Archive for July, 2007|Monthly archive page

Bull's Litmus Test

Traders,

Demands a rhetoric of fear to be
The litmus test for viable heirs
–Propagandhi “War Is Peace”

Market Bias:

SELLERS’ EDGE INTACT

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

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

Heavy selling forces the Bull out of its groove.

Our price and volume analysis gives us the Red Flag warning.

This is not an environment to test your account with new breakout buys.

On the downside, the S&P 500’s 200-day SMA is the next support level.

Indication of a reversal could come with a high volume turnaround at the 200 SMA, as it has in the past.

But never count on the market to do anything you expect.

What we love about sell-offs is their tendency to serve as a litmus test for weeding out strong sectors from weak.

What holds up well will likely be the new areas of leadership “if” the Bull swings back.

Techs issues are holding up well. This could be the new area of leadership for the second half of the year.

Technically speaking:

The Dow Industrial Average

($INDU), -4.2%, crashes and closes below its 50-day SMA.

The S&P 500

($SPX), -4.9%, also crashes and closes below its 50-day SMA.

Nasdaq

($COMPQ), -4.7%, also crashes and closes below its 50-day SMA.

Russell 2000

($RUT), -7.0%, crashes and closes below its 200-day SMA.

Volume indications flash a bearish red with all the major indexes posting multiple distributions days over the past two weeks.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) bounces after hitting a low.

The Gold & Silver Miners Index ($XAU) sells off sharply for the week, though remains above its major moving averages.

The Consumer Index ($CMR) closes just below its 200-day SMA.

The Cyclical Index ($CYC) sells off below its 50-day SMA.

The Technology Index ($DJUSTC) closes on its 50-day SMA.

The Semiconductor ($SOX) also closes on its 50-day SMA.

The Software Index ($GSO) cosolidates on its 50-day SMA.

Telecom Index ($XTC) sells off and closes below its 50-day SMA.

The Banking Index ($BKX) sells off to last year’s low, well below its major SMA’s.

The Broker Dealer Index ($XBD) also sells off to well below its major SMA’s.

The Retail Index ($RLX) sells of to lows not seen since last year.

The Healthcare Index ($HCX) sells off below its 200-day SMA.

Biotechnology Index ($BKX) consolidates on its 200-day SMA, which is positoned below the 50-day SMA.

Pharmaceutical Index ($DRG) sells off to well below its 200-day SMA.

The REIT Index ($DJR) drops to a new low for the year, well below its major SMA’s.

The Transportation Index ($TRAN) sells off to below its 50-day SMA.

The Airline Index ($XAL) hits a new low for the year.

The Defense Index ($DFX) closes just below its 50-day SMA.

The Energy Index ($IXE) also closes just below its 50-day SMA.

What Was Important About Last Week

STOCKS:

Amgen (AMGN) reported Q2 (Jun) earnings of $1.12 per share, $0.05 better than the Reuters Estimates consensus of $1.07. Revenues rose 3.4% year/year to $3.73 bln vs the $3.7 bln consensus.

Apple (AAPL) reported Q3 (Jun) earnings of $0.92 per share, $0.20 better than the Reuters Estimates consensus of $0.72. Revenues rose 23.8% year/year to $5.41 bln vs the $5.29 bln consensus.

Qualcomm (QCOM) reported Q3 (Jun) earnings of $0.55 per share, excluding non-recurring items, $0.04 better than the Reuters Estimates consensus of $0.51.

Amazon.com (AMZN) reported Q2 (Jun) earnings of $0.19 per share, $0.03 better than the Reuters Estimates consensus of $0.16.

Texas Instruments (TXN) Co reported Q2 (Jun) earnings of $0.42 per share, in line with the Reuters Estimates consensus of $0.42.

ECONOMY:

The first estimate for Q2 GDP growth is 3.4% at an annual rate, slightly more than the consensus expected and the strongest since early 2006.

New single-family home sales declined 6.6% in June to an annual rate of 834,000. The consensus expected an annual rate of 923,000. New home sales were revised down for April and May.

The median price of new homes sold was $237,900 in June, down 2.2% versus a year ago. The average price of new homes sold rose to $316,200, up 3.7% versus last year.

