Bulls ready to charge into the wall of worry

Traders work on the floor of the New York Stock Exchange on June 10, 2011.

Credit: Reuters/Brendan McDermidBy Rodrigo Campos

NEW YORK | Sun June 26, 2011 12: 13 EDT

NEW YORK (Reuters) - a rebound may be maps for stocks this week as the bulls of defending a level key technical and portfolio managers buy winners of the quarter to support their books.

But earnings from defensive staples or other areas health care which exceeded the market in recent months only support the notion that the US stock market should complete its phase of correction and panic sale must be done before a more sustained return develops.

"We want to see more fear," said Ari Wald, strategist of fairness to Brown Brothers Harriman in New York.

Be careful that your desires.

The problems that have led the recent decline, including the slow March of the Greece to default on its debt, weak U.S. economic data and the rampant due to lift the ceiling of the U.S. debt, are far from resolved.

HOLDING THE 200 DAYS SHOWS THE WAY

Despite a drop in dragging the & S P 500 as 8.2% below its high success three years in early may, the index held above its 200-day moving average - a line in the sand as the bears and bulls major battle for control of market.

The slide had been telegram for the weeks and the performance by the market book - folding to a widely followed level - seems too well choreography to some analysts.

"The fact that we went 200-days... seems just a little too perfect,"said Marc Pado, U.S. Cantor Fitzgerald & Co in San Francisco market strategist.""

He said that the timing of the move was favourable, as the market creates a technical basis before resuming its move upward on the back of solid gains.

"You might get an attempt of a move of dust," said Pado. "But the majority is sometimes right."

Even if they are right, they seem not too convinced. So far in this quarter - being the first in the red for the S & P 500 in the last year, daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has average 7.22 billion shares.

It is to the bottom of the actions 7.94 billions of dollars traded every day during the first quarter, when the & S P 500 won 5.4%. Commitment to the market decreased. Frantic selling, flush to the bottom of the day traders appears to be absent up to now in this corrective phase.

Despite the holding above this level, the market has not removed the danger zone of dipping in its 200-day average. The curve has a steep slope, the & S P 500 took about two years to check an advance of 100 per cent of its March 2009 low.

The 200 day moving average is$ 1,263.47, less than 0.4% below the S & P 500 Friday closing.

"Whenever you test a resistance or support level, make you smaller," said Nicholas Colas, chief strategist of the New York ConvergEx Group market. "It's almost like a piece of metal." Each time that you hit, it grows more fragile, and that is why people are really concerned about the third or fourth time. »

After three consecutive days of decline, the & S P 500 declined 0.24% for the week and finished Friday at 1, 268. 45 - its seventh decline in the last eight weeks.

Dow industrial lost 0.58% for the week, closing Friday at 11,934.58, so that the Composite Nasdaq rose 1.39% for the week to end the 2,652.89. The Nasdaq is only slightly higher for the year, while the Dow and the S & P 500 both are still solidly in the black for 2011.

The next two weeks before the start of serious, quarterly earnings season may be marked by wild swings as those recently considered. Thursday, after a title to the Greece market, the & S P 500 posted his return stronger in almost a year, the days where the reference point fell more than 1%.

Its session low Thursday, the & S P 500 climbed more than 20 points in the fence. Swing covered Dow 233.79 points from its low intraday high session Thursday.

But buying interest waned Friday. Doubts about the transition to the Parliament in Athens of higher taxes and service cuts, weak Italian banks are also scaring investors.

The Federal Reserve on Wednesday gave a bleak outlook on the economy, down its forecast of growth of GDP in 2011 and 2012. And Chairman of the Fed Chairman Ben Bernanke has found it difficult to explain the sources of a said economic "soft patch" which seems to have become ubiquitous.

SUMMER STORM DATA

Also the weekly numbers of claims without employment, housing and manufacturing data will attract the most attention this week.

The index of S & P Case-Shiller April home prices Tuesday and the National Association of Realtors can index sale House Wednesday awaiting could confirm double dip of the housing market.

Activity of the plant grew in May to its slower pace since September 2009, according to the Institute for supply management, and Friday June ISM number should fall to 51.9, indicating a still slower rate of growth.

New applications for unemployment Thursday are expected to land over 400 000 for a 12th consecutive week, according to economists surveyed by Reuters.

Personal income and consumption, Monday, should move higher in May. Consumer confidence, on Tuesday by the Conference Board, predicted a reading of 60.5 June, just a touch less than 60.8 may, a survey Reuters showed. Despite a recent string of weak data in may, a sharp decline in crude oil prices is expected to buoy the confidence of consumers.

(Reporting by Rodrigo Campos;) Other reports by Edward Krudy; (Editing by Jan Paschal)