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Thread: Daily Market Analysis - Q3 2013

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    Thumbs down Daily Market Analysis - Q3 2013

    WELCOME TO QUARTER THREE!
    And welcome to July ...
    The best month in the worst quarter of the year


    Just like that, half the year is over. But boy did it finish with a flourish! DOW managed 14 consecutive triple digit sessions (and it isn't over yet), the kind of volatility usually exclusive to earning season. Now that is worrying considering that we haven't even started July's earnings season which is reputed to be the most volatile period of the trading year.

    DOW wiped out two month's gains in one week then bounce to recover some of those losses in the last week while the VIX spiked to the year's high before retracing a little ... Singapore's STI in the red for the year at 3,150.44 after having dipped below its critical 3,100 for two sessions in the last week of July ... Shanghai had its worst drop since 2009 and is expected to worsen ... Japan closed the month officially in a Bear Market ... Bond yields in the U.S. spiked to multi-year highs ... Gold sold off to $1,234/oz, the lowest close since 24 August, 2010.

    The only bright spot in an otherwise bleak month was the 50th Paris Air Show where Airbus and Boeing along accounted for more than $130bln worth of sales. Its good to know that amidst all the worries, one industry is still flush with cash.

    Now we go into Quarter Three, the worst quarter of the trading year. With China battling a cash crunch and desperately tightening its credit binge while reining in its shadow banking system, with most of Asia already in the red for the year, Europe still in the dole and America threatening to taper its bond buying and hinting at tightening monetary policy sooner rather than later, things are about to get very interesting indeed.

    U.S. MARKET RECAP - MONDAY 24 JUNE TO FRIDAY 28 JUNE - AMC

    Quote Originally Posted by Conrad on Monday 24 June, 2013 View Post
    Its the last week of the month, the last week of quarter two and the last week of the first half of the year. The week after June Expiration has been down on the DOW 13 in a row with 20 of the last 22 being bearish. The last day of June has been bearish with the DOW going down 15 of the last 21 and down on NASDAQ for 6 of the last 7. Watch for Portfolio Pumping (among some select stocks) in the last week of Quarter 2 as fund managers illegally jack up the prices of their portfolios' under-performing securities.

    Direction for the week Monday 24 June to Friday 28 June, 2013; Down
    I did say that if the market overcooked the bounce, that we'd pay for it at the end of the week, didn't I? That ends the month and the quarter. Quarter two finished with a gain but June was down for the month. This completed the Eighth Candle Reversal on monthly candles on S&P500.

    __________________________________________________ ________

    U.S. Markets - Friday 28 June, 2013 AMC

    Quote Originally Posted by Conrad on Friday 28 June, 2013 View Post
    Its the very last day of the trading month, the last session of quarter 2 and the final episode in the first half of the trading year. This particular last day tends be be very bearish having been down on the DOW 15 of the last 21 and down on NASDAQ for 6 of the last 7. With those kinds of statistics, I am not going against the grain.

    Direction for Friday 04 July, 2013; Down
    That is an amazing statistic that keeps its record going. But what a divergent day it was. The benchmarks were all over the place - DOW was down for the most part, NASDAQ was up for most of the session and S&P was bouncing along the flat line. The internals were even more confusing and leadership was swing from sector to sector with no clear leaders except for Utilities - the ultimate fear trade.

    __________________________________________________ ________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Stocks End Down Week on Lower Note

    Stocks concluded their down week on a lower note as the S&P 500 shed 0.4%.

    Equities slipped out of the gate amid weakness in Treasuries. The 10-yr note sold off into the cash session open before erasing most of its losses. The benchmark 10-yr yield ended higher by two basis points at 2.493%.

    A disappointing Chicago PMI report for June (51.6 actual, 55.5 Briefing.com consensus, 58.7 prior) also contributed to the early weakness, but stocks were able to find support shortly thereafter.

    Today's session lows coincided with the release of a better-than-expected final University of Michigan Consumer Sentiment Index (84.1 final, 82.7 consensus, 82.7 preliminary).

    Stocks spent the following hour in a steady climb, allowing the S&P to erase its opening losses. However, the early buying interest fizzled out after the benchmark average returned to its flat line, where it held until the closing minutes of the session.

    The final five minutes of action saw the index return into the red as the small cap Russell 2000 index underwent its annual rebalancing.

    The S&P was anchored to its unchanged level for most of the afternoon as financials and technology weighed. The financial sector ended with a loss of 0.7% while the tech space shed 0.4%.

    While the tech sector was able to settle above its lows, not all components were as fortunate. Accenture (ACN 71.96, -8.26) tumbled 10.3% after its earnings beat was overshadowed by below-consensus revenue as well as downside fourth quarter revenue guidance. Separately, BlackBerry (BBRY 10.46, -4.02) plunged 27.8% after the company reported disappointing first quarter earnings and revenue. In addition, BB10 shipments of 2.7 million disappointed as investors expected BlackBerry to ship about 3.5 million units of its latest device.

    On the flip side, discretionary shares and utilities ended in positive territory. The discretionary sector received a boost from retailers after Finish Line (FINL 21.86, +0.66) surprised to the upside with its earnings and revenue. Meanwhile, homebuilders kept the discretionary space from logging further gains. Most major builders settled in the red while the iShares Dow Jones US Home Construction ETF (ITB 22.38, -0.37) shed 1.6%.

    Also of note, a 0.4% advance in utilities extended the sector's weekly gain to 3.0%, placing it atop this week's leaderboard. Meanwhile, the materials sector was the weakest group of the week, ending with a loss of 1.5%. However, gold miners had a strong showing today as the Market Vectors Gold Miners ETF (GDX 24.49, +1.70) surged 7.5%. On a related note, gold futures gained 1.6% to $1230.70 per ounce while silver futures jumped 5.6% to $19.60 per ounce.
    Sector Leaders/Laggards
    Leading Sectors: Utilities (+0.37%).
    Leading Industries/ETFs : Silver Miners-SIL +8.72%, Junior Gold Miners-GDXJ +8.4%, Gold Miners-GDX +7.46%, Silver-SLV +6.04%, Greece-GREK +4.03%, Mexico-EWW +2.87%, Gold-GLD +2.73%, South Africa-EZA +2.72%, Middle East and Africa-GAF +2.69%, Poland-EPOL +2.23%.

    Lagging Sectors: Telecom (-0.73%), Health Care (-0.86%), Financials (-0.68%), Industrials (-0.62%), Consumer Staples (-0.60%), Materials (-0.57%), Tech (-0.41%), Consumer Discretionary (+0.35%), Energy (-0.21%).
    Lagging Industries/ETFs : Corn-CORN -4.47%, Grains-JJG -3%, MLP Index-AMJ -2.26%, Australia-EWA -2.08%, U.S. Home Construction-ITB -1.63%, Brazilian Real-BZF -1.62%, Coffee-JO -1.52%, Thailand-THD -1.44%, Vietnam-VNM -1.43%, Japan-EPP -1.4%.

    Other Market Moving Factors:
    • Japan's Manufacturing PMI rose ... industrial production increased ... household spending declined ... retail sales rose ... the national CPI ticked down ... Tokyo CPI was unchanged ... construction orders surged ... housing starts jumped ... the unemployment rate held steady at 4.1%.
    • South Korea's industrial production declined
    • Germany's retail sales climbed 0.8% month-over-month (0.2% expected, -0.1% prior).
    • French PPI slid while consumer spending rose
    • Great Britain's Nationwide HPI increased while the Index of Services rose
    • Italian CPI rose while PPI eased and Business Confidence climbed
    • U.S. Chicago PMI misses expectations ... Michigan Sentiment surprises to the upside
    • Treasury Yields Rising

    BRIEFING.COM
    Weekly Wrap: S&P 500 Tests 100-Day Moving Average

    On Monday, the stock market began the week on a fitful note as rising interest rates at home and falling equity markets abroad conspired to keep the major averages in negative territory throughout the day. The S&P 500 registered its first close below its 100-day moving average this year. Overseas, the drop in China was attributed to a growing sense of angst that a liquidity crisis and credit crunch are brewing there. The growth concerns weighed heavily on the cyclical sectors throughout the day. Financials (-1.8%) led the losses and were joined by materials (-1.7%), industrials (-1.7%), energy (-1.5%), and technology (-1.4%) as the worst-performing areas.

    Equities ended Tuesday's session near their highs, but were unable to erase their Monday losses. The S&P 500 climbed 1.0% as all ten sectors ended with gains. The bulk of the advance occurred in the first 90 minutes of the session amid a global rebound. Interestingly, two rate-sensitive sectors vaulted to the top of this month's leaderboard despite the continued climb in Treasury yields. The telecom services sector rose 2.0%, which turned its month-to-date loss to a gain of 1.0%.

    Wednesday began on an upbeat note despite some disappointing economic news. The final first quarter GDP reading was revised down to 1.8% from 2.4%. Typically, revisions to GDP in the third estimate are very minor. The large decline in this report was very unusual and caught all economists by surprise. Most of the downward revision came from consumption in services. In the previous estimate, services spending increased 3.1%. That was revised down to 1.7% growth and contributed 0.6 percentage points less to GDP growth. Stocks received this news in stride as sluggish growth suggests the Federal Reserve is less likely to withdraw its support from the markets. To that end, the Treasury complex received an aggressive bid immediately after the GDP revision crossed the wires. The benchmark 10-yr yield ended lower by seven basis points at 2.542%.

    On Thursday, the S&P 500 settled higher by 0.6% as nine sectors posted gains. Equities were off to the races at the sound of the opening bell, aided by the personal income report, which pointed to an increase of 0.5% in May. The Briefing.com consensus expected personal income to rise 0.2%. Stocks received a secondary boost from the pending home sales report as May sales rose 6.7% (1.5% consensus). The S&P notched its high of 1620 shortly after the market digested the latest housing data point. However, the index was unable to rise above that level as the 20- and 50-day moving averages served as resistance at the session high.

    This week's biggest % gainers/losers
    The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).
    This week's top 20 % gainers
    Technology: STEC (6.72 +99.11%), KEYN (19.76 +46.91%), AFFX (4.44 +21.49%), CSIQ (10.99 +20.74%), SPRD (26.25 +18.75%), ENPH (7.73 +15.93%), DWRE (42.45 +15.65%)
    Services: CRWN (2.47 +32.11%), P (18.4 +21.63%)
    Industrial Goods: XONE (61.72 +19.49%), OSIS (64.42 +16.43%)
    Healthcare: VHS (20.74 +62.26%), ISIS (26.87 +30.84%), RPTP (9.35 +26.11%), IMMU (5.44 +23.67%), SNTA (4.99 +23.38%), HWAY (17.38 +15.98%)
    Financial: HOMB (25.91 +25.45%)
    Consumer Goods: WPRT (33.53 +16.19%)
    Basic Materials: KIOR (5.71 +46.62%)

    This week's top 20 % losers
    Technology: DMD (6 -25.49%), EBIX (9.26 -14.36%)
    Services: MATX (25 -32.33%), MG (17.58 -18.08%), BKS (15.96 -14.1%), APOL (17.72 -12.42%), PMC (13.86 -12.4%)
    Industrial Goods: PGEM (20.09 -14.02%), TREX (47.49 -13.16%)
    Healthcare: IDIX (3.61 -32.16%), NLNK (19.72 -12.32%)
    Financial: DRE (15.59 -36.65%), NBG (3.45 -32.76%)
    Basic Materials: SAND (5.85 -25.46%), WLT (10.4 -19.89%), AVD (23.43 -19.08%), SA (9.43 -15.74%), BVN (14.76 -15.49%), ANV (6.48 -13.15%), GORO (8.71 -12.16%)
    ___________________________________________

    ECONOMIC COMMENTARY
    Japan Economic Data
    - Jun Nomura JMMA Manuf PMI 52.3 vs 51.5
    - May CPI -0.3% vs -0.7% in May 2012
    - May Jobless Rate 4.1% vs 4.1% in May 2012
    - May prelim Indust Prod -1.0% vs -3.4% in May 2012
    - May Large Retailers Sales -0.4% vs -2.3% in May 2012
    - May Housing Starts +14.5% vs +5.6% in May 2012
    - May Vehicle Prod -6.2% vs -6.5% in May 2012
    - June Flash Business Sentiment indicator 53.7 vs 56.7 in Jun 2012
    China Economic Data
    - June Flash Business Sentiment indicator 53.7 vs 56.7 in Jun 2012
    Germany Economic Data
    - May Retail Sales +0.4% +2.7% in May 2012
    U.S. Economic Data
    - June Chicago PMI 51.6 vs 55.5; May 58.7
    - June Michigan Sentiment- Final 84.1 vs 82.7; Prelim 82.7

    Consumer Sentiment Rebounds in Final June Reading
    The University of Michigan Consumer Sentiment Index was revised up to 84.1 in the final reading for June from 82.7 in the preliminary reading. That is just below the 81.4 reading in May. The Briefing.com consensus expected the index to remain at 82.7. The recent volatility in the equity markets and higher gasoline prices have not affected consumer sentiment. Instead, consumers focused on the gains in payrolls/employment when viewing the economy. The Current Conditions Index was revised up to 93.8 in the final reading from 92.1 in the preliminary report. That is down from 98.0 in May. The Expectations Index was revised up from 76.7 to 77.8 in the final reading, which was the strongest reading since October 2012. Overall, consumer sentiment has little impact on consumption. Stronger income growth, not improving sentiment, drives spending behaviors.

    Manufacturing Gains From May Prove to Be Temporary in the Chicago Region
    The Chicago PMI fell to 51.6 in June after spiking to 58.7 in May. The index contracted in April with a reading of 49.0. The Briefing.com consensus expected the Chicago PMI for June to fall to 55.5. The drop in June was the largest monthly decline in the PMI in more than four years. Production remained strong as the index fell from 62.7 in May to 57.0 in June. It is unlikely that production will remain in an expansion next month unless new orders demand suddenly surges. Unfilled orders, which keep production stable, had the largest one-month fall since March 1974 as the index dropped to 34.4 in June. That was the lowest reading since September 2009 and well below the 53.1 registered in May. New orders declined from 58.1 in May to 54.6 in June. The employment index strengthened, increasing to 57.8 in June from 56.9 in May.
    Asian Markets Close: Nikkei +3.5%, Hang Seng +1.8%, Shanghai +1.5%
    It was a sea of green across Asia as all of the major bourses, aside from Australia's ASX (-0.2%) finished in positive territory. Strong gains across the region were paced by Japan's Nikkei (+3.5%), but almost the entire region was higher by at least 1.5%. The Nikkei's gains came following mostly better than expected data as it appears Abenomics is beginning to take hold. Meanwhile, China's Shanghai Composite (+1.5%) surged off its lowest levels since January 2009 after a PBOC official commented the economy is now in check. The soothing words helped push Shibor back below 5.0%. Elsewhere, peripheral markets remained strong with Indonesia's Jakarta Composite (+3.1%) and the Philippines Psei (+2.2%) setting the pace. The Philippines' Psei is up nearly 12% over the past three sessions. Data from the region saw Japan's household spending miss estimates (-1.6% YoY actual v. 1.5% YoY expected) and Tokyo Core CPI (0.2% YoY actual v. 0.2% YoY expected) meet expectations while both retail sales (0.8% YoY actual v. 0.1% YoY expected) and preliminary industrial production (2.0% MoM actual v. 0.2% MoM expected) beat. Also, Thailand's industrial production plunged 7.8% YoY as its current account deficit narrowed to $1.05 bln ($1.3 bln previous). Looking at the currencies...USDCNY fell to 6.1376; USDINR slipped to 59.40; USDJPY is higher at 99.00; AUDUSD is lower near .9215.
    In Japan, the Nikkei closed +3.5% as trade closed at a one-month high. Real estate shares were once again strong as Mitsui Fudosan jumped 4.6% to lead the space higher. Financials were also bid with Mitsubishi UFJ Financial and Mizuho Financial both adding at least 4.0%.

    In Hong Kong, the Hang Seng finished +1.8% as shares rallied for a fourth day. Financials continued their recent advance with ICBC climbing 2.7%. Meanwhile, coal-based China Shenhua Energy slumped almost 2.0% as coal prices slumped to their lowest in five years.

    In China, the Shanghai Composite settled +1.5% as shares gained for the first time in three days. Property developers and financials were among the leaders with Poly Real Estate surging 6.8% and China Minsheng Bank adding 2.3% to finish among the leaders of their respective sectors.

    In India, the Sensex closed +2.8% as shares jumped to their best level in two and a half weeks. Energy stocks were strong for a second straight session as the Indian government approved a nearly doubling of natural gas prices. Heavyweight Reliance Industries rallied 3.8% and ONGC climbed 3.0%. Click here to see a daily Sensex chart.

    In Australia, the ASX finished -0.2% amid a choppy trade that saw a mixed session from both financials and miners. Three of the four big banks ended with gains with only NAB (-0.2%) seeing losses. Meanwhile, Rio Tinto was the lone miner to finish green, as shares tacked on 1.1%.

    In Taiwan, the Taiex settled +2.3% as Taiwan Semiconductor Manufacturing rallied 6.2%.

    In South Korea, the Kospi closed +1.6% as Hyundai Motor jumped 3.4%.
    In other regional markets ...
    Vietnam -0.4%
    Thailand +0.4%
    Singapore +1.0%
    Malaysia +1.3%
    Philippines +2.2%
    Indonesia +3.1%

    European Markets Update
    Major European indices trade in the red despite showing earlier gains. Regional economic data was plentiful as Germany's retail sales climbed 0.8% month-over-month (0.2% expected, -0.1% prior). French PPI slid 1.2% month-over-month (-0.3% expected, -1.2% prior) while consumer spending rose 0.5% month-over-month (-0.1% expected, -0.5% previous). Great Britain's Nationwide HPI increased 0.3% month-over-month (0.3% forecast, 0.4% previous) while the Index of Services rose 0.2%, as expected (0.6% previous). Elsewhere, Italian CPI rose 0.3% month-over-month (0.2% expected, 0.0% prior) while PPI eased 0.1% month-over-month (-0.1% expected, -0.4% previous). Lastly, Business Confidence climbed to 90.2 from 88.7 (89.0 consensus).

    Reports out of German newspaper Sueddeutsche Zeitung suggest the European Central Bank is considering a bond-buying program similar to the Fed's quantitative easing. These reports have been promptly refuted by an ECB spokesman, who said the article was completely wrong.' Also of note, Latvia is in the process of clearing the final hurdles in its bid to become part of the Eurozone starting on January 1, 2014.
    • Great Britain's FTSE is lower by 0.2%. Miners are among the decliners as Antofagasta, Eurasian Natural Resources, and Fresnillo, hold losses between 1.5% and 3.2%. On the upside, Schroders trades higher by 4.2% following supportive comments from Exane BNP Paribas.
    • In Germany, the DAX is off by 0.6% with SAP leading to the downside. The software company is lower by 2.8% after Accenture's lower-than-expected revenue forecast cast some doubt on the strength of demand for SAP products.
    • France's CAC trades with a loss of 0.7% as financials weigh. BNP Paribas, Credit Agricole, and Societe Generale are all down between 1.6% and 2.8%.
    European Markets Closing Prices
    UK's FTSE: -0.5%
    Germany's DAX: -0.4%
    France's CAC: -0.6%
    Spain's IBEX: -1.0%
    Portugal's PSI: + 0.4%
    Italy's MIB Index: -1.2%
    Irish Ovrl Index: + 0.2%
    Greece ATHEX Composite: + 2.5%
    IN OTHER NEWS ...
    US regulators plan to decide on bank capital requirements on Tuesday, according to reports
    Click Here for the Reuters.com Article
    Related Stocks Include: XLF, JPM, BAC, C, WFC, USB, PNC, GS, MS

    Dendreon (DNDN) receives positive opinion for PROVENGE in the European Union
    Co announced that the European Medicines Agency (EMA) Committee for Medicinal Products for Human Use (CHMP) has adopted a positive opinion recommending that PROVENGE (autologous peripheral blood mononuclear cells activated with PAP-GM-CSF or Sipuleucel-T) be granted marketing authorization in the European Union, for the treatment of asymptomatic or minimally symptomatic metastatic (non-visceral) castrate resistant prostate cancer in male adults in whom chemotherapy is not yet clinically indicated. The CHMP's recommendation follows a positive recommendation by the Committee for Advanced Therapy. The CHMP will make a final recommendation to the European Commission (EC) within the coming months on the marketing authorization application for PROVENGE in the EU. A regulatory decision is anticipated from the EC in the second half of this year.

