Monday, June 29, 2009

06.29.09 - Markup - Pause - Markup

We are seeing follow-through from last week's Thursday markup and have now recaptured over half of the recent 8% pullback. Amazingly, the VIX lies just north of 25. It has been a long time since we have seen a reading like that, let alone the markup-pause-markup pattern off of a retrace.

Overnight strength was tested early-on, but immediately bought near the Pivot, making for two easy trend trades. Although we looked a bit overbought at that point near R2, price only went sideways, allowing the NASDAQ 100 (QQQQ) and Russel 2000 (IWM) time to play catch up.

As I post this, internals continue to look very supportive for a possible afternoon continuation. However, the twenty-day moving average near SPY $92.80 may prove tempting for shorts to test the bull's end-of-month resolve.

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