Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
This week Wall Street participants will come to terms, and working through the Brexit result. Friday close was not the bottom, likely the beginning of the long awaited correction.
There are some huge positions that will be unwound early this week and those have to move through the system. Also, there will be margin calls that will have to be met. Add to the Southside pressure.
If you insist on trading this market there are points to look for, but until the indices show reversal action along with some quality stocks in quality
patterns in position to move, the bottom remains just a notion, not a solid mark.
Watch the Wall Street action in the indices as well as the groups that have led: oil, chips, industrial, heavy construction, leading retail. How they hold up will be a tell. Also, watch for possible new leadership emerging from the sectors that were hardest hit Friday.
If the Wall Street leadership fail and none emerge to take their place, that is bad for the Northside. The Northside plays will then take the back seat to more Southside plays.
The market has tried and tried and tried for higher highs and failed, and this could be the last hurrah of the 21 month rounded market top, leading to a major market correction of 38 to 55% meaning a major selloff into a 2 yrs + Bear Market.
S&P 500, RUTX (Russell 2000 are over their 200-Day SMAs, S&P 400 is over its 200-Day SMA, the SOX is at its 50-Day SMA. They have room to test, some room to give into support as the week moves into the July 4th Holiday.
As they do, see plays on Southside and watch how/if the leadership groups hold or fold.
The Bulls Vs the Bears
VIX: 25.76; +8.51
VXN: 24.88; +6.67
VXO: 23.27; +7.35
Put/Call Ratio (PCR) CBOE: 1.24; -0.04, 8 of 9 over 1.0, another session of a lot of Put action, read a lot of trader and market skepticism.
The Bulls rebounded back to the 47 mark of 3 weeks ago.
The Bears faded to 23.2.
The Bulls are at: 47.5 Vs 45.9 last
The Bears are at 23.2 Vs 23.5 last
Support and Resistance
DJIA close: 17,400.75
The 50-Day EMA: 17,703
17,978 the Nov 2015 high
18,016 the Jun 2016 high
18,181 the Jul 2015 high
18,168 the Apr 2016 high
18,288 a Mar 2015 high
18,351 May 2015 all-time high
17,351 the Sept 2014 high.
17,265 a Dec 2015 low
17,245 the Nov 2015 low
The 200-Day SMA: 17,235
S&P 500 close: 2037.41
2040 the March 2015 closing low
2046 the July 2015 closing low
2062 the January 2015 lower high
The 50-Day EMA: 2073
2026 the May 2016 low
2023 the November 2015 low
The 200-Day SMA: 2021
NAS Comp close: 4707.98
4751 a Jan 2015 high
4774 the Jan 2015 high
4811 the Nov 2014 high
4815 the Dec 2014 high
The 200-Day SMA: 4820
4684 the May 2016 low
4637 the Feb 2016 high
4620 a Feb 2016 high
Have a terrific week
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