Greek Misses Deadline For 2nd EU/IMF Bailout

Gold- Pulls Back But Double Bottom Continues

Gold- Pulls Back But Double Bottom Continues

Monday, February 06, 2012
Stock Market Commentary:

Stocks and a slew of other risk assets were relatively quiet after Greece missed its latest deadline for a second bailout package from the EU and the IMF. From our point of view, the major averages confirmed their latest rally attempt on Tuesday 1.3.12 which was Day 9 of their current rally attempt. It was also encouraging to see the S&P 500 break above its downward trendline and its longer term 200 DMA line. Looking forward, the S&P 500 is doing its best to stay above its Q4 2011′s high (~1292) and now has its sights set on its 2011 high near 1370. In addition, the bulls remain in control as long as the benchmark S&P 500 trades above 1292 and then its 200 DMA line.

Greece Misses Deadline For Second Bailout Package:

Before Monday’s open, stocks in Europe fell after Greece missed another deadline to receive a second bailout package from the EU and the IMF. Greek officials were supposed to reply by noon in Brussels to the European Union on new and difficult terms for a second bailout package.

Market Outlook- New Rally Confirmed

Risk assets (stocks, FX, and commodities) have been acting better since the latter half of December. Now that the major U.S. averages scored a proper follow-through day the path of least resistance is higher. Looking forward, one can err on the long side as long as the benchmark S&P 500 remains above support (1292). Leadership is beginning to improve which is another healthy sign. Now that the 200 DMA line was taken out it will be important to see how long the market can stay above this important level. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!

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