Big Wave

The last selling thrust is upon us.  Many traders are poorly positioned after the Russell Rebalance, renewed financials optimism after FinReg, and end of month markup expectations.  On top of that, a G20 meeting will only reinforce the lack of coordination between Europe and U.S.  Europe wants austerity, and U.S. wants endless stimulus spending.  Europe has been quiet for some time, I expect one last salvo which will put in a scare to longs.  We must anticipate the traders, and many are looking to sell into quarter end markups and ahead of a weak jobs report.  Thus I expect the low to be on June 30.

The important question is how low will this thing go.  1040 again looks like a convenient spot to stop the wave, there will be buyers lined up between 1040 and 1050.  If the market can somehow blast through all those buyers and get under 1040, then we'll likely see 1020 quickly.  That should be the bottom.