Indices Threaten a New Rollover

SUMMARY:
- More downer economic data, weaker earnings guidance, expiration Friday combine to push stocks sharply lower.
- Old fashioned tail kicking, but there are relative strength leaders.
- Big dive lower but indices can still shape up. Seeking a silver lining too hard?
- Sharp drop in Michigan sentiment caps a week of economic lowlights.
- ECRI indicators on the cusp of a renewed recession.
- Money cannot buy you love, and it cannot buy you jobs and economic prosperity: just ask the Soviet Union.
- Indices threaten a new rollover but watching the bottom of the range for signs of life given the negativity.

Expiration Friday springs a sharp selloff.

Friday showed how fast a rebound can be dashed. About as quickly as a crash on the decent down the Alps in the Tour de France. That was the case on Friday with large 3% losses by the indices. It was expiration Friday, and there were a lot of other themes ongoing. I cannot put much credence into this other than the fact that in July on expiration, the session is often down. Expiration was at play as volume bumped above average on the NYSE. There were some worries with respect to the economy; there has been weaker economic data this week and fears last week that the US economy was slowing. That was playing a hand. Earnings were out, and the guidance was not there.

GOOG set the pace for the session with worries about whether it could keep its margins going. It would be a rocky start, and it did not get better as the session unfolded. Looking at the intraday chart on the SP500, it was ugly. It started lower with a gap and sold off sharply. It gapped again half an hour into the session when the Michigan Sentiment came out much less than expected at 66.5. It bounced, but it was barely a bounce. Then it tumbled over and sold all day into the close. It was a very down, lopsided session. There was no breath to come up for air at any point, and that had the gloom racing high on all the financial stations. Indeed, even with the gains, the gloom has been high all week on the financial stations due to concerns about a double dip. It is definitely a possibility. It is something I talked about in March and April as the likely scenario when we got to mid to late summer. Looks like that is unfortunately coming to fruition.

The intraday chart on the SP500 looks like a profile of a decent on the Alps. There was a swift decent, and then there was a recovery attempt. Then came a collapse. There was a gap lower that took it through the prior low for the morning. Once that occurred, there was never an attempt to even come back and test that area. Today's hopes for a tour victory were over.

The losses were impressive. -3% NASDAQ, -2.5 Dow, -2.9% SP500, -3.3% SOX, -3.61% SP600, and -2.8% NASDAQ 100. It was an equal-opportunity selloff on Friday something that we tend to call an old-fashioned butt kicking around here.


OTHER MARKETS.

The other markets held the course they had taken during the week, although the Friday action changed the table on a few somewhat.

Dollar. The DXY0 managed to post an ever-so-slight gain against the Euro (1.2927 Euros versus 1.2928 Thursday). Hardly a difference. I am looking at the break of the trendline coming out of 2009. It may come up and kiss that trendline, but I think it will have to come down and test the solid support range from the February-April consolidation. That will be the key test for the dollar. For now, with the US economy in trouble, it doesn't look like there are many foreign investors putting money into the greenback right now. A far cry from where it was in April and May when the EU was in flames and all the money was seeking dollars. My, how quickly the tables have turned. Hopes can be dashed very quickly.

http://investmenthouse.com/ihmedia/dxy0.jpeg


Bonds. Bonds continued to the upside. Economic fears caused money to flee equities and move into debt instruments. The 10 year rose in the US once more after moving well over 3% on the week (2.93% versus 2.99% Thursday). It was quite the reversal and something we saw when the bonds came down to the trendline and bounced. We moved in with our own positions on the TLT when that occurred, playing this bounce. We will see how far it can take us. With the US economic data turning sour, it could definitely hit a new high on this rally.

