End of Q2 Floor Level Changes: What to Expect? June 30, 2011

[Billy]

Forum Clusters 110630.xlsx

On the last day of the first half-year period, it is better to focus only on the moving averages, yearly, weekly and daily pivots while waiting for tomorrow’s new monthly, quarterly and half-yearly floor levels. Today’s clusters for IWM are the most bullish with the 50 dma (82.11) acting as strong potential support and only WR2 (82.84) as potential resistance.
Trying to project what tomorrow’s new floor levels and clusters might be, the most important changes will be VERY bullish: SR1 (85.46) will be erased as a confluence with YR1 (85.68), while the new SPP will be just in confluence with the 50-day moving average as strong support. Above the 50 dma, current MPP (84.14) will magically disappear and will be replaced by a much higher MR1 in the vicinity of YR1 (85.68). The new QPP will almost remain unchanged as support around 82 and will be in strong support confluence with the new SPP also around 82.
All in all, if IWM closes today above 82, the outlook for next week and month could only look even more promising than it is now. It feels like we are in the midst of a very well organized and systematic accumulation plan by large players, based on floor levels evolution. The stocks rising the most from the bottom are not the ones with strongest short-interest indicating that this is true accumulation going on , not just usual short-covering.



The multi-pivot outlook for GDX is once again rather bearish due to the strong YPP (55.19) resistance that will remain alive tomorrow. The second ominous resistance cluster may be somewhat modified tomorrow, so let’s wait for Friday’s close for a reassessment of the outlook. Make sure to read Pascal’s comments about the new improved entry rules for the GDX robot.
Billy