2nd Quarter & QE2 End, Finally!

Thursday, June 30, 2011
Stock Market Commentary:

It has been long first half of the year for global capital markets. Stocks and a slew of commodities hit fresh 2011 highs on May 2, the day after Osama Bin Laden was taken out. In early May, many of these so-called “risk” assets got smacked and spent the next 4-6 weeks pulling back before finding support near their respective 200 DMA lines. The underlying fundamental concern is that the global economy is slowing down and QE 2 is slated to end on June 30, 2011. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near their 50DMA lines.

Jobless Claims, Chicago PMI Beat Estimates, & QE 2 Ends:

On Thursday, the Labor Department said initial jobless claims fell by -1,000 last week to 428,000. The longer term four-week average, came in at 426,750, which remained above the dreaded 400,000 mark. Investors were happy to see that Chicago PMI jumped to 61.1 which easily topped the Street’s estimate for 53 and bodes well for the economic recovery. In other news, the second quarter came to a close which also marks the end of the Fed’s QE II program. It will be interesting to see if risk assets and the broader economy can continue to advance even when QE II is off the table.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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Greek Vote Yes!

Wednesday, June 29, 2011
Stock Market Commentary:

Stocks edged higher as investors digested the latest round of economic data and the Greek government voted “yes” to the much anticipated austerity measures. The major averages bounced nicely during the first half of this week but volume, an important indicator of institutional sponsorship, declined which is not ideal. Normally, one would like to see stocks rally on heavier volume and decline on lighter volume. However, the opposite has been true since the beginning of May. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

Greek Vote, Pending Home Sales

Before Wednesday’s open, the Greek Parliament passed a key vote which allows the country to begin their much needed austerity measures. So-called risk assets (stocks, currencies, commodities, etc.) were volatile right after the announcement but edged higher as investors digested the news. Part 2 of the vote is scheduled for Thursday and it will be interesting to see how the markets react to that news. Elsewhere, the National Association of Realtors said pending home sales vaulted +8.2% from April which easily topped the Street’s estimate for a +3% gain. This was the latest in a series of stronger-than-expected economic reports from the ailing housing market and bodes well, by extension, for the broader economy.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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The "Bounce" Continues

Tuesday, June 28, 2011
Stock Market Commentary:

Stocks opened higher after Nike (NKE) reported stronger-than-expected quarterly results and the latest data from the ailing housing market topped estimates. This will be a busy week for investors as a slew of economic data will be released, QE 2 and the second quarter will end. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

S&P Case-Shiller Index Tops Estimates, Greece Austerity Vote

On Tuesday, stocks opened higher after Nike reported solid quarterly results and the S&P Case-Shiller index topped estimates. The S&P/Case-Shiller composite index of 20 metropolitan areas slid -0.1% on a seasonally adjusted basis. This topped the Street’s estimate for a decline of -0.2% and suggests buyers showed up in the second quarter. On a non-seasonally adjusted basis, the index increased +0.7% which was its first advance in eight months. Elsewhere, investors bid “risk” assets higher as Greece ahead of Greece’s austerity vote on Wednesday.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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Stocks Bounce Off Support

Monday, June 27, 2011
Stock Market Commentary:

Stocks bounced off support (200 DMA line) on Monday as investors continue to wait for a near term solution for Greece. This will be a busy week for investors as a slew of economic data will be released (shown below), QE 2 and the second quarter will end. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

Monday: Greece Austerity Vote Nears & U.S. Consumer Spending Unchanged

On Monday, stocks bounced as investors waited for the Greek government to vote on the latest round of austerity measures. U.S. consumer spending was unchanged in May for the first time in almost a year. The Commerce Department said consumer spending was flat, following 10 straight monthly gains and followed a downwardly revised +0.3% gain in April. The unchanged reading was slightly lower than the Street’s +0.1% forecast. After adjusting the data for inflation, spending slid -0.1% in May which does not bode well for the ongoing economic recovery.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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MONDAY: Consumer Spending, Earnings from Nike
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 5-yr note auction, IMF board to select new chief
WEDNESDAY: Weekly mortgage apps, pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees; Earnings from Family Dollar, General Mills, KB Home, Monsanto
THURSDAY: Q2 Ends, Weekly jobless claims, Fed’s Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Q3 Begins, Consumer sentiment, ISM mfg index, construction spending, Biden’s deadline for deficit plan, HP launches TouchPad, auto sales
Source: CNBC.com
 

