Why I still favor further upside
The major
indexes finished mixed after a holiday-shortened week of trading. Things started
off on a down note, as the equities markets posted one of their worst days of
2006 on Tuesday. However, the declines came on thin volume, which in hindsight
was an indicator that further weakness would not be in the cards for stocks. In
fact, for many instruments, especially the SPoos, Tuesday’s large decline ended
up being a successful test of the previous week’s lows. Equities rallied
on Wednesday and Thursday in anticipation of Friday’s Employment Report, while
Friday ended up being a very quiet session with a flat finish after the
market-friendly jobs figures.
Despite the major indexes’ failure to extend their rally on Friday’s soft job
figures, the overall market action appeared fairly constructive. Often
times, a “sell the news” reaction to positive data takes place, which is then
reversed a few days later. The action in the bond market was also very
constructive for equities, as the yield on the 10-year Note finished under the
pivotal 5% level. This, in turn, could support the perception again that
the Fed will pause later this month. Consequently, I feel that the odds
favor further upside in the near-term, still remain somewhat concerned about a
rough market later this summer.
Daily Pivot Points for 6-5-06
| Symbol | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| INDU | 11241.74 | 11291.95 | 11336.03 | 11386.24 | 11197.66 | 11147.45 | 11103.37 |
| SPX | 1286.37 | 1292.53 | 1296.83 | 1302.99 | 1282.07 | 1275.91 | 1271.61 |
| ES M6 | 1287.83 | 1294.42 | 1300.58 | 1307.17 | 1281.67 | 1275.08 | 1268.92 |
| SP M6 | 1287.30 | 1293.10 | 1298.00 | 1303.80 | 1282.40 | 1276.60 | 1271.70 |
| YM M6 | 11258.00 | 11317.00 | 11381.00 | 11440.00 | 11194.00 | 11135.00 | 11071.00 |
| BKX | 110.65 | 111.14 | 111.57 | 112.06 | 110.22 | 109.73 | 109.30 |
| SOX | 474.47 | 479.56 | 484.46 | 489.55 | 469.57 | 464.48 | 459.58 |
Please feel free to email me with any questions
you might have, and have a great trading week!
Chris Curran
Chris Curran started his trading career at the
age of 22 with a national brokerage firm. He combines fundamental and technical
analysis to get the big picture on the market. Chris has been trading for 15
years, starting full time in 1997, and has never had a losing year as a
full-time trader.