The Low Looks In
In yesterday’s post, I mentioned that the window for a low had just begun to open and that I thought stocks were still on pace to find buyers by the end of next week. The bull seem to have cooperated on the early side of the time range although I am certainly not beating my chest that I called the bottom to the day. Today is month and quarter end so I wouldn’t be surprised to see some “curious” activity, especially this afternoon.
I think if the Dow can close above 24,500, especially on a Friday, that would give me some comfort that at least another 1000 points were on the way. The S&P 400, Russell 2000 and NASDAQ 100 are “supposed” to head back to all-time highs sooner than later if they are going to retain their leadership. Speaking of leadership, I am keenly watching for signs of change over the next week or so. There seems to be movement percolating and it could be substantial.
Banks are breathing a sigh of relief after the Fed released the stress tests last night with even Deutsche Bank bouncing. Banks have really disappointed this year and are now being pressured by lower long-term rates and a flattening yield curve. If the sector can somehow ignore these headwinds and head higher, that could the stock market a well needed shot of adrenaline for a big move in Q3.
Have a safe and enjoyable weekend! Heat wave here in New England. UGH…