Bleeding
Another negative turnaround for the market yesterday
as an early 100-point gain turned red by the close.
Like Monday, yesterday's point loss (-14) on the Dow
was nothing significant but the trend of gains
turning into losses is discouraging and shows that
investors are selling strength rather than buying
weakness. Additionally, the broader market is
selling off a little more than the Dow would have us
believe.
It can be a dangerous time for stocks but the Fed
meeting starts today, goes into tomorrow, and with
the market so oversold, a snap back rally is a good
possibility. But we may need a negative
morning first.
Keep an eye on the 1482 to 1487 area on the S&P 500.
Rather than a positive open turning negative, we'd
like to see a negative open take out this level on
the downside, but quickly bounce from there.
How the market acts during a move below 1487 will be
the tell. If stocks do not quickly rebound, it
will be a ominous sign. If it does bounce back
quickly, it is a good sign that we will get at least
get a small rally in the coming days.
Here is the July seasonality chart. Early July
is very green while mid-July would warrant caution.
Chart provided courtesy of
www.sentimentrader.com
Here is another look at the 4th of July holiday
chart. It confirms the early July strength.
It also looks like there is a tendency for one of
the last three days of June to end solidly in
positive territory.
Chart provided courtesy of
www.sentimentrader.com
For what it's worth, a
possible scenario would be for stocks to rally after the Fed meeting
into next week, bringing the S&P up near the old highs - and even
possibly taking them out. Then, after the strong holiday week and
move by the AAII sentiment survey into overly bullish territory, we see
a mid-July sell-off. Speculation - but that's the name of the
game.
Trader Fred's
TSP
Trader System remains on a sell signal and is
showing another "pile-up" formation. That usually means a 1% or
more move in one direction or the other is coming up. Which way,
we don't know. The Fed meeting would be the likely catalyst. Read more from Fred on the
system
page.
The EbbChart System
is in I-fund today and the rest of the week is
showing very few stop signs. Read more on the
ebbchart page.
That's all
for today.
I am currently 100%
S fund. See you tomorrow!
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