Jack Steiman, On Bears Fighting the Fed (SwingTradeOnline.com)
The Euro Summit is upon us with many questions still unanswered, such as how Greece and Spain will receive funds for bailouts. Everyone is looking for Merkel from Germany to step in and support it all. She, however, said over the weekend that she would have none of it. The Eurozone was not happy about this, and thus all of it sold off while we slept last night. This, of course, allowed our stock futures to fall hard into the open on Monday.
They gapped down and never looked back. Nothing horrible, but an overall downer of a day for the bulls as it was mostly a gap and run day, instead of the far more bullish gap and churn, which turns red hollow late.
We closed well below the gap down open, and thus the bulls have nothing to feel good about as the day ended. The Summit is ongoing this week, with the Eurozone trying to figure out how to handle their debt crisis, which in turn will work for, or against, our own stock market. This will naturally cause quite a bit of churn, but we should all be used to that by now. All we ever do is churn to no where, so why should things be any different in this moment!
Even though things are really bad, it doesn't take very much to get a market to turn back up, and thus even the slightest bit of good news will turn this all around. However, should there be no true resolution, the market is very vulnerable due to the fact that many of our oversold daily oscillators have unwound back up quite a bit. There is plenty of down side room should the market want it from a technical perspective. Bottom line is today we saw more uncertainty from Europe, and once you add uncertainty to a bad situation, the path of least resistance is clearly lower.
However, there's fear of the Fed, if you're a bear. It's tough being a bear when you're not in a free market environment. And folks, we're not! No matter how bad things are, there's always the printing press, and for some reason, the market loves the printing press. It shouldn't, but for some unknown reason, it really does. I think it's waning a bit, but the market still loves its free juice. So in the end, the bears fight the fundamentals and the Fed. Is it any wonder, with all of the problems out there, we're still no where in terms of being bearish in the market?
If we study the long-term weekly and monthly charts of all the major indexes, along with most of the leading stocks such as Apple Inc. (AAPL) and Caterpillar Inc. (CAT), you can see that things don't exactly look super for the bulls. Moving lower can take a long time. Distributing things lower is often a very arduous task for the bears. It would make the most sense for this market to ultimately go lower based on those weekly and monthly charts, but you never know what news may come up to turn all of those bearish looking longer-term charts into a more bullish set up. On the daily charts we see nothing bearish at all.
We're now trading between two wide open gaps, the gap down created by Monday's gap down and run, and a large 18-point gap up from a few weeks past. That gap up is from the bottom at 2778, and the top at 2796. Only if the bears can remove the 2778 level would we say that things are more favorable for them. Only if the bulls can get above Friday's close can they say they're in really good shape. In between is noise, as is the open wedges we're still seeing in the big picture on the daily, and weekly, charts on many of the key indexes.
Avi Gilburt, On Need for One More Wave Down (ElliottWaveTrader.net)
As we told subscribers over the weekend, the internal pattern was suggesting that we see another drop within this larger wave as either the completion of the (c) wave or the completion of wave v of (3) in the red count.
For now, I have removed the green wave ii count since we have broken below the 1308ES level, which had the wonderful confluence with the upper targets sited. Until the 1296ES level is broken as support, green wave ii is still a possibility, but I think the more primary bullish possibility is the fractal possibility we mentioned over the weekend.
At this time, the market still seems to need one more wave down to complete this grey wave v. Ideally, if the market can decline to the 1293ES level, where green (a) would equal green (c), this would give me more confidence in the fractal we mentioned over the weekend. Of course, 1277ES is still a possibility, but I just don't see the pattern that will take us there at this time.
The question then arises as to how do we know if the red count will not apply even if we seem to be completing red wave (3)? First, in order for the red count to work, after completing red wave (3), we would need to see a red wave (4) consolidation. Since red wave (2) was very short in time and deep in price retracement, my expectation - based upon the theory of alternation - would be a long in time and shallow in price red wave (4).
This would mean that, assuming we bottomed at 1293ES in another decline from this level, that the market will stay below the .382 retracement, which is the 1317/1318ES region. Also, my expectation would be that this consolidation should take at least a full day if not two days, especially when we consider that grey wave iv of red wave (3) took a full day, and that was a 4th wave of a lesser degree, so this one of a greater degree should take more time.
However, if the market does drop to 1293, and starts an impulsive 5 wave rally that moves over the 1318ES level quite rapidly, that is our first signal that we have completed a corrective decline, which we would label as the green (b) wave. Moving over the wave iv of one lesser degree at 1332 gives us even more confidence, and moving over the 1338ES level - the bottom of wave (1) - completely invalidates the move up as a red wave (4), and leaves us with a corrective 3 wave decline.
I also want to remind you to remember that the purple wave 4 top is still possible in a larger expanding leading diagonal, and moving below 1293ES would make that a bit more likely. So, please keep that in the back of your mind.
Mike Paulenoff, On Gold's Bullish Technicals (MPTrader.com)
My intermediate-term work indicates the SPDR Gold Shares (GLD) ended a significant correction off of its Feb 28 high at 174.00 at the May 30 low of 148.53, which coincided with my expectations for a 5.5 month cycle low.
