The Dow Jones Industrial Average (DJIA) managed to close higher for the second consecutive week and the S&P 500 Index (SPX) finished the week above 1,100 for the first time since mid-May. This despite a downgrade of Greece’s debt to junk status, the steepest monthly drop in home construction in decades, another disappointing jobs report, sluggish manufacturing data and another week of BP plc (BP) in the negative spotlight.
Gold futures skyrocketed to a record-high closing price of $1,258.30 an ounce on Friday. For the week, gold advanced 2.3%, marking the fourth straight week-over-week gain.
The S&P 500 Index (SPX) gained 2.4% last week, which has become the routine during triple-witching expiration weeks.
With the SPX coming into the week at 1,117.51 and above its 200-day trendline, the 1,120-1,125 area could be the next challenge from a technical perspective. We will look for a break above 1123 before we become full-bore bulls. Support is around the 1108 level.
Weekly Economic Calendar:
Monday
- There are no major economic reports scheduled and earnings season continues to contract. Sonic Corp. (SONC) and Steelcase Inc. (SCS) will step into the earnings spotlight.
Tuesday
- May’s existing home sales will be released. Meanwhile, Carnival Corp. (CCL), Walgreen Co. (WAG), Adobe Systems Inc. (ADBE), Jabil Circuit Inc. (JBL), and Red Hat Inc. (RHT) will post their quarterly results.
Wednesday
- Weekly U.S. petroleum supplies will be released as well as the Federal Open Market Committee’s interest rate decision. Turning to earnings, Canadian Solar Inc. (CSIQ), CarMax Inc. (KMX), Rite Aid Corp. (RAD), Bed Bath & Beyond Inc. (BBBY), Darden Restaurants Inc. (DRI), and NIKE Inc. (NKE) will announce their results.
Thursday
- Weekly initial jobless claims as well as May’s durable goods orders will be released. Lining up for earnings release will be Discover Financial Services (DFS), Lennar Corp. (LEN),H&R Block Inc. (HRB) , Oracle Corp. (ORCL), and Research In Motion Limited (RIMM).
Friday
- We round out the week with the initial third-quarter gross domestic product reading and June’s final University of Michigan consumer sentiment index. Finally, KB Home (KBH) is slated to release its quarterly earnings figures.
New Trade Idea:
Buy American International Group (AIG) July 28 Call @ $1.95 or better:
A nice basing week for the stock and we think we’ll get a move higher this week. Use $4.00 for a target and $0.75 as a mental stop–loss.
Buy Skechers (SKX)July 45 Call @ $1.75 or better:
The shoe stocks are on fire and Skechers is a leader. Use $3.80 as a target and $0.50 as a mental stop-loss for now.
Open Positions:
Chipotle Mexican Grill (CMG) July 140 Calls @ $4.00:
A nice quick double on our calls which we closed during the week. Lets find a few more like this.
Crocs (CROX)July 10 Calls @ @1.40:
We’re sitting on a nice gain already and we should see higher prices this week. Let’s continue to use $3.20 for a target and $0.50 as a mental stop-loss.
Aruba Networks (ARUN) Aruba June 15 Call @ $0.20
A great 175% profit to cap off a great week. Keep an eye on this one.
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