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What’s The News ? June 22, 2013

Posted by Tom in Thoughts.
Tags: , ,

This past week the market woke up to the fact that interest rates are (have been) low and are likely to rise.  Duha !  Even tho “Uncle” Ben has been indicating this for many months, reality hit.  Both the Bond and Stock markets took a hit.  Thursday was an especially bad day since the US markets opened with a (price) gap down.  But how much “damage” has been done?  Let’s take a look to put things in perspective:

Since the peak on May 21, 2013, her’s what’s happened:

Russell 2000: – 3.51%  (small cap index)

NASDAQ Composite: – 4.14%

S&P 500 Index: – 4.60%

The interesting thing about this move is the suddenness of it, as most of these losses occurred over two days, Wednesday and Thursday.  Obviously the markets are nervous, traders “would rather be out wishing they were in than in wishing they were out”.  Typical of a news driven market place.  Things happen quickly both up and down; emotions rule.  So what’s next?


Our support level at 3395 was taken out quickly, that confirmed the weakness of the market structure; time to hedge of exit or take a defensive stance.  Note the action of Friday.  Very heavy volume and the price bar closing toward the high-end of the range.  Obviously Supply was present and price ended rather firm.  A possible classical “Shake out” bar IF the low holds.  Friday was quad “witching” with options and future expiring, that added to the volatility too.

IF Friday was a Shake Out day, it should hold, if not the next level down is around 3300.  We could be very well in for a Summer of a broad trading range with 3325 on the bottom and 3480 toward the top.  I doubt is anyone really wants to move the market higher or lower over the next few months, but let’s stay on defense for the time being.  Next week may show us a clearer path forward.

The charts below also give us an idea of the strength of this market:

Money Flow

Money Flow: 28% in Accumulation, 45% in Distribution and 27% Neutral.

Price Strength

Price Strength (above) shows more of a hit.  Just about every sector felt the pain.  This is my last posting while “mobile”, back to “normal” next week.  Cheers !  ………  Tom  …………

price chart by MetStock and pie charts by http://www.HighGrowth Investor.com; used with permission.


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