Adam Sarhan Reuters Gold Quote

Gold slides for second day, breaks key supports
By Frank Tang
Fri, Jun 24 2011
NEW YORK (Reuters) – Gold slumped for a second day on Friday to conclude its worst week in eight, crashing through key technical supports, as investors shed riskier assets and bought the dollar on heightened concerns over Greek debt.
With less than a week until the end of the Federal Reserve’s second quantitative easing program, bullion’s three percent fall over the past two days has raised questions about whether its years-long boom has stalled. After reaching a high of $1,575.79 on May 2, gold has struggled.
Spot prices ended the week below their 50-day moving average for the first time since February, they ruptured a trendline support stemming back to a January low, and they broke out of a six-week sideways pattern to the downside.
All of those technical chart patterns were seen as warning signs by many investors.
“Once the 50-day average is broken on a weekly basis, it a first sign of weakness and that the trend may be changing,” said Adam Sarhan at Sarhan Capital.
Graphic: r.reuters.com/ruz32s
Spot gold was down 1.3 percent at $1,501.40 an ounce by 3:02 p.m. EDT (1902 GMT), having earlier fallen to a month low at $1,498.16. It was down about 2.5 percent for the week.
U.S. August gold futures settled down $19.60, a 1.30 percent drop, at $1,500.90. It set a $1,498.50 and $1,526.50 range. Volume above 170,000 lots was about 20 percent below its 30-day average, but up from weak volume in recent sessions.
The dollar gained almost 1 percent for the week versus the euro on worries that Greece’s parliament will not approve a package of austerity measures next week. The U.S. currency also strengthened after the Federal Reserve, earlier this week, offered no hope for additional monetary support.
“Gold’s decline has to do with the strength of the dollar, and since the equity market is resuming its decline, that’s what’s working counter to gold prices at the moment,” said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott, which manages $54 billion in assets.
Silver was down 2 percent at $34.55 an ounce, lifting the gold/silver ratio — the number of ounces of silver needed to buy one ounce of gold — to near a one-month high at 43.5. The ratio’s increase highlights gold’s outperformance relative to silver.
TECHNICAL WEAKNESS
Rick Bensignor, chief market strategist at Dahlman Rose, said, gold’s pullback could have more room to the downside, with next major support in area of May’s lows between $1,488 and $1,471 a tonne.
“The dollar could rally up to its 200-day moving average, and that will not help gold advance right now,” he said.
Worries about Greece defaulting on its massive debt, a development that would roil markets if the country’s parliament does not approve austerity measures and concerns over some Italian banks dragged global stock markets sharply lower for a second day. <USD/> .N
“You have prices of crude oil, commodities and the stock market again under pressure. And, you have a strong dollar. To think that gold is going to rally, it’s just not going to happen,” said independent investor Dennis Gartman.
“Every market that has the term ‘risk’ associated with it, everybody wants out,” he said.
With the second round of Fed quantitative easing (QE2) ending in June, some investors question whether risk assets could rise further. Gold has thrived on the expectation of an extended period of low U.S. interest rates, and that placed non-yielding bullion in a better position to compete for investor cash against stocks or bonds.
Among platinum group metals, platinum was last down 0.8 percent at $1,680.24 an ounce, while palladium was down 1.8 percent at $729.25.
Prices at 3:02 p.m. EDT (1902 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG US gold 1500.90 -19.60 -1.3% 5.6% US silver 34.638 -0.364 1.0% 12.0% US platinum 1677.60 -16.90 -1.0% -5.7% US palladium 730.20 -11.35 -1.5% -9.1%
Gold 1501.40 -19.30 -1.3% 5.8% Silver 34.55 -0.70 -2.0% 12.0% Platinum 1680.24 -14.26 -0.8% -4.9% Palladium 729.25 -13.10 -1.8% -8.8%
Gold Fix 1514.75 -6.25 -0.4% 7.4% Silver Fix 34.73 -128.00 -3.6% 13.4% Platinum Fix 1696.00 10.00 0.6% -2.0% Palladium Fix 739.00 5.00 0.7% -6.6%
(Additional reporting by Amanda Cooper and Silvia Antonioli in London, Manolo Serapio Jr in Singapore; Editing by Carole Vaporean)
URL: http://www.reuters.com/article/2011/06/24/us-markets-precious-idUSTRE7592IU20110624
 

