Comment: After yesterday’s break-out we saw follow through buying today. The range was a little bigger than we normally expect on OpEx day – but was still less than May’s OpEx day. Volume was naturally elevated. Volume on the SPY (ETF tracking stock for the SP500) was right on the 50-Day Average. So no surprises there one way or the other.
NewHighs/NewLows 79/40. NH>NL. The ratio of NH/(NH+NL) is at 66.4%. The Ratio is sloshing around in No-Man’s-Land. New Lows still haven’t dropped off appreciably. That’s a concern after the market has had quite a good run up from the early June lows.
Technical Comment on the Dow 30:
The Dow finished at 12767.2. Support/resistance: 12580/12810. Indicators: Stochastic: 89. Overbought. Caution. RSI.9 is at 63.6. Positive. MACD Histogram. Above zero. Positive. MACD. Above zero. Positive. CCI.14: +140. Overbought. Caution.
The 10-DayEMA is exactly the same as the 20-DayEMA. We’ll take that as a positive.
The medium term trend is undecided. The short term trend is up.
The Dow30 has now come to its next testing point. Indicators are overbought and the chart has hit the upper Bollinger Band. A number of scenarios are now possible. If this is just a normal retracement after the big May fall, then the Dow30 is likely to head back to the bottom Bollinger Band. On the other hand, it could now ride the upper Bollinger Band higher. Or it could just pause for a few days and fall back to the middle of the Bollinger Bands before once again heading higher – perhaps up to the 13000 level.
I think that covers all bases. I favour the last scenario – that would give a nice ABC correction pattern after May’s big fall. After the ABC plays out – we can look to more down side. But – we’ll just have to see how things progress from here.
Let’s now look at possibles re. the Greek elections. The American market seems unperturbed by the impending Greek elections. Markets have an uncanny ability to sniff out disaster scenarios – the American market is not pointing to disaster as a result. That doesn’t mean a positive Greek result will cause the American market to rise. Quite the contrary. A positive result appears to be priced in. So any result is likely to mean the market will fall back a bit. The “wrong” result is likely see the market fall heavily. At this stage, the “wrong” result doesn’t appear likely. But all of that is just hypothetical. Let’s see what happens on Monday evening.
In the meantime, the Oz Market on Monday will have the benefit of knowing the Greek result. I think a positive result (which seems likely) will see us higher.
Ain’t the markets fun? Better than Disney Land any day.
(20min delay)