Stock Market -- Daily Chart

The Jun. rally off the 6/1 interim low did start with some classical features: The 6/1 level of
SPX 1272 was more than 5% below the 25 day m/a. The market was also "sold out" on breadth
and selling pressure measures, although not on volume. The rally has been strong enough to
reverse the downtrend in place since late Apr., and has been confirmed by rising 10 and 25 day
m/a ' s plus a positive cross of the 10 over the 25 day. SPX chart Note as well the positive turn
to the time-extended MACD I use. The light volume in evidence over the spring has been
extended during the rally.

On a price momentum basis, the rally is at an important short run juncture in that the SPX, at 2.9%
above the 25 day m/a is at a point where many of the up moves in the market since the early 2009
cyclical lows have been temporarily clipped. Thus, there may be some short term traders who
would be happy to book some profits. I would also note that since 2010, extended moves up in the
SPX to 5% above the 25 day m/a have turned out to be "sucker plays" that preceded price
corrections. This observation may have no relevance for the near term future, but is worth
keeping in mind if the bulls push the SPX up further in the days straight ahead.