New orders for durable goods rose 1.4% in June versus a consensus expected 1.9%. New orders excluding transportation declined 0.5% versus a consensus expected gain of 0.2%.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Eagle Materials Inc. (EXP), Tyson Foods (TSN)
  • TUESDAY: Anglogold Ashanti Limited (AU), Buffalo Wild Wings, Inc. (BWLD), Cephalon, Inc. (CEPH), Marathon Oil Corporation (MRO), Valero Energy Corp. (VLO)
  • WEDNESDAY: Agnico-Eagle Mines Limited (AEM), Applebee’s International (APPB), Barrick Gold (ABX), Boyd Gaming (BYD), Chicago Bridge & Iron (CBI), Kraft Foods (KFT), LoJack (LOJN), Wyndham Worldwide (WYN)
  • THURSDAY: Activision (ATVI), MGM MIRAGE (MGM)
  • FRIDAY: Procter & Gamble Company (PG), Tenaris, S A (TS)

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: Personal Income, Personal Spending, Core PCE Inflation, Employment Cost Index, Chicago PMI, Construction Spending, Consumer Confidence
  • WEDNESDAY: ISM Index, Pending Home Sales, Crude Inventories, Auto Sales, Truck Sales
  • THURSDAY: Initial Claims, Factory Orders
  • FRIDAY: Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, Average Workweek, ISM Services

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“The discipline of writing something down is the first step toward making it happen.” – Lee Iacocca

CANSLIM SETUPS

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Bear AimsTo Derail

Traders,

’cause its the little details that derail your dreams
— Mason Jenings “Little Details”

Market Bias:

NO BIAS

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

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

Record highs in the major indexes are followed by heavy selling.

This summer promises to turn even more exciting. Mixed analytical signals coupled with a real fear of business disease brought on by subprime will likely keep the volatility high.

Our price and volume analysis gves us a Yellow Flag of no bias – as traders it’s important to maintain flexibility of bias.

The S&P 500 closed at the new support level of its most recent breakout.

As we enter the second half of the year we’re likely to see sector rotation.

If the Bull stays alive, we’re likely to see tech issues and large-cap global companies well bid.

A major threat to market is the weak condition of the Financials.

After last week’s heavy sell-off in investment banks, we suspect key support levels will be hit before any turnaround.

Because financials hold a lot of weight in setting the tone of the market, Bulls hope a sustained downward trend in the sector doesn’t derail its course.

Technically speaking:

The Dow Industrial Average

($INDU), -0.4%, hits another new high but closes the week with a loss.

The S&P 500

($SPX), -1.2%, failed to pick up momentum to the upside, but instead sold off.

Nasdaq

($COMPQ), -0.7%, hit a new high before closing for a loss on the week.

Russell 2000

($RUT), -2.3%, holds a two month trading range as it closed on its 50-day SMA.

Volume indications gives a clear bias to the bears with two heavy days of distribution settling in.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) hit another new low.

The Gold & Silver Miners Index ($XAU) continues to rally out of its base.

The Consumer Index ($CMR) shows relative weakness as it closes below its 50-day SMA.

The Cyclical Index ($CYC) pulls back after hitting a new high.

The Technology Index ($DJUSTC) posts a mosdest gain for the weak as it pulls back after making a high.

The Semiconductor ($SOX) also posts a mosdest gain for the weak as it pulls back after making a high.

The Software Index ($GSO) rallies to a new high.

Telecom Index ($XTC) consolidates under its highs.

The Banking Index ($BKX) slides to a new low while trading under their major SMA’s.

The Broker Dealer Index ($XBD) finds support at their 200-day SMA after falling below the 50-day SMA.

The Retail Index ($RLX) consolidates on its 50-day SMA in a multi-month pattern.

The Healthcare Index ($HCX) trades below its 50-day SMA and above its 200-day SMA.

Biotechnology Index ($BKX) also trades below its 50-day SMA and above its 200-day SMA.

Pharmaceutical Index ($DRG) closes below its 200-day SMA.

The REIT Index ($DJR) consolidate below its major SMA’s.

The Transportation Index ($TRAN) posts a loss after hitting a new high.

The Airline Index ($XAL) consolidates off its lows in a three-month pattern.

The Defense Index ($DFX) pulls back to unchanged for the week after hitting a new high.

The Energy Index ($IXE) also pulls back to unchanged for the week after hitting a new high.

