Before the Open (Jul 25)

Posted on by Jason Leavitt

Good morning. Happy Friday.
The Asian/Pacific markets closed mixed. Japan and China led with gains greater than 1%; Taiwan (down 0.9%) and India (down 0.6%) pulled up the rear. Europe currently leans to the downside. Greece is up 3%, followed by Prague (up 1.1%). Russia is down 1.5%, followed by Norway (down 1%) and France (down 0.8%). Futures here in the States point towards a down open for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are up.
The S&P 500 has hit an all-time high three straight days on increasing volume, but the ranges have been small and the energy and enthusiasm levels have been low. If you were wondering if a new high would bring a group of traders/investors off the sidelines and into the market, guess again. The new high hasn’t induced anything. The Nas 100 has also done well, but the Dow has started to lag and of course the Russell small caps have a lot of catching up to do.
Despite the new highs, I don’t think anything has changed. I still like the market long term, but in the near term, who knows. Between the lack of quality set ups, a few indicators which aren’t yet supporting an upside move, earnings season and geopolitical events, the market isn’t ready to rally. Things could change, but for now, even though I like the market overall, the stage doesn’t seem set for a big move up…unless it’s just a good old-fashioned short squeeze.
The most bullish ingredient that has developed lately is the growing bearishness. The number of bears are growing, as well as the volume of their argument. As long as this is the case, we’re more likely to get a surprise upside move than downside.
I remain conservative. More after the open.
Stock headlines from barchart.com…
All but one of the nine S&P 500 companies that have reported earnings this morning beat the consensus. The loser was DTE Energy (DTE +0.90%) ($0.73 vs $0.75 consensus). Notable companies that beat earnings today include: Stanley Black & Decker (SWK -1.56%) (1.43 vs 1.36), Tyco (TYC -0.24%) (0.54 vs 0.536), Aon (AON -0.12%) (1.25 vs 1.20), AEP (AEP +0.07%) (0.80 vs 0.75), Moody’s (MCO +0.95%) (1.12 vs 1.02), and Xerox (XRX +0.47%) (0.27 vs 0.26).
Amazon.com (AMZN +0.13%) fell sharply by 10% late yesterday after reporting Q2 EPS of -27 cents, much worse than the consensus of -15 cents as management spent more money than expected building new services.
Visa (V +0.70%) late yesterday reported fiscal Q3 EPS of $2.17, better than the consensus of $2.10, although the stock fell -3% in late-afternoon trading.
Starbucks (SBUX +1.66%) late yesterday reported fiscal Q3 EPS of 67 cents, slightly better than the 66 cent consensus.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Durable Goods
Notable earnings before today’s open: AAN, ABBV, ACAT, AEP, AON, AVY, B, COV, DTE, FNFG, IDXX, LEA, LPNT, LYB, MCO, MGLN, MOG.A, NS, PB, SLAB, SWK, TCB, TYC, WBC, XRX
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jul 25)”

  1. Ditto all that Jason said above.
    Today’s outlook is a bit different.
    Overnight, in fact since midday yesterday when we were less than a point away from target 1992, the market has weakened. Whether it’s a bullish retracement or the beginning of a downtrend, can’t say.
    But, as always, we have markers. All numbers are SPX.
    First off, resistance: 1986 up thru 1988. If that level holds (has so far in premarket, in futures), expect to target 1979.
    Just below that is support, starting at 1978 – 1975.
    >>>>If that holds, target is mid-high 1990s.
    >>>>If it DOES NOT hold, expect to see 1970, possibly lower.
    Futures ranged from 0 to -5.25. At 910, -3.75
    Bonds have indicated bearish from their open.

        1. Tks, there is power in numbers. However, the numbers work for both bears and bulls alike, the numbers are agnostic in that respect. So the ambiguous-ness, so to speak, is reading which camp’s numbers are in effect. As you can see, as we speak the bulls are trying to make their numbers be dominant. And to keep in mind, the bulls asserted their position at the support near 1978.50

          3. They are working towards the lower part of that support. If they break 1975, they’ll probably bounce it, but doubt it’ll hold. Would expect no higher than 1980. Short’s the way today. So far.

          4. This move up right here is what makes bulls give a sigh of relief. Usually, however, it’s just for the bears to pull in more bulls, and then they pull the rug out from under the bulls. 1980 is a good line to watch.

          7. Jim, this is the level to watch. Very possible this upmove fails here. Will be back in coupla hours.

  4. most trend turns have doji’s and that’s what we got yesterday
    monthly opts ex in Europe aust,and some asia this week and today
    earnings mostly out of the way
    Monday will be interesting,so will todays close

  5. spx and dow cash both stoped at S5 piviot [spx 1973 piviot ]
    with a tick extreme for 11.30 Europe close
    can they bounce it or another leg down

Leave a Reply