    Fed Governor Stein repeats in speech that Fed intends to continue with purchases until the outlook for the labor market has improved substantially
    Click Here for the Full Speech

    Ricmond Fed President Lacker (not a voting FOMC member, typically hawkish) gives speech on econ outlook
    Said slowing bond buying over the next 12 months only reduces pace Fed adding stimulus, not tightening policy ... says September is one of the possible meetings at which Fed could taper bond purchases, but will depend on the data; says market reaction since Bernanke press conference a sign that markets had over-estimated amount of bonds Fed would buy
    Click Here for the Full Speech

    San Fransisco Fed President John Williams (not a voting FOMC member, typically dovish) gives speech on economic recovery; maintains view that tapering depends on data; says still too early to taper

    Mr. Williams said "Of course, the economy's increased momentum has raised questions about when the Fed will cut back, and eventually end, its asset purchase program. So, is it time to act...My answer is that it's still too early. For one thing, we need to be sure that the economy can maintain its momentum in the face of ongoing fiscal contraction. And it is also prudent to wait a bit and make sure that inflation doesn't keep coming in below expectations, possibly signaling a more persistent decline in inflation."

    "I would like to emphasize three points regarding the potential timeline for adjusting our asset purchase program. First and foremost, any adjustments to our purchase program will depend on the new economic data that come in. In other words, we will modify our plans as appropriate if economic developments turn out differently than we currently expect.
    Click Here for the Full Speech

    Index Change Reminder
    News Corp. (NWSA) will replace Apollo Group (APOL) in the S&P 500, Apollo Group will replace Forest Oil (FST) in the S&P MidCap 400, Forest Oil will replace Enzo Biochem (ENZ) in the S&P SmallCap 600, and Mallinckrodt plc (MNK) will replace Tellabs (TLAB) in the S&P MidCap 400 after the close of trading today.
    ___________________________________________

    TECHNICAL UPDATE

    Quote Originally Posted by Conrad on Friday 28 June, 2013 View Post
    That makes it three Opening Marubozu in a row for DOW with a close above the psychological 15K, forming a Three Identical Soldiers which is usually a reversal confirmation. But those Opening Marubozus make the reversal doubtful. The large cap index now sits just below its 50 and 20 DSMAs which look like completing their Death Cross on Friday. NASDAQ wears a Shooting Star after narrowly closing above its 3,400 resistance and completing its 10/50 Death Cross. S&P also sports similar Opening Marubozus and stays below its 20 and 50 DSMAs which will complete its 20/50 Death Cross on Friday.

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    14,909.60 -114.89 (-0.76%)
    Volume: 230,001,214 from 113,648,930 the previous day
    Range: 14,884.80 - 15,034.63


    Volumes doubled on this last day of the quarter especially among the larger cap stocks. DOW is back below its 10, 20 and 50 DSMAs with the 20 completing its Death Cross below the 50 DSMA. Daily candles reveal a Short Dusk Line implying more downside in the coming session. On monthly candles, the large cap index closed in a Dark Cloud which doesn't bode well for July.


    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,403.25 +1.39 (+0.04%)
    Volume: 1,131,575,092 from 392,254,438 the previous day
    Range: 3,382.75 - 3,422.20


    NASDAQ is really divergent in its technicals - on weekly candles, the tech-heavy index is hinting that the coming week should be bullish as it sports a Piercing Line on a Third Candle Reversal. On daily configurations, the NASDAQ is wearing an ugly looking Side-By-Side White Lines which implies more upside in the coming session. NASDAQ confirmed its 10/50 Death Cross and looks ready for its 20/50 Death Cross in the coming week if it fails to break above its 20DSMA.


    S&P 500 INDEX (SPX: CBOE)
    1,606.28 -6.92 (-0.43%)
    Volume: 1,063,673,000 from 510,156,000 the previous day
    Range: 1,601.06 - 1,615.94


    SPX completed its 20/50 Death Cross and closed in a Bearish Harami. On monthly candles, the broad-based index closed in a Dark Cloud on an Eighth Candle Reversal. This is pointing to an ominous July.

    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Higher than avg volume @ 1754 mln vs. avg. of 785
    Advancers outpaced Decliners (adv/dec): 1551/1497
    New highs outpaced new lows (hi/lo): 92/26

    NASDAQ :
    Higher than avg volume @ 2464 mln vs. avg. of 1756
    Advancers outpaced Decliners (adv/dec): 1323/1177
    New highs outpaced new lows (hi/lo): 145/33

    Quote Originally Posted by Conrad on Friday 28 June, 2013 View Post
    Advancers outpaced Decliners by an average 4.58 to 1 on lower average volumes (-5.14%) on Thursday (avg +0.72%).

    Overall volumes continue to decline in the bull's third straight win. $UVOL again outpaced $DVOL with lower numbers, managing to beat Down volumes by only 4.32 to 1 in spite of the impressive showing on the indices. The VIX closed lower at 16.86 -0.35 (-2.03%) to hold off its impending 50/200 Death Cross just a bit longer. The Fear Indicator is now below its 10 and 20 DSMAs.
    Advancers outpaced Decliners by an average 1.08 to 1 on higher volumes (+65.99%) on Friday (avg -0.38%).

    The internals weren't clear about who was in charge of the session on Friday. Divergence was the order of the day but volumes across the broader market were impressive. While Advancers barely outpaced Decliners, Down volumes outpaced Up volumes by 1.31 to 1.



    The VIX closed unchanged at 18.86 after trading lower for most of the session. In the meantime, that Death Cross on the 50/200 remains elusive.



    ___________________________________________

    COMMODITIES, CURRENCIES & BONDS

    USDA releases annual acreage report
    Click here for USDA report.

    USDA releases quarterly grain stocks report
    Corn stocks down 12% from June 2012
    Soybean stocks down 35%
    All wheat stocks down 3%
    Click here for Crop report.

    Gold Suffers Largest Quarterly Loss On Record, Dropping 23% - from Briefing.com

    NYMEX Energy Closing Prices
    Aug crude oil fell $0.53 to $96.52/barrel. Crude oil fell for the first time this week despite spending most of its pit session chopping around slightly above the unchanged line. The energy component brushed a session high of $97.63 in morning action but sold off into negative territory as it headed into the close. Crude oil settled the session 0.5% lower, booking a 1.1% loss for the quarter. Aug natural gas fell $0.02 to $3.56/MMBtu. Natural gas touched a session high of $3.61 after lifting from its session low of $3.53 in morning action. However, it lost momentum ahead of the close and slipped back into negative territory where it settled with a 0.6% loss. Natural gas declined by 13.8% over the quarter. Aug heating oil fell 3 cents to $2.86/gallon. Aug RBOB gasoline fell 2 cents to $2.71/gallon.

    COMEX Metals Closing Prices
    Aug gold rose $12.80 to $1224.40/ounce. Gold rose for the first time in five sessions despite a stronger dollar index. The yellow metal rallied sharply into positive territory after trading as low as $1186.00 in morning action. It settled slightly below its session high of $1228.90, booking a 1.1% gain. Despite today's rally, gold suffered its biggest quarterly loss on record according to various media outlets, declining by over 23% since Mar 28, 2013. Sep silver rose $0.89 to $19.45/ounce. Silver lifted off its session low of $18.50 and touched a session high of $19.57 moments before settling with a 4.8% gain. Nonetheless, it booked a 31.6% loss for the quarter. Sep copper fell 1 cent to $3.0/lb.

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn fell 27 cents to $5.11/bushel
    July wheat fell 16 cents to $6.47/bushel
    Nov soybeans fell 23 cents to $12.51/bushel
    Aug ethanol settled unchanged at $2.35/gallon
    Sep sugar (#16 (U.S.)) fell 0.05 of a penny to 19.05 cents/lbs

    Currencies: Australian Dollar Sinks to 33-Month Low
    The Dollar Index remains on track for its sixth gain in eight days with today's bid retaking the 83.00 level. The Index looks as though it will close at its best level in a month, with trade nearing a test of resistance in the 83.60 area.
    • EURUSD is -20 pips at 1.3010 after being unable to hold its early gains. The single currency spiked to 1.3100 in early trade, but sellers defended the level and managed to push it back below its 50-, 100-, and 200-day moving averages. However, near-term support in the 1.3000 region has held as action checks up near the week's lows. Eurozone data is heavy on Monday with CPI Flash Estimate, the unemployment rate, Italian Manufacturing PMI, and Spanish Manufacturing PMI.
    • GBPUSD is -60 pips at 1.5200 as sellers remain in control for a fourth session. The Bank of England will have a different look on Monday as former Bank of Canada head Mark Carney takes the reins from outgoing Governor Mervyn King. While action has so far managed to hold the 1.5200 level, the 1.5000/1.5100 area will be the one to watch over the coming days as a breakdown sets up a test of the March lows (lowest since June 2010) near 1.4900. British data is limited to Manufacturing PMI and net lending to individuals.
    • USDCHF is unchanged at .9450 as trade stalls near the 50-day moving average. Buying over the past two weeks has added roughly 250 pips as action nears a test of the key .9500 level.
    • USDJPY is +85 pips at 99.30 as action probes the 50-day moving average. Today's bid comes following mostly better than expected data from Japan, and has action on pace to close at a one-month high. Japan's Tankan Manufacturing Index and Tankan Non-Manufacturing Index will cross the wires Sunday evening.
    • AUDUSD is -150 pips at .9130 as trade breaks down to a fresh 33-month low. Ongoing concerns of a disruption in the Chinese economy continue to weight on the Aussie with action now 1400 pips off the April highs. Chinese data due out Sunday night includes Manufacturing PMI and HSBC Final Manufacturing PMI.
    • USDCAD is +40 pips at 1.0515 as trade looks for its own 33-month closing high. Today's bid was propelled by the in-line GDP (0.1% MoM) and tamer than anticipated RMPI (0.2% MoM actual v. 0.5% MoM expected). Canadian banks are closed on Monday for Canada Day.

    Bonds: Treasuries Post Weekly Gain
    Treasuries posted just their second weekly advance in the past two months as the complex attempts to put in a bottom after weeks of heavy selling. The heavy selling that has engulfed the complex since the beginning of May has run longer dated yields up more than 100 bps. This week, the benchmark 10-yr yield hit a high above 2.65% after starting the month of May near 1.60%. This weeks bid came despite data mostly outpacing estimates as durable orders ex transportation (0.7% actual v. -0.5% expected), the Case-Shiller 20-city Index (12.1% actual v. 10.5% expected), consumer confidence (81.4 actual v. 75.0 expected), new home sales (476K actual v. 460K expected), personal income (0.5% actual v. 0.2% expected), pending home sales (6.7% actual v. 1.5% expected), and Michigan Sentiment Final (84.1 actual v. 82.7 expected) all topped estimates. However, the data wasnt all good as GDP Third Estimate (1.8% actual v. 2.4% expected) and Chicago PMI (84.1 actual v. 82.7 expected) were notable misses. Participants also had to deal with continued talk of the Fed altering its bond buying program, with speculation mounting the tapering may begin as soon as the September meeting.

    This week, maturities across the complex saw gains. Buying had the biggest impact on the long end of the curve, where the 30-yr yield fell 12 bps to 3.498%. Aside from the 2-yr, the remainder of the curve saw yields fall approximately 10 bps as the benchmark 10-yr yield slid to 2.478% and ended on its weekly low. The key yield also managed to slip back below its 200-week moving average after climbing above it for the first time since April 2011.

    Curve flattening took hold as the 2-10-yr spread narrowed to 214.5 bps.

    Treasury Yields:
    • 2 Year Note 0.36% UNCH
    • 5 Year Note 1.41% +0.03
    • 10 Year Note 2.52% +0.03
    • 30 Year Bond 3.52% -0.02
    2/30 Spread : 316bps ( -2 ) ... 2/10 Spread : 216bps ( +3 )

    Quote Originally Posted by Conrad on Friday 28 June, 2013 View Post
    Yet again, the belly of the curve saw the most action as it flattened more than its wings. The curve is starting to look damn ugly. It sorta like a parabolic chart now which you can't consider steep and neither would you call it flattening. That's just not right.
    The belly rose against its wings as the curve finish the a week that saw it flex and bend like a Yoga practitioner.

    ___________________________________________

    PREVIEW FOR JULY, 2013

    July Preview
    July is the start of quarter three and is the best month in the worst quarter of the year. The three months of Q3 are a extremely varied with July being extremely volatile (reputed to be the most volatile), August being the most unpredictable with no reliable patterns and September, known famously for having the lowest volumes of any month and the most bearish of the calendar year.

    July has 20 full trading sessions, one half day and a public holiday (Independence Day on 4 July). July is known for its volatility with huge swings either way. It is also the start of the third earnings season of the year when companies are known to pull back on their guidance and become conservative about their outlooks.

    July Trivia
    • The first trading day of July is the most bullish having been up on the DOW 19 of the last 23
    • The second immediately becomes bearish
    • Wednesday 3 July is a shortened trading session ahead of Independence Day
    • Thursday 4 July 2013 is Independence Day - Markets are closed
    • The Friday after Independence Day is usually bullish
    • The second week is usually bullish but can be volatile as earnings season begins
    • The third week (Expiration Week) is prone to wild swings
    • The Monday of July Expiration Week has been bullish on the DOW 7 of the last 9
    • July Expiration Friday is bearish with DOW going down 7 of the last 12
    • The volatility from week three tends to carry into week four and gets worse
    • The Monday of week four is reliably bearish
    • The Friday of week four is also reliably bearish
    • The last day of July is traditionally bullish

    Commodities
    • Crude finds support in late June/early July
    • Nat Gas is good to go long around mid month till mid October
    • Gold and Silver finds some strength in July till October
    • Soya stays weak and tends to bottom in July
    • Wheat maintains its seasonal strength
    • Corn traditionally stays weak in July but is known to make sudden rallies depending on the weather
    • Cocoa tops out and reverses down towards the end of July
    • Coffee stays weak
    • Sugar gets choppy because of harvests in Brazil and India

    ___________________________________________

    PREVIEW FOR THE WEEK - MONDAY 01 JULY TO FRIDAY 05 JULY, 2013

    Monday's data includes the ISM Index and construction spending (10).

    Tuesday will see factory orders (10) and auto/truck sales (14). NYs Dudley will speak in Stamford, Connecticut at the "A View from the Federal Reserve Bank of New York: An Outlook for the U.S. and Regional Economies" luncheon (12).

    Wednesday's data is heavy with the weekly MBA Mortgage Index (7), Challenger Job Cuts (7:30), ADP Employment Change (8:15), initial and continuing claims, the trade balance (8:30), and ISM Services (10). U.S. equity markets will close at 1 pm ET and the U.S. Treasury market will close at 2 pm ET for Independence Day.

    Markets are closed on Thursday in observance of Independence Day.

    Friday's data is the most anticipated of the week with nonfarm payrolls, nonfarm private payrolls, the unemployment rate, hourly earnings, and the average workweek (8:30) due out.

    Earnings Highlights
    Monday: SHLM, XRTX, IRET
    Tuesday: AYI, STZ, GBX
    Wednesday: ISCA
    Thursday: Markets are closed in observance of Independence Day
    Friday: None Scheduled

    Economic Events
    Monday:
    10:00 ISM Index
    10:00 Construction Spending
    Tuesday:
    10:00 Factory Orders
    14:00 Auto Sales
    14:00 Truck Sales
    Wednesday:
    07:00 MBA Mortgage Index
    07:30 Challenger Job Cuts
    08:15 ADP Employment Change
    08:30 Trade Balance
    10:00 ISM Services
    10:30 Crude Inventories
    12:00 Natural Gas Inventories
    Thursday:
    Markets are closed in observance of Independence Day
    Friday:
    08:30 Initial Claims
    08:30 Continuing Claims
    08:30 Nonfarm Payrolls
    08:30 Nonfarm Private Payrolls
    08:30 Unemployment Rate
    08:30 Hourly Earnings
    08:30 Average Workweek

    Conferences and Shareholder/Analyst Meetings of Interest
    Monday
    • Eurozone PMI & Inflation Data (released overnight)
    • Goldman Sachs EEMEA One-on-One Conference
      Scheduled to appear: CETV
    • SandRidge Energy (SD) annual meeting
    Tuesday
    • QUESTnet Conference 2013
      Scheduled to appear: PKT, HPQ, CKP, JNPR, BRCD, CSCO, NTAP, FIRE, MSFT
    • US regulators plan to decide on bank capital requirements (XLF)
    • NY Fed President Bill Dudley to speak at 12:00
    Wednesday
    • Eurozone Retail Sales (released overnight)
    • Japan 30 Year Treasury Auction (results overnight)
    • US Equity Markets To Close at 13:00
    Thursday
    • Markets Closed for Fourth of July Holiday in US
    • BoE Rate Decision at 7:00
    • ECB Rate Decision at 7:45 followed by Mario Draghi Press Conference at 8:30
    Friday
    • Japan Leading Indicators (released overnight)
    • Germany Factory Orders (released overnight)

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Friday 28 June, 2013 View Post
    That's three straight sessions where the market made a big jump up at the open and practically went no where thereafter. At least on Wednesday, the market made a fairly decent rally in the afternoon but Thursday's session was a poor excuse for calling it an up-day. This is, again, possibly portfolio pumping and it would seem like the fund managers have changed their tactic - instead of pumping at the close, it all happens before the open.
    With the first day of July being extremely bullish, we might not get consecutive DFDMs on NASDAQ. The next two days (Tuesday and Wednesday) are supposed to be bearish but Wednesday is the eve of a major holiday - Independence day - and is usually bullish. With tradition conflicting with historical statistics, I am going to say that we'll go down on Monday and then rally into the holiday then close out the week in bearish fashion because I am expecting Non-Farm Payrolls to disappoint.

    Direction for Monday 01 July, 2013; Down

    Direction for the week Monday 01 July to Friday 05 July, 2013; Down

    2013 Daily Directional Accuracy: 51/75 (68.00%)

    2013 Weekly Directional Accuracy Year-To-Date: 08/16 (50.00%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  2. #2

    Default

    Because of my insane schedule and desperate need for rest, please be informed that there will be no DMA for Tuesday and Wednesday.

    The DMA will return on Friday 05 July, 2013 BMO.
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  3. #3

    Question Friday 05 July, 2013 - BMO

    U.S. MARKETS - WEDNESDAY JULY 03, 2013 AMC


    Quote Originally Posted by Conrad on Monday 01 July, 2013 View Post
    ... Wednesday is the eve of a major holiday - Independence day - and is usually bullish ...
    True to form and against the odds, the eve of Independence day rallied in spite of opening considerably lower.

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Equities Register Gains Despite Early Weakness

    The S&P 500 settled with a slim gain of 0.1% after shaking off its opening losses.

    Stocks began the shortened session on a lower note as global events injected a degree of uncertainty into the market.

    In Egypt, President Mohammed Morsi was removed from his post through a military coup after he failed to answer the demands of protesting crowds within the timeframe specified by the country's armed forces.

    Elsewhere, Portugal returned to headlines after two key government officials (finance minister and foreign minister) submitted their resignations. In addition, reports indicate two more ministers (agriculture and social security) are set to follow suit. Prime Minister Pedro Passos Coelho is scheduled to meet with the country's president tomorrow to discuss the ongoing situation. As a result, the country's benchmark 10-yr yield spiked 85 basis points to 7.31%. In addition Portugal's PSI index fell 5.3%. The concerns regarding the country's future spilled over to other peripheral economies. Italy's 10-yr yield climbed 11 basis points at 4.51% while Spain's benchmark 10-yr yield jumped 14 basis points to 4.70%.

    Equities fought back from their opening losses with the technology space pacing the advance. The sector ended with a gain of 0.6% as large components like Apple (AAPL 420.80, +2.31) and Oracle (ORCL 30.70, +0.60) provided notable support. Chipmakers also displayed strength as the PHLX Semiconductor Index added 0.3%.

    The discretionary sector also outperformed the broader market. Homebuilders displayed broad strength and the iShares Dow Jones US Home Construction ETF (ITB 22.42, +0.16) added 0.7%.

    On the downside, the renewed sovereign debt concerns pressured the financial sector, which ended lower by 0.4% after spending the entire session in the red.

    Although equities ended in positive territory, market breadth remained negative throughout the day as declining issues on the New York Stock Exchange outpaced advancers by a 1.6:1 ratio.

    Today's economic data was plentiful.

    The initial claims level decreased from an upwardly revised 348,000 (from 346,000) for the week ending June 15 to 343,000 for the week ending June 29. The Briefing.com consensus pegged the initial claims level at 348,000.

