In this week’s edition you will find:
- Where We Are
- What Was Important About Last Week
- What We Are Watching For This Week
- A Word On Discipline
Where We Are:
Taking a look at the broader market:
A strong Technology sector attempts to pull the broader market higher.
But as we head into the market’s historically weakest month most sectors remain mired in bearish conditions.
A Follow Through Day on the Nasdaq suggests institutions are stepping up to support these price levels.
Strength from RIMM, INTC, BSCI and SYNA are suggestive of this.
We’re willing to buy into the Bull, but with a Yellow Flag of caution we’re not going to risk a whole lot.
If the Bull does pick up traction here we suspect it will be Tech names that continue to shine.
Should evidence of the Bear return via high volume selling and further deterioration of the all important Financial and Retail sectors, we’ll be quick to protect ourselves and stalk short opportunities.
The Dow Industrial Average
($INDU), -0.2%, advances to just under its 50-day moving average.
The S&P 500
($SPX), -0.4%, matches last week’s high which is just under its 50-day moving average.
($COMPQ), 0.8%, advances to close on its 50-day moving average.
($RUT), -0.8%, continues to consolidate under its major moving averages.
Volume indications show a bullish Follow Through Day for the Nasdaq, but a bearish environment dominates the past few weeks on the major indexes.
Key chart action for the week:
Charts courtesy of Stockcharts.com
The U.S. Dolar Index ($DXC) consolidates under its 50-day moving average which is trending below its 200-day average.
The Gold & Silver Miners Index ($XAU) advances to close between amidst its sideways trending moving agerages.
The Consumer Index ($CMR) consolidates on its 200-day moving average which is just beneath iyts 50-dya average.
The Cyclical Index ($CYC) consolidates between its major moving averages.
The Technology Index ($DJUSTC) rallies to close above its 50-day moving average.
The Semiconductor ($SOX) closes between its major moving average.
The Software Index ($GSO) also closes between its major moving averages.
Telecom Index ($XTC) closes just under its 50-day average.
The Banking Index ($BKX) posts a loss as it trades below its major moving averages.
The Broker Dealer Index ($XBD) consolidates below its major moving averages.
The Retail Index ($RLX) rallies to close on its 50-day average, which is trending below its 200-day average.
The Healthcare Index ($HCX) consolidates below its major moving averages.
Biotechnology Index ($BKX) consolidates just under its major moving averages.
Pharmaceutical Index ($DRG) consolidates below its major moving averages.
The REIT Index ($DJR) consolidates just under its 50-day average, which is trending below its 200-day average.
The Transportation Index ($TRAN) consolidates below its major moving averages.
The Airline Index ($XAL) consolidates below its 50-day average, which is trending below its 200-day average.
The Defense Index ($DFX) rallies to close above its 500-day average.
The Energy Index ($IXE) closes just under its 50-day average.
What Was Important About Last Week
- Dell, Inc. (DELL) reported Q2 (Jul) earnings of $0.32 per share, $0.02 better than the consensus of $0.30. Revenues rose 1.2% year over year to $14.8 billion vs. the $14.62 billion consensus.
- Wind River Systems, Inc. (WIND) reported Q2 (Jul) earnings of $0.12 per share, excluding non-recurring items, $0.08 better than the consensus of $0.04. Revenues rose 14.8% year over year to $84.6 million vs. the $78.9 million consensus.
- Chico’s FAS, Inc. (CHS) reported Q2 (Jul) earnings of $0.22 per share, $0.04 worse than the consensus of $0.26. Revenues rose 8.1% year over year to $436 million vs. the $443.2 million consensus estimate.
- Shanda Interactive Ent. Ltd. (SNDA) reported Q2 (Jun) earnings of $0.42 per share, excluding non-recurring items. The results were $0.06 better than the Reuters consensus of $0.36.
- Real GDP in Q2 was upwardly revised to show 4.0% growth at an annual rate versus the 3.4% originally reported. The consensus expected 4.1%.
- Personal income increased 0.5% in July while personal consumption increased 0.4%. The consensus expected gain for each was 0.3%.
- Disposable personal income (income after taxes) increased 0.6% in July and was up 6.0% versus a year ago.
- Existing home sales declined 0.2% in July to an annual rate of 5.75 million, which was above the consensus expected level of 5.70 million. Despite this, the July level was the lowest since November 2002.
What We’re Looking For This Week
Key earnings releases:
- MONDAY: Holiday
- TUESDAY: Guess (GES)
- WEDNESDAY: J. Crew Group, Inc. (JCG)
- THURSDAY: Hovnanian Enterprises, Inc. (HOV)
- FRIDAY: none
On the economic front we have potential market movers with:
- MONDAY: Holiday
- TUESDAY: Construction Spending, ISM Index, Auto Sales, Truck Sales
- WEDNESDAY: Pending Home Sales, Crude Inventories, Fed’s Beige Book, Auto Sales, Truck Sales
- THURSDAY: Initial Claims, Productivity-Rev., ISM Services
- FRIDAY: Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate, Wholesale Inventories
- The Growth Stock Landscape
- What We Like – What We Have
- This Week’s Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS
This Week’s Word On Discipline:
“ I believed in studying just because I knew education was a privilege. It was the discipline of study, to get into the habit of doing something that you don’t want to do. ” – Wynton Marsalis