TCM Notes : 7/2/09

• Same themes are at work in our playbook today. Give us the job numbers, and then talk about them all day.....and debate.....and ponder. I've got moving averages telling me something big is happening. Long term money is being put to work, and short term scalpers are dancing around these money flows. Yes, there are head and shoulder setups emerging on many things. However, if you look close many of them offer up measured moves that would put you into levels that correspond to a larger completion of an inverted head and shoulders base in many indices and individual equities. Meaning the buy signals would flip back to GO, GO, GO! So now that Q3 is underway we'll need to pay very close attention to the leading sectors during the first two weeks. I'm thinking we'll see carry over strength in XLU, XLV, and some select tech names.
• Oil is still meeting resistance at current levels, and a major break down into the mid 60's would be a great catalyst to send the ERY up through the 50dma. Oil coming down a dollar in the overnight session should provide a gap higher for ERY at the open.
• XLF is above the 200sma while it continues it's decent. Changing of the term structure of the moving averages from a resistive to a supportive function is the stuff bull markets are made of. Financials may not emerge as the next leader, but their participation is critical. While their shenanigans are held in much disdain the report of their death has been exaggerated.