There is a lot of talk about the yield curve right now, and how it is showing no chance of recession because the 2 year rate hit an all-time low. Well, of course it hit an all-time low; the Fed is artificially holding the short end down. It could not rise if it wanted to because the Fed has it pegged lower and will not allow it to move up. If it does so, it would ruin all of its monetary policy plans. The 2 year hit a record low at 0.58% on Friday. With the 10 year at 2.99%, obviously the yield curve slopes from low to high. It is upwardly sloping, just the way it should in a healthy economy.

Since the curve is not inverted, that causes some people to say we can't have a recession. I will talk more about this in the economic section, but that is bogus. If the government is holding rates at a certain level and won't let them move, then you will not get the inverted curve. Mind you, a lot of inverted curves occur before the Fed ever takes any action in the market. The Fed comes into play later when it tries to take control of interest rates, and that is when things start to invert. Sometimes it happens before and sometimes after, but normally it doesn't happen as we have seen it here. It is impossible because the Fed has been in such heavy play in the bond market for years now. The problem is it never would have had a chance to naturally invert as things worsened the second time around because the Fed was already in the market. That may not be totally clear, but if the Fed is holding its foot on the rates, it will not let the short end run higher as typically happens in a recession. People start valuing short-term money more than long-term money because they see things down the road as worse off. Long-term money is in less demand than near-term cash. That causes the short end to rise, the long end to dip, and the yield curve to invert. That is what is not happening now because of the Fed standing on top of the short end of the curve.

http://investmenthouse.com/ihmedia/tlt.jpeg


Gold. Gold dove lower from its 2009 peak. That is a move I thought would happen. Unfortunately the GLD gapped lower and sharply so, and it kept us from any ability to move into that play. I was kicking myself for not moving into it Wednesday or Thursday when it was toying with the move. Now there was gap down, but it has had that gap, so we may get a bit of a test higher toward these lows from Wednesday and Thursday next week. If we get that and it fails there, that will give a good entry point. I never totally despair when a stock or index gaps away because typically you get a second chance to move in on the test. You have to anticipate it and be ready for the move; when it makes it, you move in as well. Nonetheless, gold had a rough session ($1,193.10, -15.20). It was a significant loss again for gold as it looks like it has now made a lower high. That would be something of a head and shoulders with a wimpy right shoulder. When you have the wimpy shoulder, you can bet we will get a move down that that next peak. I am looking for a move roughly down to 1160 and maybe the 200 day EMA which is rising up and coincident with that support at 1140. The 200 day EMA is coincident with the March and January peaks. Looking for a move down into that range, and it is not a great prospect. Why is gold falling with all the money printed out there? Right now deflation concerns are outweighing inflation concerns as seen in the CPI on Friday that fell 0.1% overall.

http://investmenthouse.com/ihmedia/xgld.jpeg


Oil. The dollar was flat, but oil was still down. It did not lose much ground, however ($75.92, -0.70). It is still below the 200 day EMA, still below the up trendline, but it is also right in the middle of its trading range. It is showing a lot of tenacity. It may turn over and fall if the economic outlook continues to sour. Then there is no reason for oil to rise near term because the perception will be that is there less need for oil. It is keeping prices a bit lower for the consumer going into the summer, and that is fine. If it stalls here and moves laterally, I do not think anyone is going to complain a lot because it is mid range. It is not hampering gasoline prices in any way. I think it is a comfort range right now for the US economy and, indeed, the world economy.

http://investmenthouse.com/ihmedia/xoil.jpeg


TECHNICAL PICTURE

INTERNALS

Volume. The volume was up 2.1B on NASDAQ, and that is not huge trade. It puts it near average, but it is not near where it was on Tuesday when the market gapped higher. On the NYSE it was up 33% to 1.5B, and that was more of a move. It pushed it just above average as the SP500, and the NYSE composite fell sharply to the downside. There was distribution ongoing, but you have to take expiration into account. There was a bounce, and there was a lot of jockeying of positions to take into account that bounce at expiration.