Stocks End Week Relatively Flat

Friday, June 24, 2011
Stock Market Commentary:

Stocks ended relatively flat to slightly higher as investors digested a very busy week of data. After the dust setteled, the major averages were little changed but remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA line.

Monday-Wednesday’s Action: Greece and Fed Dominate The Headlines

On Monday, stocks and a slew of commodities ended mixed as investors waited for the next step in the ongoing situation in Greece to unfold. On Tuesday, stocks soared as investors were waiting for a positive confidence vote from Greece and the conclusion of the Fed’s latest meeting. Existing home sales fell -3.8% to a 4.81 million annual rate in May. After Tuesday’s close, the Greek Prime Minister won the much anticipated confidence vote which helped ease tensions in the region. Stocks were smacked on Wednesday effectively ending their latest (short-lived) rally attempt when the Federal Reserve held rates steady but lowered their growth targets for 2011 and 2012.

Thursday & Friday’s Action: Sloppy Action; Support Holds!

Before Thursday open, the Labor Department said weekly jobless claims rose +9,000 t0 429,000 last week which still above the dreaded 400,000 level. Elsewhere, new home sales slid -2.1% in May to 319,000, which topped the Street’s 305,000 estimate. In a healthy data point for the ailing housing market, the number of new homes on the market fell -6,000 to 166,000 which was the lowest level in 50 years. In  a surprise move to lower energy prices, the International Energy Agency (IEA) said 60 million barrels of oil would be released from strategic government stockpiles across the globe. The underlying logic behind the move was that lower oil prices may help stimulate the global economy. Only time will tell. Before Friday’s open, two important stronger than expected economic data points were released. GDP rose +1.9%, topping the Street’s estimate of +1.8%. A separate report showed that durable goods orders rose +1.9%, topping the Street’s +1.5% forecast and also topped April’s reading of -2.7%.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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Rally Ends; Stocks Smacked

Thursday, June 23, 2011
Stock Market Commentary:

Stocks and a slew of commodities got smacked on Thursday after the Fed meeting and a slew of disappointing economic data was released. Thursday’s ominous action effectively ended any chance of a rally and suggests the bears are back in control of this market.

Jobless Claims Rise, New Home Sales Fall, & IEA Takes Emergency Measures:

Before Thursday open, the Labor Department said weekly jobless claims rose +9,000 t0 429,000 last week which still above the dreaded 400,000 level. Elsewhere, new home sales slid -2.1% in May to 319,000, which topped the Street’s 305,000 estimate. In a healthy data point for the ailing housing market, the number of new homes on the market fell -6,000 to 166,000 which was the lowest level in 50 years. In  a surprise move to lower energy prices, the International Energy Agency (IEA) said 60 million barrels of oil would be released from strategic government stockpiles across the globe. The underlying logic behind the move was that lower oil prices may help stimulate the global economy. Only time will tell.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages are their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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Fed Speaks; World Listens

Wednesday, June 22, 2011
Stock Market Commentary:

Stocks and a slew of commodities opened higher in anticipation of positive comments from the Federal Reserve on Wednesday. From our point of view, the Nasdaq composite and small-cap Russell 2000 indexes both produced sound follow-through days (FTD) which confirmed their latest rally attempts on Tuesday. This healthy action suggests the bulls are now back in control of this market; as long as the 200 DMA line holds. It is important to note that every major rally in history began with a FTD but not every FTD leads to a major rally.

