Home > Stock Market Strategy > WALL STREET CRAPS MARKET OBSERVATIONS FOR JUNE 11, 2012

WALL STREET CRAPS MARKET OBSERVATIONS FOR JUNE 11, 2012

June 11th, 2012

MARKET OBSERVATIONS FOR JUNE 11, 2012: The stock market broke to new lows on Monday and Tuesday of last week. The reversal last Tuesday may have been the end of the correction with the cover story being the bad economic news from Europe. The new uptrend is currently in a “reverse head and shoulders” chart pattern with a little bit of backing and filling needed over the next day or two. With the deeply oversold bottom in terms of breadth and sentiment (but not necessarily in the extent of prices in major indices), there is now a strong chance of the stock market going into a sustained rally phase over the intermediate term.

The McClellan Summation Index appears to have ended its multi-month decline last week. Time symmetry tendencies indicate that a matching rally phase should take us well into the summer in terms of volume and breadth. Keep in mind that the McClellan Summation Index reflects the internal market and will precede price movements which is the external market.

Key market indicators shows the following:

For now, the best advice is to buy on weakness over the near term in less risky positions. Last Tuesday was the time to buy riskier vehicles like leveraged ETFs. You can buy value-oriented ETFs and stocks on weakness. This decline may only last a few days so you may have to act quickly on this.

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In regards to Apple (AAPL), this current rally in the stock is fueled by expectations on upcoming positive announcements and strong fundamentals. On the shorter term, the Money Flow Indicator has a reading of 79 which is closer to a top than a bottom. But with this particular stock, the Money Flow Indicator can sustain a high reading while the stock continues to climb. It may be too late to buy this stock individually so the QQQs are probably the best way to participate in Apple’s rally.

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