an tSionna 6.25.09

Where do the markets currently stand? Above is a chart of the S&P 500. You can enlarge it by double clicking on it. We're still stuck in our trading range from last fall which is by our calculations roughly between 800 and 960 on the S&P 500. We touched the upper band of that in mid-June and have since backed off about 6%. Not only was the market repelled from this upper level it also failed to breach its 200 day moving average. It has since backed off from that level as well. {See point 1} This is consistent with what we were seeing mid month. {See these posts from 6.12.09: http://lumencapital.blogspot.com/2009/06/tsionna-61209-market-update.html and from 6.15.09: http://lumencapital.blogspot.com/2009/06/tsionna-61509.html }.

We've also come back to the 50 day moving average. You can also see this at point 1 on the chart. So far the market has found support at this average whenever it has traded lower since this rally has started. We could also find some support here as the market is currently short term oversold. {See points 2.}

We have said repeatedly for about 3 weeks that the market was due for a correction. So far we see nothing to indicate that this is anything besides a normal pullback within a rally. We'll continue to monitor our indicators and we'll try to alert you if we see anything that would make us deviate from our current thesis and where we stand with the playbook.

We are getting closer to levels where some short term tactical entries on the long side might make sense for risk appropriate accounts. But we are not quite there yet by our methodologies.

*Long ETFs related to the S&P 500 in client & personal accounts.