Sunday, July 22, 2012

Mediocre Earnings are not Enough to Continue the Rally

MARKET SUMMARY:

- Stock market suddenly takes note of Europe once more, feels top-heavy, and mediocre earnings are not enough to continue the rally.
- Spain's biggest region asks for a bailout, bond yields surge, and oh yes, Egan Jones downgrades the country.
- And the market rallied on this?: better than expected earnings, but 45% are missing revenues expectations.
- More jobs cuts from financial sector.
- A backdoor way to get the unemployment rate lowered.
- Serious issues face the world yet stocks are climbing.
- A key test of the slow yet technically solid rally. Will there be an earnings mid-life crisis?

Shades of Wiley Coyote: after all the economic data and the first week earnings 'beats,' investors suddenly remember Europe really is bad news.


Not there yet in terms of the market, but investors did wake up to Europe again on Friday, harshing the rally's mellow.

Thursday I digressed into Wiley Coyote territory and Friday there was something of a d j vu experience along those lines. A good technical setup and who knows what else has rallied stocks from the June low. Investors ignored ever worsening US economic data and pretty much any news from the rest of the world and pushed stocks slowly but steadily higher. They even ignored the Fed failing to come to the table with more stimulus (well, after a bit), and rallied stocks back to a higher high. They were excited by rather mediocre earnings where 45% of those reporting have missed on revenues, and rallied stocks to yet another higher high. Lower expectations helped that move, affirming the old saying that those expecting nothing are never disappointed.

The lack of sales is critical. We have seen this before. When things started to get "better" at the beginning of the recovery back in 2009, companies were cutting costs and not hiring or spending. They were still able to sell overseas because Europe, China, India, and Brazil had not tanked yet. So they piled up good stockpiles of cash and held onto it. They were wise to do that because things are turning back down. Mr. Shiller, and ever-present bear of late, said on Friday morning that if the US isn't already in a recession, it is darn close.

Stocks were moving up, and they had put in a new high. Then it happened. It was nothing new, just another iteration of the same old problem: Europe. Spain's Valencia province, its largest I believe and quite beautiful, told the Spanish government it needed a bailout to meet its debt obligations.



After a terrible bond auction earlier in the week, Spaniards protested the austerity. Even with the supposed austerity, Valencia peeled off the road like a rider in the Tour de France popping and falling to the back of the peleton. Its austerity is not keeping it from defaulting and its citizens hate it. And this is just the start. For good measure, Egan Jones downgraded Spain.


At the back of the pack there is little hope of catching up. Spain is already giving up from all appearances.

It seems US investors suddenly realized those problems still exist and as the earnings are showing, they are impacting US companies. The US is not an island, particularly given the move to an export economy the past four years. When others you sell to are sick, it doesn't really help if you are not as sick as they are. If they can't take what you are selling you are not richer because your goods pile up in warehouses.

Thus futures were lower early on and stocks opened lower and sold into midday. They finally caught bottom but could not bounce, instead trading in a narrow range along that midday low through the closing bell.

Didn't help it was expiration, that earnings, while better, were not going to be that great, and that the market had rallied four out of five sessions heading into expiration. Classic setup for some selling, but with the Thursday earnings we felt we would get just a bit more upside before the sellers took over. Not the case; other issues predominated and we had to spend the day in limbo, tending positions, watching the pullback, watching just how sharp it was.

Turns out it was not that bad. Volume fell on NYSE and was up just modestly on NASDAQ, hardly a massive expiration spike and that is decent given the market was lower. In short, not a big dumping of shares. Indeed, the indices held above the 10 day EMA on the close. Now you don't necessarily want to drop that far on the first day of selling, but in this rally the pullbacks are rather sharp, but as of Friday the indices were still in good shape to survive and fight another day, or at least try to push for another higher high after a test.


OTHER MARKETS.

There was movement, although some of the charts do not do the moves justice.

Dollar. 1.2157 versus 1.2268. The dollar spiked against the euro, but it was still not spiking against other currencies such as the yen. Therefore the DXY0 is still somewhat in a pullback stage while the dollar spikes against the euro. The dollar is still in excellent position to break higher with this modest pullback holding at the 20 day EMA.


Bonds. 1.46% versus 1.51% 10 year US Treasury. Bonds surged. The Treasury is acting as a safe haven, as is the US dollar versus the euro as the European issues reemerge. Remember, in northern Europe investors are paying Germany and Finland to hold their money. In other words, they have negative rates of return on their 2 year bonds.


Gold. 1,582.70, +2.30. Gold rallied modestly. Gold was down earlier on the dollar's strength. But even with the dollar stronger against the euro, gold managed to rally. That shows a fear trade here as well.


Oil. 91.90, -0.76. Oil was down on the session, but it has had a stellar week. It was up 5% as it broke above the early July peak and rallied nicely. Oil obviously has impetus to the upside given the geopolitical concerns with Iran and Israel, not to mention the problems in Syria and the tensions that has caused between the US, China, and Russia as the latter two vetoed another security council resolution to do something with respect to Syria and the slaughter of its citizens.

The world is a tough place out there, and despite what they call advancements in human rights and advancements in their thinking about the world and their citizens, nothing has really changed with Russia and China. They still support dictators (as we do at times), and they will still, seemingly no matter what the situation is, take whatever side is not the US side. But I digress.


TECHNICAL SUMMARY

Internals.

Volume. NASDAQ, +2.5%, 1.7B; NYSE, -4%, 721M. Volume was up during the week somewhat, so there was a bit of expiration action there all week long. The daily action was mixed. It was a flip from the situation on Thursday that saw NASDAQ with lower volume and the NYSE with higher volume. That tells us there was not a lot of dumping. In any event, any increase in volume for any stock was basically related to expiration. You cannot take a lot from that.


Breadth. NASDAQ, -2.8:1; NYSE -2:1. That is more significant that what we have seen of late; then again, it is expiration. I am not putting too much stock in it given that it was expiration Friday. We will see how things play out next week. It could give us a better read, because all week long it was rather lackluster. That is not necessarily good on the way up, but it was not too terrible on the test either.


THE CHARTS

SP500. SP500 pulled back above the 10 day EMA. A bit more than you want to see with a 1% loss, but we have seen this before. We have seen this movie on the other two pullbacks on this rally. The only thing that makes this significant is that it has broken up into the final range, so to speak, where the highs from 2012 were put in. Thus it is feeling some resistance from the upside. It has been a good technical rally, and it is still in technically good shape even with a 1% loss on the first day of a pullback. It did give up the higher high over that early-July peak.

That has been somewhat the case on these rallies: You get a break and, almost immediately, they are peeling back off of that higher high. We will see if we can hold anywhere from the 10 day EMA down to the 50 day EMA. The 50 day EMA is at about 1346. You are looking at another 16 points or so. That is fairly significant, but when you consider that today was down 14 points, it is not that horrendous.


NASDAQ. NASDAQ fell to the 10 day EMA as well, and it held. It never did make that higher high this time, but it did put in a higher low, and it could still work on it. Techs are just lagging. It is not their time of year yet, even though they did have some good earnings. INTC helped bump things up, but it could not hold the move. So we fade back, and we will see if it can hold between the 10 day EMA and the 50 day EMA at 2905. That is just another 20 points to the downside. It is basically half of what it lost on Friday. It may be a tall order to hold, but how many times have we seen a big drop only to see it dry up the next day and start holding at support? It will have the chance to do that next week.


SP600. SP600 took it hard. It was down 1.2%, but it held the 20 day EMA. That keeps it in the next higher trading range that the broke into. But, similar to NASDAQ, it did not put in a higher high. It has put in a higher low, however. I am worried about the small caps. They had a stellar move and breakout in late June, but they have since lagged. That is not surprising given the deterioration in the US economic data. It will be important in the coming week whether or not they can hold or if they start to fold.


SOX. SOX had a couple of good days on Wednesday and Thursday. It made it up to the bottom of the trading range and, sure enough, it reversed off of that. We will watch them. SP600 and the SOX will be key to watch early next week. SOX tends to lead to the downside as it did this past time. It lagged on the move to the upside, and that means not as much upside strength as downside virulence. So if it turns over and falls, it will be tough for NASDAQ to continue to drive higher.

