Retail Sales Disappoint Greatly

SUMMARY:
- Another back to back gain, but it is no follow through.
- No strong surge, but the probabilities of a more sustained bounce are stacking up.
- Some quality stocks step up to leadership roles, but their ranks are still thin.
- Retail sales disappoint greatly, but it is likely just a slow month for the economy.
- EU is still the wild card for the US economy and prospects of a double dip recession.
- Bearish and bullish sentiment indicators show a rare crossover.
- Looking for a move up to the January high and watching for good stocks and good entry points for that move.

Another back to back gain, the second in 1.5 weeks, indicates a more sustained bounce.

Here in the office we are dubbing the Thursday and Friday market gains the "oversold bounce part two." There was a second attempt at a bounce off the February lows on the SP500. There was the original selling in May that took the SP500 below its February low and then the bounce. It looked like that bounce may try to make a move up to the January peaks, but it ran out of gas at the 200 day EMA twice. It then fell back down to the prior low, but then came part two. Starting this week there was an intraday reversal on Tuesday and a surge on Wednesday that could not quite hold. On Thursday the case of Viagra showed up, and the market surged and was able to hold the move. Friday things looked grim early on as some of the economic reports were not as good as hoped. The market gapped lower but then reversed and rallied into the close for a third gain out of four sessions. The market has not had that kind of batting average in quite some time. This was not the follow-through I was talking about earlier in the week, however.

Volume was extremely light on Friday. That is typical of a Friday in the summer, and the percentage gains were not strong. NASDAQ scored +1.1%, but the Dow only scored +0.38%. SP500 +0.44%, SOX +1.4%, SP600 +1.3%, and NASDAQ 100 +0.93%. Those gains are not what it takes for a follow-through session. You like to see powerful moves of +2% or better, particularly considering how this market has shown back and forth crazy moves as it has consolidated at the February lows. Huge moves back and forth, so you would expect a follow-through to be an impressive percentage move as well with high volume. That was not the case on Friday, so it was nothing doing for the first chance at a follow-through. We simply had a continuation of the rally higher.

Nonetheless, it was a decent reaction on Friday. There was bad economic news with weak retail sales for May coming in at -1.2% on the headline versus the 0.2% gain. Futures that were in decent shape before the number gap sharply lower, and the market gapped lower as well. The market did recover, however. It overcame that data and, after chopping around most of the session, it did rally into the close for gains across the board. That shows strength it has not had. Moreover, it overcame a stronger dollar that moved up as the session wore on. That one-two punch bad economic data and a strengthening dollar has typically taken this market lower, but Friday the oversold bounce continued for back-to-back gains on SP500 and the other indices as well.

This move does not have the credentials to suggest that a new rally is underway right now. There was no follow-through as of yet, and leadership remains rather sparse. There are some good quality stocks that are leading higher and that can make this a decent bounce such as AKAM and BIDU. We took positions on BIDU on Friday just to be ready in case it makes a good surge to start next week. FFIV is another strong stock ready to move as well. There are many others that look strong enough to perhaps take SP500 and NASDAQ back to the January peak.

It is hard to say that the weak volume, relatively modest bounce on a Friday in the summer is pointing toward a significant rally. When you put together all of the action that has occurred over the past month, however, there may be enough traction for stocks to make that bounce after failing spectacularly during May and early June.


OTHER MARKETS.

Dollar. The dollar did see an advance, though it closed off its high on the session compared to other currencies (1.2098 Euros versus 1.2124 Thursday). The dollar is off its highs which saw it break below 1.2 Euros. I doubt we have seen the last of a sub-1.2 dollar on this move, however. The DXY0 pulled back modestly after bumping into the late 2008/early 2009 peaks, holding the 18 day EMA on the low and starting to bounce on Friday. Likely this is just another normal pullback to near support and its move higher. It is measuring the move to break out above that prior high.

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Bonds. Bonds rallied back as well (US 10 year yield 3.24% versus 3.32% Thursday). The bond market took a sizable hit during the week because pundits statesmen all came out of various countries saying there would be no trouble in the Euro zone. Interestingly, some of the people saying that were from the Euro zone and of course have a vested interest in seeing that the entire system does not collapse (namely the CEO of BNP Paribas). US bonds did pull back during the week, but this looks like a normal consolidation. Nothing here is overly nefarious. They are bumping into prior highs and testing somewhat.

