Stock Market Analysis

Tuesday, June 16, 2015

Double Dragon Rebound!

US market closed higher today as I have expected and stated in yesterday's email to paid subscribers. So far, the continued growth in the housing market has been the main driver for the stock market and the US economy in general. Indeed, the housing market is one of the main drivers in every economy due to its huge peripheral reach into almost every industry. A growing housing market always bode well for the economy and a slumping one takes everything else down with it. It was a truly strong day today, with bond yields dropping across the bond as investors reallocate back into equities and total equities put call ratio making a healthy move down in favor of call options trading. This is the kind of indications that say it is a healthy strong day, not one that is overdone and ready to fizzle tomorrow. This, along with yesterday's double dragon formation (as I mentioned to paid subscribers), says the market should be able to challenge new highs from this point forward. How about the head and shoulders formation I spoke of few days ago? Well, like I mentioned to paid subscribers again, a double dragon formation is strong enough a reversal formation to beat even a head and shoulders formation.

However, it remains a really volatile week ahead with the Feds are announcing Wednesday afternoon (and I really don't think they want to spoil the tea party) and Quadruple Witching on Friday.

For now, the US market remains in short term neutral trend within an intermediate and primary bull trend.

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