STTG Market Recap June 3, 2014

Another day Tuesday that is just fine in the context of digesting a swift move up.  In fact it was very similar to yesterday in that there was a morning selloff and then dip buyers came in.  If you are of the belief the market is going higher after some digestion this is the area to be building in layers of your positions.  If there is a sharp reversal for some reason – well you take the losses, preserve capital and move on.   The S&P 500 fell 0.04% and NASDAQ 0.07%.   Orders to U.S. factories rose for a third consecutive month in April.  Factory orders rose 0.7 percent in April, better than the 0.5 percent rise that economists expected.

spx

nasdaq

Yesterday we mentioned it would “feel better” if 10 year Treasury yields got back over this second resistance line i.e. near 2.60%.  Well someone heard us!

tnx

The biotech ETF chart look a lot like the NASDAQ which is natural as most trade on that index.  You can see a clear area where the ETF has bottomed the past week or so, so an easy trade is to build a position here and stop out if it breaks that near term bottom; otherwise see where the wind takes you.

ibb

Energy is another area that has done well – it was one of the best sectors during the correction and has essentially been basing since late April.

xle

On the downside, Krispy Kreme slumped after the doughnut chain cut its earnings forecast for this year, citing higher costs and fewer sales than previously estimated.

kkd

If you are curious what are the 24 most popular stocks for high frequency traders, here they are.

Thursday we have the European Central Bank meeting where many economists expect President Mario Draghi to announce policy measures to combat low inflation, such as interest rate cuts, cheap loans to banks or even Federal Reserve-style asset purchases.  This could be something that really affects things here, and then Friday of course is the U.S. employment data.

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