Breadth. -7:1 on NASDAQ, and -3.6:1 on the NYSE. Small caps and large caps were all moving down together, and that leads to a very broad, negative move. No one really wanted to own stocks. There had been a bounce in the market, it was expiration, and they were rolling and unloading positions. That caused a lot of negative action.


CHARTS

SP500. The SP500 was a pretty sharp decline. It fell quickly and sharply down to the 1070 area. It tried to hold that early in the session, but it gave way and fell lower. Now it is at the May 6th flash-crash low. Still above the late May/early June low as well as the February low. We will see how it holds at this point. The bounce is definitely in trouble here. It was an easy lateral consolidation, but it is definitely in trouble and looking for more downside. We will have to see how much influence expiration had on the action versus being worn out on the bounce and ready to collapse. I think it may have been more of the former than the latter, and thus we could get a bit of a rebound next week. The July expiration is often down, and the Monday following the July expiration is often down. We may get more selling that takes it down to the May and June lows that would be the February low as well. If that is the case, it could be in serious trouble. It also could set up something of a reverse head and shoulders, which is something often seen at a decent bottom. We will have to watch for that, too. Just because there was a move down does not mean you have to throw everything overboard and don the sackcloth and ashes and beat your chest. It is not necessarily the case when you factor in an expiration Friday. Not a good move, mind you, but not all is lost.

NASDAQ. The NASDAQ showed similar action. It tried to hold early at the upper gap point from June, but that gave way and it closed at the lower gap point. It is not that bad of action. It is not great that it fell 3.1% on a bit of a bump in volume, but it was not cracking below the May and June levels. I am trying to find a silver lining here. It was an ugly session, but it is still in the range of late, however. Again expiration Friday influenced what was happening, so I am not going to get too bent out of shape over this one move. Although we were being cautious and closing some of our upside positions that were struggling. I wish we could have gotten into more downside because that gap lower took a lot of them off the table before we could get snuggled up to them. Fortunately we already have some in hand that we are riding lower.

SP600. The small caps had a disgustingly ugly session, dropping 3.6%. They did break down to the early June low. As a matter of fact, they made a closing low below that level, and that puts it also below the March consolidation. It is not looking good for the small caps, and they are the economic harbinger for the economy I said it yesterday, and I said it again. Sorry, but I had to. Nonetheless, it is in trouble, and with the economic data coming out this week, you can understand why. We will have to see if they can catch support and form that inverse head and shoulders of their own. It would not been the cleanest pattern, but we will see. You have to see how the bounce goes at this point and how this test-turned-butt-kicking of a bounce plays out.

SOX. Semiconductors were a star of the week actually for the past few weeks helping to hold the market up with a hold at long-term support and the nice bounce. They made it up to key resistance and have rolled down, but they are also still in the middle of their range and above the 200 day EMA. Not in any real trouble, but not in any great shakes. Could be just a test back down to the bottom of the range. I think that will be the true tell for all of the indices: when they get down to these prior lows and whether they hold or not. We got rid of some of our upside semiconductor plays just to preserve some gain after taking some off the table earlier in the week. Just being prudent. If it comes back down, we will see if we can play some of these puppies again.


LEADERSHIP

Financial. GS gapped higher on the announcement of the settlement with the SEC, and then it came back basically to flat. It put in about 0.5% gain, and that was the story of the day. It had good news, but even it could not hold up to the onslaught of selling. JPM had a great week. It announced good earnings. It has come back and has filled the gap, and I still like it. Lower volume, and it needs to hold in this key area.

Industrial. Industrials showed relative strength even though they were down. CAT was down, but it was holding the 18 day EMA. Still a nice pattern. It could even slide back down to the 50 day EMA and be in good shape to move back to the upside. Good relative strength. JOYG had the same thing: It was down but showing good relative strength. We will see if it can hold at this trendline test and pop back up.

Semiconductors.

