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Daily Commentary 6/8/2011

By Lawrence G. McMillan

Tuesday's market action was extremely negative.  A rally attempt stalled out in the afternoon, and that was bad enough considering the amount of oversold conditions that existed.  But then the entire rally was erased in late-day trading, and S&P futures have continued on down another 6 points in Globex trading tonight.  There is really no way to put lipstick on that pig.  It was just plain ugly.  As a result, the $SPX chart remains in a distinct downtrend, and there is now resistance from yesterday's high 1296 up to 1310 or so, as well as stronger resistance at 1325-1330.  The 20-day moving average is falling faster now, currently at 1325.  The only potentially positive thing about the $SPX chart is that it has touched the 3-standard deviation modified Bollinger Band, indicating an oversold condition that often results in a rally back towards the 20-day moving average...

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