The market is bouncing a little higher this morning as investors begin to position themselves for the next move up. The ideal scenario would be a little more downside action to about 10,800 on the Dow and 1240 on the S&P. At these levels the market would have enough of a pullback to attract some volume, and provide a springboard for a re-test of the April high's.
This morning Alan Greenspan testified before Congress and said that "consumers are finally experiencing some impact of higher oil prices." I hate to tell Uncle Alan this, but consumers have been feeling the pinch for quite some time.
Yesterday, the market was able to shrug off a negative day, and staged a rally in the last 30 minutes to close down only 46 points. At mid-day, the Dow was down 98 points.
The July fed fund futures contract is indicating an 80% chance of a 25-basis-point hike at the Fed's June meeting. Once the fed signals as pause, or if the market anticipates a pause, the summer rally that we have been looking for will begin.