The TIPS show similar action. There has been a pullback over the past month to support where they look like they are trying to hold and start to bounce. Thursday was an aberration day. It broke below the 50 day EMA on the close but immediately turned back up and held above that area. I do not think that bonds are going to start to sell off right now because Europe is not safe. I will discuss more of Europe's issues later and why that is impacting bonds and in the US and overseas bonds.

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Gold. Gold has not been rocketing straight to the upside, but it has also not been breaking down ($1,228.20, +6.00). It was rather modest compared to some of the other moves, but gold has broken to an all-time high. It fell back below it, and then broke out above that again on Monday and rallied more Tuesday. It spent the rest of the week testing. Note that it came back down to the prior high and bounced on Friday. Gold is not in trouble, and there are several reasons. Number one, it is still an inflation trade despite the fear in Europe that there will be deflation caused by the EU countries going under or defaulting. This is all despite what the CEO of BNP Paribas says as well as Trichet and the EU President.

Gold is also showing that there is a fear trade still built in with the unknown. A lot of money is moving out of Europe in fear, and that is what supported the US bonds market for the past several months (when it should be heading the other way in the Fed will start raising rates). You cannot put all of your money in US Treasuries, however. The Fed's (and the ECB's) hands are tied thanks to the trouble in Europe, and it cannot start raising rates anytime soon. Therefore there will be cheap money, inflation, and fear. People cannot put everything into US Treasuries, so they have to find some other mechanism to store their wealth and provide some upside. Gold is once again offering a haven for people looking to diversify out of US Treasuries as their only safety hedge. Gold looks as if it is just testing the break of the all-time high and still has room to the upside.

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Oil. Oil had a rougher day Friday, losing ground ($74.21, -1.27) and it showed a bounce downward from a test of the 200 day EMA on Thursday. Oil is still moving higher in its range. It is building higher lows and higher highs off the bottom of its seven-month range. I do not think oil will flip over and dive back down. The 200 day EMA could represent some resistance as it matches up with a consolidation range from late 2009 and some interim peaks and valleys in February and March of 2010. There could even be resistance in early May where it bumped up, tried to recover through that level on the selling, but was not able to do so before it sold off to the bottom of its trading range. I do not think again that oil will tank. It could continue higher, and we are basically looking for a move up into the range from March. Very important range, and topped by the January peak. It is summer, so there will be more demand for oil from driving. That should help bolster oil somewhat, though it will not break it out of that range unless there are extraneous events such as major hurricanes that plow through the Gulf and disrupt production. That would be unfortunate, spreading all the oil coming out of the BP rig. They are now saying it is twice as much as estimated during the major part of the spill when it was uncapped and gushing into the Gulf of Mexico.

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TECHNICAL PICTURE

INTERNALS

Volume. Trade fell 15% on NASDAQ down to 1.78B shares, well below average for the NASDAQ exchange. Over the past several weeks, volume has traded virtually below average on all but a handful of days. Thus there has not been much strength in the selling or the upside with respect to the NASDAQ. It is hitting its summertime doldrums and riding along on light trade. The NYSE saw a 22% decline in volume down to 1.04B. Well below average and no real drive on the move upside. That is what low volume tells you. In other words, there just were not as many players in the market pushing stocks higher. The move does not mean that much, and it lends credence to the idea that this is simply part two of the oversold bounce.

Breadth. Breadth was decent, but nowhere near what we have seen in recent rounds. It was 2.5:1 on NASDAQ and 2.6:1 on the NYSE. In the old days that would have been great breadth, but now when we are seeing 4:1-7:1 on these back and forth sessions over the past few weeks as the buyers and sellers fight it out. Breadth in the 2.5:1 range is not providing much interest, but it does show it has been matching the moves in the market. Today's move was so-so, and there was so-so breadth. Yesterday there was tremendous breadth as the market moved higher, and that is exactly what you would expect. It is definitely matching to moves; there is no divergence. We are not seeing the market move down sharply and negative breadth or vice versa. What you see is what you get, and there is nothing to surprise us. The internals show an oversold bounce.