What Was Important About Last Week

STOCKS:

  • Microsoft (MSFT) reported Q4 (Jun) earnings of $0.31 per share, including $0.08 Xbox charge that analysts were including in their estimates, in line with the Reuters Estimates consensus of $0.31. Revenues rose 13.3% year/year to $13.37 bln vs. the $13.27 bln consensus. Co issued in-line guidance for Q1, sees EPS of $0.38-0.40 (consensus $0.38) on revenues of $12.4-12.6 bln (consensus $12.57 bln). For FY08, co sees EPS of $1.69-1.73 (consensus $1.71) on revenues of $56.8-57.8 bln (consensus $57.03 bln).
  • Google (GOOG) reported Q2 (Jun) earnings of $3.56 per share, $0.03 worse than the Reuters Estimates consensus of $3.59. Revenues rose 57.6% year/year to $3.87 bln (consensus $3.87 bln). Co revenues, ex traffic acquisition cost revenue, were $2.72 bln vs. the First Call consensus of $2.68 bln.
  • IBM (IBM) reported Q2 (Jun) earnings of $1.50 per share, $0.03 better than the Reuters Estimates consensus of $1.47. Revenues rose 8.6% year/year to $23.77 bln (consensus $23.06 bln).
  • eBay (EBAY) reported Q2 (Jun) earnings of $0.34 per share, excluding non-recurring items, $0.02 better than the Reuters Estimates consensus of $0.32. Revenues rose 30.0% year/year to $1.83 bln (consensus $1.78 bln).
  • Intel (INTC) reported Q2 (Jun) earnings of $0.19 per share, in line with the Reuters Estimates consensus of $0.19. Revenues rose 8.4% year/year to $8.68 bln vs. the $8.55 bln consensus.
  • Yahoo! (YHOO) reported Q2 (Jun) GAAP earnings of $0.11 per share, in line with the Reuters Estimates consensus of $0.11. Revenues rose 10.8% year/year to $1.24 bln vs. the $1.24 bln consensus.

ECONOMY:

  • Housing starts increased 2.3% in June to 1.467 million units at an annual rate, slightly beating consensus expectations. However, starts were revised down for April and May. Starts are down 19.4% versus a year ago.The rise in starts in June was all due to multi-family units, which increased 12.5%.
  • Single-family units dropped 0.2%. By region, starts rose in the South and West, fell in the Midwest, and were basically unchanged in the Northeast.
  • New building permits declined 7.5% in June to 1.406 million units at an annual rate, slower than the consensus expected 1.480 million rate. Permits are down 25.2% versus last year, 27.5% for single-family units.
  • The Consumer Price Index (CPI) increased 0.2% in June, slightly more than the consensus expected. The CPI is up 2.7% versus a year ago.
  • Energy prices declined 0.5% in June. Excluding food and energy, the core CPI was up 0.2%, as the consensus expected. The core CPI is up 2.2% versus a year ago.
  • Industrial production was up 0.5% in June, as the consensus expected. In the past three months, industrial production is up at a 3.6% annual rate.
    Manufacturing production increased 0.5% in June and is up at a 3.2% annual rate in the past three months.
  • The production of high-tech equipment grew 1.5% in June and is up 16.9% versus a year ago.
  • Capacity utilization increased to 81.7% versus a consensus forecast of 81.6%. In the manufacturing sector, capacity utilization rose to 80.3%.
  • The Producer Price Index (PPI) declined 0.2% in June versus a consensus expected gain of 0.2%. The PPI is up 3.2% in the past twelve months (seasonally adjusted) and has climbed at an annual rate of 5.7% in the past three months.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Halliburton Company (HAL), Steel Dynamics (STLD), Texas Instruments (TXN)
  • TUESDAY: AT&T (T), Centex Corporation (CTX), Chicago Mercantile Exchange Holdings Inc. (CME), Choice Hotels International, Inc. (CHH), Countrywide Financial Corporation (CFC), Jones Lang LaSalle (JLL), Lockheed Martin (LMT), XTO Energy Inc. (XTO)
  • WEDNESDAY: Apple Inc. (APPL), Baidu (BIDU), ConocoPhillips (COP), DiamondRock Hospitality Company (DRH), General Dynamics (GD), Genzyme Corporation (GENZ), Immucor (BLUD), QUALCOMM Inc. (QCOM), The Boeing Company (BA), The New York Times Company (NYT),
  • THURSDAY: 3M Company (MMM), Beazer Homes USA Inc. (BZH), ExxonMobil Corporation (XOM), Ford Motor Company (F), Office Depot Inc. (ODP), Potash Corporation of Saskatchewan Inc. (POT), Wendy’s International (WEN)
  • FRIDAY: Chevron (CVX), Fortune Brands (FO), Ingersoll-Rand Co. Ltd. (IR)

