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fib_1618

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So with the BETS finally making it to our first weekly BUY signal since January of 2014 with a reading of +70, underlying market conditions remain buoyant enough to where the month of June should be a positive one for equities overall as we go into the July 4th holiday weekend. How far this rally might extend after that will depend greatly on how much additional thrust we receive in breadth as we go into this month's quarterly futures and options expiration period which is due on June 17th and, more importantly, if volume plurality continues to expand in tandem.

Well, it started out to look like a pretty good week for the bulls until the market suddenly tripped on Thursday, and after trying to right itself that same day, all but collapsed on Friday but leaving traders here in the United States with only a minor average loss of -.15% once the dust had settled. The largest weekly loss came from the NASDAQ Composite Index which was down -.97%, while the S&P 600 Small Cap Index actually showed a gain of +.43% and extending its weekly consecutive gains total to 4 in a row.

Looking over this week's series of breadth charts shows that money continues to pour into the relative safety of interest rate sensitive issues such as the NYSE Bond CEF, NYSE Specialty CEF, NYSE REIT, Investment Grade and Junk Bond advance/decline lines with yields on the 10 year note breaking to their lowest weekly levels since December of 2012 and less than a 1/4 point from its all time lows. Meanwhile, the price of gold and silver have now regained almost all that was lost in the month of May as cumulative money flows in the Precious Metals and XAU advance/decline lines continue to lead the way to the upside. Taken together, this instructs us that the financial markets are not only flushed with cheap money, but current liquidity levels in the United States are more than ample enough to absorb any bearish ambushes that may be thrown at it.

Looking overseas and we see that we have a mixed picture with the Aussie, Bombay (and to a lesser degree) the DAX advance/decline lines maintaining their patterns of higher cumulative highs. However, the FTSE and CAC advance/decline lines continue to have their problems in attracting investment capital and suggesting that much of the late week weakness seen in the U.S. on Friday was a direct result of these A/D line's technical breakdowns as traders begin to place their bets on the United Kingdom's upcoming vote to remain in the European Union on June 23rd. So until we (evidently) get some additional clarity on how this referendum is likely to go, this might provide a short term "thumb on the scale" toward market gains not only in Europe, but maybe worldwide as well.

So with the BETS dropping 5 points to a +65, we remain on a Buy signal overall. Another positive note is that the selloff on Friday also provided further help in working off our "overbought" readings that we cover in the chat sessions, but with that said, there's still room for a bit more unwinding before we reach a more neutral balance between buyers and sellers. Because of this, and the unfortunate massacre down in the Orlando area earlier today, the expectation is for some follow through weakness on Monday and into Tuesday, but then firming into next Friday's quarterly OPEX. Once this is out the way, the expectation remains in seeing higher equity prices going into the July 4th holiday weekend, though it may be a more laborious path in reaching these new highs than previously thought.

Have a great trading week!

US Equity Markets:

[breadthspx061016]


[breadthdjia061016]

[breadthspec061016]

[breadthpre061016]

US Interest Rates:

[breadthtnx061016]

[breadthig061016]

[breadthjunk061016]

US Real Estate:

[breadthreit061016]

Precious Metals:

[breadthpm061016]

[breadthxau061016]

Australia:

[breadthaus061016]

England:

[breadthftse061016]

France:

[breadthcac061016]

Germany:

[breadthdax061016]

India:

[breadthbse061016]

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