The major indexes finished mixed after a holiday-shortened week of trading. Things started off on a down note, as the equities markets posted one of their worst days of 2006 on Tuesday. However, the declines came on thin volume, which in hindsight was an indicator that further weakness would not be in the cards for stocks. In fact, for many instruments, especially the SPoos, Tuesday's large decline ended up being a successful test of the previous week's lows. Equities rallied on Wednesday and Thursday in anticipation of Friday’s Employment Report, while Friday ended up being a very quiet session with a flat finish after the market-friendly jobs figures.

Despite the major indexes’ failure to extend their rally on Friday’s soft job figures, the overall market action appeared fairly constructive. Often times, a "sell the news" reaction to positive data takes place, which is then reversed a few days later. The action in the bond market was also very constructive for equities, as the yield on the 10-year Note finished under the pivotal 5% level. This, in turn, could support the perception again that the Fed will pause later this month. Consequently, I feel that the odds favor further upside in the near-term, still remain somewhat concerned about a rough market later this summer.

Daily Pivot Points for 6-5-06

Please feel free to email me with any questions you might have, and have a great trading week!

Chris Curran

Chris Curran started his trading career at the age of 22 with a national brokerage firm. He combines fundamental and technical analysis to get the big picture on the market. Chris has been trading for 15 years, starting full time in 1997, and has never had a losing year as a full-time trader.