    For the past several weeks, the initial claims level has moved in a slight sawtooth pattern, but overall, trends have been relatively flat. Labor conditions have not materially changed over this time.

    June ADP Employment Change came in at 188,000 while the Briefing.com consensus expected a reading of 150,000. In addition, June Challenger Job Cuts rose 4.8% year-over-year to follow the prior month's decline of 41.2%.

    The June ISM Services Index was reported at 52.2, below the 54.0 forecast by the Briefing.com consensus, and down from the May reading of 53.7.

    Separately, the U.S. trade deficit widened to $45.0 billion in May from an upwardly revised $40.1 billion (from $40.3 billion) in April. That was the largest deficit since November 2012. The Briefing.com consensus expected the trade deficit to increase to $40.8 billion.

    The goods deficit rose to $63.4 billion in May from $58.4 billion while the services surplus increased to $18.4 billion from $18.3 billion.

    May exports fell by $0.5 billion from $187.6 billion in April to $187.0 billion.

    Bond and equity markets will be closed tomorrow in observance of Independence Day. On Friday, June nonfarm payrolls, nonfarm private payrolls, average workweek, hourly earnings, and the unemployment rate will all be reported at 8:30 ET.
    Sector Leaders/Laggards
    Leading Sectors: Tech (+0.56%), Consumer Discretionary (+0.50%), Telecom (+0.46%), Industrials (+0.12%), Energy (+0.03%)
    Leading Industries/ETFs : Egypt-EGPT +4.32%, Cocoa-NIB +2.99%, Heating Oil-UHN +2.19%, Gasoline-UGA +2.14%, Silver Miners-SIL +1.9%, Silver-SLV +1.83%, Poland-EPOL +1.47%, New Zealand-ENZL +0.89%, Eastern Europe-ESR +0.88%, British Pound-FXB +0.78%.

    Lagging Sectors: Materials (-0.05%), Health Care (-0.14%), Utilities (-0.15%), Consumer Staples (-0.25%), Financials (-0.34%)
    Lagging Industries/ETFs : Turkey-TUR -3.14%, Coffee-JO -1.96%, Rare Earths-REMX -1.95%, Indonesia-IDX -1.8%, South Africa-EZA -1.8%, Platinum-PPLT -1.78%, Australia-EWA -1.6%, Peru-EPU -1.53%, Coal-KOL -1.48%, MLP Index-AMJ -1.22%.

    Other Market Moving Factors:
    • Egyptian military coup underway.
    • Portuguese debt concerns weigh on the Eurozone
    • U.S. ADP report tops expectations
    • May trade deficit wider than expected
    • ISM misses expectations

    ___________________________________________

    ECONOMIC COMMENTARY
    World Economic Data from Wednesday 03 July, 2013
    • China's Non-Manufacturing PMI declined to 53.90 from 54.30
    • HSBC Services PMI ticked up to 51.3 from 51.2
    • Australia reported a trade surplus of $670 million
    • Eurozone Services PMI declined to 48.3 from 48.6 (48.6 consensus)
    • Germany's Services PMI fell to 50.4 from 51.3 (51.3 expected)
    • Great Britain's Services PMI rose to 56.9 from 54.9 (54.5 forecast)
    • French Services PMI ticked up to 47.2 from 46.5 (46.5 expected)
    • Italian Services PMI fell to 45.8 from 46.5 (47.0 consensus).
    • Spanish Services PMI rose to 47.8 from 47.3 (47.5 expected)

    U.S. Economic Data
    - MBA Mortgage Applications -11.7% versus -3.0% prior
    - June ISM Services 52.2 vs 54.0; May 53.7
    - Continuing Claims falls to 2.933 mln from 2.987 mln
    - May Trade Balance -$45.0 bln vs -$40.8 bln; Prior revised to -$40.1 bln from -$40.3 bln
    - Initial Claims 343K vs 348K; Prior revised to 348K from 346K

    June ADP Employment 188K vs 150K
    • Total U.S. Nonfarm Private Employment: 188,000
    • Goods-producing employment rose by 27,000 jobs in June, its largest increase in four months. Construction payrolls rose by 21,000 in June, its biggest gain since January, while manufacturers added 1,000 jobs following a two-month decline. The service-providing sector added 161,000 jobs in June, its largest increase since February and greater than the sector's average gain of 146,000 through the first five months of the year. Among the service industries reported by the ADP National Employment Report, trade/transportation/utilities added the most jobs with 43,000 over the month -- its strongest increase since the start of 2013. Professional/business services grew by 40,000 jobs, and financial activities added 13,000 jobs, nearly double the average monthly pace through the first five months of the year.
    • "During the month of June, the U.S. private sector added 188,000 jobs, driven by gains across all sizes of businesses, and with small companies showing the largest overall monthly increase," said Carlos A. Rodriguez, president and chief executive officer of ADP. "Most notably, the goods-producing sector added 27,000 jobs in June, a marked improvement over the decline the previous month."
    • Mark Zandi, chief economist of Moody's Analytics, said, "The job market continues to gracefully navigate through the strongly blowing fiscal headwinds. Health Care Reform does not appear to be significantly hampering job growth, at least not so far. Job gains are broad based across industries and businesses of all sizes."

    Initial Claims Trend Remain Flat
    The initial claims level decreased from an upwardly revised 348,000 (from 346,000) for the week ending June 15 to 343,000 for the week ending June 29. The Briefing.com consensus pegged the initial claims level at 348,000. For the past several weeks, the initial claims level has moved in a slight sawtooth pattern, but overall, trends have been relatively flat. Labor conditions have not materially changed over this time. In the upcoming weeks, we expect heavy volatility in the claims data from seasonal adjustment biases. Normally, motor vehicle manufacturers shut down their plants during the summer for retooling purposes, which essentially lays off thousands of workers. This year, many domestic manufacturers have announced that plants will remain open in order to satisfy the increase in auto demand. The seasonal adjustments, which take into account the layoffs from the retooling, will likely not be able to compensate for this new production schedule. The continuing claims level fell from an upwardly revised 2.987 mln (from 2.965 mln) for the week ending June 8 to 2.933 mln for the week ending June 15. The consensus expected the continuing claims level to fall to 2.955 mln.

    ISM Services Drops to Lowest Level Since February 2010
    The ISM Non-manufacturing Index dropped to 52.2 in June from 53.7 in May. That was the lowest reading in the index since February 2010, but it was the 42nd consecutive monthly expansion. The Briefing.com consensus expected the ISM Non-manufacturing Index to increase to 54.0. Business activity levels fell 4.8 points from 56.5 in May to 51.7 in June. New orders levels barely managed to stay in an expansion as the relative index fell from 56.0 in May to 50.8 in June. Order backlogs managed to eek out a small gain as that index increased to 52.0 from 51.5. In a surprise amid the decline in business activities, employment levels strengthened considerably in June. The Employment Index increased to 54.5 from 51.5 in May. That gain was in-line with the better-than-expected June ADP report.

    Trade Balance Widens on Demand for Oil and Cell Phones
    The U.S. trade deficit widened to $45.0 bln in May from an upwardly revised $40.1 bln (from $40.3 bln) in April. That was the largest deficit since November 2012. The Briefing.com consensus expected the trade deficit to increase to $40.8 bln. The goods deficit rose to $63.4 bln in May from $58.4 bln while the services surplus increased to $18.4 bln from $18.3 bln. May exports fell by $0.5 bln from $187.6 bln in April to $187.0 bln. As expected, exports of jewelry, gem diamonds, and artwork, which accounted for most of the increase in exports in April, gave back nearly its entire April gain in May falling by $1.3 bln. Exports of nonmonetary gold dropped by $1.1 bln. These declines offset a $1.4 bln increase in civilian aircraft exports and a $0.3 bln increase in automotive sales. May imports increased by $4.4 bln to $232.1 bln from $227.7 bln in April. That was the most imports since March 2012. A large portion of the gain was the result of stronger demand for petroleum-based products. Imports of these goods increased by $1.3 bln to $18.9 bln. Imports of cell phones and other household goods increased by $1.9 bln after adding nearly $1.0 bln in imports in April. Auto imports (+$0.8 bln) and capital goods (+$0.3 bln) also added to the import gain. After four consecutive months of declines, the petroleum deficit increased by $1.1 bln in May to $20.8 bln. That is the largest deficit since February.
    Natural Gas Inventory Data
    Natural gas inventory showed a build of 72 bcf vs expectations for a build of 71 bcf.
    Working gas in storage was 2,605 Bcf as of Friday, June 28, 2013, according to EIA estimates. This represents a net increase of 72 Bcf from the previous week. Stocks were 491 Bcf less than last year at this time and 30 Bcf below the 5-year average of 2,635 Bcf. In the East Region, stocks were 92 Bcf below the 5-year average following net injections of 48 Bcf. Stocks in the Producing Region were 19 Bcf above the 5-year average of 952 Bcf after a net injection of 14 Bcf. Stocks in the West Region were 43 Bcf above the 5-year average after a net addition of 10 Bcf. At 2,605 Bcf, total working gas is within the 5-year historical range.
    Crude Oil Inventory Data
    Dept of Energy reports that for the week ending June 28:
    • Crude oil inventories had a draw of 10.347 mln (consensus called for a draw of 2.3 mln)
    • Gasoline inventories had a draw of 1.719 mln (consensus called for a build of 0.7 mln)
    • Distillate inventories had a draw of 2.418 mln (consensus called for a build of 1.1 mln)
    Summary of Weekly Petroleum Data for the Week Ending June 28, 2013
    • Production: U.S. crude oil refinery inputs averaged 16.1 million barrels per day during the week ending June 28, 2013, 386 thousand barrels per day above the previous week's average. Refineries operated at 92.2 percent of their operable capacity last week. Gasoline production increased last week, averaging about 9.4 million barrels per day. Distillate fuel production decreased last week, averaging over 4.8 million barrels per day.
    • Imports: U.S. crude oil imports averaged 7.4 million barrels per day last week, down by 891 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 8.0 million barrels per day, 1.1 million barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 465 thousand barrels per day. Distillate fuel imports averaged 102 thousand barrels per day last week.
    • Inventory: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 10.3 million barrels from the previous week. At 383.8 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.7 million barrels last week and are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 2.4 million barrels last week and near the lower limit of the average range for this time of year.
    • Demand: Total products supplied over the last four-week period averaged over 18.9 million barrels per day, down by 1.3 percent from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 8.9 million barrels per day, equal to last year's level. Distillate fuel product supplied averaged 4.1 million barrels per day over the last four weeks, up by 10.6 percent from the same period last year.
    IN OTHER NEWS ...
    Despite modest decline in shipping rates yesterday, capsize shipping rates are still up 186% since June 5
    Yesterday, the Baltic Dry Index (BDI), aka drybulk shipping rates that renters pay, fell for the first time in 18 consecutive sessions, losing nine points to 1170.

    Meanwhile, capesize rates also fell yesterday for the first time in 18 consecutive sessions, losing $352/day to $14,866.

    However, capsize shipping rates are still up 186% (or $9,660/day) since June 5, 2013, at least partially driven by iron ore shipments. About a week and a half ago, news reports this week said that capesize ships hauling iron ore earned more than its costs for first time in 5 mos. That was big news.

    Moves and trends in the BDI are important because this index is an assessment in price of all the major raw materials transported by sea. Since the index measures end demand for commodities aboard bulk carriers, including coal, iron ore, steel, cement and grain, it is used as a barometer of economic demand. Also, keep in mind that the index can't be traded, so it can't be manipulated. Therefore, it should be viewed as if it's a rather accurate measure of spot shipping rates.

    Of the three main drybulk ships, the capesize is the largest compared to the panamax and supramax ships:
    • Capesize ships transport coal, iron ore, and other commodity raw materials
    • Panamax ships mainly carry coal, grain and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers
    • Supramax ships mainly carry dry cargo such as iron ore, cement, fertilizers, coal and food grains.Most drybulk shippers have different types of ships (e.g. capesize, panamax, handymax, supramax, etc)
    The companies with capesize ships include DSX, DRYS, GNK, SBLK and NM.
    Shippers that have Panamax ships are DRYS, DSX, EXM, GNK, NM, PRGN and SB.
    Shipping companies with exposure to both Capesize and Panamax ships include DRYS, DSX, EXM, NM.
    Drybulk shippers include: EXM, DRYS, SB, GNK, EGLE, SBLK, ULTR, NMM, NM, DSX, KEX, PRGN, SINO, BALT, FREE.
    ___________________________________________

    TECHNICAL UPDATE - JULY 03, 2013

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    14,988.55 +56.14 (+0.38%)
    Volume: 60,998,271
    Range: 14,858.93 - 15,025.90




    DOW completed 16 consecutive triple digit sessions with each one baring no less than 140 points or 1%. Wednesday's shortened session saw the DOW and S&P close in a Bullish Harami after swinging sideways for five sessions. This could be pointing to upside on Friday. For now, their respective 50DSMAs and DOW's psychological 15,000 resistance seems to be holding back the market. An emphatic break above those critical technicals could see the coming week break to higher highs. NASDAQ meanwhile, is nervously on the edge of completing a 20/50 Deathcross while being resisted at 3,450.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,443.67 +10.27 (+0.30%)
    Volume: 230,418,697
    Range: 3,417.88 - 3,455.42


    S&P 500 INDEX (SPX: CBOE)
    1,615.41 +1.33 (+0.08%)
    Volume: 299,429,000
    Range: 1,604.57 - 1,618.97


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Decliners outpaced Advancers (adv/dec): 1181/1828
    New highs outpaced new lows (hi/lo): 93/45

    NASDAQ :
    Advancers outpaced Decliners (adv/dec): 1348/1028
    New highs outpaced new lows (hi/lo): 172/23

    Decliners outpaced Advancers by an average 1.13 to 1 on Thursday (avg +0.25%).

    $DVOL outpaced $UVOL by 1.13 to 1 and the VIX closed lower at 16.20 -0.24 (-1.46%). Being a shortened trading session, I would read too deeply into that.

    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    Crude oil rose above the $100 mark on Wednesday 03 July for the first time since May 2012, driven by turmoil in Egypt; overall, catalysts are concerns of disruption in Suez Canal and turmoil spreading elsewhere in the Middle East. Front-month U.S. WTI crude oil (Aug contract) surged $2.69/barrel overnight to as high as 102.11/barrel (using the close of pit trade to the overnight high).

    The move is driven by the turmoil going on in Egypt, which is causing concerns in the Suez Canal. The country only produces about 0.8% of the world's oil supply, so the fear is not a disruption in oil production in Egypt. The main fear is supply disruptions in crude oil ships in the Suez Canal and, overall, what kind of turmoil could possibly spread throughout the Middle East. In total, the Middle East produces about 31% of the world's oil supply. It's been reported that dealers are watching Libya and Syria as well. Libya produces about 0.6% of the world's oil supply and Syria produces about 0.2%.

    The Suez Canal, is an artificial sea-level waterway running north to south across the Isthmus of Suez in Egypt to connect the Mediterranean Sea and the Red Sea. The canal separates the African continent from Asia, and it provides the shortest maritime route between Europe and the lands lying around the Indian and western Pacific oceans. It is one of the world's most heavily used shipping lanes. The Suez Canal is one of the most important waterways in the world. YTD, 8,312 ships have passed through the Suez Canal.

    The Suez Canal Treaties and Decrees 'A Republican Decree, Law No. 30 of 1975, The Organization of the Suez Canal Authority' Article 4, says "The SCA shall follow the suitable administrative methods that are in compliance with the commercial principles without bending itself to the governmental system and structure." And article 6, which says, "The SCA, by itself and by no one else, shall issue and keep in force the rules of navigation in the Canal and other rules and regulations that provide for a well and orderly run canal." Oil has an Egypt/Middle East premium added into the price, so the question is, where will it take oil prices.

    WTI crude oil fundamentals are bearish (we have decent supply and weakened demand), but, for now, oil has this Middle East premium, so when we pull back, we can pull back just as hard as when we went up.

    Currencies: Euro, Sterling Rally Ahead of Thursday's Rate Decisions

    The Dollar Index has seen steady selling over the course of the session with action slipping as far as 83.10 before buyers emerged. The Index has managed to climb off its worst levels of the day, but still holds a loss of 0.4% as trade holds near 83.20.
    • EURUSD is +25 pips at 1.3005 after a late morning bid ran the single currency to its best levels of the session. The pair is looking to regain the 1.3000 support level ahead of tomorrow's European Central Bank rate decision. Markets are expecting no change from the current 0.50%, but, as always, participants will be tracking the words of Mario Draghi's accompanying press conference closely.
    • GBPUSD is +135 pips at 1.5285 as trade looks to put in its best close in over a week. Today's bid has sterling testing its 100-day moving average ahead of tomorrow's Bank of England rate decision. The meeting will be the first under the leadership of Mark Carney, but expectations are low with no change expected from the current 0.50% and GBP375 bln asset purchase program.
    • USDCHF is -25 pips at .9475 as trade continues to struggle near the .9500 level. Early weakness provided a test of the .9450 level, but buyers stepped in to defend the 50-day moving average.
    • USDJPY is -70 pips at 99.95 as trade looks to retake parity. The pair saw heavy selling during the overnight session, but was unable to penetrate the 50-day moving average (99.20). Traders will continue to watch the 101.00 area as a breakout sets up a run at the May highs near 103.00. Bank of Japan Governor Kuroda will speak tonight in Tokyo.
    • AUDUSD is -55 pips .9090 with today's weakness dropping the pair to its lowest level in 33 months. Weighing on the hard currency were the weak Chinese Non-Manufacturing PMI (53.9 actual v. 54.3 expected) and a supposed sarcastic remark from Reserve Bank of Australia Governor Stevens suggesting the central bank "deliberated for a very long time, and then elected to sit with the cash rate unchanged." Australian data out tonight is limited to building approvals.
    • USDCAD is -25 pips at 1.0520 with trade slipping to its worst levels following the narrower than expected Canadian trade deficit ($0.3 bln actual v. 0.7 bln expected, $1 bln previous). Despite the weakness, action remains just off its best level in 33 months.

    Bonds: Treasuries Close on Lows
    Treasuries finished on their lows as the complex saw steady selling over the course of the session. Overnight, buyers were out in full force as worries of a slowdown in China, a coup in Egypt, and a reemergence of the European sovereign debt crisis sparked a flight to safety. The selling started in the early morning hours and picked up following the better than expected ADP Employment report (188K actual v. 150K expected). Sellers remained in control as initial (343K actual v. 348K expected) and continuing claims (2933K actual v. 2955K expected) and the trade balance (actual -$45.0B, consensus -$40.8B) crossed the wires. Some light buying emerged after the ISM Services miss (52.2 actual v. 54.0 expected), but sellers regained control and held it throughout the remainder of the session. The steady selling dropped the long bond more than a point from its overnight highs as it ended with a loss of 10/32. However, selling had the biggest impact on the belly of the curve as yields climbed by by more than 3bps, and the 10-yr yield settled at 2.501% to close at a one-week high. Curve steepening developed on today's selling as the 2-10-yr spread widened to 214.5 bps.

    Treasury Yields:
    • 2 Year Note 0.36% +0.02
    • 5 Year Note 1.42% +0.04
    • 10 Year Note 2.52% +0.04
    • 30 Year Bond 3.49% +0.02
    2/30 Spread : 313bps ( UNCH ) ... 2/10 Spread : 216bps ( +2 )

    ___________________________________________

    PREVIEW FOR FRIDAY 05 JULY, 2013

    Friday's data is the most anticipated of the week with nonfarm payrolls, nonfarm private payrolls, the unemployment rate, hourly earnings, and the average workweek (8:30) due out.

    Earnings Highlights
    None Scheduled

    Economic Events
    08:30 Initial Claims
    08:30 Continuing Claims
    08:30 Nonfarm Payrolls
    08:30 Nonfarm Private Payrolls
    08:30 Unemployment Rate
    08:30 Hourly Earnings
    08:30 Average Workweek

    Conferences and Shareholder/Analyst Meetings of Interest
    • Japan Leading Indicators (released overnight)
    • Germany Factory Orders (released overnight)

    ___________________________________________

    SUMMARY

    The Friday after Independence Day is usually bullish. Already, as I write this at 08:15am (SG), the DOW futures are up +120 points. I can't take that too seriously especially with NFP numbers due an hour before the open tonight. Since I have nothing on my board for now, I won't be making the call for Friday. Depending on how the NFP number emerge, I may start a seasonal portfolio on Monday.

