Summary:
·
Yesterday's price action was dominated by the
downing of a Malaysian Airliner over the Ukraine. On top of that, investors world-wide were
concerned with the new sanctions leveled against Russia. Unexpected events that
may be geo-political in nature drive price where it goes. Price finished lower, but you knew that.
·
The Tech sector provided conflicting
viewpoints. eBay and SAP both beat
bottom-line estimates. The PHLX Semiconductor
Index was pressured, and after SanDisk's (SNDK) cautious guidance, the Index
declined.
·
Economic Data:
o
Initial jobless claims dropped to 302,000. Continuing claims are also falling.
o
Housing starts fell to 893,000 from
985,000. This is the lowest point for
over a year. Single family home
construction is in a downward trend.
o
Philadelphia Fed's Business Outlook Survey
strengthened.
o
Today Consumer Sentiment is due to be released.
Expectations are that it will improve over June. If so, the stock market will very likely
recover much of yesterday's loss.
·
Today:
o
The USA stock market will open higher. Price will still be affected by yesterday's
sell off. Expect the market to move
higher unless some unexpected news occurs, but at first traders will sell and
attempt to close the up-gap
o
Bullish factors -
§
S&P
500 above 50 MVA, 200 MVA. The current
Price in the futures market is above the Monthly opening (barely). Basically, price is bullish period.
§
VXX (VIX ETF) is down this morning, but not strongly. Expect more down movement once market
opens. Fear is subsiding at the moment.
§
Equity futures markets are all up.
o
Bearish factors -
§
Oil is down which should be good for
consumers. This is a minor bearish
factor.
§
Banking sector is being hammered. Banking needs to reverse to the upside if the
price is to continue upward from the overnight move.
§
Today is option expiration day, and there may be
an opportunity for traders to take a short early in the day (1st 40
minutes). After that, unless there is
major news the market will show buying, but mostly price will be choppy.
§
Israel and Palestine are into a major battle. So
far, markets world-wide are not showing large concern with the world-wide
consequences.
o
Result? Choppy
- summer doldrums will ruin any major moves.
Remember the world is a very dangerous place now, and geo-political
factors can move the USA equity markets down in a NY minute.
o
SUPPORT on S&P is 1948 or so. This is yesterday's low in the futures
market.
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