Markets: Your Must-Read Morning Report 6.30.10
The exclusive Markets Morning Report is supplied by Precision Capital Management.
The Precise Take – Markets consolidating Tuesday’s selloff
Big Picture Analysis: The bad news keeps rolling in as this morning’s ADP Employment Report, a bellwether of Friday’s BLS Employment Situation report, disclosed only 15,000 jobs gained in June. There are some reasons to be short term bullish into Friday, however, as the first day of July (tomorrow) has a bullish seasonality, as would Friday—if—the headline employment statistics come within consensus. Days following sharp declines, such as that experienced yesterday, also tend to consolidate and produce a mild bounce. Compounding trading in the short term, however, is a conspicuous head and shoulders on the S&P 500 that has captured retail’s imagination, much as a similar one did toward the end of June, 2009. While we do expect the neckline to be broken decisively to the downside, in the spirit of the chief of staff, professionals would be remiss to let it go to waste by unfolding in textbook fashion. There may first be a quick break of the ~1030 neckline in the ES only to rally 30 points and shake out the weak shorts. Only a close above the 1172.75 high volume level suggests a…
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