June kicked off with a big bang, as stocks and many commodities hit new highs for the year. Is it time for a breather? Lind Plus Senior Market Strategist Jeff Friedman said “today could be a turnaround Tuesday” as bulls take some profits. “The signs are coming for a stronger sell-off,” he added.

Technical momentum indicators, Stochastics and the Relative Strength Index (RSI) remain bullish, signaling sideways to higher prices. Friedman said the 38 percent Fibonacci retracement from the 2008- 2009 decline comes in at 1040 in June S&P futures, the next upside target for swing traders. First resistance comes in at 947. On the flip side, two-days of closes below 875, May’s reactionary low, could confirm a top, he said. Near-term support comes in at the 20-day moving average 904.

MF Global Research Analyst Ed Meir said in his morning research notes that even if the markets are ripe for a pullback, it’s hard to fight the trend.

“Markets were on fire yesterday, reminiscent of the heady days we were seeing at this time last year. At this point, everyone is wondering whether the across-the-board rallies are for real or not, and whether prices have already over-discounted the modest signs of recovery we see cropping up. For the moment, we think there is still too much buy-side momentum to call a top in any of these markets, be it energy, U.S. equities, or base metals. According to our charts, of the three, oil is the most overbought, with an RSI of 76 versus RSI’s in the high 60’s shown for both the S&P 500 and LME copper. This could suggest that oil may be the first to buckle, dragging the others down with it.”

He said oil bears may get their chance if the Energy Information Administration’s inventory numbers come out with a bearish surprise on Wednesday.

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