New Sources of Worry in Europe

SUMMARY:
- No three straight as stocks sell sharply to end the week.
- New sources of worry in Europe, overly high jobs expectations too much for stocks to handle.
- Obama administration learns a lesson in expectations management.
- Jobless wait hits a record high as private sector creates a measly 41K new jobs. Laughable if not so tragic.
- Euro sinks to a new low since 2006
- Stocks thoroughly thrashed, but growth indices still remain in the recent lateral range: don't assume failure
- Reverting to the down on Friday, up on Monday pattern? The bulls can only hope.

It comes down to jobs quality, not quantity, for investors.

There was not a third consecutive upside session for the indices after the back-to-back gain (the first since late April) occurred on Thursday. Instead they turned and sold sharply to end the week. NASDAQ -83 points at 3.6%; the Dow -300 points at -3%; SP500 -38 points at -3.4%; SOX -4.4%, SP600 -4.8%, and NASDAQ 100 -3.3%. NASDAQ 100 almost came in as one of the relative strength leaders.

There were new sources of worry coming out of Europe. Even though Hungary does not trade the Euro as its primary currency, it reported that its economy was in a "very grave situation." Then the French bank Societe Generale was rumored to have some serious derivative losses. With the focus turning away from Portugal, Greece, and Spain into new areas, that was hard to overcome. In the US we had some overly high expectations for the jobs report. There were statements made by the head of the administration about how this would be a great number. Apparently they saw the 9.7% unemployment rate as good. It is, but the problem is that no one is coming into the job market; people are leaving the job market, and that is why the unemployment rate fell. There were a few jobs created thanks to the census, so there is a lower unemployment rate, but it is not a pretty picture.

The indices were thrashed. They started low and then moved even lower as the session progressed. There has a modest upside bounce mid-morning after the gap lower, but it never came close to scaring up anything near positive. Then the market rolled over and slid down to close at sessions lows. It was a very strong downtrend for the day in that it stayed below the 10 day EMA the entire time after the mid-morning bump, excepting a short, 20-minute period midday. It was a sharply negative day on the session. On SP500, it broke below the recent lows in its lateral trading range after undercutting the February low and coming off the new low in the selloff. For the other indices such as NASDAQ, it was not as bad. NASDAQ did break below the recent lows, but it is still more or less in that lateral consolidation after bouncing up off the May low. There is some hope there. There is something of substance still in the bounce, though it got a severe setback on Friday. It may just have been due to bad news and the jobs report being overly hyped. It could also be reverting to the more typical trend in recent months: Down on Friday on fears of what might happen over the weekend, and then bouncing back up on Monday if no major disaster hits.


OTHER MARKETS.

Dollar. The fear trade was back on, but with a bit of a twist. The dollar surged. The Euro got body slammed down with the first close below 1.20 since 2006 (1.1967 versus 1.2159 Thursday). That was one of the lows of the entire move. You can see from the DXY0 that the dollar was stronger against all other stocks. I talked about the pennant setting up that was a consolidation for a new break higher. Friday we got the new break higher, and it was a hum dinger. That is a big breakout of a nice consolidation. The dollar recovery I talked about for so long being an oversold bounce really continues to pour on the coals to the upside. Looking at the weekly chart, it balked three weeks back when it approached the late 2008 and early 2009 twin peaks. Now it is pouring on the gas and is rallying up through the late 2008 peak and is now taking aim at the 2009 closing high (not the intraday yet, but it will be there soon enough). Very strong break to the upside by the dollar. It goes to show the fear trade is alive and people are running to safety. After all, why not the US? Our debt-to-GDP ratio is a mere 90%; that is better than Greece and other European countries, so we must be a hell of a bargain. That is the good thing about having a nice track record over the last 50 or 60 years: People still instinctively turn to our currency and debt instruments in times of trouble. The question is when they will stop doing that. At what point will our debt-to-GDP ratio become so high that it overcomes our history as being the main flight-to-safety currency and debt market?

