Welcome Stockaholics to the trading week of July 25th! This past week saw the following moves in the S&P: Bird's Eye view of the Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Kimberly-Clark, Rockwell Collins, Gilead Sciences, Ryanair, Sprint, Celanese, Las Vegas Sands, Texas Instruments, Canadian National Airways, Express Scripts, Eastman Chemical, Luxottica Group, Cadence Designs 1 p.m. $26 billion 2-year note auction Tuesday Earnings: Apple, Caterpillar, Verizon, 3M, DuPont, United Technologies, McDonald's, Eli Lilly, BP, Twitter, KeyCorp, KKR, Freeport-McMoRan, Martin Marietta Materials, Paccar, United Health Services, Starwood Hotels, T. Rowe Price, LVMH, Valero Energy, Under Armour, JetBlue, Anadarko Petroleum, Chubb, Panera Bread, U.S. Steel Two-day Fed meeting begins 9 a.m. S&P/Case-Shiller home prices 9:45 a.m. Services PMI 10 a.m. New home sales; consumer confidence 1 p.m. $34 billion 5-year note auction Wednesday Earnings: Boeing, Coca-Cola, Comcast, Facebook, Amgen, State Street, Whole Foods, Groupon, GoPro, Cheesecake Factory, GlaxoSmithKline, Lumber Liquidators, Six Flags, Altria, Deutsche Bank, Fiat Chrysler, Statoil, Dr. Pepper Snapple, Ingersoll Rand, Hess, Corning, Nissan, Norfolk Southern, Nintendo, Southern Co, Anthem, Statoil, General Dynamics, Nasdaq OMX, Northrop Grumman, Mondelez 7 a.m. Mortgage applications 8:30 a.m. Durable goods; pending homes 11:30 a.m. $15 billion 2-year floating rate notes auction 2 p.m. FOMC rate decision Thursday Earnings: Amazon.com, Alphabet, AstraZeneca, Bristol-Myers Squibb, Colgate-Palmolive, Celgene, Cigna, Total, MasterCard, Ford, Dow Chemical, Diageo, ConocoPhillips, Credit Suisse, Royal Dutch Shell, BNP Paribas, Hershey, HCA, Harley-Davidson, Marsh & McLennan, Marathon Petroleum, Potash, PG&E, TransCanda, Raytheon, Expedia, CBS, Samsung 8:30 a.m. Jobless claims; advance trade balance 1 p.m. $28 billion 7-year auction Friday Earnings: Exxon Mobil, Chevron, Merck, AB InBev, UPS, UBS, Sanofi, Xerox, CBOE Holdings, Philips 66, Cabot Oil, Barclays, Eni, Tenneco, Lexmark, CNA Financial 8:30 a.m. Q2 GDP 9:30 a.m. San Francisco Fed President John Williams 9:45 a.m. Chicago PMI 10 a.m. University of Michigan consumer sentiment 1 p.m. Dallas Fed President Rob Kaplan
After "Pause That Refreshes" 'Investors' Panic-Buy Stocks Back To Record Highs After yesterday's 'stumble' everything is once again epic today... Let's start with Turkey... Borsa Istanbul 100 plunged over 13% this week, the most since Lehman... We're gonna need another coup this weekend (failed or otherwise) to keep this going into FOMC. But that never worried stocks which just kept on keeping on to record-er highs... (Trannies were worst with airlines crushed but even they saw a panic dip-buying effort)... The Dip... Was Bought... on weak volume all week... As VIX was crushed back to an 11 handle to ensure the S&P hit new record highs... Post-Brexit, gold still leads and bonds are slight winners over stocks... Treasury yields ended the week very modestly higher (though below pre-coup levels) with the long-end outperforming the short-end...NOTE every day saw TSY selling into the US open... The USD Index surged to 4-month highs this week (up 5 weeks in a row - biggest surge since November) with JPY and GBP most in play though EUR saw some post-Draghi swings... Ugly week for oil (worst 3-week slump since Feb) but only copper managed a small gain on the week as USD strength pressured PMs... While WTI bounced into the NYMEX close, Sept 2016 contracts hit 3-month lows intraday after a surprising surge in the rig count and reminder of the gasoline glut worldwide... "It's probably nothing"... more nothing... One final nothing... Charts: Bloomberg Bonus Chart: Nothing Bonus Bonus Chart: The Trump Bounce
