Morning Update: 6/13/2012

Well, indeed, the stock market had a turn-around Tuesday. Despite a bounce in the morning, and a slight sell-off to retest the lows, making nominal new lows, the indices came on like wildfire, with the Nasdaq 100 going from 2511 to 2543 in an hour. The S&P 500 jumped from 1307 to 1321. They backed off in the afternoon to form wedges, popped out, and then retested, but then came on strong in the last half hour, closing near the highs for the day going away. Stepping back and reviewing the hourly chart patterns, the indices were down early, but they came back with a roar mid-morning, only to back off and consolidate until mid-afternoon when they came on again. From there they surged in the last half hour, closing near the highs for the day.

It was an excellent day, and a strong test of support, creating perhaps what could be a large head-and-shoulders bottoming pattern, but we’ll need to get up through the S&P 500, and past the highs for last week and this week around 1335, that’s now key resistance.

Let’s see how it goes tomorrow.

 

Trades:

Instrument Strategy Market pos. Quantity Entry price Exit price Profit
ES 09-12 Initiative Trade Balance Extreme Long 2 1302.5 1309.5 691
ES 09-12 Initiative Trade Balance Extreme Long 1 1302.5 1309.5 345.5
YM 09-12 Long 2 12304 12398 931

 

Wednesday, June 13

Economics
07:00 MBA Mortgage Purchase Index
08:30 Producer Price Index – consensus -0.6%, prior -0.2%
08:30 PPI Ex Food & Energy – consensus 0.2%, prior 0.2%
08:30 Advance Retail Sales – consensus -0.1%, prior 0.1%
08:30 Retail Sales less Autos – consensus 0.0%, prior 0.1%
08:30 Retail Sales ex Auto & Gas – consensus 0.4%, prior 0.1%
10:00 Business Inventories – consensus 0.3%, prior 0.3%
11:00 Fed to purchase $4.5b-$5.5b in 8 to 10-year range
1:00 U.S. to sell $21b 10-year notes (reopening)
06:00 EUR German CPI
09:00 EUR Eurozone Industrial Production
21:00 NZD Reserve Bank of New Zealand Rate Decision
12:30 Germany to sell EU5b 10-yr notes

Earnings
No major earnings

There were no significant economic news items on Tuesday. On Wednesday we will get the PPI, retail sales and oil inventories.

 


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