    Direction for Friday 05 July, 2013; Abstain

    2013 Daily Directional Accuracy: 51/76 (67.10%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  4. #4

    Thumbs up Monday 08 July, 2013 - BMO

    U.S. MARKET RECAP - MONDAY 01 JULY TO FRIDAY 05 JULY - AMC

    Quote Originally Posted by Conrad on Monday 01 July, 2013 View Post
    With the first day of July being extremely bullish, we might not get consecutive DFDMs on NASDAQ. The next two days (Tuesday and Wednesday) are supposed to be bearish but Wednesday is the eve of a major holiday - Independence day - and is usually bullish. With tradition conflicting with historical statistics, I am going to say that we'll go down on Monday and then rally into the holiday then close out the week in bearish fashion because I am expecting Non-Farm Payrolls to disappoint.

    Direction for the week Monday 01 July to Friday 05 July, 2013; Down
    What can I say ... I got Monday to Wednesday spot on but got caught out on Friday. Non-Farms surprised again and the market seemed to like the news in spite of the overall employment picture worsening. One must wonder if the equity space rallied because the NFP news gives more hope to the idea that the Fed may need to continue easing rather than taper or tighten.

    __________________________________________________ ________

    U.S. Markets - Friday 05 July, 2013 AMC

    Quote Originally Posted by Conrad on Friday 05 July, 2013 View Post
    The Friday after Independence Day is usually bullish. Already, as I write this at 08:15am (SG), the DOW futures are up +120 points. I can't take that too seriously especially with NFP numbers due an hour before the open tonight. Since I have nothing on my board for now, I won't be making the call for Friday. Depending on how the NFP number emerge, I may start a seasonal portfolio on Monday.

    Direction for Friday 12 July, 2013; Abstain
    Now that we're done with the celebrations, let's get on with earnings and guidance.

    __________________________________________________ ________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Stocks Climb Despite Surge in Yields

    The major averages entered the weekend on a positive note. The S&P 500 settled higher by 1.0% as nine of ten sectors posted gains.

    Equities opened in the green after the June nonfarm payrolls report handily beat expectations (195K actual, 166K Briefing.com consensus). However, the details of the report took some shine off the headline number as individuals working part-time for economic reasons increased by 322,000, the number of discouraged workers was up by 206,000 from the year-ago period; the percentage of long-term unemployed workers (i.e. 27 weeks or longer) was still too high at 36.7%; and the U6 unemployment rate, which accounts for unemployed and underemployed workers, rose to 14.3% from 13.8%.

    Notably, the better-than-expected headline number gave investors enough reason to believe the Federal Reserve may begin modifying the pace of its asset purchases sooner rather than later. To that end, Treasuries sold off aggressively and spent the remainder of the session on their lows. The benchmark 10-yr yield jumped 22 basis points to end at 2.72%, its highest level since August 2011.

    Today's jobs report also gave a notable boost to the dollar, sending the Dollar Index to a three-year high amid all-around greenback strength. In turn, dollar strength pressured industrial and precious metals as copper futures tumbled 3.2% to $3.072 per pound while gold futures slumped 3.1% to $1212.50 per troy ounce.

    However, crude oil jumped 1.9% to end on its high at $103.19 per barrel. The energy component rallied throughout the day amid ongoing clashes between the Egyptian army and pro-Morsi crowds following the removal of the former President.

    Stocks slid from their morning highs as rate-sensitive sectors weighed on the broader market. The S&P briefly dipped into the red one hour into the session before staging a reversal amid thin volume. The benchmark average managed to close above its 50-day moving average after its previous three attempts were rejected sternly.

    The jump in yields contributed to weakness in the utilities sector, which ended lower by 0.5% after spending the entire day in negative territory. Two other rate-sensitive groups, consumer staples (+0.2%) and telecom services (+0.5%) spent some time in the red, but rallied into the close.

    Higher rates also exerted pressure on homebuilders and real estate investment trusts. Lennar (LEN 33.93, -1.42) and DR Horton (DHI 20.28, -0.68) ended with respective losses of 4.0% and 3.2% while the broader iShares Dow Jones US Home Construction ETF (ITB 21.97, -0.45) fell 2.0%. Meanwhile, iShares Dow Jones US Real Estate ETF (IYR 65.86, -0.70) ended lower by 1.1%.

    On the flip side, the financial sector settled higher by 1.8% after spending the entire session atop the leaderboard.

    The industrial sector also registered a strong gain (1.5%) as transportation-related names drove the sector higher. The Dow Jones Transportation Average advanced 1.5% as all 20 components rallied.

    The health care sector (+1.3%) also finished among the leaders as biotech companies outperformed. The iShares Nasdaq Biotechnology ETF (IBB 182.22, +3.47) ended higher by 1.9%.

    Today's volume was well below average as only 625 million shares changed hands on the floor of the New York Stock Exchange. The final tally was more than 100 million shares below the 200-day average.
    Sector Leaders/Laggards
    Leading Sectors: Financials (+1.76%), Industrials (+1.50%), Health Care (+1.32%), Energy (+1.09%), Consumer Discretionary (+1.03%), Tech (+0.70%), Materials (+0.68%), Telecom (+0.48%), Consumer Staples (+0.20%)
    Leading Industries/ETFs : Clean Energy-PBW +3.14%, Egypt-EGPT +3.04%, Regional Banks-KRE +2.80%, Banks-KBE +2.63%, Biotechnology-XBI +2.38%, Financial Services-IYG +2.14%, Japan-EWJ +1.31%, Netherlands-EWN +1.19%, Italy-EWI +1.19%, Taiwan-EWT +1.14%.

    Lagging Sectors: Utilities (-0.48%)
    Lagging Industries/ETFs : Junior Gold Miners-GDXJ -5.33%, Volatility-VXX -5.27%, Silver-SLV -4.26%, 20+ Year Treasuries-TLT -3.41%, Copper-JJC -3.40%, Thailand-THD -3.13%, British Pound-FXB -2.41%, Chile-ECH -2.28%, Vietnam-VNM -2.17%, South Africa-EZA -2.09%.

    Other Market Moving Factors:
    • The European Central Bank left its key interest rate unchanged at 0.5%
    • Final reading of the first quarter Eurozone GDP pointed to a decline of 0.3%
    • The Bank of England also left its key interest rate and asset purchase program unchanged at their respective 0.5% and GBP375 billion.
    • France reported a trade deficit of EUR6.0 billion
    • Spain's industrial production decreased 1.3% year-over-year
    • German factory orders decreased 1.3% month-over-month
    • U.S. Nonfarm payrolls added 195,000 jobs in June
    • Benchmark 10-yr yield touches 2.70%, highest since August 2011

    BRIEFING.COM
    Weekly Wrap: Stocks Climb Amid Thin Holiday Volume

    This week proved to be a technical affair as the S&P 500 tested its 50-day moving average on Monday and Tuesday. In addition, the benchmark average was not able to hold above its 20-day average and closed below that level on Monday, Tuesday, and Wednesday.

    On Monday, the S&P 500 advanced 0.5% to begin the third quarter on an upbeat note. Although the S&P registered a solid gain, the index closed almost 12 points below its session high. Stocks climbed at the open, taking a cue from gains in major markets across the world. Global investors favored equities despite mixed PMI data out of China as the country's Manufacturing PMI declined to 50.10 from 50.80 (50.00 expected) and the HSBC Manufacturing PMI remained in contraction with a downtick to 48.2 from 48.3 (48.3 forecast).

    Tuesday's session saw the S&P 500 shed 0.1%. Contributing to the weakness was the situation in Portugal where the country's foreign minister resigned after the finance minister, who constructed the country's EU/IMF bailout, submitted his resignation on Monday. The resignations of two key figures put the spotlight on Prime Minister Pedro Passos Coelho, who said he does not plan to step down. The uncertainty pushed the Portuguese 10-yr yield higher by nine basis points to 6.42%.

    Wednesday's shortened session ended with a gain of 0.1% for the S&P 500. In Egypt, President Mohammed Morsi was removed from his post through a military coup after he failed to answer the demands of protesting crowds within the timeframe specified by the country's armed forces. Elsewhere, Portugal returned to headlines after reports indicated two more ministers (agriculture and social security) are set to resign. As a result, the country's benchmark 10-yr yield spiked 85 basis points to 7.31%. In addition Portugal's PSI index fell 5.3%. The concerns regarding the country's future spilled over to other peripheral economies. Italy's 10-yr yield climbed 11 basis points at 4.51% while Spain's benchmark 10-yr yield jumped 14 basis points to 4.70%. Some of the concerns were allayed the following day after Portugal's Prime Minister Pedro Passos Coelho said the ruling coalition had reached an agreement to maintain the current government.

    This week's biggest % gainers/losers
    The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).
    This week's top 20 % gainers
    Technology: ZNGA (3.43 +22.14%), ELX (7.66 +20.76%), IL (8.34 +19.47%), GNCMA (9.25 +18.47%), LEAP (7.33 +17.44%), GTAT (4.19 +15.51%)
    Services: CVC (19.2 +21.66%), EDG (7.56 +19.42%), ABFS (22.95 +17.95%)
    Healthcare: ONXX (136.03 +58.63%), CLDX (21.27 +23.67%), ALNY (37.82 +21.23%), NVAX (2.62 +20.51%), PBYI (55.76 +19.98%), DYAX (3.97 +18.94%), HALO (8.04 +18.67%), OPTR (15.59 +16.5%)
    Conglomerates: ACRX (10.29 +16.36%)
    Basic Materials: AG (10.8 +24.41%), SAND (5.72 +15.47%)

    This week's top 20 % losers
    Technology: BBRY (9.55 -35.28%), IDCC (38.62 -14.34%), OIBR (1.54 -12.92%)
    Services: NWSA (15.66 -52.73%), GOL (2.78 -13.41%), ARP (19.69 -13.34%)
    Industrial Goods: AZZ (36.5 -13.82%)
    Healthcare: ACHN (6.19 -22.32%), AMED (11 -18.89%), INSM (10.34 -13.65%), ARNA (7 -11.82%)
    Financial: NBG (3.08 -28.68%)
    Consumer Goods: MJN (69.33 -12.53%)
    Basic Materials: LINE (23.45 -33.94%), LNCO (26.64 -27.48%), ALDW (19.66 -16.35%), BBEP (15.24 -14.44%), ALJ (13.06 -11.58%), YZC (6.96 -11.29%), SID (2.47 -11.03%)
    ___________________________________________

    ECONOMIC COMMENTARY
    ECB announcement (from Thursday morning): ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.50%, 1.00% and 0.00% respectively.

    European Cental Bank President Mario Draghi Press Conference bullet pts
    • Draghi says he expects rates to remain at lower level for a while; says accommodative policy will remain for as long as necessary.
    • Draghi sees weak loan demand in businesses.
    • Draghi says price pressure will remain subdued.
    • Draghi continues call for increased efforts by EU governments on the fiscal side.
    • Draghi supports moves for banking union, urges a swift implementation.
    • Asked about BoE- Reports change of guidance by BoE and whether or not the ECB follows it; asked if will put aside the precommit barrier; Deaghi noted change in forward looking guidance.
    • ECB discussed several forms of forward guidance.
    • Expressed all key interest rates were discussed (meaning deposit rates).
    • Draghi says ECB has a subdued look for inflation; says broadbased weakness in economy leads to an easier monetary policy.
    • On OMT- says it is ready to be active; conditions are known; and it is 'as an effective back stop as ever'.
    • Easing Conditions: says extended period does not necessarily mean 12-18 months or any certain time frame.
    • Notes that todays decision was unanimous.
    • Draghi ays council has taken a significant step forward in its forward looking guidance.
    • Draghi says exchange rates is important for price stability and growth; says exchange rates are not a one way affair.
    • Asked about Portugal- says it has achieved remarkable restults; says results been significant.. says Portugal is in safe hands; will not comment on political developments.
    • Banking Union: Draghi says several action could be taken to save banks before using any sort of back stop (notes asset sales, capital raises etc)

    Bank of England Rate announcement (from Thursday morning): maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at GBP375 bln
    The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at GBP375 bln.

    Since the May Inflation Report, market interest rates have risen sharply internationally and asset prices have been volatile. In the United Kingdom, there have been further signs that a recovery is in train, although it remains weak by historical standards and a degree of slack is expected to persist for some time. Twelve-month CPI inflation rose to 2.7% in May and is set to rise further in the near term. Further out, inflation should fall back towards the 2% target as external price pressures fade and a revival in productivity growth curbs domestic cost pressures.

    At its meeting yesterday, the Committee noted that the incoming data over the past couple of months had been broadly consistent with the central outlook for output growth and inflation contained in the May Report. The significant upward movement in market interest rates would, however, weigh on that outlook; in the Committee's view, the implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy.

    The latest remit letter to the MPC from the Chancellor had requested that the Committee provide an assessment, alongside its August Inflation Report, of the case for adopting some form of forward guidance, including the possible use of intermediate thresholds. This analysis would have an important bearing on the Committee's policy discussions in August.

    In the light of these considerations, the Committee voted to maintain the size of its programme of asset purchases financed by the issuance of central bank reserves at GBP375 bln. The Committee also voted to maintain Bank Rate at 0.5%.

    U.S. Economic Data
    - June Nonfarm Payrolls 195K vs 166K; Prior revised to195 K from 175K
    - June Nonfarm Private Payrolls 202K vs 180K
    - Net Nonfarm Payroll revisions in the past two months is +70K
    - June Unemployment Rate 7.6% vs 7.6%; May 7.6%
    - June Hourly Earnings +0.4% vs +0.2%; May 0.0%
    - June Average Workweek 34.5 vs 34.5; May 34.5

    Solid Employment Report Foreshadows Retail Sales Growth
    Nonfarm payrolls added 195,000 jobs in June after adding the same amount following an upward revision (from 175,000) in May. The Briefing.com consensus expected nonfarm payrolls to add 166,000 jobs. Private payrolls were up by 202,000 jobs, down from an upwardly revised 207,000 (from 178,000) in May. The consensus expected 180,000 new private payrolls. There is no way to hide it. The employment situation improved solidly in June. Not only did payroll growth exceed expectations, but aggregate wages jumped 0.6%. That was the strongest increase in income since February and should provide enough growth to keep retail sales growth on a solid upward track. The gain in aggregate earnings was the result of a 0.4% increase in average hourly wages, which easily topped expectations of a 0.2% increase, and the average workweek remaining at 34.5 hours. As expected, the unemployment rate remained at 7.6% in June. The labor force participation rate increased to 63.5% from 63.4%, a gain of 177,000 workers. Nearly all of those new workers in the labor force found jobs in June as employment increased by 160,000. If there is one small bit of poor news, the number of employed persons working part time increased by 322,000. That means at least 162,000 workers who worked full time in May saw their hours cut back in June.
    Asian Markets Close: Nikkei +2.1%, Hang Seng +1.9%, Shanghai +0.1%
    It was a sea of green across Asia as all of the major bourses, aside from South Korea's Kospi (-0.3%) and Vietnam's Ho Chi Minh (-0.3%), finished with gains. India's Sensex registered a gain of 0.4%, but trailed behind most other regional indices after Goldman Sachs lowered its 2014 growth forecast from 6.4% to 6.0% while cutting the 2015 GDP growth estimate to 6.8% from 7.3%. Elsewhere, Japan's Nikkei led the way with a gain of 2.1% after the country's Leading Index rose to 110.5 from 107.7 (96.3 expected). In addition, Japan continued to be a net seller of foreign bonds as the latest weekly reading indicated sales in the amount of JPY965.9 billion (-JPY1.19 trillion previous). In other data of note, Australia's building approvals decreased 1.1% month-over-month (-1.5% expected, 9.5% prior) while the AIG Construction Index rose to 39.5 from 35.3. Looking at the currencies...USDCNY ticked up to 6.1925; USDINR rose to 60.395; USDJPY is weaker at 100.09; AUDUSD is higher near 0.9168.
    In Japan, the Nikkei closed +2.1% amid broad gains. Steelmakers Kobe Steel and Nisshin Steel were among the leaders with gains near 7.0%. In addition, Oki Electric and Pioneer both jumped 5.1%.

    In Hong Kong, the Hang Seng ended +1.9% as energy names led. China Coal Energy and China Shenhua Energy advanced 7.2% and 6.7%, respectively. On the downside, COSCO Pacific shed 0.6%.

    In China, the Shanghai Composite settled +0.1%. Shanghai Material Trading and Yangzhou Yaxing Motor Coach both saw gains near 10.0%. Grinm Semiconductor and Suntek Technology underperformed with losses near 6.0%.

    In India, the Sensex closed +0.4% as industrials outperformed. Jindal Steel & Power and Reliance Industries settled higher by 3.2% and 2.2%, respectively. Financials were among the laggards as ICICI Bank fell 1.1% and State Bank of China shed 0.3%.

    In Australia, the ASX settled +1.0% as Prima Biomed led with a gain of 20.8%. On the downside, Perseus Mining, Gryphon Minerals, and Rex Minerals registered losses between 9.7% and 10.4%.

    In Taiwan, the Taiex ended +1.4% as Genmont Biotech jumped 7.0%.

    In South Korea, the Kospi finished -0.3% as Samsung fell 3.8% after reporting earnings below analyst expectations.
    In other regional markets ...
    Indonesia +0.5%
    Thailand +0.7%
    Singapore +0.7%
    Vietnam -0.3%
    Malaysia +0.3%
    Philippines +0.6%.

    European Markets Update
    Key European indices trade with gains despite earlier weakness. Reviewing notable economic data, the European Central Bank left its key interest rate unchanged at 0.5%, as expected. Also of note, the final reading of the first quarter Eurozone GDP pointed to a decline of 0.3% (-0.2% expected, -0.2% prior). Following the ECB rate decision, Mario Draghi said key rates will remain at their current levels, or lower, for an extended period of time. Elsewhere, the Bank of England also left its key interest rate and asset purchase program unchanged at their respective 0.5% and GBP375 billion. In addition, Great Britain's Halifax House Price Index rose 0.6% month-over-month (0.4% expected, 0.5% prior). France reported a trade deficit of EUR6.0 billion (EUR4.7 billion expected, EUR4.5 billion prior). Spain's industrial production decreased 1.3% year-over-year (-2.2% expected, -1.5% previous). German factory orders decreased 1.3% month-over-month (1.2% expected, -2.3% previous).

    On Thursday, Portugal's Prime Minister Pedro Passos Coelho said the ruling coalition had reached an agreement to maintain the current government.

    Also of note, the International Monetary Fund has cut its 2013 GDP growth forecast for Italy to -1.8% from -1.5%. In addition, the IMF called on the ECB to engage in direct asset purchases.
    • Germany's DAX is higher by 0.2% as exporters and financials display strength. BMW and Deutsche Bank trade with respective gains of 0.5% and 1.4%. Fresenius Medical is among the laggards as it holds a loss of 1.5%.
    • In France, the CAC trades with a gain of 0.2% as BNP Paribas (+1.4%) and Societe Generale (+2.3%) provide leadership. On the downside, industrials Alstom and Lafarge display losses near 1.5%.
    • Great Britain's FTSE holds a gain of 0.7% as consumer names lead. Diageo and TUI Travel trade higher by 1.9% and 1.5%, respectively. Miners are among the laggards as Antofagasta, Glencore Xstrata, and Rio Tinto sport losses between 1.8% and 2.7%.
    European Markets Closing Prices
    UK's FTSE: -0.7%
    Germany's DAX: -2.4%
    France's CAC: -1.5%
    Spain's IBEX: -1.7%
    Portugal's PSI: -0.5%
    Italy's MIB Index: -1.7%
    Irish Ovrl Index: -1.6%
    Greece ASE General Index: + 2.3%
    IN OTHER NEWS ...
    Egypt
    Markets got the first sense of calmness out of Egypt when its military removed President Morsi. The Egyptian constitutional court took over as head of state. Reports also indicate that many members of the Muslim Brotherhood were arrested and hundreds of its members are forbidden to leave the country. Overall, the tension ended in a non-violient affair, however, the situation is still in progress.

    ECB, BOE and Portugal
    Reports suggest the Portuguese govt reached a deal to continue a coalition. Although there was no change in rates or QE, the take away from both the BOE and ECB was very dovish. The EU bourses (and US Futures) responded favorably following what is now dubbed "forward guidance" and the newest favorite central bank catch phrase of "rates will remain low for an extended period of time." Both the pound and euro fell against the USD following the policy meetings, seeing the the euro dive below 1.29 and the pound below 1.51. The weakness in the pound continue into today, dropping below the 1.50 handle for the first time since mid-March. Barclays now sees GBP/USD as low as 1.41 and EUR/USD in the neighborhood of 1.23 over the next year.