CHARTS

SP500. The SP500 gapped lower on the session when the retail sales came in lower than expected, but there was a recovery and a move back to positive. That in itself was a positive because the market was able to overcome bad news and a rallying dollar. Those have been teamed up as a one-two punch to keep the market at bay, but we have a second back-to-back move. Aside from last week, that is something not seen since late April when the market peaked. That is strange. The market peaked with the last back-to-back upside gain in SP500 in late April, and it immediately turned and sold off through the end of May. It has been trying to come back starting to January, although it just sold down to the prior low. We have another double bottom created here, and a back-to-back upside gain and then a selloff. A rally and then another back-to-back upside gain two of them in roughly a week. That is something we had not seen during the entire selloff, and now we have two of them. That is another indication that the market is finding a bit of footing and will be able to put in a better bounce this time than in the first attempt. It was a good try the first time. It rallied, sold off a bit and came back up, but the 200 EMA proved to be too much. I think with this double bottom and showing more strength that we can actually challenge the January high. Whether it is the bottom or the top of the range all the way up to 1150. 1125-1150 is the band of resistance. That is what we are trying to play with the nice positions we picked up this week once the market got the selling out of its system and the stronger stocks showed themselves and started to move back up.

NASDAQ. NASDAQ is a similar picture. There was a selloff to a new low. It undercut those early May lows but still held above the February lows. We have a double bottom. There was the initial bounce that failed, a double bottom, and now there is a back-to-back upside gain on NASDAQ. There are not the three out of four days upside this week just the last two. Two out of four over the same period, but there was the reversal that SP500 showed on Tuesday as well, and it has built off of that. Volume has been terrible but it did cross over the 200 day EMA. I think there is enough mojo, as with SP500, to take it up to the January peak. 2325 is roughly where you are looking for it to move. The 50 day EMA is still lower than that, roughly coincident at 2310. NASDAQ, as with SP500, looks like it has the juice to make it back up to this peak. Then you have to worried if there is a head and shoulders forming with the move from late May into June. We will see. Those often set up and rarely consummate.

SP600. SP600 posted a nice 1% gain on the session. It, too, put together a back-to-back gain but, unlike SP500, it did not have the three out of four days upside; it was more like NASDAQ. Nonetheless, it held at a key level at the bottom of the January peak and the February consolidation shelf. It bounced at that point off of that reversal an Tuesday. It has room to run up to its next important resistance level: the March consolidation. It actually got close to that on the last move. Could it possibly rally up to the early April peak? We will have to let it make its play. Right now the move is not saying much other than it has a firmer foundation as with the other large cap indices, and it wants to make a higher move at this juncture.

SOX. The semiconductors have shown the same action, but something of a triple bottom. They are holding at this long term support line. This is a critical line right below the 200 day EMA. This is a long term (about 10-12 year) line that has held. Now it looks like it has traction and is trying to move upside toward the January peak just as NASDAQ and SP500 are doing.

In sum, we have the market failing one attempt at an oversold bounce, coming back to the same level of support, and then putting in a second bottom and bouncing. It has more traction because it is showing the second back-to-back upside pairing of the past week and a half. It has not done that since the market peaked in late April. Thus, given the other indications over the last week the extremes in the VIX, extremes in breadth, and the extremes in the put/call ratio it looks as if the groundwork is set for a bounce to the upside. That is the missing link as to why this rally will likely fail. It probably needs to fail for the leadership of the market to continue to base and set up good patterns to lead the market higher.


LEADERSHIP

This past week I have discussed leadership and the dearth of quality leaders, at least in any quantity. I do not want to imply, however, that there is no leadership. There are sectors and stocks leading higher, but it is the number of leaders that is worrisome. The ranks are thin and will have to be bolstered and fleshed out in order for the market to hold serious gains. That is just common sense. You have to have more stocks moving to the upside and in position to overcome the overhead supply that tends to push them down when sellers move in and dump stocks as they get back to their old highs. A lot of stocks need to be on the move upside to show the overall big money players mutual funds, insurance companies, hedge funds are actually in the mood to buy for the long term versus just some short term short covering.

Healthcare. Healthcare was one of the leading groups on Friday, and it has been setting up to be in a leadership roll over the past few weeks. We have been taking positions along the way. LNCR had an excellent Thursday and Friday, breaking to a new rally high. Of course we bought in already, and it is very solid as it makes the rally to the upside. It is not alone. ILMN posted a new rally high on Friday on rising, above-average volume. It has had very good above-average volume on the upside of late, and that is helping propel it to new highs. HNT is breaking to a new rally high and posted good volume on Friday as it made that move. CI is breaking higher. It is not showing huge volume, but it is set up to make the move higher. It had some lower highs, but it is starting to put in higher lows. It is using the 200 day EMA as support and starting to make the break upside. Healthcare is trying to lead, but it is a defensive area. People turn there when they feel times will not be as strong ahead. The good thing about healthcare is that it has the moves of a growth sector. We can take positions in some of these stocks and enjoy very nice gains even though it is a defensive play. You would not typically associate it with strong gains.

