Daily Commentary: June 20, 2024

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This Feels Like A Buying Climax

Posted by Pete Stolcers on June 20
www.oneoption.com

The market has been floating higher on light volume into the end of the quarter and this feels like a buying climax.

PRE-OPEN MARKET COMMENTS THURSDAY – Monday the market staged a nice rally that produced a new all-time high. Proprietary trading firms are busy rolling positions ahead of triple witching and once the momentum was established, it fed on itself. At a new all-time high, no one is going to stand in the way.

Retail sales came in a little light this week and initial jobless claims are creeping higher. Those could be signs that economic activity is starting to slow. We will get flash PMIs tomorrow, but they are not going to have a major impact. Next week we have Durable Goods and the final look at GDP. Neither are market moving. Two weeks out, we have the July 4th holiday bisecting the week.

The rally has been narrowly defined with a handful of AI stocks pushing the market higher.

European markets have been soft recently and they are up marginally today. Asia is down slightly.

I will be watching for a new all-time high and a gap reversal. That will tell me that this float higher is about to end and that we might get a dip. I am seeing good shorts and those intraday moves are sustained. That is another sign that we could be close to a short-term top.

I am NOT bearish, I just don’t want to chase. I will wait patiently for a dip. This has been a nice rally. If you are long, watch for that sharp intraday drop from the high of the day and stacked red candles on heavy volume where the market closes near the low of the day. That is your warning sign to take gains on longs.

This is a dead spot for the market. We are coming off of a holiday. Triple witching will provide some action, but most of the fireworks were used Monday.

The market made a new over-night high and much of those gains have been given back in the last two hours.

Support is the close from Tuesday and resistance is $550.70 (the overnight high).

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