    Asia
    Asian indexes were mostly higher on Thursday. With US markets closed, the indexes took the tone of the European session yesterday. The Kospi, however was the lone loser on the back of weaker than expected guidance from Samsung. The Nikkei was caught a bid on the weakened yen. Following last night's Asian session, markets were relatively quiet. Overnight ranges were tight heading into the US Jobs' data. Metals are showing some notable weakness in the commodity complex. with Gold, Silver and Copper each down over 1.5%.

    Fitch Downgrades Egypt to 'B-'; Outlook Negative
    ___________________________________________

    TECHNICAL UPDATE

    Quote Originally Posted by Conrad on Friday 05 July, 2013 View Post
    DOW completed 16 consecutive triple digit sessions with each one baring no less than 140 points or 1%. Wednesday's shortened session saw the DOW and S&P close in a Bullish Harami after swinging sideways for five sessions. This could be pointing to upside on Friday. For now, their respective 50DSMAs and DOW's psychological 15,000 resistance seems to be holding back the market. An emphatic break above those critical technicals could see the coming week break to higher highs. NASDAQ meanwhile, is nervously on the edge of completing a 20/50 Deathcross while being resisted at 3,450.

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,135.84 +147.29 (+0.98%)
    Volume: 94,564,052
    Range: 14,971.20 - 15,137.51


    DOW has gone 18 straight triple digit sessions with the narrowest being 142 points. On Friday, it close above its psychological 15,000 and above all its major moving averages. On weekly candles, the large-cap index is back above its 10 week moving average and wearing a Closing Marubozu implying more upside in the week to come.


    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,479.38 +35.71 (+1.04%)
    Volume: 311,559,458
    Range: 3,441.78 - 3,479.46


    NASDAQ's 20/50 Death Cross is still on hold although the 20DSMA (3,419) is a point below the 50DSMA (3,420). On Friday, the tech-heavy index closed in a Hanging Man which could bring a temporary end to this bounce that started on 25 June. NASDAQ is also due for an Eighth Candle Reversal today (if you include the bullish Doji on 26 June) or tomorrow (if you exclude the 26 June Doji and Monday rallies).


    S&P 500 INDEX (SPX: CBOE)
    1,631.89 +16.48 (+1.02%)
    Volume: 422,677,000
    Range: 1,614.71 - 1,632.07


    Wave theorists have been asking if this is Wave 0 to 1 of a new upside wave or if this is still part of the A to B Wave of the downside correction. Honest answer is that it is not important because if this uptrend continues, S&P is going to get a Double Top by August which could mean that we should be defending against a possible sell-down in September and October. If that happens, it won't matter what wave we're currently on. Alternatively, we could break above 1,670 and go to higher historical highs ... which means we will need to re-draw our waves again.

    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 625 mln vs. avg. of 777
    Advancers outpaced Decliners (adv/dec): 1754/1332
    New highs outpaced new lows (hi/lo): 210/85

    NASDAQ :
    Lower than avg volume @ 1221 mln vs. avg. of 1693
    Advancers outpaced Decliners (adv/dec): 1815/660
    New highs outpaced new lows (hi/lo): 310/30

    Quote Originally Posted by Conrad on Friday 05 July, 2013 View Post
    Decliners outpaced Advancers by an average 1.13 to 1 on Thursday (avg +0.25%).

    $DVOL outpaced $UVOL by 1.13 to 1 and the VIX closed lower at 16.20 -0.24 (-1.46%). Being a shortened trading session, I would read too deeply into that.
    Advancers outpaced Decliners by an average 1.79 to 1 on lower volumes (-25.25%) on Friday (avg +1.01%).

    Volumes across the broader market were very tepid possibly because most traders were still on holiday breaks. Up volumes managed to outpace Down volumes by 20.1 to 1 but on half the usual levels that you would get for a +1% session.



    The VIX closed back down in the complacent levels five weeks after it starting showing some fear. On Friday. its closed at 14.89 -1.31 (-8.09%), its first close in the 14 handle since 30 May.



    ___________________________________________

    COMMODITIES, CURRENCIES & BONDS

    Oil Gains While Natural Gas and Metals Fall - from Briefing.com

    Commodities finished today's session on a mixed note as crude oil registered a solid gain while natural gas and precious metals posted losses.

    August crude oil saw a morning surge amid reports indicating the Egyptian army has declared a State of Emergency in the Suez province. The energy component then retreated off its highs when additional headlines indicated the Suez Canal is operating normally. However, oil resumed its uptrend shortly thereafter to close with a gain of 1.9% at $103.19/barrel. August natural gas spent the entire session in negative territory and ended the day just off its lows, down 2.0% at $3.62/MMBtu.

    NYMEX Energy Closing Prices
    Aug crude oil rose $1.95 to $103.19/barrel
    Aug natural gas fell $0.07 to $3.62/MMBtu
    Aug heating oil rose 4 cents to $2.99/gallon
    Aug RBOB gasoline rose 7 cents to $2.90/gallon

    August gold was pressured to its lows following today's jobs data, where it spent the remainder of the session before ending lower by 3.1% at $1212.50 per troy ounce. On a related note, September silver followed the same pattern and settled lower by 4.9% at $18.74 per troy ounce.

    COMEX Metals Closing Prices
    Aug gold fell $39.60 to $1212.50/ounce
    Sep silver fell $0.95 to $18.74/ounce
    Sep copper fell $0.10 to $3.07/lb

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn fell $0.11 to $4.91/bushel
    July wheat closed higher by $0.02 at $6.58/bushel
    Nov soybeans fell $0.22 to $12.28/bushel
    Aug ethanol rose $0.04 to $2.40/gallon
    Sep sugar (#16 (U.S.)) fell $0.25 to $18.55 cents/lbs

    Currencies: DXY Holds Near HoD
    The Dollar Index rallied to multi-year highs in early trade as the U.S. jobs report outpaced expectations. The headline beat, coupled with the higher revision to the prior two months and strong earnings data, has increased the tapering expectations helped the dollar break above the 84 resistance level. The DXY hit a three year high of 84.53 in reaction. The index has been able to hold near the HoD as it has been trading in a tight range between 84.35-84.50.
    • The euro has been under selling pressure in the face of the strong dollar. Adding to the weakness is the uncertainty surrounding the Greek bailout. A decision by the EU finance ministers on the next EUR 8 bln tranche is expected on Monday when the group meets.
    • The pound has recovered to hold the 1.49 level. The currency has been under selling pressure the past week and went into free fall after its Thursday Bank of England meeting.
    • The yen has slid to 101.13, its lowest level in six weeks against the dollar. Since surging to 93.95 back on June 14, the yen has lost 8.5% against the yen over the past three weeks. The Bank of Japan will be meeting next week but little is expected from the central bank. The key event remains the July 21 Upper HOuse elections although Abe's LDP is expected to win easily.

    Bonds: Closing Bond Summary from Briefing.com
    What a difference a day makes. The yield on the 10-yr Treasury note rose 22 basis points this week and 21 of those points came today. One need look no further for the change agent than the June employment report, which was stronger than expected and ignited a tapering trade that posterized the intermediate to long-end of the Treasury yield curve.

    The average change in yield from the 5-yr note to the 30-yr bond was 19 basis points. The 30-yr bond dropped more than three points in price while the benchmark 10-year note was off close to two points.

    The selling pressure started early as long-term rates were rising this morning in front of the employment report. Selling accelerated, however, when it was reported that nonfarm payrolls rose by 195,000 in June (Briefing.com consensus 166,000) and nonfarm private payrolls increased by 202,000 (Briefing.com consensus 180,000). Separately, it was indicated that upward revisions for April and May added 70,000 more jobs than were previously reported.

    A big 0.4% increase in hourly earnings and a 0.6% jump in aggregate earnings, which bodes well for future consumer spending, contributed to the market's thinking that economic activity is poised to pick up in coming months. Accordingly, it was also presumed that the Fed may now be more inclined to taper its asset purchases by the September meeting, if not sooner. That presumption also manifested itself in the US Dollar Index, which was up 1.4% today to 84.43.

    The yield on the 10-yr note is now at its highest level since August 2011. That sight weighed heavily on some of the stock market's rate-sensitive areas, like the utilities and home=building stocks, however the stock market still plowed ahead in the face of rising interest rates, aided by the out-performance of its cyclical sectors. The energy sector (+0.8%) was a relative strength leader in that regard, capitalizing on a 1.8% jump in crude futures to $103.03/bbl that coincided with concerns about growing violence in Egypt. Precious metals prices, on the other commodity hand, got clipped pretty good on the dollar's strength.

    The S&P 500 vacillated around its 50-day simple moving average (1624/1625), but there was no vacillation in the Treasury market. It got hit hard early, stayed down, and never garnered any meaningful bargain hunting interest. The front end of the curve was a pocket of relative safety today as yields were little changed up through the 2-yr note.

    What will be debated in coming days is whether the jump in long-term rates is clearly a growth deterrent or simply a reflection of improving growth in the future. For today anyway, the growth story and the tapering concerns appeared to win out as participants wanted no part of longer-dated instruments.
    Treasury Yields:
    • 2 Year Note 0.40% +0.04
    • 5 Year Note 1.60% +0.18
    • 10 Year Note 2.73% +0.21
    • 30 Year Bond 3.68% +0.19
    2/30 Spread : 328bps ( +15 ) ... 2/10 Spread : 233bps ( +17 )



    A little more than six months ago, the curve was at its lows implying that the market would weakened between May and November. Now that the curve is steepening sharply, this would be hinting at better things ahead after November. This is based on the curve's reliability to tell the future six months to a year in advance. But for the immediate few weeks, this rush out of fixed income is flooding monies into the dollar. I'd like to see volumes improve in the equity space instead of currencies as this would imply that the flood is nothing more than a flight to quality rather than an indication of greed.

    ___________________________________________

    PREVIEW FOR THE WEEK - MONDAY 08 JULY TO FRIDAY12 JULY, 2013

    Monday's data is limited to consumer credit (15).

    There is no data on Tuesday. Treasury will hold a $32 bln 3-yr note auction.

    Wednesday's data includes the weekly MBA Mortgage Index (7), wholesale inventories (10), and the FOMC minutes (14). Treasury will hold a $21 bln 10-yr reopening.

    Data remains slow on Thursday with initial and continuing claims, import/export prices (8:30), and the Treasury budget (14). Treasury will reopen $13 bln 30-yr bonds.

    Friday's data is the most anticipated of the week with PPI, core PPI (8:30), and Michigan Sentiment (9:55) due out. STL's Bullard and Philly's Plosser will give their economic outlooks at the Rocky Mountain Economic Summit in Jackson Hole, WY (14:45). SF's Williams will be in in Vancouver, British Columbia discussing "A Defense of Moderation in Monetary Policy" (17:15).

    Earnings Highlights
    Monday: AA, WDFC
    Tuesday: WWW, ADTN, HELE
    Wednesday: FDO, FAST, TXI, YUM
    Thursday: ANGO, FLOW
    Friday: INFY, JPM, WFC

    Economic Events
    Monday:
    15:00 Consumer Credit
    Tuesday:
    None Scheduled
    Wednesday:
    07:00 MBA Mortgage Index
    10:00 Wholesale Inventories
    10:30 Crude Inventories
    14:00 FOMC Minutes
    Thursday:
    08:30 Export Prices ex-ag.
    08:30 Import Prices ex-oil
    08:30 Initial Claims
    08:30 Continuing Claims
    10:30 Natural Gas Inventories
    14:00 Treasury Budget
    Friday:
    08:30 PPI
    08:30 Core PPI
    09:55 Mich Sentiment

    Conferences and Shareholder/Analyst Meetings of Interest
    Monday:
    • GTC 10th Anti-Infectives Partnering and Deal-Making Conference
      Scheduled to appear: AZN, DRTX, CBST, AZN, AZN, TTPH, BAYRY.PK, TTPH, TTPH, TSRX, NVS
    • MicroStrategy World 2013
      Scheduled to appear: MSTR
    • Germany Trade & Industrial Production Data (released overnight)
    Tuesday:
    • Piper Jaffray Catalyst Symposium: Emerging Talent in Biopharma
      Scheduled to appear: CNDO, CRIS
    • JMP Securities Healthcare Conference
      Scheduled to appear: PIP, EBS, ALNY, AVNR, CSII, CYNO, CYTK, FLML, IDIX, INSM, MNKD, MNOV, NBS, OSUR, PGNX, RPRX, TTPH, CA:TTH, TSRX, VNDA, CYCC, MDVN, BAXS, ISIS, ENTA, HZNP, DEPO, PDLI, MSTX, INSV.OB, PODD, BIOD, AGEN, TTPH, ACAD, CADX, INFI, INSY, ITMN, ASTM, ZIOP, SPPI, NVDQ, BCRX, XOMA, NEPT, NAVB, OREX, DVAX, ARRY, AUXL, THRX, SLXP, VPHM, ONXX, VVUS, GALE, SNTS, SRPT, STML, VSTM, BDSI, CMRX, ACOR, CYTX, VICL, CRIS, SGMO, RPTP, HPTX, ASTX, EXEL, BOTA, ALXA,
    • Semicon West Conference 2013
      Scheduled to appear: AMAT, ASML, BRCM, CSCO, DOW, ENTG, FCS, FEIC, FUJIY. PK, IT, IBM, INTC, JBL, KLAC, KYO, LRCX, MENT, MU, NATI, SCTY, STM, SUNE, SNPS, TXN, UNXL, UMC, NVMI, AMKR, ALTR
    Wednesday:
    • 5th Annual CEO Investor Summit 2013
      Scheduled to appear: CCMP, NANO, MKSI, ESIO, INTT, RTEC, MTSN, IVAC, UTEK, UCTT, ENTG, COHU, FORM, TSRA, ATMI
    • FOMC Minutes at 14:00
    • Ben Bernanke to give speech titled 'A Century of U.S. Central Banking: Goals, Frameworks, Accountability' at 16:10
    Thursday:
    • BOJ Decision and Kuroda Press Conference (released overnight)
    • 2013 MotionTracking Developers Conference
      Scheduled to appear: SGEN, OMER, GE, JPM, NVS, FOLD, OGXI, JPM, OGXI
    • Vitesse Semiconductor (VTSS) timing is everything seminar
    Friday:
    • Saint Louis Fed President James Bullard (voting FOMC member, recently dovish) to speak at 14:45
    • San Francisco Fed President John Williams (not a voting FOMC member, typically dovish) to speak at 17:15

    ___________________________________________

    SUMMARY

    The second week is usually bullish but can be volatile as earnings season begins. Already, the volatility and absurdness of July is taking a grip on the market - Crude Oil is above $103pb, Gold and Silver are at their lowest levels since August 2010, Wheat has fallen to last year's June levels, Corn has spectacularly collapsed to September 2010 levels and Sugar is down to June 2010 levels after a steady downtrend that started at a Double Top two years ago.

    With most major commodities at multi-year lows, a 1.4% inflation rate, improving Consumer Confidence and Consumer Spending, there is no excuse for earnings and revenues to suck in Quarter 2. The only hold back could be guidance going forward as companies tend to avoid announcing guidance in Q3 and the few who do tend to be hawkish on guidance.

    Finally, someone asked me why Oil had rallied ... was it because of inventories? or Egypt? or increased demand from manufacturing? My answer (as my answers always are) is that its a cycle; Oil always rallies from July into August.

    Happy Hunting!

    Direction for Monday 08 July, 2013; Up

    Direction for the week Monday 08 July to Friday 12 July, 2013; Up

    2013 Daily Directional Accuracy: 51/76 (67.10%)

    2013 Weekly Directional Accuracy Year-To-Date: 08/17 (47.06%)



    Don't forget to check out this month's Monthly Sector Report on Aerospace & Defense 2013.
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  5. #5

    Thumbs up Tuesday 09 July, 2013 - BMO

    U.S. MARKETS - MONDAY 08 JULY, 2013 AMC

    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    ... someone asked me why Oil had rallied ... was it because of inventories? or Egypt? or increased demand from manufacturing? My answer (as my answers always are) is that its a cycle; Oil always rallies from July into August.

    Direction for Monday 08 July, 2013; Up
    Man, that was an ugly session. Leadership was once again from defensive sectors; Utilities and Staples. But its another triple digit range session for the DOW, albeit its narrowest in the last 19 sessions. I wonder how much longer this volatility is going to last before earnings takes over. Looks like July is about to live up to its reputation for being the most volatile month of the year.

    But on a graver, more somber note, Asia is not faring well. Our markets have been mired in red for too long - Shanghai is down 20% from the high in February, Singapore is down almost 9% from the high in May, Japan may have bounced but is still down by 8.3% from its May high and Australia is still down by more than 7.5% since its May highs. With contracting data and slowing growth plaguing the region, I wonder if we're overlooking one major fact - continuing quarters of slowing growth and contracting economic data usually precede a recession. Recession is not in your charts ... its in the economy.

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Stocks Climb Despite Weakness in Technology

    The S&P 500 settled higher by 0.5% as eight of ten sectors ended in the green.

    Stocks registered the bulk of their gains in the opening minutes and the S&P 500 notched its session high within the first hour of action before spending the remainder of the day in a six point range.

    The upbeat open was aided by a strong showing in Europe where major averages overlooked disappointing German industrial production data (-1.0% actual, -0.5% expected) and rallied on indications the next tranche of Greek aid will be approved by Eurozone officials.

    While most sectors were able to hold their opening gains, technology and telecom services underperformed from the start and pressured the tech-heavy Nasdaq. Chipmakers ended broadly lower after Evercore downgraded Intel (INTC 23.18, -0.88) to Underweight' from Equal Weight.' Shares of Intel fell 3.6% while the broader PHLX Semiconductor Index slid 2.0%.

    Also of note, the largest tech component, Apple (AAPL 415.05, -2.37), shed 0.6% amid reports suggesting the company is reducing its smartphone production. Major Apple suppliers also registered losses as Broadcom (BRCM 33.37, -0.40) and Qualcomm (QCOM 59.99, -0.96) both fell near 1.4%.

    Meanwhile, the telecom services sector ended lower by 0.4% after spending the entire session in negative territory.

    While the telecom space lagged, other countercyclical sectors settled in mixed fashion. The health care sector (+0.6%) ended just ahead of the broader market; consumer staples (+1.0%) displayed relative strength; and the utilities sector (+1.4%) finished atop the leaderboard.

    With regards to cyclical groups, only technology and industrials trailed behind the S&P. The industrial sector was pressured by transportation-related names after Union Pacific (UNP 156.25, -1.23) was downgraded to Market Perform' at Avondale. The rail carrier shed 0.8% while the broader Dow Jones Transportation Average added 0.1%.

    Elsewhere, the relative strength of retailers provided support to the discretionary sector (+0.9%), and overshadowed the broad losses among homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 21.66, -0.31) slumped 1.4%.

    Treasuries were on the receiving end of some overnight safe-haven flows out of Asia with the bid continuing into the U.S. session. As a result, the benchmark 10-yr yield fell 10 basis points to 2.641%.

    According to the Federal Reserve, consumer credit increased by $19.6 billion in May. This followed the prior month's increase of $10.9 billion, and was higher than the $13.2 billion that had been broadly expected among economists polled by Briefing.com.

    There is no notable economic data scheduled to be released tomorrow.
    Sector Leaders/Laggards
    Leading Sectors: Utilities (+1.43%), Consumer Staples (+0.97%), Consumer Discretionary (+0.89%), Financials (+0.76%), Energy (+0.70%), Health Care (+0.57%), Materials (+0.56%), Industrials (+0.30%)
    Leading Industries/ETFs : Greece-GREK +3.36%, MLP Index-AMJ +3.31%, Natural Gas-UNG +2.95%, Platinum-PPLT +2.51%, Coffee-JO +2.30%, Germany-EWG +1.62%, Indian Rupee-ICN +1.49%, Utilities-XLU +1.44%, New Zealand-ENZL +1.42%, France-EWQ +1.41%.

    Lagging Sectors: Tech (-0.24%), Telecom (-0.40%)
    Lagging Industries/ETFs : Egypt-EGPT -6.07%, Volatility-VXX -4.46%, Gold Miners-GDX -2.22%, Semiconductors-SMH -2.14%, Vietnam-VNM -1.79%, Cocoa-NIB -1.63%, Thailand-THD -1.60%, U.S. Home Construction-ITB -1.41%, Turkey-TUR -1.36%, Peru-EPU -1.10%.

