Bears are scarcer, falling from, 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: -3.57 points (-0.19%) to close at 1858.8
Volume: 2.005B (-16.58%)

Up Volume: 880.674M (-602.186M)
Down Volume: 1.164B (+320.092M)

A/D and Hi/Lo: Decliners led 1.15 to 1
Previous Session: Advancers led 1.8 to 1

New Highs: 34 (-17)
New Lows: 5 (-2)

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

NASDAQ is acting as if it is tired, but it has good reason. It is the only index that has made a strong breakout and made it stick. It has run well, its components have led the entire move, and it deserves a rest. If it was a human being you would think it would be a little miffed that none of the other indices are pulling their weight. The problem is that NASDAQ is tired, but it is a symptom of the rest of the market; NASDAQ cannot lead the market by itself. It can temporarily put in an uptrend or a downtrend with a strong move- as it has done with this move higher - but ultimately the rest of the indices have to come along or it fails. This repeats time and again in the market, about once a decade: A few generals lead the pack, but if the rest do not show up or they decide not to follow, after awhile the generals cannot continue to forge ahead and take new ground by themselves. At this point we have to be careful and watch NASDAQ closely. It may not make it up to the October gap-down point at 1897, and if it does not, it could come back down and easily test the November peak that it broke out over to start June at 1785 intraday and 1780 on the close. That is an 80-point decline. Nothing out of the ordinary there - it is still well above any Fibonacci near term retracement level, so this would be typical and normal. We would not have a problem with this but for the fact that we are not getting any help in the technology area from SP500, or now the small caps.

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

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


SP500/NYSE

Stats: +1.32 points (+0.14%) to close at 946.21
NYSE Volume: 858.232M (-29.84%)

Up Volume: 388.663M (-387.554M)
Down Volume: 458.72M (+52.899M)

A/D and Hi/Lo: Decliners led 1.25 to 1
Previous Session: Advancers led 1.8 to 1

New Highs: 51 (+10)
New Lows: 88 (+32)

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

You would think SP500 was well rested after two weeks of flat, lateral trade and would have all the vim and vigor it needed to make the breakout. It is still holding near 944 and above the 918 support level for this range. It keeps coming down and tapping it on the low and bouncing right back. It is maintaining this range but is weakening somewhat given the Thursday action. The longer it stretches out and we see other areas start to come back and retrench, then it may have a problem making the break and may have to come back and test further itself. If it does fade and breaks below the 918 level, then 880 to 875 would be the next area that you would really look for it to hold. 900 maybe, but those lower levels are where the real support lies. If NASDAQ comes back and finishes its test before SP500 breaks down and is ready to move back up, maybe NASDAQ can drag it back up once more. We will have to see. The action in the SP500 and refusal of the financial stocks to join the fray leaves the market vulnerable coming into next week. It is going to break one way or the other; SP500 cannot maintain this pattern forever. It just is not tipping its hand right now, and the longer it takes and the more trouble the other indices have, the more likely is it to give us a deeper shakeout before it rallies back up and tries to move higher once more.

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


DJ30

Moved higher on the session after tapping and holding the 10 day EMA on the low. Extremely low volume and still in the flat, 2-week range. As with SP500 it could break either way and will likely follow the large cap index. The Dow is a touch read given the new components so we are not paying too much attention to it right now.

Stats: +28.34 points (+0.32%) to close at 8799.26
Volume: 164M shares Friday versus 250M shares Thursday.

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


THIS WEEK

There is a pile of economic data coming. We have the regional PMI reports from New York City and Philadelphia, we have housing starts, we have industrial production and capacity utilization, and we have the CPI. A lot of these showed trouble last time around. Housing starts looked pretty good because of low mortgage rates and distressed sales. Prices are going to remain low, but now we have interest rates that jumped 1% in one week. That is going to impact sales as rates have been heading up over the past few weeks. That is going to impact the number of mortgage applications.

There is going to be a lot of economic data, and we are not sure we will get anything pleasing. Indeed, the data may revert some thinking with respect to thinking the G8 will not have to move any stimulus near term because these economic numbers stink. What will be driving the action is how the dollar fairs - whether or not it continues its relief bounce or if it is done, cooked, and ready to go back down again.

At close Friday, if you look at a chart of the DXY0 you will see that broke its April to early June downtrend with a nice push higher last week. It tested this entire week, a very choppy week, but it always held above the downtrend. On Friday it broke higher again. So we could very well see the dollar continue its relief bounce next week which would pressure the commodity and inflation trades again. They would be doing some more backfilling and we would be watching to see if they can hold their pullbacks and if they can hold near support or continue the little six-week bases they had been working on.

Remember, these stocks had a long, six-month base, they broke higher in May and into early June, and then they were testing back. They have been testing back over the last five to six weeks, forming these shallow, nice patterns whether they are ascending bases, pennants, double bottoms with handles, cup with handles - they run the gamut, but they are all nice consolidations. We want to see them ride those out as the dollar rebounds. If they hold, that is a very good sign of strength and that they will make the next break higher.

We may see more retrenching and backfilling as a result of the dollar, as a result of bonds firming up a bit more, but we will watch the important points: what leadership does with respect to its bases. Of course we will also watch what NASDAQ does with its pullback and whether it heads into a full-fledged pullback of the November breakout or it flattens out itself, similar to SP500. If SP500 cannot move, that suggests NASDAQ is going to come back and make potentially a full test of the breakout over the November high.

For our positions, this past week we took a lot of them off the table that were equivocating. In other words, they were unable to move up as NASDAQ and the rest of the market moved up. When they cannot show any kind of continued momentum after trying to break higher, we thought it best to take them off the table, with some gain in a lot of cases, and then others we just decided to nip it in the bud in case SP500 was unable to maintain its consolidation after the Thursday reversal. Indeed, on the Thursday move when we saw it start to come back, we were taking these positions off the table along with some gain as well.

