Market update June 15th

Lots to talk about today. The Dow has rallied again this morning but so far has not been able to get over the previous high of a few days ago of 10,328 and has made several attempts to climb high and penetrate above R2 resistance level of 10,377. I do not see that happening.

This week is June Options expiration on Friday. To be in the money, they want the S&P 500 to stay in the money above the 1100 level. It has bouncing above and below that for the past 2 days. It is currently at 1103.

Important data coming out tomorrow, Wednesday, on PPI, Core PPI, Industrial Production and Housing Starts. Thursday has Jobless Claims, Consumer Price Index and Core CPI.

The Intraday Dow chart does not reveal much yet but when it does I will post an Update here.

From Europe this morning an interesting bit of information. The Mannheim-based ZEW Center for European Economic research said its index of investor and analyst expectations, which aims to predict developments six months ahead, slumped to 28.7 from 45.8 in May. That compares to economists forecast for a drop to 42. This sounds like a slowdown is coming there and we in the US are expecting "slower growth" in the 3rd and 4th quarters so to me we could go back into the recession.

UPDATE 10:30am PST

As you can see in the chart above, we went higher than the level I commented on earlier today but have not gone over R@ at 10,378 level. Ther eis a "W" pattern as shown above and it is slanted slightly down. So while we are higher right now, we should go below this right leg of the W pattern.

Update 12:15pm

Well, take a look at the "W" pattern I posted above and compare it to the underlined one in red in the previous update. It looks to me that the slant was changed and now there isn't one. No wonder the Dow rallied up. I didn't do any trading during the time so it's not a problem, but could have been if I had.

European market economic data update: They are hurting too!

According to news reports today, Unemployment rose to 9.4 percent in June, the highest since 1999. More than 3 million people have joined the euro region’s jobless rolls in the last year, and the Organization for Economic Cooperation and Development expects the unemployment rate to reach 12 percent in 2010. The highest rate was in Spain, which came in at an unbelievable 18.1% rate. Prices in the euro region dropped 0.6 percent from a year earlier, the most since the data were first compiled in 1996.

What does this mean for the U.S.? It means it will be difficult for Europe, a large trading partner for us, to purchase U.S. products, thus keeping our revenues pressured for U.S. Corporations and earnings going forward. We are counting now so much more on China than we ever have been, a dangerous move and a critical partner of our future economic stability, that we have increased our risk for recovery. And on that note, U.S. stock futures erased gains after the government said personal consumption slumped more than forecast last quarter.