    Other Market Moving Factors:
    • Asian Markets fall again - Shanghai down 2.45%
    • European Markets rally - DAX up 2.45%
    • Germany reported a trade surplus of EUR14.1 billion (EUR17.5 billion expected, EUR17.5 billion prior)
    • Germany's industrial production declined 1.0% month-over-month
    • Weakness in Asian indices contributes to safe-haven U.S. Treasury buying: long-term yields retreat off last week's highs.

    Futures are higher after hours:
    DOW futures are +35.00 (+0.23%)
    S&P 500 futures are +4.50 (+0.28%)
    Nasdaq100 futures are +8.00 (+0.27%)

    Companies trading higher in after hours in reaction to earnings: WDFC +11.6%
    Companies trading higher in after hours in reaction to news:
    • TGB +1.6% (announced 21% increase in quarterly copper production at its Gibraltar mine)
    • UAL +0.3% (reports June 2013 operational performance: consolidated traffic decreased 0.6%, consolidated load factor increased 1.2 points)
    Companies trading lower in after hours in reaction to earnings: ISRG -10.7%, APU -5.2%, AA -0.4%
    Companies trading lower in after hours in reaction to news:
    • AMRN -10.8% (announced public offering of 9 mln common units; co sees normalized total Vascepa prescriptions of 18,367 for June)
    • APU -5.2% (Energy Transfer affiliate to offer 6 mln AmeriGas common units)
    • OMAB -3.9% (announced the relaunch of a global public secondary offering to sell 60 mln OMAB shares)
    • BKS -3.5% (William Lynch resigns as company CEO; Allen Lindstrom named Chief Financial Officer)
    • HME -2.2% (announced plans to offer 3.5 mln shares of common stock in an underwritten public offering)
    • IRG -1.1% (filed for $80 mln common stock offering by selling shareholders)
    • NGL -0.3% (announced public offering of 9 mln common units)

    ___________________________________________

    ECONOMIC COMMENTARY
    Japan Economic Data
    - May Trade Balance (in Yen) -906.7 bln vs -818.8 bln in Apr
    - Jun Eco Watchers Survey Current 53.0 vs 55.7 in May
    - Jun Eco Watchers Survey Outlook 53.6 vs 56.2 in May
    Germany Economic Data
    - May Trade Balance (in EUR) 13.1 bln vs 18.0 bln in Apr
    - May Exports -2.4% vs +1.4% in Apr
    - May Imoports +1.7% vs +1.2% in Apr
    Eurozone Economic Data
    - Jul Sentix Investor Confidence -12.6 vs -11.6 in Jun
    U.S. Economic Data
    - White House cuts 2013 GDP estimate to 2.0% from 2.3%
    - Consumer Credit $19.6 bln vs $13.2 bln; Prior $11.1 bln

    Consumer Credit Expands By Nearly $20 bln
    Consumer credit increased by $19.6 bln in May after increasing by a downwardly revised $10.9 bln (from $11.1 bln) in April. That was the largest increase in consumer credit since May 2012 and easily topped the Briefing.com consensus expectations of a $13.2 bln gain.Consumer credit is a volatile index and often goes through large revisions before the final numbers are released three months after the data are originally reported. It is unlikely that future revisions will show consumer credit contracted in May.Revolving credit increased by $6.6 bln in May to $856.5 bln. That was up from a $0.8 bln increase in April.Nonrevolving credit rose by $13.0 bln to $1982.8 bln in May after increasing $10.1 bln in April. Nonrevolving credit has expanded for the past 21 consecutive months and 35 out of the last 36 months.
    Asian Markets Close; Nikkei -1.4%, Hang Seng -1.3%, Shanghai -2.4%
    It was a sea of red across Asia as all of the major indices ended with losses. China's Shanghai Composite (-2.4%) was a notable underperformer despite further declines in the Shanghai Interbank Offered Rate (overnight rate -12 bps to 3.256%). Property names led equities to the downside after real estate agents in Hong Kong staged a mass protest against government property curbs. Economic data was limited to just a handful of releases. Japan reported a current account surplus of JPY0.54 trillion (JPY0.60 trillion expected, JPY0.75 trillion prior) while its adjusted current account indicated a surplus of JPY0.62 trillion (JPY0.62 trillion expected, JPY0.85 trillion previous). In addition, the country's bank lending increased 1.9% year-over-year (1.8% prior). Lastly, the Economy Watchers Current Index declined to 53.0 from 55.7 (55.6 expected). Elsewhere, Australia's ANZ Job Advertisements decreased 1.8% month-over-month (-2.5% previous). Looking at the currencies...USDCNY ticked down to 6.1338; USDINR fell to 60.757; USDJPY is stronger at 101.25; AUDUSD is higher near .9081.
    In Japan, the Nikkei closed -1.4% as growth-oriented names underperformed. Mitsui Fudosan and Nisshin Steel Holdings both lost near 4.0%. On the upside, Tokyo Electric Power gained 4.3%.

    In Hong Kong, the Hang Seng ended -1.3% amid broad weakness. Hang Lung Properties and Sino Land weighed with respective losses of 3.8% and 3.2%. Energy producer CNOOC added 0.5% to outperform the region.

    In China, the Shanghai Composite settled -2.4%. Technology names Hangzhou Silan Microelectronics and Shenzhen Kingdom Sci-Tech both lost near 10.0%.

    In India, the Sensex finished -0.9%. Tata Motors and Tata Steel settled lower by 2.8% and 1.8%, respectively. ICICI Bank also underperformed with a loss of 2.2%.

    In Australia, the ASX ended -0.7%. Ausdrill and Silver Lake Resources both lost near 9.0% while Billabong settled higher by 9.6%.

    In Taiwan, the Taiex settled -1.4% as HTC plunged 6.9% after missing sales estimates.

    In South Korea, the Kospi finished -0.9% as Kumho Industrial fell 6.8%.
    In other regional markets ...
    Indonesia -3.7%
    Thailand -2.6%
    Singapore -0.5%
    Vietnam -0.6%
    Malaysia -0.5%
    Philippines -2.8%.

    European Markets Update
    Major European indices hover near their highs after a joint EU-IMF panel issued a statement saying Greece has made important progress but remains behind in some areas of policy implementation. The Eurogroup and IMF will consider the request for review approval later this month. Regional economic data was limited. Germany reported a trade surplus of EUR14.1 billion (EUR17.5 billion expected, EUR17.5 billion prior) while the country's industrial production declined 1.0% month-over-month (-0.5% expected, 2.0% prior). Elsewhere, Eurozone Sentix Investor Confidence declined to -12.6 from -11.6 (-10.0 expected).
    • In the United Kingdom, the FTSE is higher by 1.2% as financials outperform. Barclays, Royal Bank of Scotland, and Lloyds Banking Group are all up between 2.8% and 5.4%.WM Morrison Supermarkets is among the few advancers with a loss of 0.8%.
    • France's CAC sports a gain of 1.9% as 38 of 40 components advance. Credit Agricole and Societe Generale are both up near 3.0%. On the downside, Alstom trades lower by 1.0%.
    • In Germany, the DAX trades up 2.1% with exporters in the lead. BMW is higher by 3.2% and Daimler sports a gain of 2.3%. German financials have underperformed other European banks. Commerzbank and Deutsche Bank are lower by 1.9% and 0.1%, respectively.
    European Markets Closing Prices
    UK's FTSE: + 1.2%
    Germany's DAX: + 2.1%
    France's CAC: + 1.9%
    Spain's IBEX: + 1.9%
    Portugal's PSI: + 2.3%
    Italy's MIB Index: + 1.7%
    Irish Ovrl Index: + 0.5%
    Greece ASE General Index: + 2.1%
    IN OTHER NEWS ...
    Statement by the European Commission, the ECB and the IMF on Greece
    -- Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded their review mission to Greece. The mission has reached staff-level agreement, ad referendum, with the authorities on the economic and financial policies needed to ensure the program is on track to achieve its objectives. The mission and the authorities agreed that the macroeconomic outlook remains broadly in line with program projections, with prospects for a gradual return to growth in 2014. The outlook remains uncertain, however.

    -- While important progress continues to be made, policy implementation is behind in some areas. The authorities have committed to take corrective actions to ensure delivery of the fiscal targets for 2013-14 and achieve primary balance this year.

    -- With the recapitalization of the banking sector nearly complete, the authorities have committed to further steps to safeguard financial stability, including through the sale of two bridge banks and completion of their strategy for a four-pillar banking system.

    -- The Eurogroup and the IMF's Executive Board are expected to consider the request for approval of the review in July.
    Raytheon awarded $279.4 mln Navy contract
    Co was awarded a $279,400,000 cost-plus-incentive-fee contract for developmental efforts in support of the Technology Development (TD) Phase of the Next Generation Jammer (NGJ) Program, which will replace the aging ALQ-99 tactical jamming system for integration on the EA-18G tactical aircraft. Developmental efforts will include maturation and demonstration of critical technologies, completion of the system architecture and the requirements derivation and decomposition to subsystems. Work is expected to be completed in May 2015.

    Tetra Tech EC (TTEK) awarded $100 mln U.S. Navy remedial action contract
    Co announced that its Tetra Tech EC operating unit was awarded the $100 million U.S. Navy Unrestricted Remedial Action Contract (RAC) VI for environmental remediation services at various Department of Defense installations in Alaska, Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, Washington, and other installations within the Naval Facilities Engineering Command Atlantic area of responsibility. This is the fourth consecutive time that Tetra Tech EC has been selected for this contract. The single award, indefinite delivery/indefinite quantity contract is a cost-plus award fee contract with a one-year base period and four, one-year option periods.

    FDIC to propose requirement for big banks to have common equity equal to at least 5% of assets, according to reports
    Click here for the CNBC story.
    Related tickers: JPM, WFC, MS, GS, BAC, C, USB, PNC
    EARNINGS CALL ...
    After market close
    Alcoa (AA) beats by $0.01, reports revs in-line; reaffirms FY13 global aluminum demand growth of 7%
    Reports Q2 (Jun) earnings of $0.07 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.06; revenues fell 1.9% year/year to $5.85 bln vs the $5.83 bln consensus.

    The $45 mln sequential decline was largely due to lower LME prices. Lower prices were partially offset by higher volumes, particularly in the midstream business, productivity savings, and the favorable impact of foreign exchange rates. In second quarter 2013, Alcoa's net loss included $42 mln in charges for the closing of the two Soderberg potlines at its Baie-Comeau smelter in Québec, which is part of the 460,000 metric tons of smelting capacity Alcoa has said is under review.

    "Our businesses showed remarkable operating performance in the quarter with solid free cash flow...In our value-add businesses we reached another milestone with record profitability in our downstream business while acting decisively to defy the headwinds of falling metal prices in our upstream businesses. We improved our competitive position by actively restructuring, curtailing, and closing facilities and made progress addressing legacy legal issues."

    Alcoa continues to project 7 percent global aluminum demand growth in 2013 and essentially balanced alumina and aluminum markets. Alcoa projects global growth this year across the aerospace (9-10 percent), automotive (1-4 percent), commercial transportation (3-8 percent), packaging (1-2 percent), building and construction (4-5 percent), and industrial gas turbine (3-5 percent) end markets.

    Engineered Products and Solutions Segment: After-tax operating income (ATOI) in the second quarter was $193 mln, up from $173 mln in first quarter 2013, a 12 percent improvement, and up 23 percent from $157 mln in the second quarter of 2012. Global Rolled Products Segment: ATOI in the second quarter was $79 mln compared to $81 mln in first quarter 2013 and $78 mln in second quarter 2012.

    Alcoa remains committed to being free cash flow positive in 2013. In second quarter 2013, the Company generated $228 mln in free cash flow by successfully executing against its annual financial and operational targets to maximize profitability and generate cash. Days working capital, which ultimately equates to cash, was a second quarter record low of 27 days, 6 days lower than second quarter 2012.

    WD-40 (WDFC) beats by $0.11, beats on revs; guides FY13 EPS in-line, revs in-line
    Reports Q3 (May) earnings of $0.66 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.55; revenues rose 7.0% year/year to $93.1 mln vs the $90.97 mln consensus. Co issues in-line guidance for FY13, sees EPS of $2.40-2.48 vs. $2.42 Capital IQ Consensus Estimate; sees FY13 revs of $356-370 mln vs. $359.31 mln Capital IQ Consensus Estimate. The Company expects net income of $37.6 million to $39.0 million and diluted earnings per share of $2.40 to $2.48 for fiscal year 2013 based on an estimated 15.7 million weighted average shares outstanding. Gross margin for the full year is expected to be close to 51%. The Company expects advertising and promotion expenses of 6.5% to 7.5% of net sales. This guidance is based on using average fiscal year 2012 foreign currency exchange rates.
    ___________________________________________

    TECHNICAL UPDATE

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,224.69 +88.85 (+0.59%)
    Volume: 136,823,834 from 94,564,052 the previous day
    Range: 15,151.16 - 15,262.72



    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    DOW has gone 18 straight triple digit sessions with the narrowest being 142 points. On Friday, it close above its psychological 15,000 and above all its major moving averages. On weekly candles, the large-cap index is back above its 10 week moving average and wearing a Closing Marubozu implying more upside in the week to come.
    NASDAQ's 20/50 Death Cross is still on hold although the 20DSMA (3,419) is a point below the 50DSMA (3,420). On Friday, the tech-heavy index closed in a Hanging Man which could bring a temporary end to this bounce that started on 25 June. NASDAQ is also due for an Eighth Candle Reversal today (if you include the bullish Doji on 26 June) or tomorrow (if you exclude the 26 June Doji and Monday rallies).
    S&P: Wave theorists have been asking if this is Wave 0 to 1 of a new upside wave or if this is still part of the A to B Wave of the downside correction. Honest answer is that it is not important because if this uptrend continues, S&P is going to get a Double Top by August which could mean that we should be defending against a possible sell-down in September and October. If that happens, it won't matter what wave we're currently on. Alternatively, we could break above 1,670 and go to higher historical highs ... which means we will need to re-draw our waves again.
    An Opening Marubozu on both DOW and S&P implying that the upside momentum may be compromised while NASDAQ sports a second Hanging Man in the last two sessions, also implying a compromise to the upside momentum. NASDAQ also completed its 20/50 Death Cross and joins DOW and S&P who all have their 50DSMAs above their 20DSMAs which are also above their 10DSMAs.

    For the record, DOW and S&P are still on lower highs while NASDAQ may have broken its downside trend with a higher high.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,484.83 +5.45 (+0.16%)
    Volume: 380,201,527 from 311,559,458 the previous day
    Range: 3,475.39 - 3,495.51


    S&P 500 INDEX (SPX: CBOE)
    1,640.46 +8.57 (+0.53%)
    Volume: 734,963,000 from 422,677,000 the previous day
    Range: 1,634.20 - 1,644.68


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 907 mln vs. avg. of 781
    Advancers outpaced Decliners (adv/dec): 1784/1298
    New highs outpaced new lows (hi/lo): 279/47

    NASDAQ :
    Lower than avg volume @ 1459 mln vs. avg. of 1686
    Advancers outpaced Decliners (adv/dec): 1398/1091
    New highs outpaced new lows (hi/lo): 376/17

    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    Advancers outpaced Decliners by an average 1.79 to 1 on lower volumes (-25.25%) on Friday (avg +1.01%).

    Volumes across the broader market were very tepid possibly because most traders were still on holiday breaks. Up volumes managed to outpace Down volumes by 20.1 to 1 but on half the usual levels that you would get for a +1% session. The VIX closed back down in the complacent levels five weeks after it starting showing some fear. On Friday. its closed at 14.89 -1.31 (-8.09%), its first close in the 14 handle since 30 May.
    Advancers outpaced Decliners by an average 1.33 to 1 on lower average volumes (-4.09%) on Monday (avg +0.42%).

    Volumes are still not returning fast enough from the holiday weekend. Down volumes improved by 185K but Up volumes only added 95K. Still, $UVOL did outpaced $DVOL narrowly by 1.3 to 1. The VIX closed marginally lower at 14.78 -0.11 (-0.74%) in an Inverted Hammer implying that this could be the end of this slide from fear. It also implies that it could consolidate from here on or reverse to the upside.



    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    Natural Gas Gains Over 3%

    NYMEX Energy Closing Prices
    Aug crude oil fell $0.07 to $103.12/barrel. Crude oil broke into positive territory and touched a session high of $103.57 in early afternoon action after trading as low as $102.27 in morning floor trade. However, the energy component slipped back into the red and settled 0.1% lower. Action came on reports that Libya's Sharara oilfield and an Iraqi pipeline will resume operations. In addition, reports indicated that ship traffic in Egypt's Suez Canal continued to operate at normal levels. Aug natural gas rose $0.12 to $3.74/MMBtu. Natural gas advanced to a session high of $3.76 in afternoon pit action after trading as low as $3.69 earlier in the session. It eventually settled with a 3.3% gain. Aug heating oil fell 1 cent to $2.98/gallon. Aug RBOB gasoline fell 2 cents to $2.88/gallon.

    COMEX Metals Closing Prices
    Aug gold rose $22.50 to $1235.00/ounce. Aug gold spent its entire session in positive territory despite a stronger dollar index. The yellow metal brushed a session high of $1237.40 moments after floor trade opened and spent afternoon action trading in a consolidative pattern just below that level. It eventually settled with a 1.9% gain. Sep silver rose $0.31 to $19.05/ounce. Silver also traded higher today. Although prices pulled back from a session high of $19.26 set in early morning action, silver managed to book a 1.7% gain. Sep copper rose $0.03 to $3.10/lb.

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn rose 10 cents to $5.01/bushel
    Sep wheat rose 3 cents to $6.63/bushel
    Nov soybeans rose 24 cents to $12.52/bushel
    Aug ethanol rose 1 cent to $2.41/gallon
    Sep sugar (#16 (U.S.)) settled unchanged at 18.55 cents/lbs

    Currencies: DXY Slides Lower Over
    • The Dollar Index has been sliding lower over the course of the trading day. The DXY ran into resistance at the 84.60 level overnight and then proceeded to give up some of its recent gains. 845 will set up as a key support level in overnight trading. The biggest economic report tomorrow will be the JOLT jobs report. This is closely followed by the Fed's Janet Yellen who is viewed as the current favorite top take over for Ben Bernanke in 2014. In addition the latest inflation data from China and an update by the IMF on its economic outlook could be bigger drivers in the currency markets.
    • The euro was able to push to 1.2880 before running into some resistance. The single currency continued to trend higher as news that EU officials were closing in on a deal with Greece for the latest tranche of its bailout crossed wires. There is little in the way of economic data expected tomorrow in the region.
    • The pound was able to rally to the 1.4960 level before seeing some resistance. Tomorrow the region will see its latest Industrial and Manufacturing Production data as well as the Trade Balance.
    • The yen was able to push above the 101 but has been unable to make a meaningful move above that level. Market participant focus will remain on Thursday's Bank of Japan meeting but Chinese economic data over the next two days could be a driver of the yen

    Bonds: Treasuries Stage a Rebound Effort

    All things considered, it was a good day for the Treasury market today. Buyers showed up early and never let sellers have their way. Instead, there was a steady bid throughout the session that saw longer-dated instruments close at, or near, their best levels of the day.

    Today's buying interest was spread across the curve, but it was the intermediate to long end of the curve that shined. Then again, it was that section of the curve that had the biggest shiner coming off Friday's employment report smackdown. In any event, Treasuries got up off the mat today, aided by some bottom-fishing interest, some safe-haven buying in the face of large losses in Asia's equity markets, and some supportive remarks from ECB President Draghi, who echoed the view of several Fed officials that higher rates would not be warranted given the prevailing economic conditions in large parts of the world.

    The benchmark 10-yr note slipped 10 basis points off its highest levels in two years and settled at 2.65%. The US Dollar Index, meanwhile, jumped 1.1% to 84.18 in a further sign of some safe-haven buying.

    There wasn't much economic data for participants to chew on as the lone report today - the May Consumer Credit report - wasn't released until 3:00 p.m. ET. That report was better than expected in that consumer credit expanded by $19.6 bln in May (Briefing.com consensus $13.2 bln). That was the largest increase in consumer credit since May 2012 and it was driven by a $13.0 bln increase in nonrevolving credit.The Treasury market took the consumer credit data in stride, holding fast to its rebound bid.