We have another crossroads. A good technical position on SP500. It is not bad on the NASDAQ but not nearly as strong. We have one index -- or maybe two indices if you throw the Dow in -- performing pretty well, technically making a higher high. The others are following along, and those others just so happen to be the growth sectors.


LEADERSHIP

Big Names. All week long the move has been more of a large cap move. The stocks that have been receiving the money during the worry in the original selling from May into June and even early July -- the defensive areas -- gave up some ground as money rotated into other areas. AAPL was up on the week, but it gave it back on Friday. It was a big name that did not hang on, but there were others that did. While AMZN did not have a stellar move, it put in almost 1% to the upside, adding to its gain. PCLN squeezed out another gain, but it was up and not reversing. That is rather important. GE missed on its revenues, but it still managed to hold with a modest gain although it was a wild trading session.

Technology. There were some key moves in technology stocks that hampered NASDAQ and are ominous for next week. MSFT produced fairly decent earnings, but it gapped to the upside and reversed. That is the downside engulfing pattern. It swallowed up the prior day and, indeed, it swallowed up this move and closed at the 50 day EMA. We will see what happens. Last time we saw one of these, it faded a bit more but was able to rally off of it. INTC surprised on its earnings even though it cut its 2012 forecast in half. But it did rally nicely on Wednesday on this news. Great. It made it to the 50 day EMA, but then it started down. On Friday it gapped below the 200 day EMA and sold, closing at the session low. We are not getting good action after the fact. We are getting initial good results, but afterwards not so much.

QCOM is one of the stocks that is trying to hold after its gap to the upside. We will see. NASDAQ is struggling, and it never made that higher high. Technically it is still okay, but it has a question mark by it simply because it could not put in that higher high. Some big techs were down on Friday (throw in AAPL there). They were not just down, but they made significant moves, particularly if you look at MSFT.

Homebuilders/Materials. This was a week that saw some of the leaders break. They had been holding up in a pullback, but then, boom. BZH is one of those. But then you turn the page and see KBH holding nicely at support. LPX in materials broke hard and made a modest recovery on Friday, but it was not convincing. On the other hand, CX had a nice break higher and posted very good upside on Friday. There is some good action.

Drugs/Medical. NKTR was moving nicely. Its pullback still looks good for a move to the upside. NUVA still looks just fine as it holds at the 20 day EMA, trying to set up for a new move. We did see problems in a lot of the other stocks in these areas. EXAS is moving lower. Maybe it sets up an ABCD pattern, but we will have to see what happens. There were some breaks to the downside in a group that has been quite solid. ABAX started to fall off of the table as well. The question is, if the market gets defensive again, are these areas going to improve again and have money return their way? It is possible. Some are holding up well and could give us a nice break back to the upside. OREX is one of those; it has a very nice pullback underway. We could get money returning and pushing things up if the market gets spooked again and money flows away from the stocks that it turned to during the week and have started to do that on Friday.

Metals. There are still a lot of questions in areas such as metals. FCX did not have bad news, but it was down on Friday. Some of the other steel stocks that have looked good continue to hold up such as SCHN. They still have their earnings to come, however.

The problem we found at the end of the week was a market in transition. Some of the leaders, the defensive group, were getting a lot of good money, performing well, and putting up great patterns, but they started to lose their edge. Money flowed into some big names, and it did so quite rapidly. But then, almost as quickly, it started to struggle.

Energy. Maybe some of the newly-minted leaders from energy such as IOC and others will help carry the day. There are problems in the world that are causing oil to go up. It is not economic growth by any stretch. But you take it wherever you can get it, right? Energy is enjoying gains based upon the geopolitical tensions.

Overall, however, the market is in transition right now. We will have to see where the money flows as the next week unfolds. It is very important as earnings come out and investors react to the earnings, the US economic data, and, as seen on Friday, the reawakening of the problems in Europe.


THE ECONOMY

Financial sector announces more layoffs.

In yet another sign of the times some big names in finance are cutting more jobs. MS is cutting 700 additional positions, bringing the 2012 total to 4000 and we are just halfway through the year in terms of quarters reported. Citi is laying off another 350. Deutche Bank announced it will sack an additional 1,000.

On the bright side I guess you could say that at least they have those employees to lay off. Some of our larger companies have lost jobs for decades. At least the financial arena rallies in number of jobs and then fades, following the whims of the economy and markets.


The government hits on another way to lower the unemployment rate.

Recall our continuous and lengthy discussions a few months back about how the Administration would lower the unemployment rate below 8% by the election? The plan was to shrink the work pool, dropping eligible workers into oblivion. Recall the month in the spring when 1.2M workers disappeared from January to February? Gone. The administration said they were retirees, but we know the fastest growing employment demographic is the over 55 crowd simply because their retirements have been wiped out.

The idea at the time was to lower the number of overall workers. If you slow job losses any, then the unemployment rate improves: A relatively steady number of workers divided by a smaller number of overall available workers raises the percentage of those working. It is all a fiction; there are no more people working than before, indeed less, but because the overall number of available workers is trimmed by the government bean counters, it looks as if a greater percentage of people are working.

Problem is, everyone caught onto this and the Administration had to figure out a new way to get the rate lower by election.

If you cannot do it directly, simply write an executive order overturning a law passed by Congress and you can right your own laws.

A week ago we wondered about the Administration deciding on its own that it would no longer require those seeking welfare to show they are attempting to gain employment. That was the pillar of the Clinton/Gingrich welfare reform and it is (was?) very popular for the entire nation. Moreover, it worked.

But, it can now be used as a tool to lower the unemployment rate, again without really getting anyone employed. The Administration did not entirely eliminate the work requirement, BUT there are MAJOR changes in what is called 'work.'

Bed rest is work. Smoker cessation classes is work. 'Journaling' (keeping a journal) is now work. So is massage (getting one), exercise, parent/teacher meetings, helping a friend with household tasks or errands.

All require you to do something, but is it something considered 'work' in the sense you could get paid for it? Hardly.

The result, however, is increasing the number of 'workers' in the workforce. Instead of having to decrease the workforce monthly through bogus calculations that everyone saw through, now under the 'authority' of its unilateral executive decision, without creating one additional paying job, the Obama administration is going to reduce the unemployment rate by 'creating' jobs where none existed before. Same activities that no one considered jobs are suddenly jobs. Voila, the unemployment problem is over. Nirvana.



THE MARKET

SENTIMENT INDICATORS

VIX: 16.27; +0.82
VXN: 18.2; +0.71
VXO: 15.99; +0.24

Put/Call Ratio (CBOE): 1; +0.14

Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 43.6% versus 44.7%. Dropping after a bump higher the previous week. The volatility suggests bulls are starting to turn. Undercut 35%, the threshold for bullishness, in early June. You would expect it to rise and it has. Still not at a dangerous level, just working as it should. As noted, hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 24.5% versus 24.5%. Again holding at 24.5% for the third week. Holding at the same level for over a month. 24.7% before, and 25.6% before that. Never got close to the 35% level that is bullish, but it looks as if the bulls did the work. Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: -40.6 points (-1.37%) to close at 2925.3
Volume: 1.731B (+2.46%)

Up Volume: 417.88M (-602.12M)
Down Volume: 1.42B (+744.79M)

A/D and Hi/Lo: Decliners led 2.79 to 1
Previous Session: Decliners led 1.26 to 1

New Highs: 43 (-43)
New Lows: 52 (+13)


SP500/NYSE

Stats: -13.85 points (-1.01%) to close at 1362.66
NYSE Volume: 721.106M (-3.8%)

A/D and Hi/Lo: Decliners led 1.99 to 1
Previous Session: Advancers led 1.12 to 1

New Highs: 124 (-48)
New Lows: 37 (+16)


DJ30

Stats: -120.79 points (-0.93%) to close at 12822.57
Volume: 210M shares Friday versus 139M shares Thursday. Expiration.


MONDAY

The economic calendar is not as intense as it has been of late. Some interesting stuff comes on Friday with GDP for Q2 as well as the Michigan Sentiment. All eyes will be looking toward that finale for the week, but we will get a new home sales read on Wednesday. After the existing home sales, it will be interesting to see where they stack up, particularly given the housing starts we saw.