Spoiler: Weekend Reading: The End Of 'Choppiness' Submitted by Lance Roberts via RealInvestmentAdvice.com, While the markets have indeed broken out to new highs, as I addressed earlier this week, it has done so without a significant improvement in the fundamentals. However, the breakout, such as it is, should not be dismissed or ignored. The technical underpinnings have improved enough to warrant an increase in equity related exposure given a proper entry point in the days or weeks ahead. Such an entry point would require a relaxation of the extreme short-term overbought conditions that currently exist. But a violation of critical support would negate the breakout and return the market back to a more bearish posture. The potential for such a pullback is extremely high. As Tom McClellan noted recently, the “14-day Choppiness Index,” which tracks the path of a short-term trend, suggests Wall Street’s “uptrend is getting tired.” As McClellan notes, the very linear path for the index implies that the trend is likely to come to an end soon, while more volatile, or choppy, action suggests the opposite. A low reading in McClellan’s index signals a fairly straight-line, or linear, move. And presently, his choppiness index is at its lowest level in two decades. “The reading on Monday was the lowest since Feb. 12, 1996 (yes I scrolled all the way back that far to find a lower one). And in case you are interested, that 1996 instance marked a price top which was not exceeded until 3 months afterward. Linear trends either upward or downward are very exhausting, requiring a lot of energy from either the bulls or the bears to keep everyone in formation and marching together. The market tends toward entropy, so excursions like this toward extreme organization cannot last for very long.” Furthermore, with volatility levels at extremely low levels the probability of a further advance, without a pullback first, is extremely limited. My friend, Salil Mehta made a great comment on this recently noting that at current levels of volatility there is only about a 20% probability of further declines. “At 11 [in the VIX] you are really close to the floor. chances are higher that you won’t go lower on VIX and will instead pop up on some risk-off day,” As I stated in last week’s missive, the safest course of action for those more “bullishly” inclined is to wait for a pullback in prices to further increase equity allocations in portfolios. However, as I also noted, the current setup is extremely weak and the potential for a sharp pullback in August/September could quickly extinguish the bullish exuberance. Caution remains highly advised. Here is what I will be reading on the way back home. Interesting Stuff Could France Be Facing A Civil War by Jonathon Miller via CNBC The Rise Of Zero Sum Economics by Sandwichman via Econospeak Credit Risks Are Rising by Rupert Hargreaves via Value Walk Why Oil Prices Might Never Recover by Arthur Berman via OilPrice.com Unburdening The Facebook Generation by Mohamed El-Erian via Project Syndicate $15 Minimum Wage, No Cashiers by Panos Mourdoukoutas via Forbes Land & Homes Are Lousy Investments by Robert Shiller via NY Times Yield Curve Deniers Prepare To Do Battle by Caroline Baum via MarketWatch Trump Vs. Clinton On Economic Issues by Paul Davidson via USA Today The Fed’s Cuban Connection by Mary Tao via Liberty Street Economics Helicopter Money Is No Bazooka by James Hamilton via Econobrowser Fed Mission Accomplished, Why No Change by Conor Sen via Bloomberg Markets The Dow Will Need To Hit 150,000 by Chuck Jaffe via MarketWatch Why Stocks Have Been So Resiliant by Anora Mahmydova via MarketWatch Is This Bull Market Just Starting by Shawn Langlois via MarketWatch Throwing Shade At New Market Highs by Anthony Mirhaydari via Fiscal Times Thank D.C. For Stock Market Rise by Jonathan Aberman via Washington Post Is Fed Fueling Fear In The Markets by Jonathon Trugman via New York Post Equities, The Only Game In Town by Buttonwood via The Economist Bull Market Blues? by Paul Krugman via NY Times Companies Sitting On $75 Trillion Bomb by Jeff Cox via CNBC Bull Trap Still In Play by Adam Koos via MarketWatch 3 Reasons To Worry About End Of Advance by Michael Kahn via Barron’s Light Bulb Moment For Explaining Market by Science Daily Always Good To Read Beware Of Junk Yard Dogs by Danielle DiMartino-Booth Lies, Damn Lies & Valuation Statistics by Jeffrey Snider via Alhambra Partners What Will It Take To Worry Investors by Tyler Durden via Zero Hedge Why The Fed Can’t & Shouldn’t Raise Rates by Tim Duy via Bloomberg Stocks Will Complete A Full Cycle by John Hussman via Hussman Funds BIS Reveals Biggests Risk To Global Economy by by John Mauldin via Tumblr 10 Things I Think I Think by Macro Man Monetary Cocaine & The Market by David Stockman via Contra Corner Stock Streak Hits Rarefied Air by Dana Lyons via Tumblr Never Been A Better Time To Be An Active Investor by Jesse Felder via The Felder Report