Home Prices Edge Higher, FOMC Meeting, & Bernanke Press Conference:

Before Wednesday’s open, the Federal Housing Finance Agency (FHFA) House Price Index (HPI) was released which showed a slight uptick in home prices. The index unexpectedly rose in April, snapping a six-month losing streak. The FHFA house price index rose +0.8% in April, following a decline of -0.4% in March. The Federal Reserve held rates steady which matched expectations and largely reiterated their recent stance on the U.S. economy and inflation.

Market Outlook- Confirmed Rally:

The market produced a sound follow-through day (FTD) on Tuesday, June 21, 2011 which confirmed the latest rally attempt. Looking forward, this rally will remain intact as long as the major averages continue trading above their respective 200 DMA lines and their recent chart lows. It was encouraging to see the bulls show up and defend the longer term 200 DMA line in the middle of June which is the latest level of support. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. If you are looking for specific help navigating this market, please contact us for more information.

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Sarhan Reuters Quote- METALS-Copper ends off on demand worry, recovery threats

Mon Jun 20, 2011 2:22pm EDT

* Recovery woes, euro zone debt crisis weighs on sentiment

 * Chilean mining ops unaffected by strong earthquake
 * Nickel hits lowest since November last year
 * Coming up: U.S. existing home sales Tuesday
 (Recasts, adds New York dateline/byline, updates with New York
closing copper price, adds detail and analyst comments)
 By Chris Kelly and Sue Thomas
 NEW YORK/LONDON, June 20 (Reuters) - Copper ended lower on
Monday as investors reduced risk amid concerns over metals demand
and global recovery prospects after the release of financial aid
to Greece was delayed.
 Euro-zone finance ministers gave Greece two weeks from Monday
to approve stricter austerity measures in return for another 12
billion euros in emergency loans, piling pressure on Athens to get
its ragged finances in order. [ID:nLDE75J1NR]
 "From the risk standpoint, investors are asking themselves
what solution is going to help resolve or allay some of these
concerns we are seeing from the global growth story," said Adam
Sarhan, chief executive of Sarhan Capital.
 "Greece is not resolved. Eventually you have to address the
structural imbalances that are at play. Until those structural
imbalances are addressed and resolved, the debt crisis is going to
continue in some way, shape, or form."
 As a result, the International Monetary Fund (IMGF) warned
that the economic recovery would be under threat. [ID:nB5E7GH007]
 London Metal Exchange (LME) three-month copper CMCU3 fell
$90 to end at $9,005 a tonne, but managed to bounce back from an
earlier dip through its 200-day moving average at around $8,897.
 In New York, the key September COMEX contract HGU1 settled
2.85 cents lower at $4.0925 per lb.
 Despite the negative tone, prices in London and New York stand
just 12 percent away from record highs hit in February of this
year of $10,190 per tonne and $4.63 per lb.
 "Fear is elevated ... there's no question. But when you factor
out all of the noise and just focus on the market action, we don't
see a lot of pressure ... yet," Sarhan said.
 On the supply side, a strong 6.3 magnitude earthquake in
Chile's mining heartland had little on the market after both
Codelco and Freeport McMoRan (FCX.N) said their key copper mines
were unaffected. [ID:nN08136598]
 Randy North, a trader at RBC, also cited price pressures
related to the fallout in industrial output following the March 11
earthquake and subsequent tsunami in Japan.
 "Automotive and electronics factories are just restarting (in
Japan) and it is going to take a little bit of time before metals
consumption goes back to previous levels."
 Japanese factories produce and export key components for the
automotive and manufacturing industries.
 The March earthquake and tsunami caused supply disruption in
Japan that affected industrial production worldwide.
[ID:nN27159980][ID:nL3E7HG00W]
 In this climate, people are taking money off the table, North
said.
 "We need to see copper go down to mid-$8,000 levels again to
see some more buying."
 China's credit tightening measures, aimed at calming
inflation, were also clouding the outlook for metals demand.
[ID:nL3E7HG1OC]
 NICKEL LOW
 Nickel CMNI3 hit a session low of $21,337 a tonne, its
cheapest since November last year, before ending the day with a
loss of $25 at $21,650 a tonne. It is down by about 27 percent
from the year's highs reached in February.
 "At these levels nickel is looking oversold," Barclays Capital
analyst Gayle Berry said.
 "From a fundamental perspective we don't see any reason why
nickel has underperformed to this extent."
 "LME inventories are falling yet prices have been very weak. I
think the market is pricing in expectations of a better outlook
for supply in the second half of the year."
 Nickel inventories in LME-monitored warehouses fell by 516
tonnes to 110,880 tonnes and are down nearly 20 percent since the
start of the year to a near two-year trough, data on Monday
showed.
 The International Nickel Study Group said in April it expected
the nickel market to record a 60,000-tonne surplus this year,
compared with a deficit of 30,000 tonnes in 2010. [ID:nLDE75F1ZO]
 "We believe that demand growth should at least partially
absorb additional supplies, particularly once the Japanese steel
industry recovers again," Credit Suisse said in a research note.
 Metal Prices at 1753 GMT
 COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
 Metal            Last      Change  Pct Move   End 2010   Ytd Pct
                                                         move
 COMEX Cu       408.90       -3.20     -0.78     444.70     -8.05
 LME Alum      2530.00      -15.00     -0.59    2470.00      2.43
 LME Cu        9000.00      -95.00     -1.04    9600.00     -6.25
 LME Lead      2450.00        0.00     +0.00    2550.00     -3.92
 LME Nickel   21650.00      -25.00     -0.12   24750.00    -12.53
 LME Tin      24795.00     -210.00     -0.84   26900.00     -7.83
 LME Zinc      2171.50      -15.50     -0.71    2454.00    -11.51
 SHFE Alu     16895.00      -30.00     -0.18   16840.00      0.33
 SHFE Cu*     67260.00     -740.00     -1.09   71850.00     -6.39
 SHFE Zin     17005.00     -225.00     -1.31   19475.00    -12.68
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Additional reporting by Silvia Antonioli in London; editing by
William Hardy and Alison Birrane)