Then, of course, we have a key test of the rally that is slow yet still technically solid. At least it is technically solid on SP500. The question is: With the earnings starting to have a midlife crisis, where all of a sudden people realize, as noted on Thursday, that the emperor has no clothes and earnings simply are not that good. They are not, but they are better than expected. But earnings that are better than expected but still cruddy can only carry a market so far. Thus we have to watch the test closely on SP500 as well as SP600 and the SOX.

There are so many issues facing the world right now. We have food issues with the corn crop in the US and problems in other parts of the world as well. We could have a shortage of food for a significant part of the world. We will have higher prices in the US because so much of our food stock is based upon corn and its by-products. We continue to have trouble in the financial institutions with LIBOR. Now there is talk of manipulation of other markets. One that I have posited as being manipulated is gold. Note how it has come back in this narrow range and is not going anywhere despite all of the issues. There is the Fed not pushing or stimulus as well as all of the worries in Europe where there is more stimulus. Yet gold has gone nowhere. That is just like LIBOR. LIBOR was all over the place, then all of a sudden it just went dormant and did not move for months on end. Now we have gold trading in this narrowing range even with all of the strife in the world.

We have the Middle Eastern situation. We have Syria going up in flames. The US is vying with China and Russia over what will happen there. We have Egypt, its elections, and the problems with the military taking over. We have Israel and Iran butting heads and getting to a flashpoint right now. We have a great buildup in the Persian Gulf, which I think we needed to do to show that we were there.

Then we have the world economies. It is not just financial institutions; the world economies are in serious trouble right now. Peter Shiller believes, as I do now, that the US is likely already in a recession. Others believe the same thing. Brazil might be there as well, and India could be. China is not but it seems like it is a recession given how much it has slowed down. The EU is in recession as well. We have worsening problems ahead.

It does not look good if you put all that together for the stock market, yet the stock market continues to hold up. Manipulation here as well? I doubt it. But at some point it has to take into consideration all of the issues that are confronting the world. While it has not rolled over as it did in 2011 when Europe went down, it is moving through a technically-sound base. It is at an important level of resistance, and that makes next week important. We will not be too lenient after two higher lows and three higher highs. We have been closing some positions. If they got close, then we were closing some. Others have fallen hard. If it is close, we will at least take some off the table and then put ourselves in better position in case things get ugly.

That said, there are still those stocks in defensive areas that look very good and could give us new buys in the near term as money is still flowing their way. That is exactly where you want to be for the upside. I think it is time to be defensive once again. We will look for some downside plays on top just in case we get the break to the downside. Thus far the market is holding up. It has a significant pullback on Friday, but it was not a breakdown by any stretch on SP500 or NASDAQ or even the SP600. We will approach next week with caution. We have good stops on our positions. We do not have as many positions open now, and the ones that we have are more defensive. We could turn right back to a defensive posture in the markets.

Not a great prognosis for the world economies, for the US economy, or for the market necessarily. But you always take what the market gives you. As it is still holding up a good technical pattern, we will look for those stocks in good technical patterns but with a bit more of a defensive bent. I have a feeling that money will flow out of the areas it moved into last week as quickly as it moved into them.

Enjoy the weekend. I know there is a lot going on in the US. Our hearts go out to the people in Colorado. We pray for those that did not go home last night and for those who have to deal with that loss. It is always hardest on those who are left. We just need to keep cool heads, pray for those families, and pray for those who are meeting their maker. And we can redouble our resolve to make this country a place where people have hope for the future again and hope for themselves and their neighbors versus having to hope that the government takes care of them.

Have a great weekend.


Support and resistance

NASDAQ: Closed at 2925.30

Resistance:
2942 is the mid-June 2012 high
2950 is the mid-April closing low
2962 is the April 2012 low
2988 is the July 2012 high
3000 is the February 2012 post-bear market high
3024 is the gap point from early May
3026 from 10/2000 low
3042 from 5/2000 low
3076 is the late April 2012 high
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
2910 is the March 2012 low
The 50 day EMA at 2905
2900 is the March 2012 low
2888 is the May 2011 peak and PRIOR post-bear market high
2879 is the July 2011 peak
2866 is the July 2012 closing low
2862 is the 2007 peak
2841 is the February 2011 peak
The 200 day SMA at 2824
2816 is the early April 2011 peak.
2810 is the low in the shoulders
2754 is the October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ


S&P 500: Closed at 1362.65

Resistance:
1363.46 is June 2012 high
1371 is the May 2011 peak, the post-bear market high
1375 is the early July 2012 peak
1378 is the February 2012 peak
1406 is the early May 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1359 is the April 2012 low
1357 is the July 2011 peak
The 50 day EMA at 1346
1344 is the February 2011 peak
1340 is the early April 2011 peak
1332 is the early March 2011 peak
1325 is the July 2012 intraday low
The 200 day SMA at 1313
1309 is the right shoulder low from June 2012
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high


Dow: Closed at 12,822.57
Resistance:
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,754 is the July intraday peak
The 50 day EMA at 12,721
12,716 is the April 2012 closing low
The 200 day SMA at 12,507
12,391 is the February 2011 peak
12,369 is the left shoulder low from May 2012
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak


Economic Calendar

July 24 - Tuesday
FHFA Housing Price I, May (10:00): 0.8% prior

July 25 - Wednesday
MBA Mortgage Index, 07/21 (7:00)
New Home Sales, June (10:00): 374K expected, 369K prior
Crude Inventories, 07/21 (10:30)

July 26 - Thursday
Initial Claims, 07/21 (8:30): 375K expected, 386K prior
Continuing Claims, 07/21 (8:30): 3300K expected, 3300K prior
Durable Orders, June (8:30): 1.0% expected, 1.3% prior (revised from 1.1%)
Durable Orders - ex , June (8:30): 0.0% expected, 0.7% prior (revised from 0.4%)
Pending Home Sales, June (10:00): 0.7% expected, 5.9% prior

July 27 - Friday
GDP-Adv., Q2 (8:30): 1.2% expected, 1.9% prior
Chain Deflator-Adv., Q2 (8:30): 1.5% expected, 2.0% prior
Michigan Sentiment -, July (9:55): 72.0 expected, 72.0 prior



By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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Monday, July 09, 2012

Weak Jobs Report Too Weak for Stocks

MARKET SUMMARY:

- Weak jobs report too weak for stocks, not weak enough for the Fed, and the market sells.
- A last hour rumor/report from the Fed's designated leak reporter helps lift stocks from the lows.
- Gold sees no rate cut regardless of the Fed leaker.
- Defensive Blame Bush for what he left Obama? What about what Clinton left Bush?
- Index charts still look technically fit, but earnings can change that picture.


Jobs report: on the right track or a gut punch?

Obama: A step in the right direction Romney: A gut punch

Dueling speeches but the facts are the facts. 80K non-farm jobs on top of 77K the prior week (revised up from 69K). 225K for the entire quarter, the lowest since 2010. In a week that saw national manufacturing fall back into contraction where it has not been since 2009, I suppose it is fitting that job creation fell back to levels of the same period. The sad irony is, jobs creation never came close to mirroring the success of the manufacturing recovery. Indeed, the prior two years saw hiring fizzle after starting to pick up, but this time manufacturing is now down and June retail sales were the worst in 3 years with 0.1% growth. With manufacturing, a leading indicator (remember, it telegraphed the recovery) turned back to contraction, can the President really say the economy is on the right path because a lagging indicator is hanging on to historically weak levels?



He can say it, and he did, but he is wrong. There is no recovery in labor. The employment:population ratio held at 58.6%, down from 59.4% in June 2009 when the recession ended. The decade average is 63%. Going nowhere for three years. Instead, once more we had to hear (endure?) talk of how bad things were when he took over. Yes the housing crash compounded by outlandish and irresponsible spending was bad. As noted on Tuesday, however, Paul Krugman, the Nobel Prize winning Keynesian the administration loves, advocated a housing bubble in order to get over the tech and overall stock market crash set up at the end of the Clinton administration. And we all know the likes of Senator Dodd, Schumer, and Congressman Frank who advocated and quite frankly threatened mortgage companies and banks if they did not extend loans to constituents even as the Bush Administration called for reigning in Fannie and Freddie. Bush was not innocent; he advocated home ownership and spent like crazy with his Medicare Part D, but can Obama really call that out today as a cause of our problems when he has spent more in his term than all Presidents preceding him combined?