http://investmenthouse.com/ihmedia/dxy0.jpeg


Bonds. After pulling back over the past week indeed, gapping sharply lower on Thursday there was a sharp gap higher on Friday. Very strong move to the upside. You can see something of an ABCD pattern, and there is the gap to the upside. As noted, it was strong. Looking at the weekly chart on the 20 year, you can see something of a double bottom. There is the selloff, the double bottom, the rally, and now a pennant has formed right at the hump in the double bottom. That is where you would expect it to encounter resistance. If the handle forms and keeps in an orderly, narrow formation moving laterally, then the odds of a breakout increase tremendously. We could see another breakout in US bonds, believe it or not. They are already defying logic with this move, and if Europe continues to deteriorate, bonds will continue to grow stronger until we reach the point in the US where our credit worthiness becomes suspect. If the rest of the world goes down, we will have been unable to sell the $1.25T in junk assets that the Fed bought during the crisis. We still have interest rates at 0%. Where are the bullets? What can the US do if Europe falls and we are left standing, having to fund the world, and then we start to stumble? The ammunition will be spent. It would be hand to hand combat, and I am afraid it would not be in the currency markets. By the close, the 10 year US treasury had rallied (3.20% yield versus 3.37% Thursday). Like the dollar, it made a blistering move.

http://investmenthouse.com/ihmedia/tlt.jpeg


Gold. Gold had a nice day. Even though the fear trade was on, gold still rallied. There is a fear out there, and something is driving gold beyond just inflation. It broke sharply higher, and moved back over the 2009 peak ($1,221.60, +11.60). A very solid move to the upside, and this is basically a consolidation that we have been looking at over the past few weeks. Looking at the weekly pattern, gold is simply consolidating just above the prior all-time high hit in late 2009. We have the same kind of action we are seeing in bonds, just with a different pattern. A breakout, a pennant over a few weeks, and now it is ready to make the break to the upside.

http://investmenthouse.com/ihmedia/xgld.jpeg

Oil. You would expect that oil would be clubbed from the fear trade, and it was pretty much beaten to death on Friday ($70.85, -3.76). There was a rather sharp turn in the rebound off the bottom of the trading range. Nice rally, a test, and it looked like it was making the break to the upside. Then it knocked below the recent low on the test with strong volume. Looks like there could be trouble for oil yet again. It is just one of the problems facing the commodity right now. Looking on a weekly chart, it is still at the bottom of its range. It has not broken down, and it still looks healthy on a weekly pattern. That means it could find support down at the prior lows or at the recent lows for that matter and then make a renewed move to the upside in the trading range. For now, this is a very sharp and very negative turn down near term.

http://investmenthouse.com/ihmedia/xoil.jpeg


Overall the other markets showed the fear trade once again. The twist I talked about earlier was that gold made a solid upside move despite the fear of deflation spreading throughout Europe. Remember, it was not just the PIIGS. There was an important French bank rumored to have major losses with respect to derivatives. We hear that Hungary's economy is in a very grave situation. How many more of these news stories are out there, and how much pressure will that put on the stronger countries in Europe? The bigger question one that impacted the US and its double dip possibilities later on this year is what is the contagion effect for the rest of the world? On the upside, I can say that CSCO said it was accelerating its global hiring. Perhaps trying to offset the news of the jobs report on the day, CSCO and John Chambers tried to take the bull by the horns and say they would be hiring so all is not lost. I doubt CSCO can turn the tide by itself, however.



TECHNICAL PICTURE

INTERNALS

Breadth. Breadth was massively lower. After a meager 1.6:1 advancers over decliners on Thursday on NASDAQ, the decliners led 7.5:1 on Friday. On the NYSE after a meager 1.6:1 to the upside, it was -7:1 on Friday. Sellers swamped the market and pushed most stocks lower.

Volume. Volume bounced up to 2.2B on NASDAQ. That is still right at or below average. On NYSE there was a big 34% jump to 1.6B, and that did manage to push volume back above average on that index. It was a significant move above average as it sold and broke through the lower part of the range. That is important selling. There was distribution; they were dumping stocks in the SP500.


CHARTS

SP500. After bumping the 200 day EMA twice the last being on Thursday at the high the SP500 gapped lower and then sold very hard. It did undercut the recent lateral range, and I am measuring it from the low after the initial bounce. It undercut it on Friday and did so on volume. There was some dumping of NYSE shares. It was a sharp turn lower, and I am looking at the closing low in February once again for a test. We will see if it can make something of a double bottom off that level. It tried to make a double bottom at the higher point, and now we will see if it can make one at the lower point. SP500 is one of the weaker-looking indices of the group.