    There aren't any economic releases out of the US on Tuesday, but there will be a $32 bln 3-yr note auction to digest. In turn, the Treasury market could be responsive to the second quarter earnings report out of Alcoa (AA) tonight and specifically what the aluminum maker says about the global demand outlook. The rush of earnings reporting will pick up next week and the guidance that is offered could help dictate whether the Treasury market can continue today's rebound effort or succumb to renewed selling interest that is linked to improving expectations about the growth outlook.

    On a related note, Goldman Sachs said in a recent research note that it expects the 10-yr yield to enter 2014 in the 2.75-3.00% range and to climb to 4.00% by 2016. A lot can, and will, happen between now and then, but the forecast suggests today's recovery effort wasn't made to last.

    Treasury Yields:
    • 2 Year Note 0.37% -0.03
    • 5 Year Note 1.51% -0.09
    • 10 Year Note 2.65% -0.08
    • 30 Year Bond 3.63% -0.05
    2/30 Spread : 326bps ( -2 ) ... 2/10 Spread : 228bps ( -5 )

    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    A little more than six months ago, the curve was at its lows implying that the market would weakened between May and November. Now that the curve is steepening sharply, this would be hinting at better things ahead after November. This is based on the curve's reliability to tell the future six months to a year in advance. But for the immediate few weeks, this rush out of fixed income is flooding monies into the dollar. I'd like to see volumes improve in the equity space instead of currencies as this would imply that the flood is nothing more than a flight to quality rather than an indication of greed.
    Bonds are becoming rather irrational lately. Now the yields fall simply because of safe-haven buying in fear of foreign (Asian) markets' weakness and in preparation of the IMF's World Economic Outlook (which is touted to be hawkish). ECB's Draghi also hinted that higher rates may not be necessary given the state of the global economy, which was in contrast to what Bernanke had proposed for the U.S. last month. The drop in yields were also partly because of bottom fishing.

    ___________________________________________

    PREVIEW FOR TUESDAY 09 JULY, 2013

    There is no data on Tuesday. Treasury will hold a $32 bln 3-yr note auction.

    Earnings Highlights
    BMO: HITK, MHR, WWW
    AMC: ADTN, HELE

    Economic Events
    None Scheduled

    Conferences and Shareholder/Analyst Meetings of Interest
    • Piper Jaffray Catalyst Symposium: Emerging Talent in Biopharma
      Scheduled to appear: CNDO, CRIS
    • JMP Securities Healthcare Conference
      Scheduled to appear: PIP, EBS, ALNY, AVNR, CSII, CYNO, CYTK, FLML, IDIX, INSM, MNKD, MNOV, NBS, OSUR, PGNX, RPRX, TTPH, CA:TTH, TSRX, VNDA, CYCC, MDVN, BAXS, ISIS, ENTA, HZNP, DEPO, PDLI, MSTX, INSV.OB, PODD, BIOD, AGEN, TTPH, ACAD, CADX, INFI, INSY, ITMN, ASTM, ZIOP, SPPI, NVDQ, BCRX, XOMA, NEPT, NAVB, OREX, DVAX, ARRY, AUXL, THRX, SLXP, VPHM, ONXX, VVUS, GALE, SNTS, SRPT, STML, VSTM, BDSI, CMRX, ACOR, CYTX, VICL, CRIS, SGMO, RPTP, HPTX, ASTX, EXEL, BOTA, ALXA,
    • Semicon West Conference 2013
      Scheduled to appear: AMAT, ASML, BRCM, CSCO, DOW, ENTG, FCS, FEIC, FUJIY. PK, IT, IBM, INTC, JBL, KLAC, KYO, LRCX, MENT, MU, NATI, SCTY, STM, SUNE, SNPS, TXN, UNXL, UMC, NVMI, AMKR, ALTR

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    One must wonder if the equity space rallied because the NFP news gives more hope to the idea that the Fed may need to continue easing rather than taper or tighten.

    Now that we're done with the celebrations, let's get on with earnings and guidance.
    With AA's earnings not doing much in the after-hours and no data to spur the market, I reckon the buying will continue on Tuesday albeit in muted fashion.

    Direction for Tuesday 09 July, 2013; Up

    2013 Daily Directional Accuracy: 52/77 (67.53%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  6. #6

    Thumbs down Tuesday 09 July, 2013 - BMO

    U.S. MARKETS - TUESDAY 09 JULY, 2013 AMC

    Quote Originally Posted by Conrad on Tuesday 09 July, 2013 View Post
    With AA's earnings not doing much in the after-hours and no data to spur the market, I reckon the buying will continue on Tuesday albeit in muted fashion.

    Direction for Tuesday 09 July, 2013; Up
    This was a convincing session by the bulls with good leadership from Materials and Industrials. Telcos lagged for the second time in two sessions. Looks like we're really going for that Double Top.

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Equities Settle on Highs

    The S&P 500 settled higher by 0.7% after seeing steady buying over the course of the session.

    Growth-oriented groups paced today's advance even after the International Monetary Fund cut its 2013 global growth outlook to 3.1% from 3.3%. The materials sector gained 1.6% as steelmakers and gold miners outperformed. The Market Vectors Steel ETF (SLX 38.51, +0.56) settled higher by 1.5% while miners displayed strength as gold futures added 0.9% to $1246.30 per ounce.

    Also of note, Dow component Alcoa (AA 7.91, -0.01) shed 0.1% after its slim earnings beat was overshadowed by a 1.9% year-over-year decline in revenue. In addition, the aluminum producer reaffirmed its global aluminum demand growth forecast at 7.0%.

    The industrial sector also finished among the leaders after FedEx (FDX 103.15, +4.32) rallied 4.4% amid speculation activist investor Bill Ackman may be building a position in the company. FedEx provided significant support to the Dow Jones Transportation Average, which jumped 2.3% as all 20 components posted gains.

    Another commodity-related sector, energy, rose 1.1% as crude oil climbed 0.8% to $104.00 per barrel.

    Stocks overcame a morning stumble after reports indicated the Federal Deposit Insurance Committee has proposed a dual standard for bank leverage ratios. Under this proposal, large banks would have to satisfy a 6.0% capital requirement while smaller banks would be subject to a ratio of 5.0%. The financial sector briefly dipped into the red before ending with a gain of 0.8%.

    Similar to yesterday, the tech sector trailed behind the broader market. Dow component IBM (IBM 191.30, -3.68) pressured the group after Goldman Sachs downgraded the stock to Neutral' from Buy.'

    On the downside, the telecom sector shed 0.2%. Meanwhile, other countercyclical groups finished mixed. Consumer staples outperformed (+0.8); utilities (+0.7%) finished in-line with the S&P; and health care (+0.3%) was pressured by disappointing preliminary results from Intuitive Surgical (ISRG 419.30, -80.78).

    Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, May wholesale inventories will cross the wires at 10:00 ET, and the Federal Open Market Committee will release the minutes from its June 19 policy meeting at 14:00 ET.

    The U.S. Treasury will auction $21 billion in 10-yr notes.
    Sector Leaders/Laggards
    Leading Sectors: Materials (+1.58%), Industrials (+1.45%), Energy (+1.07%), Financials (+0.84%), Consumer Staples (+0.81%), Utilities (+0.75%), Tech (+0.45%), Consumer Discretionary (+0.43%), Health Care (+0.25%)
    Leading Industries/ETFs : Egypt-EGPT +8.03%, Corn-CORN +4.01%, U.S. Home Construction-ITB +3.97%, South Africa-EZA +3.02%, Grains-JJG +2.86%, Homebuilders-XHB +2.77%, Junior Gold Miners-GDXJ +2.65%, Middle East and Africa-GAF +2.14%, Australia-EWA +2.08%, Turkey-TUR +2.01%.

    Lagging Sectors: Telecom (-0.17%)
    Lagging Industries/ETFs : Greece-GREK -2.42%, Volatility-VXX -2.03%, Natural Gas-UNG -1.55%, Poland-EPOL -1.4%, Copper-JJC -1.34%, Swiss Franc-FXF -0.97%, Coffee-JO -0.89%, Indonesia-IDX -0.85%, Peru-EPU -0.71%, Base Metals-DBB -0.67%.

    Other Market Moving Factors:
    • China's hotter-than-expected inflation data suggests PBoC will refrain from system-wide liquidity injections: precious metals rising.
    • Alcoa (AA) beats EPS estimates; reaffirms global aluminum demand growth forecast at 7%; reports 1.9% year-over-year revenue decline.
    • Regulators propose dual standard for bank leverage ratios (6% for large banks).

    Futures are lower at 22:30 EST:
    DOW futures are -12.00 (-0.08%)
    S&P 500 futures are -2.00 (-0.12%)
    Nasdaq100 futures are -1.50(-0.05%)

    Companies trading higher in after hours in reaction to earnings: NUS +13.0%, HELE +3.0%, FC +0.7%
    Companies trading higher in after hours in reaction to news:
    • ASTI +16.7% (to build new manufacturing plant in Suqian of Jiangsu Province, China with funding from the Suqian Government in a Joint Venture)
    • ZN +3.1% (reported that the Israeli Petroleum Commissioner has awarded the company a one-year extension on its Asher-Menashe petroleum exploration license in Northern Israel)
    • CLF +0.7% (announces CEO succession plan; also announces retirement of EVP Global Ops Laurie Brlas)
    • CMI +0.6% (increased quarterly dividend 25% to $0625 from $0.50 per share)
    • FAST +0.5% (announced third quarter dividend of $0.25, up from $0.20 paid in second quarter)
    Companies trading lower in after hours in reaction to earnings: FLY -6.8%, NBR -6.0%, QTM -0.7%
    Companies trading lower in after hours in reaction to news:
    • KYN -4.8% (announced public offering of 5,750,000 shares of common stock)
    • RH -1.4% (announced launch of follow-on offering of 12 mln shares of common stock)
    • BEN -0.6% (announced June 30, 2013 AUM of $815.0 bln vs $846.5 bln in prior month and $707.1 bln in prior year)
    • NGL -0.6% (priced public offering of 9 mln common units at $29.00 per unit)
    • AIG -0.2% (co said it welcomed determination that co should be supervised by the Federal Reserve Board)

    ___________________________________________

    ECONOMIC COMMENTARY
    China Economic Data
    - Jun CPI +2.7% vs +2.1% in Jun 2012
    - Jun PPI -2.7% vs -2.9% in Jun 2012
    Australia Economic Data
    - Jun NAB Business Conf 0 vs -1 in May
    - Jun NAB Business Conditions -8 vs -4 in May
    Japan Economic Data
    - Jun M3 +3.0% vs +2.8% in Jun 2012
    - Jun prelim Machine Tool Orders -12.4% vs -7.4% in Jun 2012
    UK Economic Data
    - May Industrial Prod -2.3% vs -1.4% in May 2012
    - May Manuf Prod -2.9% vs -0.9% in May 2012
    - May Trade Balance (in GBP) -2435 vs -2073 in Apr
    Asian Markets Close; Nikkei +2.6%, Hang Seng +0.5%, Shanghai +0.4%
    It was a sea of green across Asia as all of the major averages, aside from Indonesia's Jakarta Composite (-0.7%) and Thailand's SET (-0.4%), ended with gains. Japan's Nikkei (+2.6%) was the leader, and China's Shanghai Composite (+0.4%) managed to post gains despite the hotter than anticipated Chinese CPI (2.7% YoY actual v. 2.5% YoY expected) and a State researcher suggesting Q2 GDP might be below the 7.5% target. Data from the rest of the region saw Australian NAB Business Confidence tick up to 0 (-1 previous) and Taiwan's trade surplus narrow to TWD94.6 bln (TWD96 bln previous). Looking at the currencies...USDCNY slipped to 6.1295; USDINR fell to 60.15; USDJPY is stronger at 101.10; AUDUSD is higher near .9165.
    In Japan, the Nikkei closed +2.6% as shares benefited from the weak yen. Financials and real estate shares posted strong gains as Nomura Holdings and Mitsui Fudosan added 3.4% and 3.7% respectively. Exporters also advanced with Toyota Motor adding 2.6% Komatsu jumping 3.5%. Click here to see a daily Nikkei chart.

    In Hong Kong, the Hang Seng finished +0.5% amid a quiet trade. Insurer AIA was among the leaders, posting a 2% advance. Meanwhile, gaming stocks lagged as Sands China and Galaxy Entertainment shed 1.1% and 3.8% respectively.

    In China, the Shanghai Composite settled +0.4% despite today's inflation data. Sinopec surged 4.6% to lead the way, accounting for roughly a third of the index's gain. Elsewhere, property stocks were pressured with China Vanke giving up 3.4%.

    In India, the Sensex closed +0.6% as recently beaten down shares paced the advance. Heavyweight Reliance Industries gained 0.9% and HDFC Bank rallied 1.5%. Elsewhere, traders moved into shares of Infosys, which added 1.2% ahead of its earnings.

    In Australia, the ASX finished +1.5% to close at a one-month high. Miners and financials were among the leaders with BHP Billiton and Westpac both adding 2.1% to pace their sectors' advances.

    In Taiwan, the Taiex settled +1.1% as Formosa Petrochemical gained 2.2%.

    In South Korea, the Kospi closed +0.7% as Asiana Airlines added 1.1%.
    In other regional markets ...
    Indonesia -0.7%
    Thailand -0.4%
    Philippines +0.1%
    Malaysia +0.2%
    Vietnam +0.6%
    Singapore +0.7%

    European Markets Update
    Major European indices hover near their highs amid generally quiet action. In Portugal, deputy Prime Minister Paulo Portas, who rejoined government after resigning from his post as foreign minister, said conditions for political stability as well as conditions for meeting terms of the bailout agreement are in place. Regional economic data was limited. Great Britain's industrial production was unchanged month-over-month (0.2% consensus, -0.1% previous) while the year-over-year reading declined 2.3% (-1.5% expected, -1.4% prior). In addition, manufacturing production declined 0.8% month-over-month (0.3% expected, -0.2% previous) while the year-over-year reading posted a decrease of 2.9% (-1.6% expected, -0.9% prior). Lastly, the country's trade deficit came in at GBP8.49 billion (GBP8.47 billion deficit expected, GBP8.43 billion prior). Elsewhere, France reported a budget deficit of EUR72.6 billion (EUR66.8 billion previous).
    • In France, the CAC is higher by 0.5%. Electricite de France leads the way with a gain of 8.1% after the government approved a household rate hike. On the downside, Credit Agricole trades lower by 1.3%.
    • Great Britain's FTSE trades up 1.0% amid broad strength. Miners are among the leaders as Anglo American, BHP Biliton, and Fresnillo all display gains between 3.0% and 3.7%.
    • In Germany, the DAX sports a gain of 1.1% as all 30 components advance. Materials producers Lanxess and K+S are higher by 3.5% and 1.7%, respectively.
    European Markets Closing Prices
    UK's FTSE: + 1.0%
    Germany's DAX: + 1.1%
    France's CAC: + 0.5%
    Spain's IBEX: 0.0%
    Portugal's PSI: 0.0%
    Italy's MIB Index: -0.1%
    Irish Ovrl Index: + 0.6%
    Greece ASE General Index: -2.3%
    IN OTHER NEWS ...
    IMF Lowers Global Growth Projections for 2013 to 3.1% from 3.3%; Lowers 2014 to 3.8% from 4.0%
    • Global growth is projected to remain subdued at slightly above 3% in 2013, the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as by a more protracted recession in the euro area. Downside risks to global growth prospects still dominate. Many emerging market and developing economies face a trade-off between macroeconomic policies to support weak activity and those to contain capital outflows.
    • Global growth increased only slightly from an annualized rate of 2.5% in 2H12 to 2.75% in 1Q13, instead of accelerating further as expected at the time of the April 2013 WEO. The under performance was due to three factors
      1) growth continued to disappoint in major emerging market economies, reflecting, to varying degrees, infrastructure bottlenecks and other capacity constraints, slower external demand growth, lower commodity prices, financial stability concerns, and, in some cases, weaker policy support.
      2) the recession in the euro area was deeper than expected, as low demand, depressed confidence, and weak balance sheets interacted to exacerbate the effects on growth and the impact of tight fiscal and financial conditions.
      3) the U.S. economy expanded at a weaker pace, as stronger fiscal contraction weighed on improving private demand. By contrast, growth was stronger than expected in Japan, driven by consumption and net exports.


    IMF Growth Forecast Notables
    • Japan (EWJ), U.K. (EWU), and Canada (EWC) were the only countries to see an upgrade to the 2013 outlook; Spain (EWP) was flat.
    • U.K. and France (EWQ) were the only two countries that did not see 2014 outlooks revised lower.
    • Russia (RSX) saw the largest cut to 2013 outlook (-0.9%).
    • Brazil (EWZ, -0.8%) and Spain (-0.7%) saw the largest cuts to 2014 forecasts.
    • China (FXI) saw both 2013 and 2014 forecasts fall below 8%.
    • Russia (-1.4%), Brazil (-1.3%), China (-0.9%), Mexico (-0.7%), Spain (-0.7%) saw the largest cumulative decline for 2013-14.
    • The best cumulative improvements were Japan (+0.2%), U.K. (+0.3%), France (-0.1%), and Italy (-0.1%)

    Italy downgraded to BBB from BBB+ at S&P -- outlook negative
    ___________________________________________

    TECHNICAL UPDATE

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,300.34 +75.65 (+0.50%)
    Volume: 109,265,860 from 136,823,834 the previous day
    Range: 15,228.46 - 15,320.42



    Quote Originally Posted by Conrad on Tuesday 09 July, 2013 View Post
    An Opening Marubozu on both DOW and S&P implying that the upside momentum may be compromised while NASDAQ sports a second Hanging Man in the last two sessions, also implying a compromise to the upside momentum. NASDAQ also completed its 20/50 Death Cross and joins DOW and S&P who all have their 50DSMAs above their 20DSMAs which are also above their 10DSMAs.

    For the record, DOW and S&P are still on lower highs while NASDAQ may have broken its downside trend with a higher high.
    NASDAQ made a new multi-year high close. You have to go back to 10 April 2000 to see a previous higher close. This sets the tech-heavy index up for a Double Top. Now that its closed with a Hanging Man, We could either get a consolidation for a reversal. Seeing that DOW and S&P have had four straight days of gains, this sets them up for a possible Fifth Candle Reversal. DOW is up against its 15,300 resistance while S&P will test its own 1,654. DOW's and S&P's 10DSMA looks ready to cross over their 20DSMA on Wednesday while NASDAQ 10DSMA has already crossed back above its 20 and 50 DSMAs.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,504.26 +19.43 (+0.56%
    Volume: 385,579,019 from 380,201,527 the previous day
    Range: 3,484.79 - 3,508.81


    S&P 500 INDEX (SPX: CBOE)
    1,652.32 +11.86 (+0.72%)
    Volume: 507,487,000 from 734,963,000 the previous day
    Range: 1,643.93 - 1,654.18


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 692 mln vs. avg. of 781
    Advancers outpaced Decliners (adv/dec): 2265/802
    New highs outpaced new lows (hi/lo): 281/37

    NASDAQ :
    Lower than avg volume @ 1566 mln vs. avg. of 1685
    Advancers outpaced Decliners (adv/dec): 1513/954
    New highs outpaced new lows (hi/lo): 310/16

    Quote Originally Posted by Conrad on Tuesday 09 July, 2013 View Post
    Advancers outpaced Decliners by an average 1.33 to 1 on lower average volumes (-4.09%) on Monday (avg +0.42%).

    Volumes are still not returning fast enough from the holiday weekend. Down volumes improved by 185K but Up volumes only added 95K. Still, $UVOL did outpaced $DVOL narrowly by 1.3 to 1. The VIX closed marginally lower at 14.78 -0.11 (-0.74%) in an Inverted Hammer implying that this could be the end of this slide from fear. It also implies that it could consolidate from here on or reverse to the upside.
    Advancers outpaced Decliners by an average 2.15 to 1 on lower average volumes (-8.43%) on Tuesday (avg +0.59%).

    Up volumes printed a marked improvement from Monday outpacing Down volumes by 3.86 to 1. The VIX closed just above the 14.25 support at 14.35 -0.43 (-2.91%) in an Inverted Crucifix Doji which could translate into more downside on Wednesday.



    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    Crude Rises Above $104/Barrel, Ends Near $103.50/Barrel

    Commodities ended the day mixed with crude oil rallying, copper and natural gas showing some weakness and precious metals posting gains.