The three housing musketeers orchestrating a housing disaster.

I remember writing about the first couple of years of the Bush administration and how the economy was performing. I went through the litany of events that confronted the country during that time. On March 2000 the stock market topped thanks to major monetary policy blunders from Alan Greenspan (recall he flooded the economy with money pre-Y2K even as he hiked rates, pulled it ALL back in March, then raised rates with another 50BP kicker in May; the market pitched over and the economy finished falling into the recession that was starting under the end of the Clinton years). It was a monumental bubble and a monumental crash. In the aftermath there was virtually no investment in the US for 3 straight years. During that period we lost our technology edge and thousands upon thousands of tech jobs that went overseas in a brain drain and those jobs never came back.
Then there was the corporate malfeasance with Tyco's CEO plundering his company, Worldcom officers bankrupting that company, and Enron's smartest guys in the room epitomizing the height of corporate arrogance and then the depth of corporate collapse. That was followed by the 9-11 terror attacks JUST when the stock market was starting to turn the corner in a signal the recession was ending. That plunged us back into recession.




Remember, it was the housing market that remained strong throughout. Nesting, 'stay-cations,' and an abundance of easy money courtesy of Greenspan (at the urging of the likes of Krugman) was seen as the force that kept the economy from totally cratering given business was dormant after the beating it received at the hands of the Fed. Cisco's Chambers said at the time he had never seen the business cycle turn so fast from so good to so bad. Thousands of companies went bust and those that did not spent years eating the inventory build up accrued before the rug was pulled. It is no wonder we lost so many jobs overseas as companies were hesitant to invest and encounter the same troubles again from a Fed and government that could so easily spike the punch bowl and then take it away.


I guess we should have paid more attention to the man behind the curtain.


So as you see, it was not a situation of a simple decision to create the housing bubble out of nothing. It was the LAST lap of a race to the bottom so to speak as the Fed officials and the government in the form of the Congress and Executive tried to patch one policy misstep with another one. The tech crash was bad. The housing crash was simply a bigger bubble on top of that bubble. The current Fed stimulus gambit, similar to China's building binge, is another last ditch attempt to thwart another massive collapse, one that tried to happen in 2008 but that was propped up. As the Great Depression showed us, propping up only prolongs the pain. The Great Depression would have ultimately ended without WWII, but it would have taken another 10 years to do so.

That means the prognosis is not good for us now as we are trying to wind down wars and cut spending, but at the same time not freeing companies and entrepreneurs from massive new regulations in every aspect of business so they can truly grow us out of this mess. We used to laugh at the Eurozone's huge increase in regulations when the countries combined. They result of that overregulation is clear, but what is also sadly clear is that we are following in its footsteps. The clear, empirical evidence shows that their way does not produce equality, balanced budgets, quality healthcare, or decent levels of economic activity. We fought a war to break away from that system and now we are willingly going back? Is that a 'step in the right direction?'


Stocks see through the rhetoric, see no rate cuts, sell on weak data and not much economic hope.

Stocks saw through it all. Weak numbers again, back to 2010 levels, but not weak enough for the Fed to act. Futures flopped fairly hard as stocks opened lower and sold through lunch. Midmorning we posited the possibility of an afternoon run, but also noted that the indices were holding over the 10 day EMA, the near support level for a 'normal' test. Of course the test was a bit much for just one day though I do note it was nowhere near as negative as it was the prior 'test' of the breakout from the inverted head and shoulders.

The indices double bottomed and started upside off the second bottom with two hours left. Just when they were out of steam on a short bounce, the Wall Street Journal's Hilsenrath, the Fed's leaker of choice, issued a short narrative about the jobs report and what the Fed could likely do. The blurbs came across one at a time but it went like this: weak jobs increases likelihood of Fed action but doesn't ensure it. Fed hawks want to wait for more serious threats, but some officials are interested in bond purchases. That my friends is QE. There was a lot more, but that was the gist. It said NOTHING new but it was what the Fed wanted out there to help bolster the markets. 'Jawboning' as they used to call it when Greenspan talked for minutes and said nothing, similar to the governor in 'The Best Little Whorehouse in Texas.'


Oooh I love to dance a little sidestep, now they see me, now they don't . . .
'What did he say?' 'A definite maybe.'

Yes, a definite maybe but it was enough for the markets. The indices bounced, cut the losses, and looked pretty decent on the close above the 10 day EMA. In position to bounce next week, maybe after a bit more testing, but of course earnings will have something to say about that as the season cranks up and the warnings are running almost 5:1 over upside surprises. Makes sense: the economy is slowing down fast, heading toward ECRI's recession.



OTHER MARKETS.

Dollar. 1.2281 versus 1.2391 euro. Weak data but not enough for more stimulus. The dollar rallied. Typically the dollar falls on weak economic data but when everyone expects a Fed move, the lack of one is celebrated and built back into the price of a greenback. Also, don't forget that China is cutting rates, Europe is cutting rates, and the UK is printing money in its UK-TARP program. All of that makes the dollar look a bit greener and the dollar exploded higher for a second day after falling back to the 50 day EMA. It has now broken out again, clearing the late May highs.


Bonds. 1.54% versus 1.60% 10 year US Treasury. Bonds should rise as economic data craps out. Also, the hint the Fed might buy mortgage backed securities doesn't hurt. Bonds gapped upside but note they are STILL in the now 5-week lateral range, holding the break higher to an elevated level as they ride out the indecision with the Fed. Thing is, with the weak economic data OR the Fed action bonds are winners once again.


Gold. 1578.80, -30.60. Winning, as Charlie Sheen would spout, is not what gold is up to right now. It rallied to the top of its two month range, waited on the Fed, got the thumbs down, dove lower. Back through the 50 day EMA and likely moving back to 1550ish as it waits on the FOMC. Note it didn't take much solace from the Hilsenrad missive.


Still winning?

Oil. 84.43, -2.79. Oil faded from the 50 day EMA test, falling to the 20 day EMA. Weak economy so no need for oil. Moreover, the dollar shot higher so it takes less dollars to buy the same amount of oil. Good support for oil as it also sits on the early June two week consolidation. Depends upon what the Fed does because the US economy and the world economies stink.


TECHNICAL SUMMARY

Internals

Volume. NASDAQ +2.4%, 1.42B; NYSE -11.8%, 543M. Summer, Friday, holiday week, low volume. Not bad for a selloff, however.


Breadth. NASDAQ -2.6:1; NYSE -2:1. Stronger downside breadth but let's face it, in this environment that is just nothing.


THE CHARTS

SP500. Rallied to the May 2011 peak at 1370, paused, then sold back Friday. Undercut the 10 day EMA on the low but the late market move closed out SP500 just over that near support. You prefer to see the move occur over a few sessions, not just one, but this happened the third week of June on that 'test' and it held. Holding the 10 day EMA is good; but now the real test this week. 1344 is important (February 2011 peak) as you want to see SP500 put in a decent higher low to continue the move. It is set up, but those earnings are coming . . .


DJ30. All the way to the 50 day EMA on the session low but the Dow also rebounded late to close right at the 10 day EMA. A hold of the 50 day EMA would be good and we note it closed over the lower level of the support range as well.


NASDAQ. As with SP500, NASDAQ fell to the 10 day EMA in one session with a big step lower. Of course not as big as in June, but still no gentle 1-2-3 pullback. It did tap it on the low and rebounded to close. Continued low volume so no major dumping though in the summer and with such light trade it is more a game of support and leadership moves versus volume . . . in most cases. Holding over the June peak and that leaves NASDAQ in good shape to bounce if earnings come in well. Ironic. Techs were poor performers Friday, but the index overall looks good.


SP600. -1.23%. Fell back sharply from the solid move to the upper resistance range. A great move off the 200 day SMA and now a test. It could easily make the 10 day EMA (443) on this drop, putting it back at the next support range.