Technology. Some of the same, some not. AAPL had a good day overall. It is still trading in its range. Steve Jobs offered a side cover for the iPhone 4 as the fix. I admire Jobs, but I did not like his "apology." He just said others have the same problems they do. He said they have seen Youtube videos of Nokia phones dropping calls, too. Not a great excuse, but the misstep did not seem to hurt it on the session. It probably will not hurt it long term because they keep coming out with great products. If they keep making mistakes, that will be a problem, but everyone is willing to overlook this. GOOG gapped sharply lower and the margins were not as expected. They are spending a lot of money on Android and other things. They are hiring people to do other things that are not making money for them right now, and the margins compress. That's what happens. Everyone will be cheering them on when they hit a home run on one or two of these things, but that was not the case on Friday. They were selling them off. FFIV was down, but not a lot. It is coming back down toward the mid-June peaks. We will see if it holds in that range and can start back to the upside. Still showing excellent relative strength.

Energy. BP was down a bit. It may have had its move. All the good news was anticipated over the past week. It got the cap on, it is holding, but the pressures are not as high as hoped. There may be an issue there. Maybe it has seen its run, or it may get a pullback to test that gap. If it does, that may be an entry opportunity. If good news resurfaces, it will move back up and resurface itself. APC was off today as well. Energy did not have a great day. HAL pulled back, but it had a nice day. It fell back and I was looking at it as a downside play, but it is all of a sudden shaping up as a much better upside play with this gap and run higher. A very orderly, sedate pullback. A bit of a reverse head and shoulders here, a breakout, and a test. After the selloff, we might get a run up toward 33 or so. That would be a decent move indeed.

Retail. PNRA was in trouble today, and we moved out of our positions as a precaution. It sold off sharply from the 50 day EMA even though volume was low. I did not want to hang around and see what would happen. ANN is struggling big time. It broke the 200 day EMA, kissed it, and it is turning back down. A bit of rising volume. Not great action, but it is not uniform across the retail sector. Other areas are doing just fine, like PCLN and NFLX.

Market Leaders. There is a group of leaders I am watching: SNDK, CMG, NFLX, PCLN, FFIV, and AAPL. Some of those are holding up and some are breaking down. It is somewhat representative of the market. As I said, SNDK was breaking lower and not looking good. We moved out of it on Friday. We moved out of CMG a while back when it started to break its trendline. I was looking for it to move back up. It started to, but it did the old kiss-the-trendline move last week, and it is heading lower on high volume. NFLX is still holding up well, although it is making a lower high. That is something to watch, but it is relatively in excellent shape. PCLN went up and up last week. FFIV is holding up quite well. AKAM may be in trouble. It has moved up similarly to NFLX, and now it has turned down just below the 78% Fibonacci retracement of this selling. It may come down, bounce, and hit the 78 again. If it hits the 78 again and double tops at that level, I would definitely be playing it to the downside because that is often the precursor to a more serious downside move.

Leadership is having some trouble. It is breaking apart somewhat, and maybe new leaders are coming to the fore. I am watching for those. There are stocks making good moves, but we have to see if they have the staying power that this cadre had as the market rallied from February into June and July. These stocks performed well all the way through that market selling, but now they are running out of gas a bit as the market's rug is pulled out from under them with this double dip possibility.


THE ECONOMY

Michigan sentiment caps a week of bad data.

ECRI on the verge of a recession forecast.

Spend your way to prosperity? We tried it and put the 'great' in the Great Depression. The USSR tried it and collapsed.

