The morning got going with GDP coming in-line with expectations. Putrid growth of 1.9% was in-line with expectations, but far from where we should be 3 years removed from 2009 lows. Shortly after the market opened the Supreme Court upheld Obamacare and the market got interesting. Stocks ended up heading lower after creating a bit of intraday volatility. Nearing the end of the day it appeared sellers were about to unleash on stocks, but Angela Merkel had other ideas. Sending the EURUSD currency pair higher, Merkel canceled her press conference and sent US stocks well off their lows. Hope is still alive the EU summit will produce a solution to European lows. The underlying story of the day was the brutal beating leading stocks took during the day. Big Wave Trading remains in sell mode and today’s craziness confirms our market model.
The crazy moves the last two days at the closes on rumor is quite astounding. Yesterday we had the Supreme Court decision shooting down Obamacare. Now, we get Merkel cancelling a press conference and the European Union is saved for another day? Debt on top of more debt is not a solution and at some point hits the point of diminishing returns. Tomorrow, despite the bar being set low will certainly provide some more fireworks.
After-hours today RIMM reported terrible earnings as the company continues its downward spiral. It is no surprise the stock continues moving lower. NKE on the other hand was a leading stock and its after-hours action is very troubling. UA another leading stock was hit in sympathy and not to mention has broken down lately. It is never a good sign when leading stocks get hit hard. There are other leading stocks breaking down leading us to be very cautious. We are in sell mode for a reason and until the market can turn around with leading stocks we’ll stay in sell mode.
Next week we’ll get holiday trading with the fourth of July landing smack-dab in the middle of the week. Get out and enjoy the weekend!