Yesterday, the markets continued to consolidate last week’s gains, with the NASDAQ closing at a new all-time record high of 6344 and the S&P up slightly on the day, but the DOW, Russell and Transportation Index all closed lower, on volume of just 695 million shares. I know that over the past month or so, I have been complaining constantly, about the lack of Volume and Volatility in this market, but it is starting to have an negative affect on the Major Banks, whose Trading Departments Profits, depend on Volume and Volatility. Goldman Sachs 2nd Qtr earnings beat estimates, but inside the numbers, their Trading Profits are shrinking and with the Banks up plenty since November, any disappointments in earnings going forward, could cause trouble for this markets leading sector. Anyway, Goldman single handedly, knocked off 50pts off the DOW yesterday and that and the failure of the Republicans to pass a Health Care deal, took the air out of the rest of the markets,
but over all, no damage was done.
Technically, the last 2 choppy, low volume sessions, have done little to relive the averages overbought situation, so there’s a good chance that we continue to S-L-O-W-L-Y trade sideways, for a few more days, which is not a terrible thing and could be beneficial longer term. However, with the earnings season beginning
in earnest, the averages may be subject to good or bad news daily, so pay attention.
Overnight the Global markets were quietly mixed and in early trading, the DOW is off slightly as IBM missed earnings estimates again, but the S&P and NASDAQ are higher. The Yield on the 10 Yr is up a few ticks to 2.30%, after testing its 200dma at 2.27% yesterday. The Dollar is bouncing a bit higher today, after dropping hard for the past week and that has Commodities mostly lower, but Oil is holding steady around $46.50, after last night’s API number showed a slight build in Crude, but a large draw in Gasoline Supplies.
Today we have Housing numbers for June at 8:30, followed by the Weekly Oil Inventory guess at 10:30. Overall, I expect another low volume, fairly uneventful day, but any big earnings surprises, might stir up things so pay attention.
Today’s Early Markets
DOW Futures— down 10.00 London – up 5.58
S&P – up 100 DAX – down 58.56
GOLD—$1235 August Nikkei — down 119.84
OIL— $46.50 August HangSeng — up 54.78
DOW RESISTANCE 21,680 S&P RESISTANCE 2470
DOW SUPPORT: 21,520 S&P SUPPORT: 2450
$NASDAQ RESISTANCE 6370
$NASDAQ SUPPORT 6320