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: none
  • WEDNESDAY: Existing Home Sales, Crude Inventories, Fed’s Beige Book
  • THURSDAY: Durable Orders, Initial Claims, Help-Wanted Index, New Home Sales
  • FRIDAY: GDP-Adv., Chain Deflator-Adv., Mich Sentiment-Rev.

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“ Either you think, or else others have to think for you and take power from you, pervert and discipline your natural tastes, civilize and sterilize you.” – F. Scott Fitzgerald

CANSLIM SETUPS

Bulls Loud And Clear

Traders,

The band is playing our song again
And all the world is green
— Tom Waits “All The World Is Green”

Market Bias:

BUYERS’ EDGE INTACT

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

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

Aggressive biding leads to new highs for the major indexes.

Solid support of Tech issues bodes well with nearly every sector posting gains.

This summer is making for a hot one for traders.

Recent distribution followed buy accumulation makes for a potent volatility.

With earnings season taking form we might expect to see more of the same.

A record number of short sellers most likely has added to the buying pressure as they’re squeezed out of their positions.

We are also seeing Big Caps take charge over Small Caps.

Financial sectors showing relative weakness don’t appear to be much of a threat to the broader market as subprime fears have had time to be digested.

But keep in mind anything can happen. A revaluation of subprime bond packages bought by Wall Street could have an imploding effect.

Basically the mortgage pools bought by investment banks trade so illiquid that they’re valued on default rates.

Should the bonds be revalued to a poorly bid market for them, many balance sheets will pay the consequences. The scope of the issue is unclear, but at this juncture we’re not seeing any panic.

Technically speaking:

The Dow Industrial Average

($INDU), +2.2%, screams to a new high.

The S&P 500

($SPX), +1.4%, hits a new high.

Nasdaq

($COMPQ), +1.5%, leads the indexes higher as it continues on a three week rally.

Russell 2000

($RUT), +0.4%, hits a new high, though shows relative weakness in posting a small gain for the week.

Volume indications favor the Bulls for the week.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) hits a new low for the year.

The Gold & Silver Miners Index ($XAU) works its way up the right side of a new year-long base.

The Consumer Index ($CMR) regained ground above its 50-day moving average.

The Cyclical Index ($CYC) hits a new high.

The Technology Index ($DJUSTC) hits a new high.

The Semiconductor ($SOX) hits a new high for the year as it gains on last year’s high.

The Software Index ($GSO) consolidates on its 50-day SMA, just under new highs.

Telecom Index ($XTC) consolidates above its 50-day SMA, just under a new high.

The Banking Index ($BKX) rallies to close just under its 50 and 200-day averages.

The Broker Dealer Index ($XBD) consolidates on its 50-day SMA, just under new highs.

The Retail Index ($RLX) consolidates on its 50-day SMA, just under new highs.

The Healthcare Index ($HCX) consolidates under its 50-day SMA, just under new highs.

Biotechnology Index ($BKX) consolidates between under 50-day SMA and above its 200-day SMA.

Pharmaceutical Index ($DRG) rally off a 30-day low to close just under its 50-day SMA.

The REIT Index ($DJR) rally off a 30-day low to close just under its 50-day and 200-day SMA’s.

The Transportation Index ($TRAN) hits a new high.

The Airline Index ($XAL) remain in a downtrend with the 50-day SMA under the 200-day SMA.

The Defense Index ($DFX) hits a new high.

The Energy Index ($IXE) hits a new high.

