Week In Preview – June 22, 2009 BMO
With a little more than 2 weeks to go till the start of Q3’s Earnings Season, the market is going to see a lot of action between now and then.
This coming week is going to be a bumpy ride with the market anticipating and then reacting to the Fed’s June Monetary Policy meeting which will be due out on Wednesday at about 2:15pm EST. The Tuesday before that, Existing Home Sales will be keenly watched as current inventory levels are expected to decline. Anything less will rock the market. And before the Fed does its thing on Wednesday, New Home Sales will be the market mover.
Thursday’s GDP report will then take over the rocking with Personal Income and Spending taking over the market shaking duty on Friday.
All in all, I am expecting a major downside move this coming week.
Since the start of June, DOW has failed repeatedly to break and hold above 8,770 except for one occasion and then promptly broke back down to 8,500. DOW also failed to hold above the critical 200DSMA for more than 8 days and is not below that MA again.
On weekly candles, DOW is wearing an Evening Star. Level 1 Reversal Patterns have never failed on DOW’s weekly candles.
Dow Jones - Weekly Candles
Although it can be argued that the NASDAQ is well above the 200 and the S&P500 is also holding above the 200, I won’t be convinced about a return to the bull market for many reasons, one of the main reasons being the DOW is not there yet. The true test of the strength of the past three months’ rally will be put forth in two weeks’ time when Earnings Season gets underway. We shall see what kind of results turn out after such a buoyant Q2 earnings season which was, IMO, empty and without guidance. Based on what I saw in Q2, I am expecting much worse to come.
The Fed’s effort in buying up the 10yr has been a waste of money and if the 10yr yield is any indication, Ben & Co should be hiking rates this coming Wednesday. If they don’t, my Oil and Copper are going to be pretty good bets. If they do, the sky will fall and Geithner & Summers will have to have more “tricks” up their filthy sleeves.
Be watchful, be cautious and be ready to take action because if I am right, this week is going to set the tone ahead of earnings season and the tone will be a bearish one.
Here comes the bear!
Plus if you read the previous post, it doesn’t seem much like a joke now, does it?
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