SOX. -2.50%. Chips continued their split action though overall they were roughed up Friday. Through the 50 day EMA as well as the 20 day EMA, falling to the support at 372ish. We said SOX was not strong, just following, and as soon as things started to hit the fan SOX was out the exit fast.


LEADERSHIP

Defensive in flavor as you would expect. Drugs/healthcare still performing, housing not bad, financials struggling. Many leaders are giving the pullback we wanted and thus we are looking for buys in drugs and the like, not to mention some strong stocks such as PCLN. Surprisingly, some metals held up.

Big names. AAPL took the day off but a great move on the week. AMZN shows a nice doji near the 10 day EMA. PCLN looks super on its pullback; looking at a new play there.

Drugs. Pulling back but orderly, unlike the indices. ABAX, AMRN, ARNA, NUVA, OREX. Not bad.

Metals. Surprising. FCX is testing the 50 day EMA break. STLD is sliding laterally after a good break over resistance. Others holding up as well.

Materials. LPX, MAS, CX (cement) all are pulling back in some form or another to test their moves.

Financial. Tried to check up on the session but about all they did was not sell further after gapping lower. JPM, BAC, C all gapped to a doji. Not too promising but we will see if they can gap back upside next week.


THE MARKET

SENTIMENT INDICATORS

VIX: 17.1; -0.4
VXN: 18.65; +0.22
VXO: 16.7; -0.47

Put/Call Ratio (CBOE): 1.09; +0.23


Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 42.5% versus 38.7% versus 37.2%. What a rebound as bulls survived the sharp drop after the breakout, building as the market rebounded into the Fourth of July. Hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 24.5% versus 24.7% versus 25.6%. Still hovering around the 25% level, never getting close to the 35% level that is bullish. It is always the best signal of bulls and bears cross paths so to speak. Not bad given the bulls' action, but not the best signal. Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: -38.78 points (-1.3%) to close at 2937.33
Volume: 1.415B (+2.39%)

Up Volume: 287.08M (-407.78M)
Down Volume: 1.13B (+423.18M)

A/D and Hi/Lo: Decliners led 2.59 to 1
Previous Session: Decliners led 1.17 to 1

New Highs: 56 (-73)
New Lows: 29 (+12)


SP500/NYSE

Stats: -12.9 points (-0.94%) to close at 1354.68
NYSE Volume: 543M (-11.85%)

Up Volume: 469.12M (-428.55M)
Down Volume: 2.18B (+120M)

A/D and Hi/Lo: Decliners led 2.08 to 1
Previous Session: Decliners led 1.3 to 1

New Highs: 128 (-112)
New Lows: 10 (+1)


DJ30

Stats: -124.2 points (-0.96%) to close at 12772.47
Volume: 96.8M shares Friday versus 97.8M shares Thursday.


MONDAY

Some economic data later in the week but let's face it, most of the big news on the economy is out and investors will turn to earnings. Earnings start slow but pick up speed toward the end of the week as well.

The indices are set up in some pretty decent pullbacks and leaders are in good shape. As noted in our alerts, we went over the positions several times looking for those with weak links. We closed some, but we have gravitated toward stocks and sectors that are getting the money (drugs, healthcare in general, homebuilders, materials) and as they were holding up quite nicely we were not going to cut them off, at least on Friday. We had that choice because earnings do start slow next week and we can get a better view of investor sentiment toward earnings buy watching the reaction to the initial round that has basically no big names.

As noted, the indices are set decently and there is leadership. That leadership has held well even in the prior dip that tested the inverted head and shoulders breakout. While we expect them to at least do the same here, being defensive, earnings are a bit different beast. If investors sour on the outlooks, even good patterns and 'safer' defensive sectors can and will take hits. That is why we were really poring over the plays Friday to see what we wanted to close.

If the action starts to erode further, we will close out more and flip some downside plays on the burner. Don't want to try and ride out an earnings season we feel will disappoint in the raw numbers that will take stellar guidance to overcome. With this economic data, while hope springs eternal, it is a chance to take. Thus we see how they react early in the week and have the goal of sticking only with the strongest that continue their 1-2-3 type pullbacks for the upside.

Why so concerned this time around? Because we know profits are lower; companies have warned us about this. Also, if the numbers suddenly show that ECRI's recession call is indeed on point, stocks will lead the move and head lower first. It would take the Fed to act in order to reverse the action, but quite frankly, despite the afternoon 'leak,' the Fed doesn't want to act. That is why it leaked, pulling a 'Greenspan.' It wants to talk the markets through it without having to act. That won't offset weak outlooks. Further, it will TAKE a selloff to get the Fed to act given the 'improvement' in the jobs to 80K.

In sum, we like the patterns overall in the indices, and there are still some great pullbacks in the defensive leadership groups such as biotech drugs. We will look at those for new entries in the defensive category that can also make us money as they have been doing. The pullback is what we wanted with them. We will be ready to close existing positions that hack around, unable to build toward a move. If bad news hits, they are the first to go. Then we have some downside to play it as well, though likely the bottom falls out at once on some earnings worries, if that is going to happen, and the gaps are hard to play. If we see weak stocks breaking down, we pick up some positions downside and then when the news hits, they implode and make us money.

It is always so much fun when the Fed and government are nosing in. The market is showing resilience BECAUSE of that presence and the carrot of more stimulus. IF THE MARKET BREAKS DOWN that means it does not believe stimulus is coming and is factoring in a weak economy. That eventually brings the Fed in, but we don't want to ride it down waiting for the 'when' as in when the Fed will act.

Traveling Monday through Wednesday, checking out some companies as I love to do, so the reports will be cut back some, but you will still get the best analysis there is.

Have a great weekend!


Support and resistance

NASDAQ: Closed at 2937.33

Resistance:
2942 is the mid-June 2012 high
2950 is the mid-April closing low
2962 is the April 2012 low
3000 is the February 2012 post-bear market high
3024 is the gap point from early May
3026 from 10/2000 low
3042 from 5/2000 low
3076 is the late April 2012 high
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
The 10 day EMA at 2922
2910 is the recent March 2012 low
2900 is the March 2012 low
The 50 day EMA at 2900
2888 is the May 2011 peak and PRIOR post-bear market high
2879 is the July 2011 peak
2862 is the 2007 peak
2841 is the February 2011 peak
2816 is the early April 2011 peak.
2810 is the low in the shoulders
The 200 day SMA at 2801
2754 is the October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ


S&P 500: Closed at 1354.68

Resistance:
1357 is the July 2011 peak
1359 is the April 2012 low
1363.46 is June 2012 high
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1406 is the early May 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
The 10 day EMA at 1351
1344 is the February 2011 peak
The 50 day EMA at 1342
1340 is the early April 2011 peak
1332 is the early March 2011 peak
1309 is the right shoulder low from June 2012
The 200 day SMA at 1303
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high


Dow: Closed at 12,772.47
Resistance:
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,754 is the July intraday peak
12,716 is the April 2012 closing low
The 50 day EMA at 12,700
The 200 day SMA at 12,416
12,391 is the February 2011 peak
12,369 is the left shoulder low from May 2012
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak


Economic Calendar

July 2 - Monday
ISM Index, June (10:00): 49.7 actual versus 52.2 expected, 53.5 prior
Construction Spending, May (10:00): 0.9% actual versus 0.2% expected, 0.6% prior (revised from 0.3%)

July 3 - Tuesday
Factory Orders, May (10:00): 0.7% actual versus 0.4% expected, -0.7% prior (revised from -0.6%)

July 5 - Thursday
MBA Mortgage Index, 06/30 (7:00): -6.7% actual versus -7.1% prior
Challenger Job Cuts, June (7:30): -9.5% actual versus 66.7% prior
ADP Employment Change, June (8:15): 179K actual versus 105K expected, 136K prior (revised from 133K)
Initial Claims, 06/30 (8:30): 374K actual versus 385K expected, 388K prior
Continuing Claims, 06/23 (8:30): 3306K actual versus 3283K expected, 3302K prior (revised from 3296K)
ISM Services, June (10:00): 52.1 actual versus 53.0 expected, 53.7 prior
Crude Inventories, 06/30 (11:00): -4.270M actual versus -0.133M prior

