Before the Open (Jun 14)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly up – China, Japan, South Korea and Taiwan each gained more than 1%. Europe is currently up across the board – Austria, Germany and Stockholm are up more than 1%. Futures here in the States point towards a large gap up open for the cash market that will put the S&P at a 2-day high (except for the opening minutes last Friday). But things could change by the open given retail sales will be released an hour before the bell.
The dollar is down slightly…so are gold, silver and oil.
China’s central bank raised bank reserve ratios for the ninth time since October to 21.5% – the highest level ever. Inflation is at a 3-year high, and Chinese leaders have made keeping inflation under control a top priority.
The market remains in bad shape. It got a little boost yesterday afternoon, but the buying interest only lasted an hour before sellers took charge again. Every little pop has gotten sold this month, so my stance remains the same. The short and intermediate term trends are down. Taking partial profits on moves down is fine, but I’d maintain some short exposure just in case the market melts down. Everyone seems to be watching S&P 1250. This tells me the level either won’t get hit right now or the index will slice right through it – the level will either be front-runned or stops will be taken out. Predicting what will happen is a tough call because 80% of the volume is computer algorithms – what are the machines programmed to do, and what kind of momentum can build if they’re all on the same page?
Have a plan for different scenarios. Don’t under any circumstance show up with plans on “seeing what will happen.” Decisions are made beforehand, not in the heat of the battle. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers