Opening Market Commentary For 06-19-2012
Markets opened up a few points in a slow motion manner. Low volume all green as the ‘dippers’ and DaBoyz push it up, never fails. Pro and investors alike are awaiting now for the FOMC meeting tomorrow to see if helicopter Ben is going to hint at more QE as many analyst believe will happen. If there is no QE3 in the works the other half of the crowd expect a big sell-off, but seriously I don”t see that happening for all the reasons I have explained before. A slow melt down maybe, but no waterfall is in the works from a disappointing report from the Fed’s.
This morning financial report were mixed with the May housing starts making a big miss coming in at 708K with 722K expected. Building permits were up huge coming in at 7.9% over the 1.0% expected. Further, housing starts fell 4.8% in May (708K) when a 0.7% gain to 722K was expected. The DOW is at 12820 up 79.35 or 0.62%%.
The 500 is at 1355 up 10.84 or 0.83%.
The $RUT is at 791.38 up 8.85 or 1.15%.
SPY is at 135.54 up 1.15 or 0.86%.
The trend is up and the current bias is up.
WTI oil is at 84.04 climbing from 82.28 earlier this morning.
Brent crude is at 96.55 currently climbing.
Gold fell to 1622 earlier falling from 1633, now trading at 1626.
The one thing no one has mentioned is the crossing of the 50 day MA by most of the major indexes as being very bullish. Bullish for at least for the short term as it now appears the 50 day MA is going to cross the 200 day MA in July sometime setting up a major bearish scenario. The summer rally is close to being over.
Tomorrow of course if FOMC day. In the past nobody expected anything. Now a greater percentage of Wall St expects QE3 or at least language that suggests the Fed is standing by ready to act if needed. This sets up the market for a possible stiff sell-off if it doesn’t get what it wants.
Here are the daily index charts. The Dow and S&P broke out last week. The Nas joined the party yesterday. The Russell needs to catch up.
The war of words is accelerating with David Cameron of the UK slamming the French President Hollande after Germany’s Chancellor Merkel criticized the French President yesterday for his proposed spending.
At the G20 Summit in Mexico, David Cameron has slammed French President Francois Hollande‘s tax-and-spend approach to resolving the eurozone crisis.
“I think it’s wrong to have a completely uncompetitive top rate of tax,” he said, and promised to “roll out the red carpet” for France’s wealthy and businesses if Hollande‘s government goes ahead with a campaign pledge to increase the tax rate on earnings above €1m to 75pc.”
Cameron said he’ll “welcome more French businesses to Britain and they can pay tax in Britain and pay for our health service and schools and everything else”.
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Written by Gary
