Friday, June 28, 2013

Market Update

The market put in the W4 I was hoping for today, just too bad it had me confused with the triangle yesterday. And technically speaking, that triangle was actually the W4 for the W3 with W5 coming in pre-market. So the the initial drop today could be labeled as the A of this W4, B at 1616 and presumably the C ending near or just at the 1597 resistance. The alternative to the W4 is obviously a completed ABC from 1560 with intense selling to come on Monday but I lean towards the completion of the 5 wave structure before a bigger bearish wave. Also, if anyone is wondering why the index closed down so hard in the last few minutes it is mainly because of the annual Russell Reconstitution at the end of the day and perhaps end of the quarter activity. Which in turn might trip orders Monday morning that will allow the market to go to the 1597 area and finalize the W4?

After completing its ranking of stocks above, beginning on June 14th, Russell publishes a preliminary list of the additions and deletions to each index.  Updates to these lists of additions and deletions will be made on June 21st, with the final list of changes published on June 28th.  Between May 31st and June 28th, indexers will begin to adjust the positions in their portfolios based on expectations for the reconstituted index.  The trading volume driven by these changes will be spread out over several weeks, but we can expect a significant concentration of volume on June 28th, especially going into the close.

I didn't enter any positions today as I rather wait for a higher probability set up plus I'm already long enough. I think there is a good chance July will be a turn around month, we'll find out soon..

Have a Great Weekend!

Main S&P 500 Trends*

Short Term Trend = Bearish Leaning Neutral
Medium Term Trend = Neutral Leaning Bearish
Long Term Trend = Bullish 

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

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