June 24, 2009 (FinancialWire) (By Joe Duarte) — Beware a dull market, and never sell one short. These two Wall Street adages go together and are applicable to the action on June 23rd, where the market stopped falling after Monday’s big volume breakdown in the S&P 500 (SPX) and its proxy ETF, the S&P 500 SPDR (NYSE: SPY).

At stake for traders are two major factors. One is what the Federal Reserve says and does with regard to interest rates and its future actions on inflation. The second is what will the price of oil do in response to the latest supply data put forth by the U.S. Energy Information Agency (EIA). Both really go hand in hand, since the price of oil has risen to levels where economists and traders are starting to fret about the potential for a second dip in the U.S. recession.

That means that the Federal Reserve is walking a very tight line with regard to its future policy. Traders want to hear that the Fed is vigilant on inflation. But they also want to know that the Fed isn’t going to start raising interest rates too soon, especially with oil prices rising, at least relatively speaking.

A potential clue to the EIA figures was provided in the figures released Tuesday, after the market closed by the American Petroleum Institute (API). The API survey reported a rise in gasoline stores for last week of 3.7 million barrels, where traders were expecting a rise of only 1.3 million barrels. Distillate levels (heating oil and diesel fuel) also rose, beyond expectations, while crude oil supplies remained fairly stable.

The caveat in the API numbers is that they often differ from the more highly regarded EIA numbers, as the methodology used for the surveys and the estimates differ. Yet, much of the time, the general trend of the numbers remains the same. If the numbers are similar, we would expect a further fall in the price of oil. At the same time, though, the markets could interpret rising fuel supplies as a sign of a weakening economy. That means that any kind of talk from the Fed that seems aggressive could lead to more weakness in stocks.

From a charting standpoint, the S&P 500 has major resistance now near the 897-900 area, which is for all intents and purposes the 50-day moving average. A failure to close above that for the index could lead to a test of the 880 area, or even lower prices.

The EIA numbers are scheduled for release at 10:30 eastern time. The Fed announcement is usually around 2:00 P.M. These are good times to be near reliable news outlets and trading screens.

The Investrend Economics Calendar lists Durable Goods Orders for May (8:30 a.m.), New Home Sales for May (10 a.m.), EIA Petroleum Inventories (10:30 a.m.), Treasury auctions 5-year notes (1 p.m.), FOMC Meeting - Policy Decision (2:15 a.m.).

The Investrend Events Calendar showcases ALL, FDX, ITW, EPD at Wachovia Annual Mid-Year Equity Conference; ANR, CNX, MEE, BTU at The McCloskey Group Coal USA Conference; BX, MQG at International Quality & Productivity Center Infrastructure Investing Summit; FSLR Analyst/Investor Meeting.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session’s trading showed 30 advancers versus 19 decliners and one unchanged. Advancers were led by Brocade Communications Systems, (NASDAQ: BRCD) up 6.78%. Decliners followed Ual Corporation (NASDAQ: UAUA) down 10.36%.

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Quote of the Day: “Space isn’t remote at all. It’s only an hour’s drive away if your car could go straight upwards.” Sir Fred Hoyle

Today is: St. Jean Baptiste Day (Quebec National Day).

Happy Birthday: Henry Ward Beecher, Ambrose Bierce, Jack Dempsey, Phil Harris, Fred Hoyle, Billy Casper, Colin Blunstone, George Pataki, Peter Weller, Mick Fleetwood, Patrick Moraz, Scott Oden.

Today in History: A sudden outbreak of St. John’s Dance in 1374 causes people in the streets of Aachen, Germany, to experience hallucinations and begin to jump and twitch uncontrollably until they collapsed from exhaustion. Eton College was founded in 1441. Henry VIII and Catherine of Aragon were crowned King and Queen of England in 1509. The colony of New Jersey was founded in 1664. Mary Pickford in 1916 became first female film star to get million dollar contract. The first documented UFO sighting was reported in 1947 near Washington’s Cascade Mountains. The first television western, Hopalong Cassidy, was aired in 1949 on NBC starring William Boyd.

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