July 6 - Friday
Nonfarm Payrolls, June (8:30): 80K actual versus 100K expected, 77K prior (revised from 69K)
Nonfarm Private Payrolls, June (8:30): 84K actual versus 105K expected, 105K prior (revised from 82K)
Unemployment Rate, June (8:30): 8.2% actual versus 8.2% expected, 8.2% prior
Hourly Earnings, June (8:30): 0.3% actual versus 0.2% expected, 0.2% prior (revised from 0.1%)
Average Workweek, June (8:30): 34.5 actual versus 34.4 expected, 34.4 prior

July 9 - Monday
Consumer Credit, May (15:00): $9.5B expected, $6.5B prior

July 11 - Wednesday
MBA Mortgage Index, 07/07 (7:00): -6.7% prior
Trade Balance, May (8:30): -$48.9B expected, -$50.1B prior
Wholesale Inventories, May (10:00): 0.3% expected, 0.6% prior
Crude Inventories, 07/07 (10:30): -4.270M prior
FOMC Minutes, 6/20 (14:00)

July 12 - Thursday
Initial Claims, 07/07 (8:30): 375K expected, 374K prior
Continuing Claims, 06/30 (8:30): 3300K expected, 3306K prior
Export Prices ex-ag., June (8:30): -0.5% prior
Import Prices ex-oil, June (8:30): -0.1% prior
Treasury Budget, June (14:00): -$43.1B prior

July 13 - Friday
PPI, June (8:30): -0.6% expected, -1.0% prior
Core PPI, June (8:30): 0.2% expected, 0.2% prior
Michigan Sentiment, Preliminary July (9:55): 73.5 expected, 73.2 prior



By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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Monday, July 02, 2012

Stocks Rally on Unexpected EU E-TARP Agreement

MARKET SUMMARY:

- Stocks ride an unexpected EU E-TARP agreement to 3% gains, overlooking another round of week US economic data and earnings misses.
- EU to use emergency fund for supporting Italian, Spanish bonds.
- Other markets react as if US QE was announced.
- Spending flat for the first time in 6 months, incomes post a modest gain.
- Only 42% of the average wage consists of wages. The other 58%: entitlements.
- Michigan Sentiment final for June hits a low for 2012.
- Chicago PMI still above 50, but survey authors say this is a 'wicked' report. Wicked in a bad way.
- The rally: trying to withstand earnings warnings, economic data and continue toward the prior highs.

It's E-TARP and stocks rally.


It's a bailout US-style for southern Europe.


Of course that raises the same old question about moral hazard . . .

But stocks don't really care about that!

Ring the bells and dance in street for TARP European style. We called it E-TARP. Everyone was celebrating including the US. Stocks rallied 2-3% on the indices. Of course that raises the question about moral hazard. When the little girl in the cartoon asks Santa Claus whether the kids on the naughty list get a lump of coal, he says, "No, of course not. They get a bailout." Those who act irresponsibly are the ones we all have to pay for. You would think that, as parents, we would know this lesson. It applies not only to kids but to any human being (and a lot of animals). We have not seemed to learn that.

The indices surged to the upside. These were big moves that took them up to the highs of a couple weeks back. SP500 and SP600 cleared those highs, at least on a closing basis. Strong moves, indeed. Futures were up in the wee hours of the morning on a deal that the European leaders struck. It would use the emergency fund for supporting -- and you can read that as "buying" -- Spanish and Italian bonds. That is the US version of a bailout. It is the old TARP. We did not necessarily do it that way, but that was the intent. That sent stocks higher. Futures were up all night, and stocks just got better with age as the market rally continued.

SP500, +2.49%; NASDAQ, +3%; Dow, +2.2%; SP600, +3%; SOX, +4.35%

It was a boffo day to say the least.

The E-TARP effect was enough to overcome some fairly weak US data in personal income and spending. Michigan sentiment also hit a 2012 low. The Chicago PMI showed a report that, even though it was above 50, the authors called "wicked." It was not wicked in a good way. But stocks had seen that story before in the US; what they really cared about was Europe getting grips on liquidity, and they surged.


OTHER MARKETS.

The other markets reacted as you would expect, I guess. A lot of them acted as if the world would be all candy and apples come Christmastime.

Dollar. 1.2658 versus 1.2435 euro. The dollar tanked. A huge move down in the dollar to the 50 day EMA. That is where it held on the last dump. We will see if it does so again. Last time it was a much more orderly pullback to test the breakout. It still has a chance of putting in a higher low. It just received a pretty big setback, obviously, when it was viewed that the bailout in Europe will help firm the euro by firming European economies.


Bonds. 1.65% versus 1.59% 10 year US Treasury. Bonds tanked. A big drop in bonds as you would expect. Overall they held up fairly well, however.


Gold. 1,603.50, +53.10.Gold surged. After all, if we start reducing the value of currencies, then we need to raise the price of gold. It jumped much higher.


Oil. 85.02, +7.32. Oil had a banner day. A big break to the upside. I noted that it was moving laterally in a consolidation. But it looked as if it was setting up at the 10 day EMA for another fall, as we have seen in this trend lower that started in early May. It did not happen. I guess the perception that there will be improvement in the European economy helped bolster demand for oil, not to mention the dollar falling like a stone. Nothing like that to pump up the price of anything based in dollars.


Interestingly, there were even more countries this week who said they would not use dollars when dealing with China. Chile was the most recent saying they will use the renminbi with them. That makes Brazil, Chile, Korea, and the list goes on. Some friendly and some unfriendly. They are dealing with China directly in renminbi and bypassing the dollar. We will see that more and more. At one point we may just see the dollar quietly slip into reserve currency oblivion similar to the pound. That will have dire ill effects on the US economy.

I have talked about this at length before. It does not seem to matter whether it was Bush or Obama. They are content to let the dollar crater. Frankly, they have to be because the debts are so big. If they ever hope to repay them, they need cheap dollars. Unfortunately that eviscerates every US citizen's retirements. What is good for the profligate spenders in our government is not good for those that have to earn the money. Then the government takes that money from us in order to provide us goods and services that we may not want or need or that should be provided by the private sector. But what can I say? That is the way it will be from now on. We have Obamacare, and the likelihood of repeal is very small. I doubt the republicans will win the Senate. It is a tossup as to whether even Romney can defeat Obama with his horrid economic record. Enough said on that.

Other markets reversed according to a massive stimulus program similar to what they would do if there was a stimulus program in the US. Of course stocks reacted in the same way with upside vigor.


TECHNICAL SUMMARY

Internals

Volume. NASDAQ +7%, 1.73B; NYSE +19%, 745M. A solid increase in volume to the upside. Now the question is: Was that all payoff the E-TARP? Surely some of it was because of that. There was a lot of short covering ongoing. A lot of stocks were shorted. NYSE short interest was at the highest since October 2011. That was quite a surge. When you get that high of a reading, you will have a counter move. That is what we saw. Sentiment reached somewhat of an extreme level, and we had a reaction to the other side. If you get too many shorts or too many longs, you get to the point of extreme levels where it needs adjusting. We got something of an adjustment on Friday, I would say.


Breadth. NASDAQ 5.7:1; NYSE 6.6:1. Breadth was impressive. It was a strong day in terms of internals. Typically if you have just short covering, you are looking at a rather narrow rally with breadth not anywhere approaching the 5:1 and 6:1 levels that we saw on Friday. This has attributes of real strength to the move. I guess the exuberance is noteworthy, and it is expected because the Europeans seem to be in agreement. They have crossed a bridge that heretofore they did not want to take -- or at least Germany did not want to take it. Now it looks like they are there, so that is worth celebrating, indeed. Stocks did just that.

Again, the question is whether there will be staying power after that move. All the others have failed. Of course all the others have not reached this level of stimulus or liquidity injection that the bond support provides. That is a completely different animal. Thus we can understand the exuberance in all of the markets whether in Europe or in the United States.


THE CHARTS

SP500. There was a big break to the upside by SP500. It also moved to a closing high, at least in terms of the mid-June highs. It did not make an intraday high, but it produced a closing high on some very solid, above-average volume. Thursday volume jumped up above average as the index reached lower and reverse. This is decent action as well. Let's recap. We had the top and a selloff, but immediately upon the conclusion of the three-week selloff, we had the formation of an inverted head and shoulders. It put that in right above the next support level. It broke higher, could not make it hold, but then it formed something of an ABCD pattern. This week it has been moving up. With this rally at the end of the month, it gave SP500 its best June ever. The Dow put in its best June since 1999. It was noteworthy. The move set some records.

