Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, May 22, 2012

5/22/12 Summer Trading With Greece Looming

Stock Market Technical Analysis
 Click on above image to enlarge

At the open today, major indexes followed through nicely until midday where they turned sideways.  The NASDAQ, S&P 500, DOW, and QQQ all four had their price bars cross above the day 5 EMA in the morning and then pullback to set down on top of the day 5 EMA line at midday.  All was well until that point as that is the first rest point in a market push when the index price bars set down on the 5 EMA line and start trading sideways on it.  Late in the afternoon, the Greek Prime Minister issued a news release that they really are considering exiting the Euro and the entire stock market rolled over and dived into the bell.

The chart above is the 15 minute bars chart of the VXX (VIX Futures), you can see in the last hour when the euro comments hit the newswire there was a huge sudden spike in volatility with a corresponding market selloff.

As I mentioned in last night's blog, any bad news on the Euro will reverse any rally in its tracks and sure enough, we got it and the market went from nicely up to slightly in the red by the close.  Classic summer trading along with the euro mess...no wonder so many traders won't trust anything now.  Now we will be depending on WallStreet and/or the PPT to pick up the ball to get this thing going again or we will look back and this will be seen as a two day speed bump in the journey South.

Alan