Before the Open (Jul 6)

Posted on by Jason Leavitt

Good morning. Happy Wednesday.
The Asian/Pacific markets close mixed. Hong Kong dropped 1%; Japan rallied 1%. Europe is currently down across the board; several markets are down 0.75% or more. Futures here in the States point towards a moderate gap down open for the cash market which will open the indexes much closer to yesterday’s lows than the highs.

Yesterday did not change my stance heading into this week. I’m laying low. Last week’s rally put the market in ridiculously overbought territory, and although the charts tell me we have more upside coming, I don’t feel comfortable chasing here. There’s a time to be aggressive and a time to lay low, be patient and wait for trades to come. That latter characterizes my attitude right now. After the best week in two years, chasing stocks higher is not wise.
Volume continues to be very light. It’s not a huge concern considering the time of year, but it does tell me if either the bulls or bears wanted to press the issue, they could relatively easily.
The rest of this week and early next week will go a long way hinting at what happens the rest of the summer. If a pullback is intense and full of energy, I’d question the market’s ability to leg up again. But if a pullback is calm and boring and it’s evident the bears are not going to control things, then odds favor taking out last week’s high and making a run to the top Bollinger Band (see yesterday’s chart). 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

0 thoughts on “Before the Open (Jul 6)”

  4. Hi Neal, where have you been? I thought you were in jail
    for failure to pay child support. 2) Day Trading in this
    so called ‘alpha environment’ is way too difficult for me.

  6. Hey Neal,
    look nothing personal,but can u show me how,where the economy is improving
    that seems to be the main line between the bulls/bears thinking

  7. Chuck Plosser called me again today to confirm that I’m no longer on 24 hr call. BEN is convinced the BOYZ have his back and will trade the bullish “Triangle” (especially in the DOW. BEN will not even discuss the potential bearish “Head & Shoulders” pattern. So, we have completed (or are completing) wave “D” or the “right shoulder” – take your pick. I think Jason has it right. It will be important to watch the structure & depth of any decline. If we’re looking at a “TRI”, wave “E” should unfold without intensity & ideally find support in the 1290-1310 area. Interesting days are at hand. Will we yet see Neal’s DOW 13,000? Inquiring minds want to know. BEN is complacent and breathing easier!

    1. When Portugal went junk status earlier today I don’t know
      how one could breath a little easier. Hmm…what’s that smell?
      Tim, is that you? Are you still in the bathroom? Damn,
      is there another available toilet stall somewhere here
      in the White House? I gotta go right now! HW

  9. if we do get a “E” then tecknically we could expect another leg up to 13250 ish dji i suppose–or truncated—-would that be right ,PeteM

    1. It would depend where wave “E” ends. My understanding is that you take the widest part of the “TRI” and add it to the end of “E”, but some people add it to the point where the “TRI” breakout occurs and others use Elliott Wave and FIBO numbers, etc. Whatever, we would see new highs and have to buy Neal’s Dow 13,000 T-Shirts at a premium price – I would guess.
      By the way, there are other bullish patterns that could emerge to negate the “TRI” idea, e.g. an “ending diagonal” wedge pattern could be emerging off of the JUN low. But that’s a story for another day depending on the how things work out over the 1st half of JUL. Some fun, eh!

      1. Thanks Pete—yes ive seen the wedge–this months opts ex could be interesting
        instos and hedgies are still negative hedged–have we converted enough retailers,mutuals yet
        looks like we just completed the ‘D’and all in syn
        ‘

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