Futures are up 4-7 handles ahead of Big Ben’s testimony before Congress today and tomorrow. Yesterday was a somewhat constructive but typical inside day after Friday’s big move. The news rolling in continues to be negative, but the market doesn’t seem to care.
Investors seem more enamored with what the Fed will do! Will they take action on August 1st or September 13th? Interestingly, the consensus seems to be not if but when. The consensus also seems to be that any Fed action will be more than “Twist,” so if there isn’t more than a twist, or no action for August, we need to watch for market disappointment.
I’ve seen some blogs claiming that we are about a week away from a “Tremendous Slide.” Some chartists are pointing out the similarities to last year when the market unraveled very quickly. SocGen is pointing out the “ultimate Death Cross,” where the 50-month moving average falls below the 200-month average. I wouldn’t try to anticipate this. Just don’t fall asleep behind the wheel if the complexion changes quickly. I will be on the look out! Use high level stops and low level stops in order to protect gains and act fast!
The SPY is opening around $135.89. Use this as a pivot. Above that, the next resistance is at $136.23 and then a major level at $137.51. If we open up and start to trade below this pivot, make sure you don’t get caught in a day like we saw on July 10th.
Earnings season starts to kick in to another gear
Corporate Events Calendar – Week of Mon Jul 16
· Tues Jul 17: earnings before the open (AMTD, CMA, GS, HST, JNJ, KO, KSU, MAT, MOS, MTB, OMC, STT); earnings after the close (CSX, FIS, INTC, YHOO); trading updates (Rio Tinto)
· Wed Jul 18: earnings before the open (ABT, APH, ASML, BAC, BK, BLK, CHKP, DOV, ERIC, GWW, HON, NTRS, PNC, STJ, SWK, USB); earnings after the close (AXP, EBAY, FFIV, IBM, PLXS, QCOM, SLM, SWKS, SYK, XLNX, YUM); trading updates (BHP, Land Securities, LSE); analyst meetings (PAYX)
· Thurs Jul 19: earnings before the open (ADS, Akzo Nobel, ARB, BAX, BBT, BX, CY, DHR, DO, Electrolux, FCS, FCX, FITB, HBAN, KEY, LUV, MS, NOK, NUE, PM, PPG, Sandvik, SHW, SWY, TCB, TRV, TSM, TXT, UNH, UNP, VFC, VZ); earnings after the close (AMD, ASBC, CMG, COF, CYN, ETFC, FSL, GOOG, ISRG, MSFT, SNDK); trading updates/sales reports (Alstom, Hermes)
· Fri Jul 20: earnings before the open (BHI, FHN, GE, IR, MAN, SLB, STI, VOD, XRX)
Also, a reminder that the Eurozone finance ministers will have another meeting on Friday July 20th. Spain is the main topic, but I’m sure Italy will come up as well.
I’m keeping it light and just tactically looking for cash flow. I’m in no rush for a portfolio approach.
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*DISCLOSURES: Scott Redler is long August (NYSEARCA:SPY) puts.