Back to Last Friday’s Open

• Posted by Robert Sinn
• on July 6th, 2012

After a June non-farm payrolls report that came in almost exactly in the middle of my worst case scenario range for equities, the S&P 500 ($SPY) is right back to where it opened after last Friday’s large gap higher:

 Click to enlarge

Bulls certainly will not want to see SPY fall below the 135 level and into the large open gap, however, it is worth noting that a 50% retrace of the entire rally from last Thursday’s low to Tuesday’s high comes in near $SPX 1344 with the important long term support level at 1338 just below.

The next major market catalysts will come from 2nd quarter earnings season which begins on Monday with Alcoa ($AA), next Wednesday’s FOMC minutes, a bevy of economic price data (import/export prices, PPI, CPI), and then finally the Fed Chairman’s semi-annual monetary policy testimony to the House Financial Services Committee on July 18th. As we have become so accustomed during the last few years, everything will revolve around future Fed action and the possibility of another ECB LTRO this summer.

 

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