Thursday, June 7, 2012

The Morning Call--Be sure there is follow through before getting too jiggy

The Market


The indices (DJIA 12414, S&P 1315) staged a moon shot yesterday. Both of the Averages (1) pushed back up through their 200 day moving average [12269, 1285], (2) stayed within their intermediate term uptrends [11760-16760, 1234-1801] and (3) closed near or right on the downtrend off their May highs [12426, 1314].

First, blowing back through the 200 day moving average gives some strength to this support level. For the S&P that suggests a potential lower boundary of a short term trading range in the 1266-1285; for the Dow, the corresponding area would be 12037-12269. Time will tell whether these zones can provide the necessary support.