Summer Begins; New Rally Confirmed!

Tuesday, June 21, 2011
Stock Market Commentary:

Stocks and a slew of commodities ended higher as investors awaited the Greek confidence vote. Tuesday marked day 4 of a new rally attempt for the major averages. Upon further review, even though the Nasdaq composite ended lower on Thursday, it was in the upper half of its range which marked Day 1 of a new rally attempt for that index as well as the other popular averages. Tuesday’s robust action in the Nasdaq composite and the small-cap Russell 2000 index confirmed the current rally attempt for the major averages and suggests the bulls are now back in control of this market; as long as the 200 DMA line holds.

Existing Home Sales, Fed Meeting & Greek Confidence Vote:

The Federal Reserve began its much anticipated two-day meeting on Tuesday. The Street expects the FOMC to hold rates steady but will be looking closely at the after meeting commentary for signs of a change in policy. At 10 AM EST, existing home sales fell -3.8% in May to a 4.81 million annual rate in May. After Tuesday’s close, the Greek Prime Minister won the much anticipated confidence vote.

Market Outlook- Confirmed Rally:

The market produced a sound follow-through day (FTD) on Tuesday, June 21, 2011 which confirmed the latest rally attempt. Looking forward, this rally will remain intact as long as the major averages continue trading above their respective 200 DMA lines and their recent chart lows. It was encouraging to see the bulls show up and defend the longer term 200 DMA line in the middle of June which is the latest level of support. The next level of resistance for the major averages is their respective 50 DMA lines.
For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. If you are looking for specific help navigating this market, please contact us for more information.

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