What Was Important About Last Week

STOCKS:

  • Genetech (DNA) reported Q2 (Jun) earnings of $0.78 per share, excluding non-recurring items, and excl option expense, $0.07 better than the Reuters Estimates consensus of $0.71. Revenues rose 36.6% year/year to $3 bln vs the $2.85 bln consensus. Co issued in-line guidance for FY07, sees EPS of $2.85-2.95 vs. $2.91 consensus.
  • Yum! Brands (YUM) reported Q2 (Jun) earnings of $0.39 per share, $0.03 better than the Reuters Estimates consensus of $0.36. Revenues rose 8.5% year/year to $2.37 bln vs the $2.28 bln consensus.
  • American Eagle Outfitters (AEO) Jun same store sales +8.0% vs +4.8% Briefing.com consensus. Co also issued in-line guidance for Q2 (Jul), it sees EPS of $0.35-0.36 vs. $0.36 Reuters Estimates consensus (prior guidance $0.34-0.36).
  • Alcoa (AA) reported Q2 (Jun) earnings of $0.81 per share, includes $0.04 per share of curtailment costs at the Tennessee and Rockdale, TX smelters, and may not be comparable to the Reuters Estimates consensus of $0.82. Revenues rose 3.5% year/year to $8.07 bln vs the $8.41 bln consensus.

ECONOMY:

  • June retail sales declined 0.9% and were down 0.4% excluding autos, both worse than consensus expectations. Retail sales are up 3.8% versus last year, 4.2% excluding autos.
  • The largest dollar drop in June sales was in autos, which fell $2.3 billion. Other declines included building materials (down $690 million), furniture-electronics-appliances (down $435 million), and gas stations (down $417 million). Stronger components of sales included internet-mail order (up $299 million), health and personal care stores (up $229 million), and general merchandise stores (up $131 million).
  • Excluding autos, building materials, and gas, sales were unchanged in June and are up 5.2% versus a year ago.
  • The trade deficit in goods and services increased to $60.0 billion in May, exactly as the consensus expected, from a revised $58.7 billion in April.
  • Exports increased $2.9 billion in May and are up 11.1% versus last year. Capital goods exports rose $1.9 billion (including $0.8 billion in civilian aircraft).
  • Imports increased $4.2 billion in May and are up 4.1% versus a year ago. Petroleum imports increased $1.8 billion (due to both higher prices and higher volume) while telecom equipment and pharmaceutical imports each rose $0.4 billion.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: JB Hunt Transportation (JBHT), W.W. Grainger (GWW),
  • TUESDAY: Johnson & Johnson (JNJ), Merrill Lynch (MER), The Coca-Cola Company (KO), Wells Fargo & Company (WFC), Yahoo, Inc. (YHOO)
  • WEDNESDAY: Abbott Laboratories (ABT), Alliance Data (ADS), Altria Group, Inc. (MO), eBay (EBAY), Host Hotels & Resorts Inc. (HST), J.P. Morgan Chase & Co (JPM), Juniper Networks (JNPR), LaSalle Hotel Properties (LHO), Washington Mutual (WM)
  • THURSDAY: Advanced Micro Devices (AMD), Capital One Financial Corp. (COF), Dow Jones & Company Inc. (DJ), Gilead Sciences (GILD), Google (GOOG), Harley-Davidson (HOG), Illinois Tool Works Inc. (ITW), Microsoft (MSFT), Motorola Inc. (MOT), Nucor (NUE), Reliance Steel (RS), The Nasdaq Stock Market, Inc. (NDAQ), Wyeth (WYE)
  • FRIDAY: Caterpillar Inc. (CAT), Citigroup Inc. (C), Schlumberger (SLB)

On the economic front we have potential market movers with:

  • MONDAY: NY Empire State Index
  • TUESDAY: Core PPI, PPI, Net Foreign Purchases, Capacity Utilization, Industrial Production
  • WEDNESDAY: Core CPI, CPI
  • THURSDAY: Initial Claims, Leading Indicators, Philadelphia Fed
  • FRIDAY: FOMC Minutes

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“In the last analysis, our only freedom is the freedom to discipline ourselves.” — Bernard Baruch

CANSLIM SETUPS

Bulls Skip Higher

Traders,

Careful where you lay your head.
Coldplay “Careful Where You Stand”

Market Bias:

NO BIAS

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

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

The Bulls take control for the holiday week.

Advances in key sectors improves our technical outlook to a Bullish bias.

However, the past three weeks show a dominance of sellers.

Our Yellow Flag indicates no bias.

We need to be careful not to look too much into last week.

Technically speaking:

The Dow Industrial Average

($INDU), +1.5%, rallies off its 50-day MA just shy of a new high.