NASDAQ. The NASDAQ was no beauty as it, too, was gutted. It gapped lower, was selling below its 200 day EMA, and undercutting this low on Tuesday. It is not a good move for it, but volume was still below average even though it was elevated. There were not a lot of sellers ready to take this index down. It looked as if it wanted to emerge as a leader to the upside on this bounce, taking over for SP500. The growth indices looked like they were starting to move. I am not writing off NASDAQ based on this move. The volume has been low, and it has been consolidating laterally in this range on lower, below-average volume. Ever since it sold off on higher trade, it is moved laterally on lower volume after that bounce. It bounced on higher volume, and then continued to move up. We will see how this next week plays out. It is still good enough to make the bounce higher given the low volume, it could do that. Continue this move, continue to consolidate, and then try to make the next break to the upside. From at the way it is acting and the volume associated with the move lower, NASDAQ is not dead yet.

SP600. The small caps were one of the other growth indices that looked good. It has some issues. It made a closing low on the Friday move on this pullback. It has now broken down into the January range at that peak and is coming to a critical level at the 200 day EMA. That is also coincident with the bottom of that January consolidation as well as a late-February lateral shelf consolidation. There are three points lining up. The 200 day EMA, the February flat shelf consolidation, and the bottom of the January peak. This is an important point for the SP600 as it is one of the indices that was holding up better than the rest and trying to lead higher. Nice that it was a growth index as well.

SOX. The SOX turned back as well. It made it up to the bottom of its January peak and actually cracked into that range on Thursday. Looking strong, looking like it wanted to do something, and then it gapped lower. It is still in the range as of Friday; it did not make a lower low. There is still a double bottom in place, and this could still be viewed as a handle. We will have to see how the chips play out next week. Just as we will have to see how all the other indices react to the Friday selling that took them down to or just below the recent lows in the lateral consolidation. Remember, one of the patterns that were in place most weeks was a selloff on Friday on fear, and then a rebound on Monday when the worst-imagined fears did not come to fruition over the weekend. That would bring the buyers or short coverers back on Monday, and we would have an upside Monday. With the indices still in this lateral consolidation, there is a very good chance that if nothing major happens over the weekend we get the bounce back up in the range. That could be more consolidation, and also it would be overcoming some really bad news. Let us face it, the news out there is not good. If the market continues to consolidate and finds footing at this higher level, that is a positive. It keeps getting hit with bad news. It was down on that day, but if it does not break the range, that shows there are buyers supporting the indices at support at the lower part of that range. If they see the news as not any worse than they anticipate, that is how you set up at least interim bottoms for bounces higher.



LEADERSHIP

Retail. The retailers have been the strongest in the market. Some have moved well of late that were maybe pulling back on Friday in the selling. ARO gapped sharply higher on Thursday on good results and was filling that gap on Friday. Note that the volume was quite low on that move. Great volume the prior three sessions as it bottomed and started back up, and volume was quite tame as it sold off on Friday. That is called opportunity. A lot of people do not want to step in when the market looks like chopped liver left in the sun, but when you see good setups from good stocks, you should watch and see how they hold. If they hold and the market can hold in this range, it has a very good chance of bouncing nicely. Same thing with ROST. It is a stock that posted a very solid Thursday on good results. It was testing back on Friday and filling this little gap; no big deal. Volume was lower again. There is a little double bottom and you can see almost a head and shoulders. There was a break higher, and now it is filling the gap and coming back to test. That could be opportunity for more positions on ROST. PNRA is the same thing. A good break on Wednesday, coming back, and testing toward the 10 day EMA and this March peak. It could provide opportunity for those looking for good stocks that have held up very well in a pullback mode. Contrast that with AEO. The eagle looks like it has been shot. ANF sold off. It tried to make the move Thursday through the 200 day EMA to the gap, but then it gapped lower on Friday. It is not looking too healthy.

Internet. AKAM has been a solid performer. It was down on Friday after a big gap higher on Thursday that broke it to a new high in the move. It closed at a closing high over the prior peaks. It was not really burned on Friday; it just came back and gave back part of what it gained on Thursday. GOOG is looking quite decent. It sold back on Friday, but it was only 1.3% after a strong break to the upside. If it can hold in this range, maybe come back to the 10 day and maybe take off from there, that is an interesting trade to the upside. It has some issues which makes you want to get a quick-hit move. The lows from February and early March are at roughly 525, and it is at 498 right now. You have to see the move and get in to get a decent trade using options.

Semiconductors. SNDK was back on Friday, but it was not gutted. Volume was up, but it is still holding at the 10 day EMA and holding over these twin peaks. We might get a decent entry point for even more positions out of this. NVLS got a pullback to the 10 day EMA on lower, below-average volume. It could hold in this range, move laterally, and kick back up. That would be a great entry point. Usually you do not want to chase the bus. You wait for the bus to come back to you and get on at your leisure.

