Archive for July, 2010
The Market Feels Heavy and SPY 105 Could Be Tested Soon!
I will not be posting market comments from August 2nd – 6th. Thursday, stocks retreated early in the day. The biggest news came from Colgate and Kellogg. Consumers are “trading down” to cheaper products and this has broad-based market implications. We have already seen deteriorating retail sales numbers and stores are reporting that consumers are focusing on necessities. Over 70% of our GDP is derived from spending and Americans are tightening their belts. I am writing this report before the GDP number has been released, but I believe it will come in at 2.5%. As we have seen in the last …
Chinese PMI and ISM Manufacturing Could Be Real Spoilers Monday Morning!
This week, the market is taking a break after one of the best months ever. Stocks rebounded sharply ahead of earnings and a continued to move higher once the releases started. Some of the strongest companies report early and great earnings news is now “baked in” for those who are about to post numbers. During the last three quarters, stocks have retreated during the second half of earnings season. We are at that juncture now and weak economic news will add to the selling pressure. As I mentioned in yesterday’s comments, the Beige Book would weigh on the market and we …
Look For Weakness In The Beige Book and Selling Pressure Into Next Week!
This week, the market is taking a breather after a big run-up. The strongest companies report early and we typically see a rally as earnings season kicks off. During the last three quarters, stocks have retreated after the first few weeks of releases. Bulls have been able to push stocks higher uncontested. Concerns over a European credit crisis have eased and the economic calendar has been light. The Eurodollar has rebounded and some of the PIIGS bond yields have actually pulled back slightly. The bank stress test (although it was a joke) has also calmed nerves. The issues have not been …
Let This Rally Run. Watch For Signs of Resistance Near SPY 115 or Earlier!
Yesterday, the market convincingly broke through resistance at SPY 110 and it closed right at the 200-day moving average. Earnings have been excellent and we have had a reprieve from Euro credit crisis and from economic releases. This morning, DuPont blew away estimates and we have another cyclical stock that is marching higher and giving good guidance. FedEx raised its forecast yesterday and described improving transportation activity. Bulls have the ball and they are running with it. Interest rates are low and stock valuations are reasonable so Asset Managers are putting money back into equities. From a return standpoint, Asset Managers …
This Rally Should Start To Stall Later In The Week!
Last week, the market did not have to fight off bad economic/credit news and it was able to rally higher on good earnings. Corporations are making great money and balance sheets are strong. Typically, earnings season kicks off with some of the strongest companies reporting early. Economic conditions have been gradually deteriorating and there weren’t any major releases last week. That will change a little this week and consumer confidence, durable goods orders, the Beige Book, initial claims, GDP, Chicago PMI and consumer sentiment will be released. Durable goods orders have been volatile and given solid earnings from Ford and Whirlpool, …