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Fusion Research - Major Index Review for June 12th 2012

Fusion Research - Major Index Review for June 12th 2012

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Published by: annawitkowski88 on Jun 12, 2012
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Fusion Analytics Research Partners LLC ©2012 FusionAnalytics P 212-661-2022
June 12
th
, 2012
 Equity Market Review
In the ollowing note, we take a look at some o the widely ollowed U.S. indices. As seen below, most o these indiceshave a similar pattern, broken and bouncing along near support. As they say, a picture is worth a thousand wordsand the story this picture tells is certainly a story that U.S. markets are still reeling, despite their recent bounce.Yesterday’s trading activity was a bit discouraging as it appeared to be the classic buy the rumor (buy the Spain bail-out), then sell the news. This “sell the newssession occurred or most indices right at overhead resistance. As wehave said or a while now, with summer seasonality, sporadic - and at times - conicting news ow out o Europe, U.S.indices would likely have a summer very similar to last year. Given the technical damage that many o these indiceshave suered, we will need more evidence, in the orm o bases orming, beore we can suggest a real turn has oc-curred. That said, in the absence o proper bases at present, tactical trading will likely be the most successul strategy.Stated another way, hit and run strategies seem to make more sense at present, as opposed to getting comortableand setting up a base camp. In trading environments like these it doesn’t pay to be a hero or frst one on the battle-feld, but rather, it pays to wait or reinorcements and ground to be gained, beore jumping in the ray.Bottoms tend to be a process, not a singular event, and typically occur when everyone becomes exhausted romtrying to call them and being wrong. At present, investors continue to look or the bottom with every tick down.Consequently, we don’t think we’ve seen one yet. That said don’t ret you’re going to be late to the party, or i a realand durable move is about to occur, not catching the low won’t put you at a disadvantage.S&P 500 resistance remains in the 1,336 to 1,340 zone, while support lies in the 1,270 level. Meanwhile, over on theNASDAQ Composite, resistance remains in the 2,900 to 2,890 area, with support at the 2,725 level.Now let’s move to the major indices on the pages below. 
Summary
 
Fusion Analytics Research Partners LLC ©2012 FusionAnalytics P 212-661-2022
June 12
th
, 2012
 Equity Market Review
KBW Bank Index (BKX)
- Daily Chart
Dow Jones Transportation Index (TRAN)
- Daily Chart
 The Bank Index hit lower support zone(green shaded lines) near 40, had anominal bounce, but remains ar belowsupport. Unless something horrifc comesdown the pike, we would expect thebanks to build a base in and around thissupport level or just slightly lower. The Transportation Index is locked in arange below resistance 5,100 to 5,200 (redshaded lines) and support 4,800 to 4,700(green shaded lines). A breakout aboveor below support will tell us a lot aboutwhere the U.S. economy is tracking.$ ow trends remaindistributive$ ow trends remaindistributive
 
Fusion Analytics Research Partners LLC ©2012 FusionAnalytics P 212-661-2022
June 12
th
, 2012
 Equity Market Review
Morgan Stanley Consumer Staples Index (CMR)
- Daily Chart
AMEX Broker Dealer Index (XBD)
- Daily Chart
 The Consumer Staples Index is also rangebound. The Index is locked in a rangebelow resistance 790 to 780 (red shadedlines) and support 760 to 750 (greenshaded lines)$ ow trends remaindistributive$ ow trends remaindistributive The AMEX Broker Dealer Index has been one o the weakerindices and recently broke support, which has now becomeresistance, in the 90 to 88 area (red shaded lines). Thenext real support is the all 2011 lows near 76 to 74 (greenshaded lines)

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