Quantcast
SH @ the close 6/8/12: Suckers rally or time to get bullish again? | Stock Haven | Stock Chat Room | Penny Stocks | Options |Stock Haven | Stock Chat Room | Penny Stocks | Options |

Stockhaven Blog  

SH @ the close 6/8/12: Suckers rally or time to get bullish again?

The S&P500 finished the week with a solid gain of 3.5% and managed to shrug off continued weakness in oil. If you would have told us that oil would nearly give up all of its gains for the week before struggling to finish 1% and the market would still be higher by 3.5% we would have taken that bet. The reason we say oil “struggled” to gain 1% on the week is because it was actually going to finish flat to slightly lower if it weren’t for an end of day rally that started shortly after 2 pm. 

Keeping the focus on weekly charts, the VIX finished at its lowest Friday close since May 11th. We must point out though, that on Friday the VIX was actually down nearly 7% at one point before finishing down 2.2%. That type of intraday bounce points to a sense of anxiety that still exists in the market, even after SPX has risen 4.5% from its recent low at 1,266. Especially encouraging from a bullish perspective to us though is the fact that after the market gave up most of their gains from yesterday, they clawed back today to finish solidly higher.

The markets could have easily continued the downside momentum they built up heading into the close yesterday, but that was not the case. This definitely suggests an appetite for further upside, especially considering SPX is less than 1% away from the key 1,334 level (last weeks high). Looking for another positive? Have an AAPL.

The largest company in the market closed at its highest level since 5/3 and its chart continues to trend higher since bottoming in the $520′s on 5/18. We’ve said it before and we’ll say it again, what’s good for AAPL is good for the market. If AAPL can maintain its threshold above $560-$570 and creep back towards $600 over the coming weeks, we would expect the NASDAQ to have a hard time moving substantially lower.

At the end of the day we are conflicted given the mixed signals out there from the likes of oil and copper but the positive price action in key names like AAPL. At the risk of missing out on a move higher that we believe most are not expecting, we’re shifting to the cautiously bullish camp. Our reasoning is simple, after the huge bounce from 1,266 we saw the most recent dip get bought.

That most recent dip came today when the market was initially red. Being short term traders, we are most concerned with the most recent price action, and it was positive. The risk to this bullish bias is we are not following one of our own rules by overlooking the weakness in oil (something we recommend never to do). However, we simply can’t turn down the juicy contrarian trade that’s currently presenting itself given the recent price action in the market. We’ll use today’s low as a reference point for reversing this bullish sentiment.

Did you know that you can watch Stockhaven trade live in real time?

Learn how to daytrade by watching someone else trade! Watchhimtrade.com is the only site that lets you look over the shoulder of a professional daytrader.

Watch this video now where he shows you how it’s possible to make 100% in just 5 minutes!

About stockhaven

StockHaven is your #1 Source for reliable and honest picks.
Educo Web Design

Sign up for the FREE SH Newsletter