Monday June 27, 2011
Monday Monday, can't trust that day,
Monday Monday, sometimes it just turns out that way
Mamas and the Papas, 1966
Once again various gurus are turning bullish on the basis of today's action which did little more than erase Friday's action. As we mentioned this weekend it is the end of the month portfolio dressing time. That means managers pick the hot stocks so that shareholders can be assured their manger has 'the hot hand.'
I looked at all the major indices after the market close today from the Dow Industrials to the Russell 2000 to the Mid Cap 600. They are all about where they were five days ago. Above we have the SPX. Best I can tell, price has moved through the 1280 line about eight or nine times, this month alone. See green arrow at left. We marked the upper and lower boundaries.
As we said this weekend, the weekly indicators are a long way from being buy signals. Yes the daily PAR SAR do exhibit a buy but it looks like a fourth wave bounce to me.
And, gold, silver, and crude oil were all down today. We would need AOM all the one markets up together to believe we saw a bottom last Friday in stocks.
I suspect the stock rally will end Thursday June 30. TLT was down but the shorter term IEF was still strong.
So I am sticking with our original story, the markets will confuse and confound giving mixed signals. Stocks are up on end of quarter re-positioning. Stocks are usually up into three day weekends. Crude oil and gold, not subject to end of quarter squirming are the more reliable indicators here.
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