Home > Stock Market Strategy > WALL STREET CRAPS MARKET OBSERVATIONS FOR JUNE 26, 2012

WALL STREET CRAPS MARKET OBSERVATIONS FOR JUNE 26, 2012

June 26th, 2012

MARKET OBSERVATIONS FOR JUNE 26, 2012: The stock market rally of the last few weeks is taking a breather. With Monday’s sharp drop, I would expect a retest of the early June lows sometime early next week. That would allow several of the internal indicators to set up for another buy signal.

The McClellan Summation Index is looking toppy and will probably zig-zag down to another point slightly above the early June lows. This would be a normal pattern for setting up a buy range to enter the market.

Other key market indicators show the following:

For now, the best advice is to remain on the sidelines getting ready for a buy signal in the near term either late this week or next. This may not be a major buy signal but one for a short run up. Don’t expect all stocks to participate in this run so avoid the temptation to buy low with energy stocks. Choose the broad-based ETFs like DIA and QQQ for accumulation. If things set up perfectly, then you could also make a side-bet on leveraged ETFs such as DDM and SSO.

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In regards to Apple (AAPL), the stock seems to have topped out for the near term at 590 and could head lower towards a good buy range just above 500. The Money Flow Indicator has a reading of 60 after hitting a short-term upside target of 80 and is quite a long distance to a buy signal around 20.  The “Full Stochastics Indicator” is in a downwards zig-zag formation with a good chance of heading south toward a new buy area under 20 after Monday’s action. That would be the best time to buy APPL for a trade up. The price at that time would probably between its previous low at 522 and the 200-day moving average which now stands around 501. I’d start making small bets on any move under 530 if that should occur. The last move down could turn out to be an intraday spike.

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