We are still holding onto a lot of nice positions, but we have taken a lot of gain off of those and we have comfortable cushion there where we can let them come back and test a logical support level and then bounce again. As far as the others that are newer positions that have not had time to build that gap, we need to watch them, and if they cannot hold near support we will close them. If SP500 breaks down, usually these moves out of this flat time of consolidation are pretty brisk. If that is the case, the best option is to go ahead and play it a bit safe and get out of the positions. If they gap lower on you that is a problem, but we do not think we will see a gap right away to start the week.

What you have to do on positions with a lot of gain built in and that you have already taken some, is decide whether or not you want to ride them back. Do you want to just take the money off the table, especially in our short term option positions, and then ride them back down and see if you can get back in? If you banked a lot of gain and you are taking a free ride on them, if nothing changes for the worse in the market, then you want to let them come back and make the bounce back up. It depends on how nimble you are and if you feel like you can get in and out quickly enough to make the trade when it presents itself again.

As for new positions, we will watch for some downside opportunities given the market's action, or in SP500's case, the lack of action. We put some on the report the past week toward the end of the week and we picked up some downside positions. We are not looking for a really big rollover but that does not mean that will not happen or cannot happen, and that we cannot make good money if it is just a 'normal' pullback. We are looking to see if NASDAQ comes back and tests the November high and whether SP500 fades as well. Remember, it can still go down to 900, it can still go down to 875 or 870 and be very typical. Indeed, that would be a very small pullback considering the strong run off of the March low. So that will not be anything huge in the overall picture of the market, but if you are in short term option positions, that could be a big deal for you. That is why we take the interim gains on the way up, and then we are letting you know right now that it is not as positive as it was heading into Thursday. You need to adjust your mindset a little and know what you want to do in the event SP500 breaks lower. If you want to play it safe and take them off the table, there is nothing wrong with that, but you have to be ready to get back in if it hold and shows it is ready to bounce back up.

We are going to be looking at some downside, but still looking at some upside because, as of the close Friday, there are still a lot of great stocks in position to move higher. If the dollar continues to strengthen, commodity trades may take more time. If they hold their near support, and if they hold their patterns right before the shakeout, that is fine. They can break down intraday, but if they snap back and continue to hold, that is what you want to see. What that means is the sellers are taking it down, but the buyers are jumping right back in and pushing it up. The sellers lack the strength to hold it down. If the liquidity remains in the market, in other words if investors get used to the idea that the G8 may be taking off some stimulus - once they digest that and the liquidity is still there, they will be looking for opportunity. If we see that happening, we are happy and can stay in those positions and look for upside positions after they make that shakeout, close higher and then go into the next session closing higher again. That is when we can move in.

To sum up, nothing has really changed in terms of inflation trade or the liquidity trade. There was a little news this week with the G8 which caused some hiccups along the way, and it caused the dollar to get a little stronger. Some of our allies said they believe in the United States, and that caused the dollar to strengthen. It does not take much when you have been beaten up and kicked to make a little bit of a comeback and feel better. Relatively, however, things are still pretty weak. Since there is no real change in the market's character, we are going to continue to look for these inflation trades and liquidity trades, and that includes technology after this test. What would change this is if there was a serious character-changing move, such as seeing the sellers piling in on strong volume. We saw sellers try to come in later in the week, especially on Thursday when they reversed a breakout. We will have to watch and see if they show up any more. The liquidity is out there, the market is a little tired, though. SP500 and the financials are not playing ball with the semiconductors and NASDAQ. If they do not, they are going to test and we need to be ready for that. Have a great weekend - stay cool, it is hot out there. Good investing to you.


Support and Resistance

NASDAQ: Closed at 1862.37
Resistance:
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:
The 10 day EMA at 1831
1780 is the November 2008 peak
1773 is the May peak
1770 is the mid-October interim peak
The 50 day EMA at 1715
The 200 day SMA at 1673
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 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 944.89
Resistance:
944 is the January 2009 high
1000
1050

Support:
935 is the January closing high
The 10 day EMA at 935
930 is the May peak
919 is the early December peak
The 200 day SMA at 913
899 is the early October closing low
896 is the late November 2008 peak
The 50 day EMA at 891
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
The 90 day SMA at 838
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 8770.92
Resistance:
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:
The 10 day EMA at 8692
8626 from December 2002
8588 is the May high
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
8375 is the late January 2009 interim peak
The 50 day EMA at 8330
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.

June 15 - Monday

NY Empire Manufactur, Jun (08:30):-5.10 expected, -4.55 prior
Net Long-Term TIC Fl, Apr (09:00): $52.9B expected, $55.8B prior

June 16 - Tuesday

Housing Starts, May (08:30): 483K expected, 458K prior
Building Permits, May (08:30): 500K expected, 498K prior
PPI, May (08:30): 0.6% expected, 0.3% prior
Core PPI, May (08:30): 0.1% expected, 0.1% prior
Capacity Utilization, May (09:15): 68.4% expected, 69.1% prior
Industrial Productio, May (09:15): -0.8% expected, -0.5% prior

June 17 - Wednesday

Core CPI, May (08:30): 0.1% expected, 0.3% prior
CPI, May (08:30): -0.9% expected, -0.7% prior
Current Account Bala, Q1 (08:30): -$85.0B expected, -$132.8B prior
Crude Oil Inventories, 06/12 (10:30): -4.38M prior

June 18 - Thursday

Initial Jobless Claims, 06/13 (08:30): 610K expected, 601K prior
Leading Indicators, May (10:00): 0.9% expected, 1.0% prior
Philadelphia Fed, Jun (10:00): -17.0 expected, -22.6 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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