Before the Open (Jul 28)

Posted on by Jason Leavitt

Good morning from San Diego, where I’ll be spending the next week. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed mixed. China rallied 2.4%, followed by Hong Kong (up 0.9%) and Taiwan (up 0.7%). India fell 0.5%. Europe is currently mostly down. Russia is down 2.1%, followed by Austria (down 1.05%), Amsterdam and Norway (down 0.6%). Futures here in the States point towards a flat-to-down open for the cash market.

The dollar is flat. Oil and copper are down. Gold and silver are down.
We start the new week similarly to how we started last week…with a lot of unanswered questions.
Earnings season is ramping up. So far companies that beat are doing ok, while companies that miss are getting hit hard.
We have a lot of econ news this week, highlighted by an FOMC statement on Wednesday and the latest employment figures Friday.
Tensions in the Middle East and Eastern Europe continue. On any given day the market could gap up or down a bunch based on a sudden development.
Technical indicators have neutralized so aren’t offering a strong signal in either direction.
The quality of trading set ups right is ok – not horrible, but certainly not as good as when the market is solidly trending.
Taken together, swing traders would be wise to be conservative. More after the open.
Stock headlines from barchart.com…
Tyson Foods (TSN -0.58%) reported Q3 EPS of 75 cents, weaker than consensus of 78 cents.
PG&E (PCG -0.57%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.
Pfizer (PFE -0.49%) was downgraded to ‘Market Perform’ from ‘Outperform’ at BMO Capital.
Time Warner Cable (TWC -1.09%) was upgraded to ‘Buy’ from ‘Hold’ at Wunderlich.
Semtech (SMTC -4.26%) was upgraded to ‘Strong Buy’ from ‘Outperform’ at Raymond James.
Reynolds American (RAI -0.75%) was upgraded to ‘Top Pick’ from ‘Outperform’ at RBC Capital.
Cal-Maine Foods (CALM +0.66%) reported Q4 EPS $1.30, better than consensus of $1.15.
Citigroup raised its price target for Chipotle (CMG +2.03%) to $793 from $648 and keeps its ‘Buy’ ratng on the stock.
Dollar Tree (DLTR -1.33%) agreed to buy Family Dollar (FDO -0.79%) for $74.50 per share in cash and stock.
Cisco (CSCO +0.54%) was downgraded to ‘Sector Perform’ from ‘Outperform’ at Pacific Crest.
CIT Group (CIT +0.59%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Morgan Stanley who also raised their price target on the stock to $57 from $46.
Cummins (CMI -0.43%) reported Q2 EPS of $2.43, higher than consensus of $2.39.
Roper Industries (ROP -0.14%) reported Q2 EPS of $1.56, better than consensus of $1.50.
The U.S Commerce Department proposed expanded duties on some Chinese solar-energy imports, according to Bloomberg, potentially affecting Chinese solar companies such as Trina (TSL +0.71%), Yingli (YGE +0.57%) and JinkoSolar (JKS +2.17%), among others.
Amazon.com (AMZN -9.65%) is likely to remain range-bound as costs escalate, according to Barron’s.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
9:00 PMI Services Index Flash
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Outlook
1:00 PM Results of $29B, 2-Year Note Auction
Notable earnings before today’s open: ACW, AHGP, ARLP, AWI, CALM, CMI, CMP, CRNT, CYOU, DCIX, EDR, LECO, MCY, NTLS, ONB, ROP, RPM, SIR, SOHU, STNG, TEN, TSN
Notable earnings after today’s close: ADVS, AFG, AFOP, AGNC, AMKR, ARE, BOH, CGNX, CR, DCO, DENN, EMN, EXAC, GGP, GHL, HLF, HLIT, HLS, IDTI, IPHS, JEC, JJSF, KN, LMNX, MAS, MERU, MSTR, NCLH, OMI, PCL, PRE, PSMI, RRC, SIMO, SSW, TTS, WRB, XL
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jul 28)”

  1. Friday afternoon went sideways which kind of gave us a preview that they were done going down. Overnight, the futures went a bit lower, but futures are giving a bullish pre-mkt reading. Technically where we bounced overnight is not a solid level.
    They bounced it a full 2 points above where it “should” have, and my concern is that what appears to have been a bottom last night, may be a false one. So, with that understanding, be aware that they can bring it down to approx SPX 1970.
    However, we have to go with what they’ve shown us so far, so expect a pullback to 1977-75 unless they take it higher than 1980 after the bell. If there is a pullback (think likely) and 1975 is broken, then you can expect to go lower to that 1970 area where I expect a bullish reaction. If it holds 1975, go with it but exercise caution.
    On the upside, if we do go higher, there is a solid layer of resistance that goes from 1982 to 1984-85.
    There are several scenarios, so that’s the reason for so many “ifs” and “thens.”
    Futures were -5 to +3 (at 8:50). At 920, +1.0
    Bonds bullish.

    2. gm jim. IMHO, ES leads.
      RE commitment of traders, if I’m reading it right, I think so.
      This is the area I expect to hold. Would not want to go lower than 1965.
      Will be leaving in an hour, 11 EST, back mid afternoon.

  3. It’s going to encounter resistance here at 1971.5 up thru 1975.
    It has to break 1975-76.
    It will prob pullback after that, down to 1969-68, which needs to hold.
    I’ll be back in a few hours.

  4. Back. Longer than expected.
    Like what I’m seeing so far. They didn’t do a full pullback this morning after the break of 1975, I see.
    Now, need to break that swing high at 1981.50 which will negate that resistance level and gives us room to move higher. Off hand, based on that low holding this morning, target is 2001.
    If they pull back here, it needs to hold 1974-72.
    All numbers SPX.

Leave a Reply