Courtesy of Daniel Sckolnik, Sabrient Systems and Gradient Analytics
“Most great people have attained their greatest success just one step beyond their greatest failure.” — Napoleon Hill
Last Friday’s 120-point smack down of the Dow Jones Industrial Average (DJIA) left the blue-chip index pretty much where it began at the beginning of July. It might be regarded as a microcosm of the entire year, one where the Dow has more or less trended sideways in spite of the occasional attempt to either break out or break down from that trend.
Apparently, the eternal battle between the Bulls and Bears is fairly balanced for the moment, as may be evidenced by the lack of commitment that is required for either side to gain the upper or, in the Bearish case, the lower hand. Apparently enough buyers are out there for most stocks, provided the price is right. The flip side is that investors are also quick to take any profits off the table, evidently lacking confidence in the overall macroeconomic picture.
The low bar set by analysts for this quarter’s earnings season remains the leading factor for a sustained push by the Bulls. So far, the results have been mixed, and the usual daily knee-jerk reaction of traders and investors to any given day’s earning announcements seems to get countered rather swiftly in the opposite direction of the initial “jerk.”
As far as the coming week is concerned, the plate is set for more of the same sort of battle that will potentially result in a stasis similar to the one that has been occurring overall in the equity market this year.
Economic reports out of Washington due this week will provide the latest indication of the general health of the U.S. economy, as second quarter gross domestic product numbers will be released. The initial consensus from economists points to a minimal level of GDP growth, under the 2% mark. The accompanying stagnation in unemployment will likely continue as a result, a reoccurring loop which will go on until a significant impetus, such as additional stimulus, is injected into the economy.
What could goose the market upward this week would be a combination of good numbers from Apple (AAPL), which would be expected, and solid numbers from Facebook (FB), which would come as a bit of a surprise. Facebook has already proven its ability to impact the market…