The rally from the 148.53 low to the June 6 high at 159.30 exhibited very bullish form, which suggests strongly that a new intermediate-term bull phase has commenced. The pullback from the June 6 high into Friday's low at 151.21 satisfied the criteria of a deep, successful retest of the 5/30 low, which if accurate, means that the GLD has put in a potential Double Bottom low in the aftermath of its intermediate term correction into the 151.00-148.50 support zone.
We are looking for the resumption of strength that propels the GLD to revisit and hurdle the 158-159 resistance plateau, on the way to 165-166 thereafter.
Meanwhile, the USD is also climbing today, suggesting that for some reason the gold and the euro markets are diverging. My suspicion is that increasingly a disillusioned investor class will "hide" in the perceived safety of gold rather than in U.S. Treasuries and German Bunds (puny yields offer insufficient risk- premium).
Harry Boxer, On Longs & Shorts to Watch (TheTechTrader.com)
We have a lot of stocks that are looking interesting, especially junior biotech stocks. It was a lousy-looking market on Monday, so we also have a lot of Boxer Shorts that are looking well.
American Vanguard Corp. (AVD) was a swing trade of ours a few weeks ago. It continues to consolidate, but it's still bullish. As a matter of fact, it's a rising flag, or so. On Monday, it popped 75 cents to 25.29, or 3%, on 429,000 shares. If it pops through the 27 1/2 area, this stock could really run again, perhaps even as high as low- to mid-30's. That will be the target once it does get out across the resistance level. It could be time for it to make a move, so keep an eye on this one.
Medgenics, Inc. (MDGN) has really moved in the last 5 sessions, taking it from 5 3/4 all the way up to 12 3/4. That doesn't happen too often, and it's a result of being overbought. On Monday, it jumped 1.28 to 11.88, or 12%, on 649,000 shares. The momentum is strong enough that it may be carried to 14.
Pharmacyclics Inc. (PCYC) undauntedly continues to run up. It was up another 3.73 to 51.53, or 7.8%, on 2.1 million shares on Monday. Right now, it's at the top of the channel, and it may accelerate into a spike here.
Helmerich & Payne Inc. (HP) has gone from 46 to 39 just in the last 4 sessions. On Monday, it was down another 2.49 to 39.31, or 5.95%, on 3.7 million shares. There may very well be a test of the October 2011 lows on this one down around 35 1/2 - 36.
Joy Global, Inc. (JOY) broke, formed a wedge, and on Monday was down 2.12 to 52.11, or 3.91%, on 2.2 million shares. At this point, this stock may very well get down to the mid-40's.
Other stocks in our Charts for the Day are Akorn, Inc. (AKRX), Amarin Corporation (AMRN), CalAmp Corp. (CAMP), Celsion Corp. (CLSN), CytRx Corporation (CYTR), Endocyte, Inc. (ECYT), Galena Biopharma, Inc. (GALE), Horizon Pharma, Inc. (HZNP), Synta Pharmaceuticals Corp. (SNTA), Spectrum Pharmaceuticals, Inc. (SPPI), Threshold Pharmaceuticals, Inc. (THLD), and VirnetX Holding Corp (VHC). Boxer Shorts include Abercrombie & Fitch Co. (ANF), American Public Education, Inc. (APEI), Deckers Outdoor Corp. (DECK), Freeport-McMoRan Copper & Gold Inc. (FCX), Gardner Denver Inc. (GDI), Schnitzer Steel Industries Inc. (SCHN), and A. Schulman, Inc. (SHLM).
Sinisa Persich, On Free Stock Picks: OMER, AMTG, UTHR, and UMBF. (TraderHr.com)
The following four stocks have been in bullish consolidations ahead of what could be continued uptrends should the market cooperate. Plus, all had a relatively flat session on Monday while the market sold off significantly.
Omeros Corporation (OMER) has been flagging in the last two weeks after a huge week-long upmove earlier this month from the 10 to 13 area. The stock closed up 2% on Friday to 13.25 after hitting a new 52-week high of 13.40, and appears poised to continue the uptrend. It pulled back by just a penny on Monday.
Apollo Residential Mortgage (AMTG) has in a rising channel over the last two months, and currently is testing the 19 1/2 resistance area from its March high. The stock has potential to move up to 20.20 once it breaks its previous high, and continue the uptrend from 14 1/2 back in December. The stock actually gained 2 cents on Monday.
United Therapeutics Corporation (UTHR) has been in a bullish pennant over the last week after a several-session surge of nearly 5 points. If it breaks above current levels, it faces next resistance at the 51 level, its February high, and then the 54-55 area from a year ago. The stock closed down just 41 cents, or 0.85%, on Monday.
UMB Financial Corporation(UMBF) has been consolidating over the past two months, and is approaching its April high at 49.37. A move above 49 1/2 would position the stock to test its 55 all-time high from July 2007. The stock dropped just 15 cents on Monday.