Metals. There was a little inverse head and shoulders they were trying to set up, but that did not happen on a lot of these. They gapped lower on Friday and are threatening the bottom of the range. We will have to see if they get a false break where it goes below and moves back up. Notice how MACD is at a higher level. If it holds it will make a divergent bottom, and that would be very interesting for a move back up. It is being sticky in the 63 range. It is trying to hold at the lower key support, and I will give it the benefit of the doubt and watch what it does next week. AKS is one of those inverse head and shoulders. It gapped lower on Friday on volume, taking it back down to these lows. We will see what happens when it gets to the lows. Will it undercut and then rebound, showing some kind of false bottom? We will have to be patient and let it show us the move. Remember, we are down at the prior lows. The indices are still above those prior lows and we do not want to assume failure at this point. Everything is negative without a doubt, but do not assume failure. Things are so negative, the indicators are at extremes, and that is when you often see changes. Even though it looks like it may have failed, that may just be the head fake. We will have to see.

Financial. JPM has come back down to a prior support level at the bottom of its range, gapping and selling off all session. Volume was up, but when a stock comes down to a support level, is not a bad thing. Upside volume shows that someone is still stepping in to hold it up. If it does bounce at this level (or sells under it) and reverses to close early in the week and the high volume remains, that shows you that someone is there picking it up and wanting to hold it up at this support range again. GS is another key financial. It was down 1.25% on Friday, but notice it is holding its lateral move. This is what I am talking about with respect to the indices. Holding that lateral move, down at the lows it does not look pretty. Everything looks bad and nothing sounds right on any of the financial and news stations. That is when you have to watch out. When things look like they will never get better, they have a weird way of turning around.


It is hard to call it leadership since a lot of these stocks and sectors are getting their tails kicked. Nonetheless, there are stocks still holding at support. There are also stocks still moving higher this week that just got knocked back some on Friday. We will have to see how that plays out.



THE ECONOMY

Headline jobs numbers are not good once you look behind them just a bit.

Expectations raised by the administration had no hope of being met.

It was all quantity versus expectations

Trucking upswing versus a double bottom.

TO VIEW THE ECONOMY VIDEO USE THE FOLLOWING LINK:

http://investmenthouse1.com/ihmedia/Economy.wmv


THE MARKET

MARKET SENTIMENT

VIX. It looked as if it had bounced but was rolling back over as the market put together the back-to-back gains. Then the news hit out of Europe and the US, and on Friday the VIX gapped higher. It has tried to make a higher high over the Tuesday peak, but it was unable to do that and faded. It still held a 20% gain on the session and still has higher lows put in. Maybe it is not done at this point, and maybe it is still factoring in issues that are facing the rest of the world. Remember, the market had sold back enough to bounce, but they have been piling additional problems on top of those we already know about. There were new issues dealing with a French bank and Hungary. If unexpected news hits the market, it will trump technical action. That is basically what was seen on Friday. The news was unexpected; it hit the market and blasted VIX to the upside. VIX is still much lower than the prior peaks. If things calm down, the market can still hold its lateral range and VIX would start to head back down as it bounces. This does not necessarily indicate there is more selling based on what happened Friday; it depends on what happens next week. If there is more selling that spikes it higher, then we have more issues. For now, the big high was made almost two weeks back, and it is normal to take a few weeks after that initial big spike is hit for the market to rally seriously. When we look at the charts, we will see that the bounce in the lateral move is not quite dead yet.

VIX: 35.48; +6.02
VXN: 34.16; +4.78
VXO: 34.38; +5.6

Put/Call Ratio (CBOE): 0.97; -0.11

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: 39.8% versus 39.3. Holding rather flat after some substantial drops from 43.8%, 47.2%, and 56.0% before that. This move started at a low of 35.6% in February, the lowest it has been since July 2009. 35% is the threshold level suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 28.4% versus 29.2%. Surprising drop, but given the market's attempt to move higher, understandable. Still a big move up from 24.7% the week before where it held for a couple of weeks. Fell to 18.7% on the low. Hit a high of 27.8% level on the prior leg in February. Over 35% is considered bullish for the market; definitely at the lower end of the scale. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. For reference, cracking above the 35% threshold considered bullish. Hit a 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: -83.86 points (-3.64%) to close at 2219.17
Volume: 2.263B (+5.81%)