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:

http://investmenthouse1.com/ihmedia/Economy.wmv



THE MARKET

MARKET SENTIMENT

VIX. Once again the VIX held the 200 day EMA on the low and bounced as the market sold off toward the end of the week. Actually it did not sell off until Friday. There was a creep higher as the market moved laterally on Wednesday and Thursday. Then on the Friday selloff, it did rise up 4.4%. That was well off its high and hardly a great move by volatility. Volatility is once again not associating 1:1 with the index action. That is because there was a fairly sharp selloff on the SP500 that took away over one third of the gains off the lows, but the VIX did not show an equivalent move. It is very sluggish, and is not ballooning higher despite all of the gloom on the financial stations, in the AAII investor surveys, and in the sentiment survey for the investment advisors. They are all extremely negative, and the VIX is not showing that same level of fear. That helped bring the market back up. Even though it hit a new low, VIX did not hit a new high, and that was one of the factors predicating the bounce. After a pullback on Friday that may have been very expiration related in itself given that the VIX is hardly moving higher we may see a bounce back and see VIX fall right back down to the 200 day EMA.

VIX: 26.25; +1.11
VXN: 26.87; +0.3
VXO: 26.49; +1.65

Put/Call Ratio (CBOE): 1.1; +0.22

Bulls versus Bears:

CROSSOVER. Rare and typically quite bullish, the number of bullish investment advisors fell below the number of bearish advisors. As noted, this is typically quite bullish.

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 doesn't have the cash to drive it higher.

Bulls: 32.6%. Down from 37.0% and below the 35% threshold, below which is considered bullish. Down from 56.0% on this leg's high. This move started at a low of 35.6% in February, the lowest it has been since July 2009. 35% is the threshold level suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 34.8% for the second straight week, and though still below the 35% threshold, with the drop in bulls the 'crossover' has occurred. Those crossovers are very bullish, and we didn't think it would happen given the market bounce. Wrong. Solid rise from the mid to upper 20's. Fell to 18.7% on the low. Hit a high of 27.8% level on the prior leg in February. Over 35% is considered bullish for the market; definitely at the lower end of the scale. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. 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: -70.03 points (-3.11%) to close at 2179.05
Volume: 2.123B (+9.75%)

Up Volume: 143.553M (-919.704M)
Down Volume: 2.016B (+1.15B)

A/D and Hi/Lo: Decliners led 7.05 to 1
Previous Session: Decliners led 1.98 to 1

New Highs: 16 (-6)
New Lows: 73 (+42)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: -31.6 points (-2.88%) to close at 1064.88
NYSE Volume: 1.49B (+33.47%)

Up Volume: 69.956M (-467.054M)
Down Volume: 1.42B (+862.643M)

A/D and Hi/Lo: Decliners led 3.58 to 1
Previous Session: Advancers led 1.03 to 1

New Highs: 130 (-16)
New Lows: 53 (+15)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: -261.41 points (-2.52%) to close at 10097.9
Volume DJ30: 335M shares on expiration Friday versus 210M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


MONDAY

There is economic data out, but it is not heavy. Building permits and housing starts on Tuesday are important. Thursday there will be jobless claims and existing home sales followed by leading indicators. Leading indicators are important, but they don't really tell the story. Earnings will be one of the major drivers next week because we are going into the teeth of earnings season. Some of the early results pleased the markets, but then they did not on the back half of the week. INTC had a great earnings report, but it was unable to sate the market's appetite for stronger and stronger economic reports. INTC is not in bad shape to start next week.

The question is whether the rest of the market going to make the turn back up. There was a selloff on Friday across the board. It was also expiration Friday, and that had something to do with it. As noted earlier, July expiration Fridays tend to be down as are the Mondays in July following the expiration. We may get more downside. Indeed, with the momentum, it would not be difficult to see these indices come down and test the May and June lows. That is not necessarily a bad thing for the upside because they could make another hold there, another low, and form a reverse head and shoulders. That is a pattern you often see at the bottom of a selloff in what could be a cut base. Not necessarily a negative; this is all part of the attempt to base.

Some are obviously calling it a top and a precursor to a new low on the indices. That could be the case, but I don't know at this juncture. All we know is that the market is still relatively weak and still going through the basing process. If you look at all the indices, you will see a lot of the same picture: SP500, NASDAQ, and of course the semiconductors index is still banging around in its trading range. Just another normal week at the office for the SOX. SP600 is a bit of a concern because it is already close to its early June low. It would have to hold in this area and turn back up if it is going to establish its inverted head and shoulders. We will see how this plays out.

