DTI JUNE 14 CONTENT

June 14, 2010

Can We Rally?

The equity markets rose steadily last week to close right at the daily 20 EMA once again. As we

have been pointing out this level has been resistance numerous times during this recent decline.

The market also put in a higher low on June 8 to the previous low of May 25 so now the potential

exists for a bit more of a rally to develop. The ESM10 has not closed above its 20 EMA since

late April and is overdue for a longer rally. The bad news is the volume on Thursday and Friday

as the market lifted was very anemic. The markets are set to gap open Monday morning which is not surprising because they broke

from a consolidation on Friday and were set up to have more follow through today. However,

after two up days that traded from low to high in the midst of a decline the rally today may be

short lived. Watch for divergences to signal the potential end of any upside. The daily time

frame is in a down trend and will be unless the ESM10 can clear 1108. A move above this area

would give us a higher high to go with the higher low. There is still a high degree of risk in the market but

we do have a new pick for today. CLICK HERE has held up well during the decline and is still resting above its 20 EMA and its 50 SMA (simple

moving average). It is forming a bit of a triangle pattern but does appear ready to move higher.

Obviously if the overall market can stage a rally it will increase the probability of a winning trade

here. We plan to buy above Friday’s high and take a partial before the previous swing high at

$00.00. We are using a tight stop at CLICK HERE below support and the previous swing low.