Again, will the move be able to keep the records going into July? That is the question. I will talk about that shortly. As a precursor, I still think it can get up into this range where the March and April highs were before it rolls over again.


DJ30. DJ30 showed similar action. It, too, put in a higher closing high over the mid-June peaks. These are solid. Higher lows, bounces, higher closing highs. That is building; that is not tailing off. We see some strength coming.


NASDAQ. NASDAQ put in a new closing high. It was not able to put in a new intraday high over those mid-June highs, however. But it did not do a bad job. It put in that closing high and it made a higher low. It held at support. You name it. It is the same as SP500. It takes out this recent high, and it is playing in the range of the March and April peaks.


SP600. The small caps were impressive, indeed. Not only putting in a higher closing high above the mid-June highs but also simply a higher high. Very solid. It has broken back into the range that it was rejected from two weeks back and a month ago. Not bad.


SOX. SOX put in the biggest percentage move on the day, of course. It just has not played along yet. It broke through the 50 day EMA, but it is not above its next resistance. It has yet to break through. It tried it two weeks ago and failed. We will see what happens here. The key for the indices is whether they are going to be able to hold this move. When you ask whether they will be able to hold, of course you have to ask whether they have leadership to push them to the upside.


LEADERSHIP

Big Names. AAPL was up 2.6%. A solid, respectable move. Not a blowout move, but we will take it. AMZN was very good as well, up 3.2%. Very solid, very respectable. It is an outstanding pattern. PCLN was not bad. It gapped to the upside, but it stopped at the 50 day EMA. GOOG was rolling off of the bottom of its range. Look at this big gap. It had been banging up and down at a support level, and it gapped to the upside after that doji on Thursday. Not bad.

Financial. If you just saw JPM, you would think financials did not have a very good day. But outside of that stock they did. BAC rallied almost 6% in a solid upside break. WFC added 3%. Very nice, indeed. TCBI gapped to the upside, but it could not keep the move rolling. Financials overall held up very well. They did not have huge moves in some instances, but some of the leaders were performing just fine.

Medical/Drugs/Healthcare. We had the same results from some of the medical stocks. ALGN posted a very credible 4.9% move. ARAY moved up 4.5%. Medical appliances, health services and drugs are moving up well. Some that had fallen back ahead of the ruling were moving back up such as CERN. It gained almost 6%. That leadership group continues.

Homebuilders, Materials. Once again, the builders are looking strong. BZH was up 7.6%. KBH reported very good earnings and rallied over 12%. Strong moves from the home builders, and some materials are also moving well. LPX rallied 3%. That is another sector that continues to lead.

Industrials. DE continues to the upside, gapping through the 200 day EMA. CAT bounced as well, up 2.75%, although it is still mired in the muck. It is coming back, but it does not look like it has any real pattern. The interesting thing, however, is that it has a higher MACD as the stock put in a lower price low. We could be seeing the formation of a bottom. The question is how much room do you have to run? You can get yourself up to 95 or so. Another 10 points is a possibility for a play to the upside. We will be looking at this one as well as some other plays in this sector to see if we can get enough of a gain and have enough sweet spots, so to speak, to take out of the middle of the move.

Software. Software is looking good again, although it has been treacherous. There are some nice bases out here. TIBX gapped to the upside in its little cup base. It posted a nice pullback to the Fibonacci. AZPN made a nice upside break out of its triangle.

Energy. Energy is rebounding. HAL has bounced nicely, but it is just up to the 20 day EMA, showing a doji in a continuing downtrend. That is one of the problems we are seeing. A lot of stocks have bounced to the upside, but they still do not have great patterns. APC is considered a gas play predominantly, although it has a lot of oil as well. It gapped up to the 50 day EMA, matching the highs from two weeks ago.

We have service stocks that are still trending lower but have bounced. We have oil stocks that have been beaten up but have been trying to turn the corner and bounce as well. We will be looking at some those to see if they can produce anything. If there is going to be some kind of turn in oil, it would be worth picking it up. We will have to see if there are any better patterns that what we have seen in our quick scan.

The point is there are still good stocks in position to lead, and others are stepping up such as software. That is what you like to see. The defensive stocks held up nicely through the selling, and so did the household brand stocks. For the most part they did just fine, and now they are trying to bounce and help lead. All week we were saying that they needed to step up if this move would continue. On Friday they did that. The question for next week -- and it is just a four-day week because of the July 4th holiday on Wednesday -- is whether they can keep the move rolling and post some nice gains before they decide to turn back over.


THE ECONOMY

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.html

Income benefits from inflation decline but spending hits a 6 month low.

Personal Income, May (8:30): 0.2% actual versus 0.1% expected, 0.2% prior
Personal Spending, May (8:30): 0.0% actual versus 0.1% expected, 0.1% prior (revised from 0.3%)




Still counting the change as wage growth remains tepid.
Wages up just 3% year/year.


Private wages trend lower as entitlements make up more and more of take home.

Wages % of take home pay.

1959: 54% private wages versus entitlements.
1980-1990: 45%
2000-2011: 42%

Conclusion: The average wage earner gets more from the government than from the employer via a paycheck. Is it any wonder we have people voting for more and more entitlements? And who pays them? Those whose percent of private wages is the highest. That is the 'other people's money' Margaret Thatcher talked of.



















June Final Michigan Sentiment hits a 2012 low. What happened to the cheer in Michigan?

Sentiment at 73.2 when 74.1 was expected? What about Government Motors helping the economy? Oh the heartbreak.

























Chicago PMI for June rises, but report is described as 'wicked' in a bad way.

Not the play.

Chicago PMI, June (9:45): 52.9 actual versus 53.0 expected, 52.7 prior

Prices Paid: -6.4
Inventories up
Order backlogs down
New Orders down: 51.9 vs 52.9

No new orders and thus eating into the backlogs with nothing to replace them to keep activity going.

Down 3 straight months. A sign of trouble for the economy according to the report authors.





THE MARKET

SENTIMENT INDICATORS

VIX: 17.08; -2.63
VXN: 18.65; -2.86
VXO: 16.54; -3.15

Put/Call Ratio (CBOE): 0.89; -0.09

Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 38.7% versus 37.2%. Bounced after two weeks flat. It is now back above 35% after hitting 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 24.7% versus 25.6%. Falling for the second week after two weeks at 26.6%. Never did get close to the 35% level that is very bullish. It is always the best signal of bulls and bears cross paths so to speak. Not bad given the bulls' action, but not the best signal. Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +85.56 points (+3%) to close at 2935.05
Volume: 1.88B (+8.67%)

Up Volume: 1.75B (+1.289B)
Down Volume: 295.12M (-1.005B)

A/D and Hi/Lo: Advancers led 5.69 to 1
Previous Session: Decliners led 1.63 to 1

New Highs: 144 (+98)
New Lows: 27 (-37)


SP500/NYSE

Stats: +33.12 points (+2.49%) to close at 1362.16
NYSE Volume: 874M (+17.32%)

Up Volume: 3.93B (+1.88B)
Down Volume: 623.63M (-1.286B)

A/D and Hi/Lo: Advancers led 6.62 to 1
Previous Session: Advancers led 1.3 to 1

New Highs: 235 (+143)
New Lows: 9 (-34)


DJ30

Stats: +277.83 points (+2.2%) to close at 12880.09
Volume: 191M shares Friday versus 126M shares Thursday.


MONDAY

MONDAY

Next week is a full calendar of economic data. The ISM index is on Monday. Factory orders are on Tuesday. Thursday we have our usual pre-jobs report warm up with Challenger and ADP initial jobless claims. Of course we have the nonfarm payrolls as well. Wednesday the market is closed for the 4th. Everyone should go out and enjoy that. I will not comment on what I think we ought to do, but I think everyone has their own idea of how they need to participate and how we need to bring about the change we need in this country.

