I’m back from my travels and it seems I missed quite a bit of market drama. The market last week broke down out of the ascending bearish channel that had been noted numerous times prior to my departure. And as far as the Gold drop off goes, TraderMike readers definitely had a heads up!
A huge rebound day for bulls allows the recent roller coaster to continue. We are still trading in a defined range so no major direction is in place yet but we may have a better idea sooner than later.
Last week’s Wednesday recap I noted that buyers were exhausted and we should expect a pull back. Thursday and Friday saw volatility and all negative price action. To see us gap down this morning and rally back is a positive sign, however this is hardly a “contained” pullback and suggests cash is best at this time.
The expectation for further stimulus (aka Operations Twist) has mostly worn off as it is mostly now baked into the market. This in turn has the market once again focusing on Europe’s dilemma; vice the bearish price action. Below I have included a chart of the German stock market ($DAX) to give a bit of perspective on how the strongest country in the EU is doing compared to the US. If anything it suggests we should be making lower lows sooner than later.
The market finally met some resistance today as the NASDAQ climbed above 2600 after an opening upside gap then reversed back to a flat close. Volume was a bit higher and with a spread of economic data due out the next two days we should expect some volatility the rest of the week.
After giving us a small buy signal on Tuesday, today’s bearish engulfment was definitely not what investors wanted to see. On the block tomorrow we have Q2 GDP revisions due out at 8:30 AM followed by a consumer sentiment update at 9:55 AM. If Q2′s revision is revised down anything close to Q1′s revision then [...]
