PRE MARKET

We try to be very careful with our words here. There are too many calling for 5,000 DOW and just as many calling for 50,000 DOW. You know what we mean and you must know, they are usually selling something.

We have never called for crashes. We have never called for melt-ups. We do call for the major trends both up and down…and when changes occur, we let you know. On June 9th, the NASDAQ/NDX-types had one of those days. We questioned whether it could possibly be the changing of the guard. For sure, a few things are rolling over and others have emerged. (BIOTECH) We went on to tell you that as long as the 50 day/10 week average holds up, all is well. It looks like by the day, that all important area of support is holding…and with this morning’s gap (even though durable goods yonked), it gets stronger. We add the SOX to this equation as it continues to also hold though there are many names in the group that are now acting suspect.

So…as of this second, June 9th looks like nothing more than a sharp drop off of extended conditions. Since, the great have rallied into new highs, the good have rallied into or near new highs, the ok have rallied back some of the drop…and of course, the BIOTECHS broke out of a long range.

It is end of month but more importantly, end of quarter window dressing this week…and into what is usually an upward biased pre-holiday trading. Of course, window dressing is illegal so it does not happen. A few of the big tech/internet names are now teasing old highs (helping the QQQ). And we now think the onus is on the bears to prove themselves. Again, there are still plenty of areas in bad shape but the good is getting gooder again.

This morning, for the second week in a row, a good Monday gap to the upside on no news.