US Equity Technical Strategist: Oversold Rally Enters 1071-1085 Next Targets. Short Term Floor Now 1040.Update- S+P 500 Cash Index (1078). Strong inside week gains 55 points, after the last week’s “1040 break panic”, engendered extreme oversold sentiment readings. Today met the 1071 June 21 50% retrace target, with the 1085 61.8% retrace just above. Any pause should be contained, and re-hold 1040 support. We do not anticipate strength this Summer above the 1112 200 day MA and 1131 June 21 peak. Big picture- Prefer one more new low in late Summer targeting 950-1000 macro support, ideally 956-943. Should complete a platform for the next bull leg in 4Q (1200) & 2011 (1300-1350). Wrong below 940. Momentum- Daily: Oversold Buy Signal on July 6. Weekly: April Sell is very oversold/bottoming, and can turn up later this month. Monthly: Overbought Sell in May reversed April ‘09 Buy signal (which was the most oversold condition since 1974)
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