Industrials. Industrials started to show new life this week after some rocky times over the past month and a half. CMI made a break above the triangle it formed, and we started moving in on positions Friday. Would have liked to have done it Thursday, but we got an entry point on Friday as well as it gapped back and rallied to the upside. There is life out there, and you can see it also in DE. It is not yet running like a deer, but it made the triple bottoms above the 200 day EMA and is breaking higher. It is not in a great buy position now, but it may give one if it comes back and tests and makes a higher low along this trendline and starts to break higher. That would be a nice entry point. Industrials have some life and they can help lead. They helped lead the market higher from 2007 into the crash and then in the recovery in 2009.

Technology. FFIV is starting to move again after setting up in something of an ascending triangle that is consolidating a nice run higher through April. Good volume on the break to the upside, nice tests showing volume reversal in the early week. It then broke off the 50 day EMA that it held yet again on Friday, and we picked up positions as it made that move. AAPL was up again on Friday, putting in a back-to-back upside day, but its volume was lower each session. AAPL has made the double top at the 78% Fibonacci retracement level of the selloff in May, and that is a classic sell signal. It managed to bounce off of the gap up point from April on Thursday and Friday. Again it was low volume, and I expect it to turn back down and sell some more. AAPL makes its own wake, however; it may just continue to run to the upside. We will have to see because it is always a strong run.

Internet. Internet. AKAM continues to perform, and was up again on Friday to a new rally high. We took some of the gain of our second position off the table, over 16% on the stock and 100% on the options. It is doing very well. It has trended higher and higher even through all of the selling. Cannot complain about that.

Retail. Some of the retailers are going down while new areas are rising. UA made the break higher on Friday on some very solid volume, clearing this downtrend line and what is basically a double bottom with handle that broke out. You may want to call it an ABCD pattern that broke, tested, and is moving up again. The point is that it is a solid upside pattern and is starting to break to the upside as well. We did not catch all those that we wanted and typically do look at and catch on the moves. XKS set up nicely with the triangle. I looked at it, and then it made the break and gapped and ran away from us on good volume at the end of the week.

DECK is another position we wanted to get into, but it is elusive, staying a jump ahead of you, always seeming to gap away just as you want to move in. You almost have to hold your nose and jump in no matter where it is. We had a chance to get into it on Wednesday, then on Thursday it gapped and ran. Friday it came back and I was looking at it because I had talked about it in the morning alert. It did not open down that much. I thought we might get a little pullback, but the next thing you know the buyers hit the pedal and it roared higher to a new rally higher on strong volume. Sometimes you have to hold your nose and jump, but the way this market has been, it is not the kind to hold your nose and jump too many times. As volatile as things are, you may find there is no water in the bottom of the pool. As you can see, there has been a reemergence of leadership, but it is still very thin.

Energy still remains very weak. You can go sector by sector of weak, downtrodden sectors. Financials, energy, and many industrials while some have improved are really beaten up and have terrible patterns. It takes time to rebuild leadership across the market where there are waves of stocks breaking out of the upside off of solid bases. That typically does not work when you have a month or two of hard selling in the market and then try to bolt back up off the lows. There is so much damage done to patterns that they cannot just turn on a dime and move back to the upside. They have to work through the overhead supply, set new bases, and then make good upside rallies. If we get that, that is great. If it cannot do it, then it will take time. The market makes these rallies like it looks like it will make now, and that is part of the basing process. It is not the end of the selling; it is just part of the process that the market goes through. It bases, works the sellers out of the system, and getting the committed holders holding the stocks. Then there is the breakout.

At this juncture that looks like it could take a while. We have a bounce we are playing to the upside, but I do not think that bounce will hold. I think that stocks will come back down and do more basing. I hate to say it, but we could spend a good chunk of the summer in the basing process. That does not mean you cannot make money. We have stocks right now that are breaking to the upside nicely and have plenty of room to run, particularly if SP500 makes it up to the January consolidation (even more so the January peak). That will give excellent gains on the great stocks we have been buying positions on over the latter part of this week. There are other stocks we already have positions on. AKAM continues to bolster gains and is getting tremendous gains on our earlier position we took several weeks back.