The S&P 500

($SPX), +1.8%, also rallies off its 50-day MA just shy of a new high.

Nasdaq

($COMPQ), +2.4%, climbs to a new high.

Russell 2000

($RUT), +2.2%, moves to the top of a two-month trading range.

Volume indications for the past three weeks favor the Bears.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) plunges to just shy of a new low.

The Gold & Silver Miners Index ($XAU) moves to the top of a year-long trading range.

The Consumer Index ($CMR) puts in a modest rally under its 50-day MA.

The Cyclical Index ($CYC) moves to a new high.

The Technology Index ($DJUSTC) climbs to a new high.

The Semiconductor ($SOX) breaks out to a new high for the year.

The Software Index ($GSO) sells off below its 50-day MA.

Telecom Index ($XTC) moves to just shy of a new high.

The Banking Index ($BKX) puts in a modest rally below its 50-day MA.

The Broker Dealer Index ($XBD) moves above its 50-day MA, shy of a new high.

The Retail Index ($RLX) rallies above its 50-day MA, shy of a new high.

The Healthcare Index ($HCX) rallies, though remains below its 50-day MA.

Biotechnology Index ($BKX) consolidates below its 50-day MA and above its 200-day MA.

Pharmaceutical Index ($DRG) put in a rally though stays below its major MA’s.

The REIT Index ($DJR) rally to just short of its 50-day MA.

The Transportation Index ($TRAN) rallies to above its 50-day MA, though is shy of a new high.

The Airline Index ($XAL) rallies to above its 50-day MA, though remains below its 200-day MA.

The Defense Index ($DFX) climbs to just shy of a new high.

The Energy Index ($IXE) barely makes a new high.

What Was Important About Last Week

STOCKS:

  • none

ECONOMY:

  • Non-farm payrolls increased 132,000 in June while revisions to April and May added a total of 75,000 to payroll growth. The consensus expected a gain of 125,000.
  • Sectors performing well in June included education and health (+59,000), restaurants and bars (+35,000), and state and local government (+41,000). Upward revisions to April and May were centered in financial services, manufacturing, leisure and hospitality, and retail trade.
  • Non-residential construction payrolls increased 12,000 in June, while residential construction jobs were unchanged.
  • The unemployment rate remained at 4.5%. Average hourly earnings increased 0.3% (0.35% un-rounded) and are up 3.9% versus a year ago, consistent with nominal wage gains in the late 1990s.
  • The ISM non-manufacturing business barometer (a measure of production growth in the services sector) increased to 60.7 in June, the highest level since April 2006, just before the US economy hit its recent slow-growth patch. The consensus expected a decline to 58.0 from the May level of 59.7. Levels above 50 signal expansion and levels below 50 signal contraction in the services sector. Despite a decline in the new orders index to 56.9 in June, from 57.4 in May, the level of orders remains robust. The employment component rose to 55.0, the highest in a year. The prices paid component decreased slightly to 65.5 versus a level of 66.4 in May.
  • The ISM Manufacturing index increased to 56.0 in June from 55.0 in May. The consensus expected the index to be unchanged at 55.0. (Levels higher than 50 signal expansion; levels below 50 signal contraction.) The index was driven upward by an increase of 4.6 (to 62.9) in the production component. The new orders component rose by 0.7 points (to 60.3). The prices paid index declined to 68.0 from 71.0, but remains at a high level.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: ALCOA Inc (AA), Schnitzer Steel Industries, Inc. (STLD)
  • TUESDAY: Infosys Technologies LTD (INFY)
  • WEDNESDAY: Genentech, Inc. (DNA), Ruby Tuesday (RT), Yum! Brands, Inc. (YUM)
  • THURSDAY: Fastenal (FAST), Marriott International (MAR)
  • FRIDAY: none

On the economic front we have potential market movers with:

  • MONDAY: Consumer Credit
  • TUESDAY: Wholesale Inventories
  • WEDNESDAY: Crude Inventories
  • THURSDAY: Initial Claims, Trade Balance, Treasury Budget
  • FRIDAY: Export Prices ex-ag., Import Prices ex-oil, Retail Sales, Retail Sales ex-auto, Business Inventories, Mich Sentiment-Prel

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“No evil propensity of the human heart is so powerful that it may not be subdued by discipline.” – Seneca

CANSLIM SETUPS