Market Briefing For Monday, June 4
Early-June levitation dismissed more pressure in Italy; Spanish change at the top; or the various geopolitical ongoings; preferring to focus more on the technical prospects of simply extending the market. My view was it was to be expected at the start of the month; and likely wouldn't carry far.
I welcome a 'Teflon' market; but believe that's what we had led by FANGs, and later by Oils, over the past year and a half. While there may be further upside (in the face of mixed global data but progress towards Asian peace on the Korean Peninsula), gains should not come easily and this is frothy.
While I continue to prefer US stocks (in general) to Emerging Markets (for sure that's been a good view, including optimism on the Dollar versus the majority looking for big weakness), it's all so long-in-the-tooth to remain on the wary side of those complacently looking for an upward Summer glide.
That doesn't mean we're on the verge of a dramatic slide instead, because you have so much 'cushion' about the 50-Day and of course 200-Day MA's in both cases. Those Moving Averages will eventually merely confirm any new up-down reversal after-the-fact, whereas a new parabola in what very quickly becomes a new overbought daily basis condition, would be clearer as a potential 'sell' signal (and I hate the word signal) such as January was of course.
Bottom line: the market continues trading in a 'ranging' pattern with slight efforts now to break-out to the upside after many recent faltering attempts that briefly rolled-over back into declining or consolidation phases. Hence you've had no real resolution to the overall pattern for quite some time.