With that in mind, we do not want to get ahead of ourselves. This is still likely a bounce with the potential to be something more. Over the next few weeks, there could be improvement in the quality of leadership as stocks continue to base out. Maybe this was the bottom, but we do not have to guess on that. We can play good stocks as they move higher and, if it was the bottom, we will smell like roses as stocks continue to move higher and build profits for us as more and more money comes back to the market. If that is the case, we will see more and more stocks join the rally. Leadership comes in and joins and it moves up in waves. That will give more and more buying opportunities if there is a recovery. If not, we can live with that, too. It is all part of the basing process, and we will take advantage of what the market gives us.


THE MARKET

MARKET SENTIMENT

VIX. Volatility on Friday thumped hard to the downside, coming down to the 50 day EMA and undercutting the lows over the past three weeks. What we saw in the original selling was the spiking higher of volatility almost to 48 before it started to peel back. Rallies tend to start a few weeks after volatility hits its peaks, and it looks like volatility has hit its peak. We had one high, a higher low, a new higher high, and then another higher low. Now it is rolling over and getting a lower high and a lower low. Some people who have been watching awhile may ask if that is an ABCD pattern forming. That could be the case, but typically volatility does not follow that pattern as stocks do. Nonetheless, I will be watching to see if it bounces higher. As I will discuss later, it looks as if the market is trying to make for more of a rally here. We have broken the string of higher highs and higher lows in the VIX, and this allows the oversold bounce to have a bit more traction.

VIX: 28.79; -1.78
VXN: 28.8; -2.5
VXO: 27.9; -1.78

Put/Call Ratio (CBOE): 1.08; +0.08. Still above 1.0 on the rise, indicating there is still plenty of skepticism about any upside move. That skepticism plays into the somewhat extreme negative views.

Bulls versus Bears:

This past week the bearish number of investment advisors topped bullish advisors. That is a rare event and thus very noteworthy. It falls into our theme that the sentiment indicators have hit extremes and are at levels sufficient for at least a more sustained bounce in the indices.

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: 38.5%. Falling as the last rally attempt failed, down from 39.8% the prior week. Down substantially 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: 39.9%. Huge spike from 28.4% shows a rare crossover as bears top bulls. It continues a sharp rise 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: +24.89 points (+1.12%) to close at 2243.6
Volume: 1.78B (-14.89%)

Up Volume: 1.539B (-375.872M)
Down Volume: 221.307M (-9.262M)

A/D and Hi/Lo: Advancers led 2.53 to 1
Previous Session: Advancers led 5.28 to 1

New Highs: 41 (+21)
New Lows: 38 (-39)

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: +4.76 points (+0.44%) to close at 1091.6
NYSE Volume: 1.042B (-22%)

Up Volume: 695.551M (-608.401M)
Down Volume: 334.608M (+305.056M)

A/D and Hi/Lo: Advancers led 2.66 to 1
Previous Session: Advancers led 5.54 to 1

New Highs: 84 (+4)
New Lows: 39 (+1)

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

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


DJ30

Stats: +38.54 points (+0.38%) to close at 10211.07
Volume DJ30: 188M shares Friday versus 222M shares Thursday.

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


MONDAY

There is a lot of economic data coming our way. There are a lot of regional manufacturing reports starting with New York on Monday, and then industrial production and capacity on Wednesday. Housing starts, building permits, initial claims, and then CPI on Thursday. That is followed by leading indicators and we close out with the Philly Fed on Thursday morning. Plenty of economic indicators. The regional manufacturing report will be for June already, and we will see if there is that uptick I was talking about when discussing trucking.. We have some more economic data, and we have potential bad news coming out of Europe every day. We could see another country emerge as a problem that was heretofore not considered a problem. That is an ever-present issue for the market, but there is nothing you can do about it. On Friday it did not undermine the market. Stocks were able to recover and post the second gain in a back-to-back gain for the end of the week.

I am looking for this bounce to continue, but it may not continue every day. Remember, we have only had three back-to-back upside sessions since late April, but two of them have been in the past week and a half. That is a sign of strength to the upside. We may get an off Monday, but I still think we have the momentum to continue up to the January peak. With respect to leadership, we are seeing more good stocks break to the upside that can propel the market higher. That is exactly what I am looking for them to do as the market continues to the upside. It is not too late to buy into some of these stocks. Some these have set up. Early leaders were out in front on Thursday and Friday, but others are there still in position to buy. If there is a nice pullback on Monday (a setback as some would view it), I think it would be an opportunity to move into some of these positions. Friday was an opportunity for a few positions, although the pullback was not enough on some of the stocks we were looking at given the strength of the move they made on Thursday.

