EQUITIES PUSH TROUGH AND HOLD ABOVE KEY RESITANCE LEVELS AS BETTER THAN EXPECTED TREASURY AUCTION RESULTS SUPPORT CONFIDENCE FOR US RECOVERY STRATEGIES.
US Equities broke through significant resistance levels today, allowing the major market indices to remain on track for their best monthly gain in decades. NASDAQ futures rallied into positive territory for 2009 as the cash rich sector garnered support from renewed positive sentiment regarding the US government led recovery plan. Early gains seemed destined to stall out again until the results of the final Treasury auction of the week-a record $24 billion of US 7 year notes-posted a very respectable bid to cover and lower than expected yield.
Commodity, Technology, and Retail stocks led the markets higher today as better than expected earnings reports from Best Buy and ConAgra Foods allowed the creation of a somewhat longer term outlook for recovery in these basic sectors. Rising commodity prices, particularly in energies, helped to support a broad based rise in equity prices The rise in these sectors was strong enough to overcome pressure in the financials after Treasury Secretary Geithner testified before Congress today, calling for sweeping overhauls and creations of new oversight powers for the purpose of controlling the levels of risk that financial institutions are allowed to take.
Technically, June Dow futures broke through and held above a key resistance level of 7800. While the move higher is beginning to look slightly toppy for the week, there is a setup for a possible test of the 7990 level, with the next key level of resistance at 8090.Support has reset at the 7460 level.
DJM9 (JUNE DOW)
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