Twist   This week the Fed said it will extend "Operation Twist" through the end of the year in an effort to extend the average maturity of the Fed's securities holdings. Fed Chairman Bernanke later stated in a press conference that additional asset purchases would be considered by the Fed if necessary. (We guess he had seen that the market reaction  was not positive and wanted to include that more ideas may come.)  They said that they would be buying $267 billion in longer-dated bonds while selling shorter-dated bonds. The idea is to lower the interest rate of the longer bonds, which in turn is supposed to lower interest rates for borrowers on mortgages, cars, and business loans. This has not been working in the past but they decided to just continue it. Seems they want businesses and individuals to borrow enough in hopes of improving the economy. We have not heard from anyone who complained that interest rates were too high so the market was not happy with this approach but it had been strong enough to rally anyway by Friday. The Russell 2000 had been underperforming which is not a good sign for the market but that was better  this week actually gaining 0.5%. The number of new lows has decreased so perhaps this decline has finished and the  last week of the month will end with a rally.

Was just an interesting press release from the SEC:

Washington, D.C., June 21, 2012 – The Securities and Exchange Commission today charged that a former broker in Orlando, Fla., defrauded investors in an astrology-based Ponzi scheme. The SEC alleges that Gurudeo “Buddy” Persaud lured family, friends, and others into investing in his firm, White Elephant Trading Company LLC, by falsely guaranteeing their money would be safe and yield lofty returns ranging from 6 to 18 percent. Persaud told investors he would invest in the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces. Persaud’s strategy was premised on the idea that gravitational forces affect mass human behavior, and in turn, the stock market. For example, Persaud believed that when the moon exerts greater gravitational pull on the Earth, people feel dejected and are more inclined to sell securities.

I have not read all the details but seems the problem is he did not disclose his methods. Heck - in 2003 the Federal Reserve Bank of Atlanta published a 53 page paper by Anna Krivelyova and Cesare Robotti titled Playing the Field: Geomagnetic Storms and the Stock Market.   Seems a valid "science"  - anyway for years we have had a moon page just to check the solar activity and solar forecasts.  The current space weather forecast shows no high level days through mid July. When both page indicators are red use caution.   

Before we get to today's charts some  entertainment.

Stand by Me   From the award-winning documentary, "Playing For Change: Peace Through Music", comes the first of many "songs around the world" being released independently. Featured is a cover of the Ben E. King classic by musicians around the world adding their part to the song as it travelled the globe. This video was uploaded to YouTube on November 6, 2008 and with over 42 million views, new comments about it on YouTube still come every few hours. The official website http://playingforchange.com

The weekly figure for new for unemployment claims fell slightly but remained higher than the expectations of most economists, according to Labor Department figures. The Department of Labor estimated that for the week ending June 16, new unemployment claims came in at a seasonally adjusted level of 387,000, a decrease of 2,000 from the previous week's revised level of 389,000. The decrease comes in part because revised figures put the previous week's level of new unemployment claims up from the 386,000 initially reported. As a result, the current level of 387,000 is higher than the 383,000 predicted by most economists. The four-week moving average of new unemployment claims, a figure that reduces some of the week-to-week fluctuations in the data, ticked up 3,500 to 386,250 from the previous week's revised average of 382,750.  graphs -  RTTNews

The National Association of Realtors said that existing home sales slipped 1.5 percent to an annual rate of 4.55 million units last month. That was in line with analysts' expectations. Nationwide, the median price for a home resale rose to $182,600 in May, up 7.9 percent from a year earlier and the highest since June 2010.

A gauge of future U.S. economic activity rebounded in May, the Conference Board said on Thursday, suggesting the economy remained on moderate growth path. The group's Leading Economic Index rose 0.3 percent to 95.8 after slipping 0.1 percent in April, and beating economists' expectations for a 0.1 percent gain.

For some perspective on the European sovereign debt crisis, today's chart illustrates the forecasted 2012 debt to GDP ratio for each of the PIIGS (red bars) plus a handful of today's major economies (blue bars). While the PIIGS are currently enduring relatively high debt loads, it is noteworthy how some of the relatively safe nations/bond markets (e.g. United State and Germany) are not far behind. These relatively high debt loads are of concern as they could lead to higher taxes sometime in the future and can risk fiscal crises if bond holders sense an increasing risk of default. The current crisis in Europe provides a clear example of the bond market's reaction (i.e. higher bond yields) to increased default fears. This leads to a very interesting case study that is Japan. With a debt to GDP ratio of over 200%, the Japanese 10-year bond yield is a relatively low 0.83%. Why? At the moment, the bond market feels that the Japanese have the ability to repay their debts -- in part due to Japan's perceived ability to raise taxes. To that end, Japanese Prime Minister Yoshiko Noda just won opposition support for the doubling of the nation's sales tax to 10% by 2015. So it's not just the amount of debt but also convincing your banker that you are good for it.

This past week's  sectors.

This past week's indices  - 

While surely not conclusive, the monthly chart for the Dow, NASDAQ and S&P 500 are above their center Bollinger bands and this opens the door for a possible summer rally. The Russell 2000 is still below its center band and has been underperforming though this last week activity did pick up. Crude oil dropped to the lower Bollinger band not far from testing the prior low at the 50% retrace level. At the moment gold has a bearish candle and a break of last month's support could take it into the $1400 price level.  

The highs of the week were reached on Tuesday as seen on these 60 min. charts and the largest decline started on Wednesday and continued to the Friday rally after dropping under the lower Bollinger bands and RSI touching 30 

A year long look at the Dow and its closed on Friday just  38 points under the 50 day EMA. The bounce came at horizontal support and a close back over the 50 day may  take it to test the previous recent highs 

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The weekly shows the Dow has that horizontal resistance overhead, which is also in line with the 20 week MA. 