A lot of data but also a lot of earnings. As we saw on Friday, it still plays a big role. Ford announced that its European losses were tripling. We have had a spate of rather poor earnings warnings and results of late with almost 4:1 negative over positive pre-announcements. We will see how this goes. Profits are down; we know they are falling. We are concerned about what the results will show. Next week is still a rather light week for earnings. We have gone through the list, and there are not that many. The following week is where things really start. That means that earnings may not play as big of a role. A lot of companies will be going into quiet time. While we will get some warnings, it may slow down. It is the holiday week, and they may not want to give them, or they may sneak some in. You never know about that; you always have to watch out for that late in the week.

It will also be a new month. June went out with a big finish, and one of the best months for June in many years. Now we have July to face. Of course, that will mean earnings and the meat of the summer. It also means that if the indices continue this move, they will be punching up toward the March and April peaks. It has been our thesis that we will get a continued rally off of this inverted head and shoulders that formed above the prior resistance point. And we are getting that. It has a good initial move, and a test that was kind of dicey. We still saw patterns and stocks looking good, so we hung with it. Sure enough, there was a good break higher on this week. It was capped off by the Friday move. We want to see it continue and break higher next week.

Do we buy a lot of new positions? That will be the question. We do not think we will get a move up through these prior highs -- or if it does it will not hold. We can ride our existing positions higher and do quite well on that move. We will look for some new ones that have not made their breaks yet or are just starting to make their breaks and are not extended. They are out there. They are the next tier of stocks moving higher, and they will play a support role in the continuing move to the upside. We will look for some of those to play but, at the same time, we need to start looking for some downside plays. If we get another few days of upside, that will put the indices at the foothills of the highs from March and April. In that case, we need to be ready in case things want to turn back to the downside or the euphoria from another European deal runs out of gas.

That is the concern, of course. Will this rally be able to continue on the hope of an E-TARP bailout really bringing about good economic results in Europe? Will it be able to withstand earnings warnings or earnings themselves? How about all the economic data next week? Do we want to be around on Friday when the jobs report comes in, or do we want to be out? Last time was a pitiful 69K. They are expecting 100K this time. I think that may just be wishful thinking because the economy has gotten worse rather than better since the prior report. We will see.

We want to focus on winners and focus on the good patterns as we have been. They have been panning out for us. If we get two or three more days of rallying, we will be able to take more gain off of the table for those plays. It will be probably a natural transition at that point over to looking at downside plays as they bump up against the next resistance levels. It will be a natural progression into those if we see the move start to run out of gas. For now it looks as if it still wants to move higher. We will not argue with the move, particularly if the central banks and the leaders of the countries in need start offering more stimulus that reflects the United States style.

Finally, there is the issue of the Fed. With jobs out Friday, that will be the key it is looking for. Another poor performance well less than expectations could trigger our Fed. The Fed now has the Europeans doing what the Fed has been saying they need to do, and our Treasury Secretary as well. The Fed might feel that they do not have to do anything for now. They likely convinced the Europeans to take this step. Germany made a 180 degree turn. I wonder what caused that? But they did make the step. If it was at the urging of the Fed, now the Fed can sit back a bit, let that run its course, and wait on any new Quantitative Easing stimulus.

There is a lot ahead. A lot of issues, but there are issues that this market has faced every day, and it is moving to the upside. As long as it has the leadership it will move. And we want to participate in that move. We will continue to pick up sweet plays. We are not overloading because we have been buying all along. There are still plays in position, and we will be more than happy to pick them up and let them run for us.

Enjoy getting ready for that 4th of July celebration. Have a great weekend!


Support and resistance

NASDAQ: Closed at 2935.05

Resistance:
2942 is the mid-June 2012 high
2950 is the mid-April closing low
2962 is the April 2012 low
3000 is the February 2012 post-bear market high
3024 is the gap point from early May
3026 from 10/2000 low
3042 from 5/2000 low
3076 is the late April 2012 high
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
2910 is the recent March 2012 low
2900 is the March 2012 low
The 50 day EMA at 2889
2888 is the May 2011 peak and PRIOR post-bear market high
2879 is the July 2011 peak
2862 is the 2007 peak
2841 is the February 2011 peak
2816 is the early April 2011 peak.
2810 is the low in the shoulders
The 200 day SMA at 2794
2754 is the October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2555 is the mid-August 2011 peak
2535 is the November island reversal gap point
2441 is the November 2011 low


S&P 500: Closed at 1362.16

Resistance:
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1406 is the early May 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1359 is the April 2012 low
1357 is the July 2011 peak
1344 is the February 2011 peak
1340 is the early April 2011 peak
The 50 day EMA at 1337
1332 is the early March 2011 peak
1309 is the right shoulder low from June 2012
The 200 day SMA at 1299
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1099 from the mid-July interim peak
1075 is the October 2011 intraday low


Dow: Closed at 12,880.09
Resistance:
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,754 is the July intraday peak
12,716 is the April 2012 closing low
The 50 day EMA at 12,671
12,391 is the February 2011 peak
The 200 day SMA at 12,387
12,369 is the left shoulder low from May 2012
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak


Economic Calendar

June 25 - Monday
New Home Sales, May (10:00): 369K actual versus 350K expected, 343K prior

June 26 - Tuesday
Case-Shiller 20-city, April (9:00): -1.9% actual versus -2.5% expected, -2.6% prior
Consumer Confidence, June (10:00): 62.0 actual versus 64.0 expected, 64.4 prior (revised from 64.9)

June 27 - Wednesday
MBA Mortgage Index, 06/23 (7:00): -7.1% actual versus -0.8% prior
Durable Orders, May (8:30): 1.1% actual versus 0.5% expected, -0.2% prior (revised from 0.0%)
Durable Orders -ex Transports, May (8:30): 0.4% actual versus 0.7% expected, -0.6% prior (revised from -0.9%)
Pending Home Sales, May (10:00): 5.9% actual versus 0.5% expected, -5.5% prior
Crude Inventories, 06/23 (10:30): -0.133M actual versus 2.861M prior

June 28 - Thursday
Initial Claims, 06/23 (8:30): 386K actual versus 385K expected, 392K prior (revised from 387K)
Continuing Claims, 06/16 (8:30): 3296K actual versus 3283K expected, 3311K prior (revised from 3299K)
GDP - Third Estimate, Q1 (8:30): 1.9% actual versus 1.9% expected, 1.9% prior
GDP Deflator - Third, Q1 (8:30): 2.0% actual versus 1.7% expected, 1.7% prior

June 29 - Friday
Personal Income, May (8:30): 0.2% actual versus 0.1% expected, 0.2% prior
Personal Spending, May (8:30): 0.0% actual versus 0.1% expected, 0.1% prior (revised from 0.3%)
PCE Prices - Core, May (8:30): 0.1% actual versus 0.2% expected, 0.1% prior
Chicago PMI, June (9:45): 52.9 actual versus 53.0 expected, 52.7 prior
Michigan Sentiment -, June (9:55): 73.2 actual versus 74.1 expected, 74.1 prior


July 2 - Monday
ISM Index, June (10:00): 52.2 expected, 53.5 prior
Construction Spending, May (10:00): 0.2% expected, 0.3% prior

July 3 - Tuesday
Factory Orders, May (10:00): 0.4% expected, -0.6% prior
Auto Sales, June (14:00): 4.7M prior
Truck Sales, June (14:00): 5.9M prior

July 5 - Thursday
MBA Mortgage Index, 06/30 (7:00): -7.1% prior
Challenger Job Cuts, June (7:30): 66.7% prior
ADP Employment Change, June (8:15): 105K expected, 133K prior
Initial Claims, 06/30 (8:30): 385K expected, 386K prior
Continuing Claims, 06/23 (8:30): 3283K expected, 3296K prior
ISM Services, June (10:00): 53.0 expected, 53.7 prior
Crude Inventories, 06/30 (11:00): -0.133M prior

July 6 - Friday
Nonfarm Payrolls, June (8:30): 100K expected, 69K prior
Nonfarm Private Payrolls, June (8:30): 105K expected, 82K prior
Unemployment Rate, June (8:30): 8.2% expected, 8.2% prior
Hourly Earnings, June (8:30): 0.2% expected, 0.1% prior
Average Workweek, June (8:30): 34.4 expected, 34.4 prior



By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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