Midweek Update

It’s been an interesting week in the markets. The SPX is up more than 2% after two nice up days. Volume however has been weak even for Summer trading.

(click on charts to enlarge)

End of quarter window dressing? Probably. Sucker’s rally? Maybe, but so long as we stay above that 200 day line, it’s difficult to get overy bearish. Also going for the bulls: 10 year yield jumped 4% today to close with a 3 handle, and Dollar index fell below 76.

Yes, we’ve been focused on the macro risk in this space recently, but as always, what matters most is the market’s reaction. I’m not quite ready to fire off a bunch of buy orders, but as long as we’re feeling optimistic, how about this one coming off support:

Should the Greeks decide to play nice, and the end game is put off for another few months, we just might find we have a nice tradeable rally on our hands.

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2 thoughts on “Midweek Update

  1. Hi Harry,

    Good summary of the current market condition. I find it difficult to keep up with the price action, always needing to study the day after it is over. Your sense of this market pretty much covers it.

    2 more days into the holiday weekend. Let’s see if this short rally can continue.

    Aloha,
    Shirley

  2. Thank you for the kind words Shirley. It’s always difficult to form a strong conviction in markets like these. Today we passed the nearest resistance on the SPX at 1300, next test is around 1320 (the 50 DMA is around 1317). With tomorrow being the last trading day of the quarter, it will be interesting to see what happens. If the index can hold those levels through the first few days of Q2, especially with an increase in volume, I will start adding to longs for the first time since February. We noted Citi; also see the action in the other money center banks, which seem to be coming off a near term bottom. That is a bullish signal.

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