Monday Market Conditions 6/25/12 $SPX $SPY $VIX $VXX

As expected, we didn't get all-out QE3, but we did get more operations twist.  This means the Fed knows that the recovery is slowing and more stimulus is needed.  However, they are saving their lone bullet to prevent things from getting really bad.  We aren't there yet, but something needs to be done to promote growth worldwide.

As for the market itself, the S&P bounced right off resistance at 1360 last week, and proceeded to break down back below the 20- and 50-day smas.  Today we hit the technical support zone at 1310 and held.  We've been trapped between the 50- and 200-day smas since April, but they are beginning to squeeze.  We may hang around in this range for a little while longer, but once one breaks, it could mean a big move either way.

The Volatility Index (a.k.a. - The Fear Index) actually closed below its open, and even dropped below Thursday's close.  Given today's big down day, this is a clear divergence.  The big boys do not appear worried.  Is that because they think we're headed back up, or because they're prepared and hedged against a move down?

The McClellan Oscillator worked off the overbought conditions we saw last week almost as quickly as we got there.  Short-term momentum appears to be down, but we are back to being neutrally-bought.

The percent of stocks above their 50-day sma closed back below the descending trendline.  Many stocks' 50-day smas are still fairly high from the beginning of the year run nup.

Technology continues to form a descending triangle.  This could see a sharp move down soon.
Good to see the financial sector start to pick it back up again.  This is bullish for the market.
Energy and materials are still some of the biggest dogs out there.  Not a good indication for the macro economy.