What we were doing on Friday was protecting the upside positions. We closed out those that were struggling. The relative strength leaders and others that are holding support we left alone. I will not hesitate to move out of those if we have to. What I would like to do is get another opportunity to move into some downside positions, but they all gapped away from us on Friday. There was a nice lateral move, and we could have loaded up to the downside. We took some downside positions, but not enough as it turned out. We had the SPY and others, but in hindsight I wish we would have loaded up. We did get good representations. We also made good money to the upside, so I am not going to complain about that. We will just protect those upside positions if there is further weakness and be ready to move in the downside if we get a bounce or an opportunity.

Opportunity comes even after gaps, whether upside or downside. You can't give up on positions. I will keep watching the ones we are dropping. We have moved the buy point on others just to account for a change and a rebound and test that fails. We may not get in at the exact moment we wanted to. We may have to get in a bit lower to the downside if it is going to turn back over, but that is okay. We can still make good money off those plays; a test is one of my favorite times to enter in any event.

The market is weak. It has been weak for the past two and a half months, and we are seeing how it plays out. It may be a basing situation where it moves laterally and completes a bottoming pattern that rallies back up in something of a cup (as we are seeing in many of the stocks in the market). How many of these stocks have we seen moving down laterally for the last month and a half, forming a rounded bottom, and ready to start back to the upside. We will see if that action continues. If it does not and breaks to a new low, then it breaks to a new low. They will start the basing process all over again. We will have to take what the market gives us, and we have been doing that all along. That's what we did on this bounce higher, and we made good money off of it. If it can't stick, we will close out the rest of the upside at least the upside that is struggling and look for that opportunity to move into the downside while we let our current downside positions run. That could score us nice gains over the next couple of weeks if this move on Friday signals the end of the oversold bounce.

Not a glowing prognosis, but that is the market we have. It is not overly negative or overly positive. It is just trying to chop through a base. As always, you have to approach it a bit unemotionally, and just take what the market gives. Have an outstanding weekend, and I will see you next week while we see what this pullback turns into.


Support and Resistance

NASDAQ: Closed at 2179.05

Resistance:
2184 is the June gap bottom side.
2185 to 2195 represent support points for years: December 2004 peak, July to October 2005 consolidation, January, March and July 2008 lows, and October 2009 peak.
2205 is the November 2009 peak 2210 (from September 2008) to 2212 (the July 2009 closing low)
2221 is the gap down upside point from June.
2245 from July 2008 through 2260 from late 2005.
The 50 day EMA at 2246
The 200 day SMA at 2256
2275 - 2278 from the February 2008 and April 2008 lows
2273 to 2282 marks bottom of January 2010 lateral peak
2292 is a low from January 2008
2319 from the September 2008 peak
2320 to 2326.28 is the January 2010 high
2324-2370 is a range of resistance from early 2008
2382-2395 from 2008

Support:
2177 is a low from March 2008
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low
2100 is the February 2010 low
2024 from November 2009
2020 to 2005 from the Q4 2009 peaks


S&P 500: Closed at 1064.88
Resistance:
1070 is the late September 2009 peak as well as several other peaks and valleys even in 2010
1078 is the October range low
1084 to 1080 (September 2009 peak)
The 50 day EMA at 1093
1101 is the October 2009 high and the recent May and June 2010 interim peaks
1106 is the September 2008 low
The 200 day SMA at 1112
1114 is the November 2009 peak
1119 is the early December intraday high
Bottom of the January 2010 consolidation 1131 to 1136
1133 from a September 2008 intraday low
1151 is the January 2010 peak
1156 is the Sept 2008 low
1170 is the prior March 2010 high
1174 is the May 2010 high
1181 is the April selloff low
1185 from late September 2008

Support:

1044 is the October 2008 intraday high AND the February 2010 low
1040 is the May 2010 low
1020 is the bottom of the late summer 2009 consolidation
946 from June 2009


Dow: Closed at 10,097.90
Resistance:
10,120 is the October 2009 peak
10,260 from the May and June 2010 interim peaks
The 50 day EMA at 10,264
10,285 is the late December consolidation peak
10,365 is the late September 2008 low
The 200 day SMA at 10,379
10,496 is the November 2009 high
10,594 is the June 2010 peak
10,609 from the Mid-September 2008 interim low
10,730 is the January 2010 peak
10,920 is the recent May high
10,963 is the July 2008 low
11,100 from the 7-08 low
11,205 is the April closing high
11,734 from 11-98 peak

Support:
9829 is the September 2008 closing high
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak AND the February 2010 low
9774 is the May 2010 intraday low
9325 is a late 2008 interim peak
9034 from early 2009 peaks


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

July 13 - Tuesday
Trade Balance, May (08:30): -$42.3B actual versus -$39.4B expected, -$40.3B prior
Treasury Budget, June (14:00): -$68.4B actual versus -$70.0B expected, -$94.3B prior

July 14 - Wednesday
Retail Sales, June (08:30): -0.5% actual versus -0.2% expected, -1.1% prior (revised from -1.2%)
Retail Sales ex-auto, June (08:30): -0.1% actual versus 0.0% expected, -1.2% prior (revised from -1.1%)
Export Prices ex-ag., June (08:30): -0.2% actual versus 0.5% prior (revised from 0.6%)
Import Prices ex-oil, June (08:30): -0.6% actual versus 0.5% prior
Business Inventories, May (10:00): 0.1% actual versus 0.2% expected, 0.4% prior
Crude Inventories, 07/10 (10:30): -5.06M actual versus -4.96M prior
Minutes of FOMC Meeting (14:00)

July 15 - Thursday
Initial Jobless Claims, 07/10 (08:30): 429K actual versus 450K expected, 458K prior (revised from 454K)
Continuing Claims, 07/03 (08:30): 4681K actual versus 4400K expected, 4434K prior (revised from 4413K)
PPI, June (08:30): -0.5% actual versus -0.1% expected, -0.3% prior
Core PPI, June (08:30): 0.1% actual versus 0.1% expected, 0.2% prior
NY Fed - Empire Manufacturing, July (08:30): 5.08 actual versus 18.0 expected, 19.57 prior
Industrial Production, June (09:15): 0.1% actual versus 0.0% expected, 1.3% prior
Capacity Utilization, June (09:15): 74.1% actual versus 74.2 expected, 74.1% prior
Philadelphia Fed, July (10:00): 5.1 actual versus 10.1 expected, 8.0 prior

July 16 - Friday
Core CPI, June (08:30): 0.2% actual versus 0.1% expected, 0.1% prior
CPI, June (08:30): -0.1% actual versus -0.1% expected, -0.2% prior
Net Long-Term TIC Fl, May (09:00): $35.4B actual versus $81.5B prior (revised from $83.0B)
Michigan Sentiment - Pre, July (09:55): 66.5 actual versus 74.5 expected, 76.0 prior

July 19 - Monday
National Homebuilder, July (10:00): 17 prior

July 20 - Tuesday
Building Permits, June (08:30): 575K expected, 574K prior
Housing Starts, June (08:30): 570K expected, 593K prior

July 21 - Wednesday
Crude Inventories, 07/17 (10:30): -5.06M prior

July 22 - Thursday
Initial Claims, 07/17 (08:30): 445K expected, 429K prior
Continuing Claims, 07/10 (08:30): 4600K expected, 4681K prior
Existing Home Sales, June (10:00): 5.04M expected, 5.66M prior
Leading Indicators, June (10:00): -0.4% expected

By: Jon Johnson, Editor
Copyright 2010 | All Rights Reserved

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

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