I think the rally is going to continue, so I am looking for openings for good plays that we can use as vehicles to the upside. If we get a pullback on Monday on stocks we are looking to get in, we can use that to our advantage. Then as the market recovers, that pushes us up in better profit position as it moves toward the January peak. That is our initial target on any bounce. We have some great positions in play, and we will look to pick up more as the rally gives us opportunity. Have an excellent weekend.


Support and Resistance

NASDAQ: Closed at 2243.60

Resistance:
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
The 50 day EMA at 2311
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
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:
The 200 day SMA at 2239
2205 is the November 2009 peak 2210 (from September 2008) to 2212 (the July 2009 closing low)
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 1091.60
Resistance:
1101 is the October 2009 high
1106 is the September 2008 low
The 200 day SMA at 1108
1114 is the November 2009 peak
1119 is the early December intraday high
The 50 day EMA at 1121
Bottom of the January 2010 consolidation 1131 to 1136
1133 from a September 2008 intraday low
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:
1084 to 1080 (September 2009 peak)
1078 is the October range low
1070 is the late September 2009 peak
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 10,211.07
Resistance:
10,285 is the late December consolidation peak
The 200 day SMA at 10,313
10,365 is the late September 2008 low
The 50 day EMA at 10,447
10,496 is the November 2009 high
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:
10,120 is the October 2009 peak
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 07 - Monday
Consumer Credit, April (15:00): $1.0B actual versus -$2.0B expected, -$5.4B prior (revised from $2.0B)

June 09 - Wednesday
Wholesale Inventories, April (10:00): 0.4% actual versus 0.5% expected, 0.7% prior (revised from 0.4%)
Crude Inventories, 06/05 (10:30): -1.83M actual versus -1.90M prior

June 10 - Thursday
Initial Claims, 06/05 (08:30): 456K actual versus 450K expected, 459K prior (revised from 453K)
Continuing Claims, 05/29 (08:30): 4462K actual versus 4600K expected, 4717K prior (revised from 4666K)
Trade Balance, April (08:30): -$40.3B actual versus -$41.3B expected, -$40.0B prior (revised from -$40.4B)
Treasury Budget, May (14:00): $135.9B actual versus $142.0B expected, $189.6B prior

June 11 - Friday
Retail Sales, May (08:30): -1.2% actual versus 0.2% expected, 0.6% prior (revised from 0.4%)
Retail Sales ex-auto, May (08:30): -1.1% actual versus 0.1% expected, 0.6% prior (revised from 0.4%)
Michigan Sentiment, June (09:55): 75.5 actual versus 74.5 expected, 73.6 prior
Business Inventories, April (10:00): 0.4% actual versus 0.5% expected, 0.7% prior (revised from 0.4%)

June 15 - Tuesday
Export Prices ex-ag., May (08:30): 1.4% prior
Import Prices ex-oil, May (08:30): 0.5% prior
Empire Manufacturing, June (08:30): 20.0 expected, 19.11 prior
Net Long-Term TIC Fl, Aprilil (09:00): $140.5B prior

June 16 - Wednesday
Housing Starts, May (08:30): 653K expected, 672K prior
Building Permits, May (08:30): 631K expected, 610K prior
PPI, May (08:30): -0.5% expected, -0.1% prior
Core PPI, May (08:30): 0.1% expected, 0.2% prior
Capacity Utilization, May (09:15): 74.4% expected, 73.7% prior
Industrial Productio, May (09:15): 0.8% expected, 0.8% prior
Crude Inventories, 06/12 (10:30): -1.83M prior

June 17 - Thursday
Initial Claims, 06/12 (08:30): 450K expected, 452K prior
Continuing Claims, 06/5 (08:30): 4475K expected, 4462K prior
CPI, May (08:30): -0.2% expected, -0.1% prior
Core CPI, May (08:30): 0.1% expected, 0.0% prior
Current Account Bala, Q1 (08:30): -$123.0B expected, -$115.6B prior
Leading Indicators, May (10:00): 0.4% expected, -0.1% prior
Philadelphia Fed, June (10:00): 18.8 expected, 21.4 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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