Thursday June 22, 2006
The index markets rallied sharply through the late morning into early afternoon trading hours yesterday, however, late session selling produced some questions as to the move's durability. On the plus side, a strong move higher in commodity related issues helped underpin a bid in the midcap and small cap issues, two indices that have been suffering during this trading decline. That being said, neither the Midcap 400 or the Russell 2000 could push into positive territory for the week...seemingly there continues to be a liquidation of these issues at higher levels ahead of next week's ending of Q2. The beneficiaries, so far, of this selling seems to be the DJIA and SPX. The DJIA took our its recent bounce highs from last Thursday on yesterday's close as money continues to flow into these issues. The key question is this : is it enough to stop the downside bleeding? Or is it simply a case of minor rotation that will have no lasting impact on the trade?
This morning the indices are called to open lower as early buying in Europe has evaporated...keep a close eye on the Russell and Midcap indices today as they should provide the most interesting trade due to the end of the quarter and Russell rebalancing over the next week.
Good Trading to All,
Brad Sullivan
www.HamzeiAnalytics.com
