Market Montage

Thus far the action is almost identical to the Euro Summit Friday gap up on June 29th.  That night (Thursday) the futures were down 0.4% until word of the meeting agreement leaked around 1 AM I believe, and things turned on a dime as the dollar was pounded into the ground, the euro bounced and futures surged.  Today we have identical action except that it happened in the 6 AM hour rather than in dead of the night.  The euphoria from that event lasted 3 sessions and then all of it was given back over the following 6 sessions.

This environment remains incredibly difficult – you can be positioned correctly at 5 AM and incorrectly at 6 AM the way these headlines work.

Should note the Monday gap down created a gap at 136.32 on the SPY ETF chart.  Will be interesting if that fills in 1 session to take back the entire week of losses.

After a morning rally, markets have given back all their gains in a poor showing for the bulls.  Yesterday's late afternoon lows pre-Hilsenrath story were S&P 1329s and we are currently seeing prints in the 1331s.  A break of yesterday's lows will be bringing in some technical traders and robots.   Whatever the case the action is not good as the "good spirits" from any earning reports quickly was sold.  It looks like that buying late in the day was mostly short sellers covering.

All the high beta technology stocks are obviously getting hit as the NASDAQ is performing worse than the other indexes.   If we continue this 5-7 day rally, rebound, rally, rebound trend we are in day 4 of the selling.  A simplistic view as it seems improbable such a simple pattern continues indefinitely.

Yesterday around 2 PM I posted this chart noting how the S&P 500 had fallen out (to the downside) of an ascending channel.

Par for the course, a late day news story by the Wall Street Journal by Fed mole Hilsenrath, caused the Pavlovian reaction to buy – or at least cover shorts.   …