The closer daily you with the 50 day at 12,678 

The Dow futures showing this pullback went down to the 38.2% retrace level, which is a very valid correction point which could lead to a recovery from this late spring dip. 

On the shorter time frame this week's drop took it to the 61.8% retrace and it closed back over the 50%. This pattern has the chance of being a bear flag short term, which if so could drop it back to the 78.6% level or so 

Last week week we commented on how strong the the utilities have had been and this week they lost all of those gains and closed back under support. A move back over that line may run them back up to the previous week's high but if so market would likely pullback.  

Although the transportation average closed with a gravestone marker candle for the week, it is still above this horizontal support and 50 week EMA 

The NASDAQ ran back up and over the horizontal resistance this week, but closed back under it 

The 60 min. NASDAQ broke out of what may be an inverse head and shoulders this week, pulled back to that, and rallied a bit on Friday 

The NASDAQ 100 futures with a similar pattern to the Dow and the rally from the 38.2% Fibonacci retracement level 

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The slight pullback this week did not change the NASDAQ summation index and it's bullish stance 

The EMA of the number of new highs on the NASDAQ did not decline this week which gives a positive outlook.

In the first week of the month Facebook had its RSI move above 30 for the second time and from that $26 level it ran to $33 where you see the resistance currently. A move over there could take it first to the $35.66 127.2% projection level. 

On top we see the NYSE and its bounce from just below support and on the bottom the number of new highs minus new lows, as it has been moving up 

Just 36% of stocks on the NYSE are now trading over there 50 day moving average.

The S&P 500 bullish percent indicator remains on a buy though on Thursday the index did drop briefly  just below the 20 day EMA. 

The weekly S&P 500 shows this may only be some normal consolidation after a two week rally. 

Like the Dow, the S&P 500 closed still under the 50 day EMA. 

The 60 min. S&P 500 and its rally up to the 61.8% retrace this week, and the decline back to 38.2%, as RSI went from 70 to 30. 

The last seven days of trading on the 15 min. S&P 500 renko chart with some quick trades and some nice profitable ones as well. 

The S&P 500 ultra ETF had RSI dropped below 70 near its high. It then broke a trendline, had its EMA crossover for various sells. There was a short term RSI buy later in the week, though the moving averages have not yet crossed over. 

The S&P 500 futures chart with its slight rally at the end of the week. 

The Russell 2000 and a nice 10 point move on Friday, though it has closed still under its 50 day and 200 day EMA. 

The 60 min. Russell 2000 with its short term current support and overhead resistance. 

The Russell is in a pretty clear 15 min. parallel channel with it bounced at the low this week. 

10 minute renko chart shows the progress of the nice 10 point move on Friday. 

The Russell 2000 ETF - we posted this chart on Thursday showing the support from both descending and ascending trendlines and it rallied a couple of points from there 

The retail sector still looks pretty good not far from its April highs 

The banking sector remains above this 38.2% retracement level. 

On the daily chart, it closed  back over the moving averages and this shows the  overhead trendline resistance. 

Very little movement in the 30 year bond prices. 

The FTSE closed back over 200 week EMA a but under its 50 week EMA  after testing it  this week. 

The Shanghai exchange index is just a 18 points above its spring low. So we could see a bounce from there. 

The Canadian venture exchange remains weak with gold pulling back. 

The Russian market this month so far has gained 3% after its big drop last month 

This commodity ETF had a small two week bear flag and it  dropped out of it this week, closing under the 2011 low. 

Crude oil has not quite yet tested the $76 low, though RSI has gone under 30. It would be better if RSI stays low for some time and then a bounce would be stronger. If the $76 level breaks look to the 2010 low at $67 for support. 

This crude oil drop from over the $100 level has been pretty straight forward with no real surprises at all. 

This daily view shows the up trend line support broken in May and it is now  testing the October lows.

The crude oil futures chart shows the one possible support was broken, but the close was back over on Friday. RSI is oversold at 20 

Natural gas closed up 6% this week. Its second week move after the retracement from the big rally this spring.

Natural gas futures shows there was a small correction back towards support and then the move back up towards resistance.

The basic ETF for natural gas showing the higher low achieved in the previous week, and the rally this past week. This could be a multi-decade low. If so, over the years, here are some retracement levels,  the first a resistance point just over $20. 

The ultra long for natural gas, closing slightly above the previous week's high. 

For 10 months gold has produced a series of bear flags and gold may have started dropping out of the current one this week. If so look for support next near that 1478 level 

On the positive side - gold is still over this trend line. 

Gold futures on this time frame chart again has its RSI under 30 for the first time in a month. So watch it for a short term buy on a move back over 

The long term weekly, gold ETF looking weak. 

Point and figure charts have various price objectives depending on time frames. On this 60 min. chart GDX as a price objective of $40. 

The GDX bounce took it basically up to its 20 week moving average and from there it has been lower for 3 weeks. 

The daily chart shows its break below both moving averages on Thursday.

 The 60 min. chart shows it filled one gap and bounced only slightly from there

The mechanical trading ETF is currently on a sell. 

This monthly silver trendline is not precise but it is  close is near  and further below the 50 month EMA near $25.

The support also at that 200 week EMA 

The silver futures with its drop from that trendline, then a test of it and the further decline from there. 

Silver ETF mirroring the silver weekly chart. 

The 60 min. version with RSI very short term just moving back over 30. 

The silver ETF is on a sell. 

The euro weekly inside its descending parallel channel. 

The long term US dollar remaining bullish while it stays over this trendline. 

And the US dollar daily view in a rather bullish looking flag holding over support. 

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