The last four trading days have seen closes in the S&P 500 of 1959, 1957, 1960 and 1960. Oh sure, we've had a few intraday swings here and there, but the index hasn't budged. In fact, the media would have you believe the S&P has had one heckuva month of June. And it has. But the first week of June, we saw an intraday high at 1955, so with today's close at 1960, that means we have spent most of the month up and down.
The real action was in the momentum names, or what some call high beta. The Nasdaq has gone on to make a higher high, over its spring high. The outperformance of the Nasdaq over the S&P since the rally began in late May has been good, but it has not yet reached the massive extreme reading it had in the spring.
In any event, none of the indicators has changed much, if at all. Breadth remains positive, while almost all other indicators remain overbought. Sentiment remains too bullish as well.
The real move today came in the currencies, and that is no surprise to us. Here you can see the surge in the euro against the dollar; you can also see that the resistance begins here. While I still believe we will see the CurrencyShares Euro Trust (FXE) - Get Free Report move higher, I believe it might be quite difficult in the very near term to plow right through this easily.
This of course caused a nice rally in the SPDR Gold Shares (GLD) - Get Free Report. I still believe that over time, GLD is going higher, but there is also some resistance just over $128 here. Once over that line, the measured target becomes $136-ish. The stocks (Market Vectors Gold Miners ETF (GDX) - Get Free Report, Market Vectors Junior Gold Miners (GDXJ) - Get Free Report also continue to have bullish charts.
I want to close tonight by noting that my mentor in this business, Justin Mamis, finally decided to retire this week, at 85 years young. It was a pleasure to learn from him 30- plus years ago. I can only hope that I am able to share with you what I have learned over the years as he shared with me.
Read Helene's latest column here.
This morning, I highlighted Freeport-McMoRan (FCX) - Get Free Report as a long trade. I was remiss in not highlighting another copper stock, Southern Copper (SCCO) - Get Free Report as well. Here is another chart that has a base. It had an outsized move today, so it would need to see some follow- through in the short term, but as you can see, over $31, and that's a nice breakout. The measured target would be, eventually, in the upper $30s.
It is too early to fret over the biotechs again, but please note that the iShares Nasdaq Biotechnology (IBB:Nasdaq) has not made a higher high in five days now (while the Nasdaq has made new highs). If IBB rolls over from here, it could be the first sign of weakness in a momentum group since the May lows. A failure to get over $260 is the first issue. The second and more concerning issue would be a move back under $250, since that would break the uptrend line.
Today's Indicator The 30-day moving average of the advance/decline line is overbought. In the next 15 trading days (about three weeks), there are exactly three red numbers to drop.
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I was asked to follow up on Rosetta Resources (ROSE:Nasdaq), a chart I highlighted here months ago, noting that I would return to it if and when it broke out over $50. It took long enough and had a circuitous route by falling to $45 first, but it did eventually break out. It now has some resistance at $55 but measures to near $60.
I was asked to follow up on the iShares MSCI Italy Capped ETF (EWI) - Get Free Report, an ETF to be long the Italian market. You might recall that we had a measured target around $18 from sometime late last year. It got there this spring, had another run-up there in early June but has now pulled back again. I am inclined to believe it will bounce off this $16.75-$17 area. There is this uptrend line that will be difficult to break the first tip down. There is also that gap to be filled at $16.75. Thus any trip down there ought to produce a short-term rally.
I am not really a fan in the intermediate term of Bank of America (BAC) - Get Free Report, but as long as it holds over this $15.25 area, I wouldn't argue with another rally attempt back up into or toward resistance in the $16-$16.25 area.