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Tuesday, June 14, 2011

Market Thought... the bounce

We got a nice bounce today thanks to China's soft landing. (But I also think the action after the VF corp/timberland acquisition told the big-boys the market is very undervalued here.)

I think the Market Thought post 'obvious' is in play, but the above information gave a very nice catalyst for the bounce.  Although we had nice action, technically, we are in rough waters.  The SP500 passed the first round of resistance with the 5sma, but it push downward after hitting the 150SMA intra-day.

The action was so nice, we may have follow through, and the 150SMA may only have been intraday resistance. But after that its the 14SMA and the 1305 level. The 1305 level is also indicated by the weekly.

I think earnings will allow the SP500 to breach these resistance levels, but on its own, I am not sure if the 1305 level can be breached just yet. (Unless we rally into earnings, and earnings becomes a 'sell-the-news' event.)

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