Up Volume: 93.379M (-1.583B)
Down Volume: 2.241B (+1.754B)

A/D and Hi/Lo: Decliners led 7.47 to 1
Previous Session: Advancers led 1.64 to 1

New Highs: 18 (-36)
New Lows: 98 (+71)

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

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

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


SP500/NYSE

Stats: -37.95 points (-3.44%) to close at 1064.88
NYSE Volume: 1.634B (+33.91%)

Up Volume: 12.448M (-749.225M)
Down Volume: 1.621B (+1.176B)

A/D and Hi/Lo: Decliners led 6.97 to 1
Previous Session: Advancers led 1.63 to 1

New Highs: 77 (-24)
New Lows: 81 (+40)

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

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


DJ30

Stats: -323.31 points (-3.15%) to close at 9931.97
Volume DJ30: 256M shares Friday versus 177M shares Thursday.

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


MONDAY

There are some interesting economic reports coming as well as technical action. We will have wholesale inventories on Wednesday, and on Friday there will be business inventories. I just talked about truckers and inventories, and it will be interesting to see if they continue to build or not. The data is back from April, so it is not the freshest, but it will be curious to see if they continue on the uptrend. There will also be the important initial claims and retail sales. We got a look at same store sales, and they were mixed to lackluster. We will see what kind of sales we were able to generate in May.

I talked earlier about how there was a pattern (before last week) of down Fridays and up Mondays. We went back to the down Friday in a big way, and we will see if it generates an upside Monday. It is not a total breakdown yet. It was definitely not a good day, but there is that stickiness at this point that I was talking about with respect to leadership stocks. They are down, they are coming back to test this level, but do not assume a rollover. They have been trading in this range and have shown a lot of stickiness at this level. We will see if they can continue to move higher. It is not a slam dunk or an assured fact they will break below that support level. SP500 does not look great. NASDAQ does not look that bad. It is not a raving beauty of a pattern, but there are support levels that it is still well above. It is still above this long-term support level. It stretches back over a decade, although it did not hold up through the 2008 crash. Of course not. It did not hold, but it has recovered and is trying to hold it now. We will see if it can continue to do that.

It is a battle right now. Will there be growth or will there be blood? Will the economy be able to hold up with the problems in Europe and maybe with problems here in the US? We will have to see how this test of these February lows play out this time. They have shown a lot of stickiness. There are still stocks in good leadership position. I am not ready to write it off. On the other hand, I am not saying it is a sure thing that it will move higher. Nothing is a sure thing right now. There is a lot of thrashing about here; a lot of going down one day and then up the next. Very volatile. They are fighting each over at key levels trying to determine where the market will go.

What do you do in a situation like that? You do not take every trade. We have not been doing much with trades we pick up a position here and there. Be patient, take opportunity as it presents itself, and you put a bit of money to work. The payoffs here can be big. If it breaks to the upside, you have plenty of upside. If it breaks downside and you are playing a move to the upside, you have a good stop point. If it breaks to the downside, we also have a good stop loss point and a good potential gain to the downside. Either way, this is an important point. Pick your shots, and look for good plays upside and downside. Put some money to work and see which way it breaks. We can still make money both ways. We can make money at the upside and downside as it thrashes about. Some of the good stocks continue to move higher overall despite the back and forth motion of the market. On the other hand, some of the weak stocks continue to move down overall despite the back and forth action. You can play that to your advantage, taking what the market gives. It is a bit hairier and quicker, but it can be done. Overall be patient and do not take too much of a position. Look for the really good setups. If the market moves in that direction, they will be the ones that play out the best. Have an excellent weekend.


Support and Resistance

NASDAQ: Closed at 2219.17

Resistance:
The 200 day SMA at 2234
2245 from July 2008 through 2260 from late 2005.
2275 - 2278 from the February 2008 and April 2008 lows
2273 to 2282 marks bottom of January 2010 lateral peak
2292 is a low from January 2008
2319 from the September 2008 peak
2320 to 2326.28 is the January 2010 high
2324-2370 is a range of resistance from early 2008
The 50 day EMA at 2336
2382-2395 from 2008
2412-2415 represents a series of peaks and lows in 2007, 2008
2434 is the May 2010 high
2453 is the August 2008 peak

Support:
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
2185 to 2195 represent support points for years: December 2004 peak, July to October 2005 consolidation, January, March and July 2008 lows, and October 2009 peak.
2177 is a low from March 2008
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low
2100 is the February 2010 low


