Sunday, June 18, 2006

Lots of News in the Next Two Weeks

Friday’s option expiration, or quadruple witching as it is called, didn’t show very much in the way of volatility or in volume for that matter.  The volume figures for the week were pretty strong but Friday’s was only in line with the rest of the week.  As for price action, the Dow was down 64 Cents while the Russell 2000 and the NASDAQ Comp were both down 1% on the day.  What we find curious is that our momentum indicators are still oversold even after the big rally we saw during the middle of last week.    

We see that the upcoming couple of weeks hold a lot of information that the market will need to digest, not so much this week but the following week does include the FOMC meeting.  Before we get to that data point, the market will get to see May housing starts and Leading Economic Indicators (LEI) and durable goods orders next week.  The following week brings May new home sales, May existing home sales, and consumer confidence before we get to hear from the Fed on the course of interest rates.  We will talk more about these data points as the come upon us.

We do remind you that the market is not paying much attention to the news of the day and no matter what the media may tell you, they don’t always know what the market is doing or why.  We don’t know what the market is doing but we try to listen to what it is trying to say to us.  Right now, we see that the rally has not pushed us out of the oversold position which leaves us thinking that the market can surprise on the downside.  We continue to say…

Be careful out there.

Dow Industrials:  11,014.55  -0.64
RYVNX:   21.90
RYAIX:  24.03
TLT:  84.31
BEGBX:  13.41

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