Weekly Market Report: Clear Threats to Summer Doldrums

Market Bias

Buyer’s Caution

Our market bias is based on a combo of Fundamental and Technical evidence. Economic and earning trends are matched against our analysis of price and volume charts, giving us an indication of how friendly the market is for our beloved Breakout Growth Stocks.

This is active trading, not investing. Our holding periods can last a day to months. The idea here is to keep it simple. The goal is to accumulate as many trading profits as possible.

Where We Are

Sleepy summer action on the major indexes gave way to some heavy selling Friday.

Our indicators leaned a little further to the Seller’s Bias for the week. But not enough to shift from our overall Buyer’s Caution stance.

We expect this holiday shortened week to offer more of the same low-volume drift from stocks.

Though Emplolyment Data scheduled for release Wednesday threatens to shake things up.

As Growth Stock buyer’s we’re still encouranged by the number of stocks that continue to hold up.

Technology in particular has been an encouraging source of Leadership for this rally we’ve had since March.

But weakness in broader market, and Banks in particular, threatens to drag the whole thing down again.

The S&P 500’s 50-day moving average just recently crossed its 200-day to the upside. This is a huge psycholigacal occurence. Odds are it won’t be a clean cut as Bears attempt to drag it under again.

We’re big believers in not saying much when little needs to be said.

We let the market do the talking while we do the listening.

Technically Speaking

MAJOR INDEX PERFORMANCE
BIAS	Index	Change	Wk. %	Action
	DJIA	-101.34	-1.19%	Undercuts its 50-dy and 200-day MAs
+	Nasdaq	+10.75	+0.59%	Consolidates above its 50-day MA.
+	S&P 500	-2.33	-0.25%	Sinks below/above its 50-day MA.
+	Russell 2K	+0.50	+0.10%	Holds at 50-day MA.
Arrows denote sector’s position above or below its 40-week exponential moving average. + indicates 50-day moving average above 200-day moving average.

FOUR-WEEK VOLUME INDICATORS
		Accumulation		Distribution
BIAS	Index	Major	Minor	Major	Minor
	DJIA	0	2	2	3
	Nasdaq	6	1	2	1
	S&P 500	1	1	1	4
	Russell 2K	7	2	2	0
Accumulation = Day when index is up with volume above previous day’s. Distribution = Day when index is down with volume above previous day’s. This is how we measure institutional interest in market. Major days = when volume stronger than 50-day average. Minor days = when volume below 50-day average.

SECTOR PERFORMANCE
BIAS	Sector	Wk. %	Action
	U.S. Dollar Index ($DXC )	-0.60%	Consolidates under its 50-day MA
+	Gold & Silver Miners Index	+1.52%	Cuts below, above 50-day MA
+	Consumer Index ($CMR )	-0.10%	Consolidates on its 50-day MA
+	Cyclical Index ($CYC )	-0.10%	Consolidates on its 50-day MA
+	Technology Index ($DJUSTC )	+0.36%	Consolidates above its 50-day MA
+	Semiconductor ($SOX )	-0.54%	Consolidates on its 50-day MA
+	Software Index ($GSO )	-0.91%	Consolidates above its 50-day MA
+	Telecom Index ($XTC )	+2.69%	Consolidates on its 50-day MA
	Banking Index ($BKX )	-2.44%	Consolidates on its 50-day MA
+	Broker Dealer Index ($XBD )	+1.02%	Consolidates on its 50-day MA
+	Retail Index ($RLX )	+0.88%	Holds just below its 50-day MA
	Healthcare Index ($HCX )	+1.32%	Rallies above 200-day MA
	Biotechnology Index ($BKX )	+3.25%	Rallies above 200-day MA
	Pharmaceutical Index ($DRG )	-0.68%	Consolidates on its 200-day MA
	REIT Index ($DJR )	-0.62%	Holds under its 50-day MA
+	Homebuilders ($DJUSHB)	+1.34%	Holds under its major MAs
	Transportation Index ($TRAN)	+1.34%	Consolidates on its major MAs
	Airline Index ($XAL )	+0.06%	Consolidates under its major MAs
	Defense Index ($DFX )	-4.04%	Sinks below its 50-day MA
	Energy Index ($IXE )	-2.75%	Sinks below its 50-day MA
*Arrows denote sector’s position above or below its 40-week exponential moving average. + indicates 50-day moving average above 200-day moving average.

Potential Market Movers This Week

Earnings releases:

• MONDAY: Apollo Group (APOL), H&R Block, Inc. (HRB)
• TUESDAY: Schnitzer Steel Industries, Inc. (SCHN)
• WEDNESDAY: Constellation Brands, Inc. (STZ), General Mills, Inc. (GIS)
• THURSDAY: none
• FRIDAY: none

Economic data:

• MONDAY: Consumer Confidence, S&P/Case-Shiller Home Price Index, Chicago PMI
• TUESDAY: ADP Employment Change, Construction Spending, ISM Index, Pending Home Sales, Crude Inventories, Auto Sales, Truck Sales
• WEDNESDAY: Average Workweek, Hourly Earnings, Initial Claims, Employment Data, Factory Orders
• THURSDAY: none
• FRIDAY: none

This Week’s Work On Discipline

“Beware of endeavoring to become a great man in a hurry. One such attempt in ten thousand may succeed. These are fearful odds.” — Benjamin Disraeli

Comments

[Larry House:]

Sounds like this is a good time to trade little or nothing. That is a fairly wide-spread view.

Jun 30 10:47 AM