By Gareth Soloway on July 6th, 2010 12:33pm Eastern Time
The markets surged higher as an oversold bounce took place. China jumped higher by 2% over night and the Nikkei rallied as well. The Dow Jones Industrial Average had been down seven straight days and due for a bounce. The SPDR S&P 500 ETF (NYSE:SPY) rallied higher by $1.70 to $103.90. That is a gain of 1.66%. Technically speaking, the markets have moved right back into a major resistance level at $104.00 - $104.50 on the SPY. Not only is this a master level of resistance, but it is also the 200 moving average on the 10 minute chart. All these added together are making this market falter and start to pull back.
Gold is again getting pounded. The SPDR Gold Trust (ETF) (NYSE:GLD) is down another 1.35% and has found itself trading at $116.89. This is after it hit a new all time high of $123.50 just a week ago. This fall in gold is due to two reasons. The first is the threat of a global double dip recession is pushing the idea of deflation again. If deflation comes, all commodities will drop in value. The second reason only applies to today. With fear subsiding and the markets rallying, gold is being dumped in favor of bottom fishing equities.
Oil is getting a small bounce today as the United States Oil Fund LP (ETF) (NYSE:USO) is up 1.53%. Oil has been punished lately as fear of a double dip global recession has caused many to fear a drop in demand for oil.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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