Summary for Week Ending 1st July 2006
The big news of the week was of course the interest rate hike by the Fed and the inference that this would be the last for the foreseeable future. This news sent the markets rocketing like there was no tomorrow and perhaps has provided the impetus that the market requires to shrug off the lethargy that we have seen for the past few weeks.
Last week...
The market looked like it was going to duplicate the previous weeks efforts by doing absolutely nothing. That was of course until Thursday when the news from the Fed saw the largest one day movement we have seen in some time. The jump out of the malaise was welcome, but it should be remembered that what we have seen is a response to a single news event. If there is anything more to the rise then we have to assume that the inference from the Fed has a deeper impact to the long term health of the market. If not then what we have seen is simply an over reaction and we may be in for some more downside. Maybe !
Where to ?
As it stands at present we've had a one day rush and that's all. As they say 'One swallow does not make a summer' as so it is with markets that one big day does not make a bull run. I'm still sticking with my scenario of a lower high around the 1290 level that would produce a lower double top and then a resumption of the bearishness. If we see the market come off the high on Friday and form a basing pattern between 1260 and 1238 ( a higher low ) then this scenario may be in trouble and we may see bullishness return, but as things stand at present, its all hollow and anything could prick the balloon.
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