EQUITIES
The equity markets attempted to regain solid footing last week as the ESU11 added 26 points to close higher at 1341.00. The market rallied into the weekend but Friday was a low volume inside day in most indexes. The NQ or NASDAQ 100 was the exception as it was strong and made new highs for 2011. The semiconductor index was very strong to lead this charge higher for the NASDAQ.
While the ongoing issues of sovereign debt in Europe and raising the debt ceiling in the U.S. is pressuring stocks, the EPS season is unfolding on a positive note with solid corporate earnings being announced. There will be many key reports this week as well including AMZN, BIDU and POT, three of our commonly traded stocks. Overall we expect the market will remain healthy despite the economic concerns. However, it is late July so we are in a traditionally lower volume, less volatile period as summer comes to a close. The trend remains up and should be traded accordingly.
ECONOMICS
There will be several economic reports this week that may impact the trading although the biggest issues will be EPS reports and the debt ceiling debate. Tuesday will give us new home sales for June and consumer confidence. Wednesday the beige book will be released and this can be a market mover on occasion. Thursday the weekly jobless claims will be released and then we close the week with a 2nd quarter GDP and Chicago PMI release.
GOLD
We most frequently discuss the equity markets and related issues in the StockYard. We wanted to mention some other trading markets and update their current trading picture in this issue. Gold (GLD) has been on a tear to the upside. As we have discussed in past issues, the actions of the U.S. government in recent years should have a long term inflationary impact on the U.S. economy and we expect the price of GLD to move higher. With the recent break above 153 resistance the upside target is 158 to 160. Pay particular attention to any pullbacks to the 152.50 or 150.50 areas and 148.29 is a good stop loss area.
CRUDE OIL
Oil pulled back into the broken declining wedge pattern and a resistance area. Price has been holding up well and appears ready to break 100 and move higher. The upside target area is 102 (the June Peak) and above that 103.1 (may peak). Major support at 96.50 must hold for this bullish projection to remain. Continue to work the buy side on your day and swing trades and especially interesting is any pullback to the 97.50 area for new entries.
BONDS
The 30 year bond may be one of the more tricky markets at the moment. While technically it appears a double top is forming, the overall bullish tone is still in place as price is holding its 50 day moving average which is in an uptrend. The past 3 days have recorded a reduction in volatility and a breakout pattern is forming right on support. However, with the U.S. debt ceiling decision looming over the markets it may be best to stand aside in this market from a trading standpoint.
EURO$
The EC or euro currency remains inside a very large triangle pattern which has been forming since early May. This triangle has recorded several lower highs and mostly higher lows. Should the EC manage a breakout this week above 1.446 price area then it could trigger a move to 1.47 or higher. Again, this is another market that will be impacted by the decision on the U.S. debt ceiling and traders should monitor the markets for news that will move the market.
