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The State of the Trend

Three weeks ago we were expecting the indices to trade flat, consolidating their May run. The high for the SPX on June 9th was 1955.55, and the index traded on both sides of this level last Friday. The one difference is that at the beginning of the month market internals were getting overbought, while now they are just moving up from oversold levels. This should provide enough fuel for the SPX to make a new high during the upcoming week, and follow the Qs lead.

Coincidentally, the daily Pivot line is also at 1955 and a break below that resistance-turned-support level will indicate quickly that the bullish scenario may not work out as expected:

SPX Chart
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Another encouraging sign is that the Russell 2000 is closing the gap with the other major indices (DJIA, SPX and NDX), and finds itself only 1% below the March closing high:

Russell 2000 Chart
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The June seasonality map proved to be a good trading guide for the month, and we expect the same positive results for July as well:

June Seasonality Map

Gold found support at the 75% retracement level of the December-March upswing but couldn't make it above the 50% retracement level of the '09 - '11 bull run. Just like before, this remains our bullish fulcrum:

SPDR Gold Trust Shares Weekly Chart
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