S&P 500: Closed at 1064.88
Resistance:
1070 is the late September 2009 peak
1078 is the October range low
1084 to 1080 (September 2009 peak)
1101 is the October 2009 high
1106 is the September 2008 low
The 200 day SMA at 1107
1114 is the November 2009 peak
1119 is the early December intraday high
Bottom of the January 2010 consolidation 1131 to 1136
1133 from a September 2008 intraday low
The 50 day EMA at 1133
1151 is the January 2010 peak
1156 is the Sept 2008 low
1170 is the prior March 2010 high
1174 is the May 2010 high
1181 is the April selloff low
1185 from late September 2008

Support:
1044 is the October 2008 intraday high AND the February 2010 low
1040 is the May 2010 low
1020 is the bottom of the late summer 2009 consolidation
946 from June 2009


Dow: Closed at 9931.97
Resistance:
10,120 is the October 2009 peak
10,285 is the late December consolidation peak
The 200 day SMA at 10,299
10,365 is the late September 2008 low
10,496 is the November 2009 high
The 50 day EMA at 10,543
10,609 from the Mid-September 2008 interim low
10,730 is the January 2010 peak
10,920 is the recent May high
10,963 is the July 2008 low
11,100 from the 7-08 low
11,205 is the April closing high
11,734 from 11-98 peak

Support:
9829 is the September 2008 closing high
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak AND the February 2010 low
9774 is the May 2010 intraday low

Economic Calendar

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

June 01 - Tuesday
Construction Spending, April (10:00): 2.7% actual versus 0.1% expected, 0.4% prior (revised from 0.2%)
ISM Index, May (10:00): 59.7 actual versus 59.4 expected, 60.4 prior (no revisions)

June 02 - Wednesday
Challenger Job Cuts, May (07:30): -65.1% actual versus -71.1% prior
Pending Home Sales, April (10:00): 6.0% actual versus 4.3% expected, 7.1% prior (revised from 5.3%)
Auto Sales, May (14:00): 4.1M expected, 3.9M prior
Truck Sales, May (14:00): 4.8M expected, 4.9M prior

June 03 - Thursday
ADP Employment Change, May (08:15): 55K actual versus 60K expected, 65K prior (revised from 32K)
Productivity-Rev., Q1 (08:30): 2.8% actual versus 3.3% expected, 3.6% prior
Unit Labor Costs, Q1 (08:30): -1.3% actual versus -1.6% expected, -1.6% prior
Initial Claims, 05/29 (08:30): 453K actual versus 455K expected, 463K prior (revised from 460K)
Continuing Claims, 05/22 (08:30): 4666K actual versus 4600K expected, 4635K prior (revised from 4607K)
Factory Orders, April (10:00): 1.2% actual versus 1.7% expected, 1.7% prior (revised from 1.3%)
ISM Services, May (10:00): 55.4 actual versus 55.6 expected, 55.4 prior
Crude Inventories, 05/29 (11:00): -1.90M actual versus 2.46M prior

June 04 - Friday
Nonfarm Payrolls, May (08:30): 431K actual versus 500K expected, 290K prior
Unemployment Rate, May (08:30): 9.7% actual versus 9.8% expected, 9.9% prior
Hourly Earnings, May (08:30): 0.3% actual versus 0.1% expected, 0.0% prior
Average Workweek, May (08:30): 34.2 actual versus 34.2 expected, 34.1 prior

June 07 - Monday
Consumer Credit, April (15:00): -$2.0B expected, $2.0B prior

June 09 - Wednesday
Wholesale Inventories, April (10:00): 0.5% expected, 0.4% prior
Crude Inventories, 06/05 (10:30): -1.90M prior

June 10 - Thursday
Initial Claims, 06/05 (08:30): 450K expected, 453K prior
Continuing Claims, 06/29 (08:30): 4600K expected, 4666K prior
Trade Balance, April (08:30): -$41.2B expected, -$40.4B prior
Treasury Budget, May (14:00): $154.0B expected, $189.6B prior

June 11 - Friday
Retail Sales, May (08:30): 0.3% expected, 0.4% prior
Retail Sales ex-auto, May (08:30): 0.1% expected, 0.4% prior
Michigan Sentiment, June (09:55): 74.8 expected, 73.6 prior
Business Inventories, April (10:00): 0.5% expected, 0.4% prior

By: Jon Johnson, Editor
Copyright 2010 | All Rights Reserved

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

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