Before the Open (Jul 1)

Posted on by Jason Leavitt

Good morning. Happy Friday.
The Asian/Pacific markets closed mostly up – Hong Kong, Indonesia, South Korea and Taiwan rallied more than 1%. Europe is currently mixed – there are no standout winners or losers. Futures here in the States point towards a flat open for the cash market.

June is in the books. The second quarter of 2011 is in the books. QE2 is over and done. Today should be a slow day because it’s summer and the day before a 3-day holiday weekend, but with the re-balancing of the Russell indexes complete and it being the first day of a new month, there could be a little movement the first hour or so today as traders and money managers square off positions etc.
The rally we’ve had this week is something we haven’t seen since the beginning of September. Nobody expected it which is one of the reason it could go so far in such a short period of time. But the easy money has now been made. Several good set ups were posted early in the week, but it’s too late to jump on those…new set ups need to emerge. Bouncing off support when many indicators are oversold isn’t hard. Besides the pent up demand, the bears no doubt were all-in and have had to cover. But here we are 5 days later…the bulls can’t depend on short covering to fuel a continuation of the rally. They also can’t depend on market-moving news from Europe (the Greece austerity plan will last 5 years, but as far as the US market goes, it’s a done deal). Volume hasn’t been great. Sooner or later (probably sooner) the market will rest. Then we need to see a surge in buying to “confirm” the newly formed short term uptrend. Failure to do so would hint at a summer of range bound prices.
What happened over the last 4 days is not what happens right before the market falls apart, so I’m thinking we either get a summer rally (at best) or range bound trading (at worst). I think the odds of the market falling apart have declined a bunch. Have a great weekend if you’re not sticking around. Otherwise I’ll have more to say after the opening bell.
headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jul 1)”

  1. “What happened over the last 4 days is not what happens right before the market falls apart…”
    please see end of May chart of SPX….

    1. This rally has gone almost twice as far in the same amount of time and unlike May, it started at support while many indicators were oversold. Also, there have been dozens of individual stocks such as NKE, AMZN, MSFT that have gone straight up the last week…this wasn’t the case at the end of May.

  2. Bears will continue to be bears and the Bulls will continue to be bulls.
    That’s why I argue the case for “a summer of range bound prices” (JL)
    with a slight upward bias. After that, I will arrange for interplanetary
    guidance from my buddy Neal (who has been awfully quiet lately). HW

  3. contary to what some may think
    this is typical of a bear market bounce–very violent
    the trick is will new buying come in at these levels
    what will the world do to the futures/usd/euro over the long 4th/7 w/e
    we are at levels now consistant with a counter trend bounce
    does it have legs
    definitly no short entry signals————-yet

  4. there is the start of inds of a intraday top and some sell sig emerging
    but no short intraday entry yet
    isnt it wonderfull to be a daytrader
    we dont have to worry about all the other stuff just the intraday trend or trends

  5. the big boy banks still have their short put opt bias
    but the retailers overdone them with their bearish put opts
    everyone cant be on the same side–the retailers will cover whereas the instos can afford the time to hold if they wish
    there are 2 opts charts –one for what they call the smart money and the other for the retailers–they need to be dynamicly opposed for big moves

  6. interest rates are the key to any long term market decline
    at the moment the yeild curve is ok
    but watch the bond yeilds with no qe2 and funny pollies
    the 13 wk t bill yeild will tell the story compared to the 30 year

    1. I track the IEF, i have treasuries under IB acct. but i dont know what im looking at…Ic us treasury,bonds(notes & note strips interest),maturity date,issue date,coupon..im clueless..

  7. I just placed a limit order to short the QQQ’s
    (buy puts at slightly outside of the money).
    Another small pop in the Q’s from here and
    I should get a fill order later on today. HW

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