June 21, 2012 at 08:41 AM EDT
Markets bought the rumors, sell the news?
Thursday, June 21, 8:35 a.m. Two weeks ago markets were excited and bought the rumor that Spain’s banks would receive a large infusion of capital. But when the news was reported that the rescue effort had indeed taken place, markets rallied only a half a day more and then sold off. Last week, markets bought [...]

Thursday, June 21, 8:35 a.m.

Two weeks ago markets were excited and bought the rumor that Spain’s banks would receive a large infusion of capital. But when the news was reported that the rescue effort had indeed taken place, markets rallied only a half a day more and then sold off.

Last week, markets bought the rumor that either the Greek election would see the pro-euro party win, or there would be an immediate coordinated global rescue announcement. A win-win situation. But when the Greek election was a positive, the pro-euro party winning, the market rallied only half a day further and then sold off.

This week, the market bought the rumor that the continuing negative U.S. economic reports would force the Fed to take dramatic action at its FOMC meeting yesterday. When it didn’t, only maintaining the status quo by extending operation twist (which has been in operation for six months anyway), and repeating its months-old promise that it stands ready to provide a stimulus package in the future “if needed”, the market’s response was a few minutes of volatility, then basically flat.

It leaves the U.S. market at an intriguing juncture.

Intermediate-term, the S&P 500 topped out in March and subsequently broke below the support at its 20-week m.a. for the first time since last summer’s correction.

The rally of the last two weeks has retraced about 50% of the correction from the March peak, and has the S&P 500 just about at its 20-week m.a. again, where the question is whether it will be overhead resistance that halts the rally, or will break through and begin another leg up.

62112a

And short-term, the rally has carried it back up to (and fractionally above) its 50-day m.a.

That has both the short-term and intermediate-term at potential overhead resistance where it will obviously either break through or be halted.

62112b 

Sorry to be so brief this morning (and an hour early with the post), but I have an important early meeting to get to.

Subscribers to Street Smart Report: There is a hotline and an in-depth signals and recommendations report on the U.S. Market are in the subscribers’ area of the Street Smart Report website from last evening.

To read my weekend newspaper column ‘Markets and Governments Are Rolling the Dice!’ click here.

Yesterday in the U.S. Market.

A mixed response to the Fed’s FOMC statement and Chairman Bernanke’s press conference.

The Dow closed down 12 points, or 0.1%. The S&P 500 closed up 0.1%. The NYSE Composite closed down 0.1%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed up 0.1%. The Russell 2000 closed down 0.3%. The DJ Transportation Avg. closed down 0.4%. The DJ Utilities Avg closed up 1.2%.

Gold closed down $4 an ounce at $1,610.

Oil plunged $3.26 a barrel at $81.09.

The U.S. dollar etf UUP closed up 0.2%.

The U.S. Treasury bond etf TLT closed up 0.5%.

Yesterday in European Markets.

European markets were up fractionally yesterday, but closed before the U.S. Fed’s FOMC statement and Bernanke’s press conference. The London market closed up 0.6%. The German DAX closed up 0.4%. And France’s CAC closed up 0.3%.

Asian Markets were mostly down last night.

The Asia Dow closed down 1.0%.

Among individual markets:

Australia closed down 1.0%. China closed down 1.4%. Hong Kong closed down 1.3%. India closed up 0.8%. Indonesia closed down 1.1%. Japan closed up 0.8%. Malaysia closed down 0.1%. New Zealand closed down 1.0%. South Korea closed down 0.8%. Singapore closed down 0.9%. Taiwan closed down 0.8%. Thailand closed down 1.2%.

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Markets This Morning:

European markets are mixed this morning. The London FTSE is down 0.4%. The German DAX is up 0.1%. France’s CAC is up 0.2%.

Oil is down $.86 a barrel at $80.59.

Gold is down $20 an ounce at $1,590 an ounce.

This Morning in the U.S. Market:

This week is a quite important week for potential market-moving economic reports, including Housing Starts, Existing Home Sales, and the Phila Fed Mfg Index. But the most important is likely to be the Fed’s decisions and statement after its FOMC meeting on Wednesday. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

Last week’s reports were more of the same dismal variety of the last several months, providing no indication that the economic recovery is back on track.

Monday’s report was that the NAHB Housing Market Index ,which measures the sentiment of home-builders, ticked up one point in June to 29 from 28 in May. But that was only accomplished because they revised their previous report or May from 29 down to 28.

Tuesday’s report was that new Housing Starts fell 4.8% in May, but permits for future starts were up 7.9%.

Yesterday, it was all about the Fed’s FOMC decision.

This morning’s report was that new weekly unemployment claims fell by 2,000 last week to 387,000, while the four-week m.a. rose by 3,500 to 386,250.

Still to come is U.S. PMI at 9 a.m., existing home sales, the Phila Fed Mfg Index, the Housing Price Index, and Leading Economic Indicators, all of which will be released at 10 a.m.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being basically flat in the early going.

To read my weekend newspaper column ‘Markets and Governments Are Rolling the Dice!’ click here.

Subscribers to Street Smart Report: In addition to the charts and signals in the premium content area of today’s blog, a hotline and an in-depth signals and recommendations report on the U.S. Market are in the subscribers’ area of the Street Smart Report website from last evening.

I’ll be back with the next regular blog post on Saturday morning, as usual later than the weekday posts, probably around 11:00 a.m.

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