There is a new Three Peaks and a Domed House Top Pattern (3PDH) developing. Last month I noted another potential 3PDH pattern developing, but with the market recently breaking out it this new analysis lines up quite well with the current Three Peaks lasting just 8 months from Peak 1 (point 3) in February/March 2015 to Peak 3 (point 7) in October/November 2015, falling right in the 8-10 time span of Lindsay’s Basic Model. The Domed House top time frame in the Basic Model is 7 months and change from the end of the Separating Decline at point 14 to the top at point 23. From the Separating Decline low in February 2016 that would put the top some around or after September. But I have seen this phase of the pattern transpire in much shorter and longer time frames. Whenever that top occurs, the pattern resolves at point 28, somewhere back around points 10 and 14 at a minimum. It can go substantially lower before a new high, which could culminate in a bear market. If the top occurs soon, I would expect another correction and not the 20%+ type of bear market, which from current levels is well below the February low. If the this 3PDH top does not occur until September or later, perhaps around the election, then this 3PDH is more likely to resolve in a bear.
ShadowTrader Video Weekly 7.24.16 - How to Prepare for Daytrading & Live NFLX Trade Example Video from ShadowTrader Peter Reznicek
come join us in our market weekly sentiment poll and vote where you think the markets end this week! Weekly SPX Poll - Sentiment (7/25-7/29) and also our weekly stock picks challenge! Stockaholics Weekly Big Board Contest for the Week of (7/25-7/29)
Maybe they will hint that they want to hike by end of the year and it could move the market a little but I don't expect much. The BOJ decision probably is a bigger event.
The coming two weeks will offer telltale signs of how markets will perform through year end. This week you got the USD breaking and closing above the 50 WMA for the first time since February 2016 just as the S&P put in a bottom, yet it has not had a corrosive effect on stocks. I am sure with nearly 1/4 of S&P 500 companies reporting earnings this week and the Fed on deck, the narrative of pushing markets to extremes and inflicting pain on investors before an actual trend gets consummated will remain true. Even the correlation between a weak price of oil and the S&P has ended while a the Yen carry trade is back in full effect. I'll begin to take a look at TM or SNE. SNE actually has a footstep in VR. This has all been about flushing money out our hands, creating a fictional story any shmuck believes in to create a divide (between us) for the intended purposes of conquering one by one. You first go after the head honcho and the rest will fall. Each story is different but the outcome is the same.
ER in this upcoming week ahead: $AAPL $FB $AMZN $TWTR $GILD $UA $GOOGL $F $S $FCX $MCD $JBLU $GPRO $CAT $VZ
what if the fed raise? lol, probably not happening as they like to telegraph it before they do it, but it does feel like they are in a spot to raise considering oil has sort of came back, earnings havent been too bad so far, and data has been looking somewhat better. what will their excuse be this time to not raise?
Headline says video game spending in June declines 26% y/y. http://seekingalpha.com/news/3195316-videogame-spending-declines-26-percent-hardware-falls Don't be alarmed though, it's not the end of video games. And in fact historically sales start ramping from August. But one thing is for sure, spending is not increasing. http://www.statista.com/statistics/201093/revenue-of-the-us-video-game-industry/
with most things being purchasable from psn/xbox store and the ability to game share those games with other consoles, im not surprised by that headline, whether that is a big cause or people just arent buying games, either way that is something to pay attention to.
