The calendar may have turned but stocks picked up right where they left off at the end of Q2, with both the S&P adding to its gains on the first day of the new month and the Dow surging higher by triple digits.
In fact, by Friday's close Wall Street had posted its best weekly gains in 2 whole years!
The move triggered chatter on the floor about the future potential of the market and just how high stocks might go.
Considering July ushered in, not only a new month, but also a new quarter as well as the second half of the year, are Friday's gains a sign that bulls are already off to the races?
Instant Insights with the Fast Money traders
Trader Zach Karabell finds the gains impressive however he’s most focused on the gains made on Friday, which were made on low volume ahead of a holiday week-end. He says, “wait until Tuesday to see if they're confirmed.”
However, if they are, Karabell will takes it as a sign that the market is back to trading on fundamentals – and the weakness in June was much more about the fear of potential contagion from a Greece default, than anything else.
Trader Steve Grasso agrees that the market action signals weakness in June was much more about Greece – than anything else. However, Grasso has mixed feelings about the market. He admits he’s a little skeptical considering how far and how fast the market has moved. But at the same time he’s optimistic because historically July is a much better month than June.
If you trade the technicals, Grasso adds that 1365 is the next big level. “We’ve got to break above that to break out,” he says. If that level generates resistance, it would suggest the market is range bound.
Trader Stephen Weiss thinks the next big signal will come when earnings season kicks off on July 11th with results from Alcoa . “If we start to see companies issue strong numbers – I think we see money come back in.”
However, he reminds the traders that earnings season has to be robust, to justify the current levels of the S&P. And Weiss is a little cautious that headwinds are still blowing – in the form of financial woes lingering in Europe and China getting weaker.
Karabell reminds the desk that so far the Street has received very few pre-announcements, which could be a positive indication of a good earnings season to come.
Trader Patty Edwards is cautiously optimistic. She thinks retail investors remain scared of the market, which in turn, leaves a lot of cash on the sidelines. If the market can continue to show strength – she thinks that cash could come into stocks and drive further gains.
What do you think? We want to know!