    Crude oil rallied off its LoD and rose as high as $104.10/barrel. On the session, Aug crude rose $0.40 to $103.52/barrel. Natural gas, however, remained in the red all session and fell as low as $3.63/MMBtu. By the end of today's session, the Aug contract closed 2.2% higher at $3.66/MMBtu.

    NYMEX Energy Closing Prices
    Aug crude oil rose $0.40 to $103.52/barrel
    Aug natural gas fell $0.08 to $3.66/MMBtu
    Aug heating oil rose 1 cent to $2.99/gallon
    Aug RBOB gasoline rose 5 cents to $2.93/gallon

    Precious metals rose in today's session with Aug gold rising 0.9% to $1246.30/oz and Sept silver gaining $0.09 to $19.14/oz. Copper, however, lost $0.03 to end the day at $3.07/lb.

    COMEX Metals Closing Prices
    Aug gold rose $11.30 to $1246.30/ounce
    Sep silver rose $0.09 to $19.14/ounce
    Sep copper fell $0.03 to $3.07/lb

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn rose 22 cents to $5.23/bushel
    Sep wheat rose 13 cents to $6.76/bushel
    Nov soybeans rose 25 cents to $12.77/bushel
    Aug ethanol rose 2 cents to $2.43/gallon
    Sep sugar (#16 (U.S.)) settled $0.20 higher at 18.75 cents/lbs

    Currencies: Euro Slides to Three Month Low as S&P Downgrades Italy
    The Dollar Index remains on track to close at its best level in three years as trade presses the 84.70 level.
    • EURUSD is -95 pips at 1.2770 with trade breaking down to a three-month low after S&P downgraded Italy to BBB' from BBB+' while maintaining a negative' outlook. Today's slide has traders eyeing key support in the 1.2700/1.2750 area as a breakdown would produce a 10-month low. French industrial production will cross the wires tomorrow.
    • GBPUSD is -85 pips at 1.4860 as trade remains on track to close at its worst level since June 2010. Sterling dropped to a fresh three year low following today's NIESR GDP Estimate (0.6%), but had already been under pressure after the latest manufacturing production (-0.8% MoM actual v. 0.3% MoM expected) fell short of expectations. Should the 1.4800 area give way, a move into the 1.4400 region cannot be ruled out.
    • USDCHF is +90 pips at .9725 as trade continues to climb back towards the May highs. The pair has rallied more than 500 pips since the third week of June, and is now just more than 50 pips away from closing at its best level in three years.
    • USDJPY is +10 pips at 101.00 as action tests resistance in the vicinity. A 700 pip rally since the middle of June has trade just 200 pips off its best print in more than five and a half years. The latest Bank of Japan minutes will be released tonight along with tertiary industry activity.
    • AUDUSD is +55 pips at .9185 as action holds just off the best levels of the session. The hard currency has gained despite today's hotter than anticipated Chinese CPI (2.7% YoY actual v. 2.5% YoY expected) as trade continues to hold support in the .9100 region. Australian data is limited to Westpac Consumer Sentiment. China's trade balance is tentatively scheduled for release this evening.
    • USDCAD is -25 pips at 1.0535 with trade continuing its slide off Friday's 33-month high. A larger than anticipated Canadian housing starts (200K actual v. 189K expected) has pressured the pair, but selling has been limited.

    Bonds: Treasuries End Mixed
    Treasuries ended little changed as the complex fluctuated between gains and losses throughout the session. The lack of data made for an uninspiring trade as action was rather choppy. Today's only driver was this afternoon's $32 bln 3-yr note auction, which drew 0.719% and a somewhat disappointing 3.35x bid/cover. Indirect bidder participation was strong at 35.6% (12-auction average 26.8%), and helped offset the weak direct takedown of 13.0% (12-auction average 21.8%). Primary dealers ended up with 51.4% of the supply. The auction provoked some light buying, causing most maturities to work their way into positive territory ahead of the cash close. However, the long bond struggled to retake its flat line as light selling ran its yield up roughly 1 bp to 3.654%. The rest of the complex was firm was buying pushed yields down by as much as 2 bps. A decline of 1.5 bps dropped the 10-yr yield to 2.630%. Slight flattening along yield curve narrowed the 2-10-yr spread to 226.5 bps

    Treasury Yields:
    • 2 Year Note 0.37% UNCH
    • 5 Year Note 1.50% -0.01
    • 10 Year Note 2.65% UNCH
    • 30 Year Bond 3.64% +0.01
    2/30 Spread : 327bps ( +1 ) ... 2/10 Spread : 228bps ( UNCH )

    Quote Originally Posted by Conrad on Tuesday 09 July, 2013 View Post
    Bonds are becoming rather irrational lately. Now the yields fall simply because of safe-haven buying in fear of foreign (Asian) markets' weakness and in preparation of the IMF's World Economic Outlook (which is touted to be hawkish). ECB's Draghi also hinted that higher rates may not be necessary given the state of the global economy, which was in contrast to what Bernanke had proposed for the U.S. last month. The drop in yields were also partly because of bottom fishing.
    Status Quo. Bond traders were either confused or they ran out of ideas. Not a good thing to have while risk is bouncing up. But then again, the bond traders haven't been quite rational lately.

    ___________________________________________

    PREVIEW FOR WEDNESDAY 10 JULY, 2013

    Wednesday's data includes the weekly MBA Mortgage Index (7), wholesale inventories (10), and the FOMC minutes (14). Treasury will hold a $21 bln 10-yr reopening.

    Earnings Highlights
    BMO: TXI, YUM
    AMC: FDO, FAST, MSM

    Economic Events
    07:00 MBA Mortgage Index
    10:00 Wholesale Inventories
    10:30 Crude Inventories
    14:00 FOMC Minutes

    Conferences and Shareholder/Analyst Meetings of Interest
    • 5th Annual CEO Investor Summit 2013
      Scheduled to appear: CCMP, NANO, MKSI, ESIO, INTT, RTEC, MTSN, IVAC, UTEK, UCTT, ENTG, COHU, FORM, TSRA, ATMI
    • FOMC Minutes at 14:00
    • Ben Bernanke to give speech titled 'A Century of U.S. Central Banking: Goals, Frameworks, Accountability' at 16:10

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Tuesday 09 July, 2013 View Post
    Man, that was an ugly session. Leadership was once again from defensive sectors; Utilities and Staples. But its another triple digit range session for the DOW, albeit its narrowest in the last 19 sessions. I wonder how much longer this volatility is going to last before earnings takes over. Looks like July is about to live up to its reputation for being the most volatile month of the year ... But on a graver, more somber note, Asia is not faring well. Our markets have been mired in red for too long - Shanghai is down 20% from the high in February, Singapore is down almost 9% from the high in May, Japan may have bounced but is still down by 8.3% from its May high and Australia is still down by more than 7.5% since its May highs. With contracting data and slowing growth plaguing the region, I wonder if we're overlooking one major fact - continuing quarters of slowing growth and contracting economic data usually precede a recession. Recession is not in your charts ... its in the economy.
    With no significant data due out BMO, I reckon the market will be quite stagnant as it is due a pause in its upside proceedings. After 2pm, its a whole new ballgame but I am not expecting any new surprises from the Beige Book since most of the data are already pointing to a slow but steady recovery.

    Direction for Wednesday 10 July, 2013; Down or Flat Consolidation

    2013 Daily Directional Accuracy: 53/78 (67.95%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  7. #7

    Thumbs down Thursday 11 July, 2013 - BMO

    U.S. MARKETS - WEDNESDAY 10 JULY, 2013 AMC

    Quote Originally Posted by Conrad on Wednesday 10 July, 2013 View Post
    With no significant data due out BMO, I reckon the market will be quite stagnant as it is due a pause in its upside proceedings. After 2pm, its a whole new ballgame but I am not expecting any new surprises from the Beige Book since most of the data are already pointing to a slow but steady recovery.

    Direction for Wednesday 10 July, 2013; Down or Flat Consolidation
    This was more bearish than meets the eye. Don't let the indices fool you - the bears owned Wednesday. Healthcare, Utilities and Staples led while Financials lagged.

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Stocks End Mixed

    The major averages ended in mixed fashion as the Dow shed 0.1% while the Nasdaq added 0.5%. For its part, the S&P 500 ended flat.

    Equities held their levels into the afternoon as market participants awaited the Minutes from the June 18/19 meeting of the Federal Open Market Committee. Most notably, the Minutes indicated several members judged a reduction in asset purchases would be warranted soon.' However, the Fed will continue to look for more evidence suggesting projected acceleration of growth remains on track before tapering.

    With regard to Treasury yields, some participants voiced concern about a few institutions being ill-prepared to handle a rapid run-up in rates. In addition, other members said that a prolonged period of low interest rates would encourage investors to take on excessive credit or interest rate risk and would distort some asset prices.'

    Committee participants also stressed their desire to emphasize the distinction between decisions about slowing bond buying and future rate hikes.

    Overall, the Minutes did not provide too much fresh insight. With that in mind, the major averages returned to their earlier levels after spiking to fresh highs immediately after the Minutes crossed the wires.

    Energy and financials displayed weakness throughout the day before settling near their lows. The energy sector shed 0.6% despite the continued rise in crude oil, which added 2.4% to $106.04 per barrel. The energy component has rallied steadily since late June, and reports of a well leak off the coast of Louisiana contributed to today's strength.

    Elsewhere, major banks registered losses across the board as the financial sector settled lower by 0.6%.

    Also of note, the Dow Jones Transportation Average fell 1.0% after jumping 2.3% yesterday.

    While most cyclical groups finished in the red, the technology sector outperformed with a gain of 0.5% as most of its top components registered gains. Qualcomm (QCOM 60.46, +1.08) ended higher by 1.8% after providing leadership throughout the session.

    Countercyclical consumer staples, health care, and utilities added between 0.1% and 0.7% while the telecom services sector shed 0.4%.

    May wholesale inventories decreased 0.5% while the Briefing.com consensus expected an uptick of 0.3%. Today's report followed last month's revised decrease of 0.1%.

    Tomorrow, weekly initial claims, June import prices ex-oil, and export prices ex-agriculture will be reported at 8:30 ET. In addition, the Treasury will release its June budget at 14:00 ET.

    The U.S. Treasury will auction $13 billion in 30-yr bonds.
    Sector Leaders/Laggards
    Leading Sectors: Health Care (+0.69%), Utilities (+0.48%), Tech (+0.46%), Consumer Staples (+0.13%), Consumer Discretionary (+0.07%)
    Leading Industries/ETFs : Gasoline-UGA +2.37%, Oil-USO +1.79%, Biotechnology-XBI +1.56%, Poland-EPOL +1.55%, Rare Earths-REMX +1.47%, Nuclear Energy-NLR +1.27%, Netherlands-EWN +1.12%, Belgium-EWK +1.09%, Egypt-EGPT +1.09%, Switzerland-EWL +1.07%.

    Lagging Sectors: Industrials (-0.08%), Materials (-0.09%), Telecom (-0.40%), Energy (-0.58%), Financials (-0.63%)
    Lagging Industries/ETFs : Turkey-TUR -3.2%, Peru-EPU -2.74%, Thailand-THD -1.88%, South Africa-EZA -1.66%, Chile-ECH -1.64%, MLP Index-AMJ -1.21%, Regional Banks-KRE -1.08%, Sugar-SGG -1.05%, Banks-KBE -1.02%, Volatility-VXX -1.01%.

    Other Market Moving Factors:
    • China posts better-than-expected trade surplus on below-consensus imports and exports, sparking questions about the strength of the country's economy
    • German CPI rose 0.1% month-over-month
    • Peripheral markets pressure European indices after S&P downgrade of Italy on Tuesday to 'BBB.'
    • France reported a current account deficit of EUR4.10 billion (prior deficit of EUR2.80)
    • France industrial production decreased 0.4% month-over-month (-0.8% expected, 2.2% prior)
    • Italian industrial production rose 0.1% month-over-month (0.3% expected, -0.3% prior)
    • Wholesale inventories show unexpected decline
    • FOMC Minutes indicate several members believe a reduction in asset purchases would be warranted 'soon.'

    Futures are sharply higher at 23:35 EST:
    DOW futures are +146 (+0.96%)
    S&P 500 futures are +17.25 (+1.05%)
    Nasdaq100 futures are +29.50 (+0.98%)

    Companies trading higher in after hours in reaction to earnings: BPI +21.6%, VOXX +3.8%, NG +1.6%, DRWI +0.8%, YUM +0.5%
    Companies trading higher in after hours in reaction to news:
    • BPI +21.6% (announced its academic institution, Ashford University, has been granted initial accreditation for five years by the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges)
    • APOL +6.2% (reported that the University of Phoenix received a Final Action Letter from the HLC notifying the University that the HLC, at its meeting on June 27, reaffirmed the accreditation of the University through the 2022-2023 academic year and placed the University on Notice status for a two-year period)
    • SWHC +2.6% (increased tender offer price to $11 from $10 per share)
    • NEM +1.8% (announced Q2 attributable gold and copper production and sales: gold production was 1.167 mln oz)
    • PENN +1.1% (secured Nevada Gaming Control Board approval of the steps necessary to implement the planned separation of its operating assets from real property assets)
    Companies trading lower in after hours in reaction to earnings: PSMT -3.4%
    Companies trading lower in after hours in reaction to news:
    • MACK -8.4% (announced proposed concurrent public offerings of common stock and convertible senior notes)
    • RMTI -6.9% (co announced it will discuss top-line results from SFP Phase 3 CRUISE-1 efficacy study on a conference call tomorrow morning)
    • VTG -6.2% (announced proposed offering of $75 mln of convertible senior notes due 2043)
    • EGAS -4.7% (filed for 850k share common stock offering)

    ___________________________________________

    ECONOMIC COMMENTARY
    Australia Economic Data
    - Jul Westpac Cons Conf -0.1% vs +4.7% in Jun
    Japan Economic Data
    - May Tertiary Industry Index +1.2% vs -0.5% in Apr
    China Economic Data
    - Jun Trade Balance (in USD) 27.12 bln vs 20.42 bln in June 2012
    - Exports -3.1% vs +1.0% in Jun 2012
    - Imports -0.7% vs -0.3% in Jun 2012
    U.S. Economic Data
    - MBA Mortgage Applications -4% versus -11.7% prior
    - May Wholesale Inventories -0.5% vs +0.3%; April +0.1%

    Growth in Wholesale Sales Drives Inventories Lower
    Wholesale inventories fell 0.5% in May after declining a downwardly revised 0.1% (from +0.2%) in April. The Briefing.com consensus expected wholesale inventories to increase 0.3%.The drop in inventories, while bad for GDP growth, was likely the result of an unexpected improvement in economic conditions. Wholesale sales jumped 1.6% in May after increasing 0.7% in April. Merchant wholesalers did not have enough inventory on the shelves to support those sales increases.Durable goods inventories dropped 0.3% from large declines in metals (-1.7%), machinery (-0.7%), and miscellaneous durables (-0.4%).Nondurable goods inventories fell 0.8% in May. Most of that decline was due to a 6.0% drop in farm products and a 5.1% decline in miscellaneous nondurables.
    Crude Oil Inventory Data
    Dept of Energy reports that for the week ending July 5:
    • Crude oil inventories had a draw of 9.874 mln (consensus called for a draw of 3.15 mln)
    • Gasoline inventories had a draw of 2.634 mln (consensus called for a build of 0.6 to 1.0 mln)
    • Distillate inventories had a build of 3.038 mln (consensus called for a build of 0.7 to 1.0 mln)
    • Change in refinery utilization is at +0.2%
    Summary of Weekly Petroleum Data for the Week Ending July 5, 2013
    • Production: U.S. crude oil refinery inputs averaged 16.1 mln barrels per day (bpd) during the week ending July 5, 2013, 28 thousand bpd above the previous week's average. Refineries operated at 92.4% of their operable capacity last week. Gasoline production increased last week, averaging 9.6 mln bpd. Distillate fuel production increased last week, averaging over 5.0 mln bpd.
    • Imports: U.S. crude oil imports averaged over 7.5 mln bpd last week, up by 118 thousand bpd from the previous week. Over the last four weeks, crude oil imports averaged over 7.9 mln bpd, 1.1 mln bpd below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 493 thousand bpd. Distillate fuel imports averaged 81 thousand bpd last week.
    • Inventory: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.9 mln barrels from the previous week. At 373.9 mln barrels, U.S. crude oil inventories are near the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 2.6 mln barrels last week and are well above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 3.0 mln barrels last week and are near the lower limit of the average range for this time of year.
    • Demand: Total products supplied over the last four-week period averaged about 19.3 mln bpd, up by 1.6% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.1 mln bpd, up by 2.5% from the same period last year. Distillate fuel product supplied averaged about 4.1 mln bpd over the last four weeks, up by 12.3% from the same period last year.
    Asian Markets Close; Nikkei -0.4%, Hang Seng +1.1%, Shanghai +2.2%
    The major Asian averages ended mixed as China's Shanghai Composite (+2.2%) led and India's Sensex lagged (-0.8%). Virtually all of the gains in the Shanghai Composite came in the final hour and a half of trading as rumors surfaced the People's Bank of China was going to cut its Reserve Requirement Ratio after trade data showed China's surplus widened to $27.1 bln ($27.8 bln expected) as both imports (-0.7%) and exports (-3.1%) fell. Elsewhere, the Bank of Thailand held its key rate unchanged at 2.50%, as expected. Data from the rest of the region saw Australia's Westpac Consumer Sentiment slip 0.1% and Japan's tertiary industry activity jump 1.2% MoM (0.9% MoM expected). Looking at the currencies...USDCNY ticked up to 6.1338; USDINR fell to 59.65; USDJPY is weaker at 100.15; AUDUSD is higher near .9210.
    In Japan, the Nikkei closed -0.4% as the stronger yen weighed. Heavyweight Fast Retailing surrendered 1.2% while Sumitomo Realty & Development shed 0.9%.

    In Hong Kong, the Hang Seng finished +1.1% to close at its best level in three weeks. Commodity related names were in favor as Chalco added 0.8% and China Petrochemical surged 2.5%.

    In China, the Shanghai Composite settled +2.2% as shares rallied on hopes the People's Bank of China would ease policy. Commodity names were also in favor on the mainland as Sinopec jumped 6.5% and Jiangxi Copper climbed 5.4%. Click here to see a daily Hang Seng chart.

    In India, the Sensex closed -0.8% to post its worst close in a week. Blue chips weighed as Reliance Industries shed 2.0% and Mahindra & Mahindra gave up 2.6%.

    In Australia, the ASX finished +0.4% as shares rallied into the close. Miners were strong with Newcrest Mining gaining 2.2% to lead the way while heavyweights BHP Billiton and Rio Tinto both added 0.7%.

    In Taiwan, the Taiex settled +0.5% as Acer gained 1.3%.

    In South Korea, the Kospi closed +0.1% as Hyundai Motor tacked on 0.7%.
    In other regional markets ...
    Thailand -0.7%
    Vietnam -0.2%
    Philippines -0.3%
    Malaysia +0.1%
    Singapore +0.3%
    Indonesia +1.7%

    European Markets Update
    Key European indices hover near their lows after opening the session in positive territory. Italian banks have led European stocks lower after Standard & Poor's downgraded Italy's sovereign rating to BBB' from BBB+.' As a result, Italian 10-yr yield has jumped five basis points to 4.46%. In addition, Spain's benchmark 10-yr yield is higher by 11 basis points at 4.78%. Economic data was limited. Germany's CPI rose 0.1% month-over-month, as expected. France reported a current account deficit of EUR4.10 billion (prior deficit of EUR2.80) while the country's industrial production decreased 0.4% month-over-month (-0.8% expected, 2.2% prior). Elsewhere, Italian industrial production rose 0.1% month-over-month (0.3% expected, -0.3% prior) while the year-over-year reading indicated a decline of 4.2% (-4.7% expected, -4.7% previous).
    • Germany's DAX is lower by 0.1% with producers of basic materials leading to the downside. K+S and Lanxess trade with respective losses of 2.3% and 4.6%. On the upside, Deutsche Bank trades higher by 1.3%.
    • In France, the CAC is off by 0.1% amid broad weakness. Steelmaker Vallourec and provider of building materials Lafarge are both down near 1.5%. In addition, drug maker Sanofi trades with a loss of 1.7%.
    • Great Britain's FTSE holds a loss of 0.1% as miners weigh. Anglo American, Fresnillo, and Glencore Xstrata are all down between 1.1% and 3.1%. On the flip side, Burberry is higher by 4.8% after beating sales expectations.
    • Peripheral markets have been pressured by the Italian downgrade at S&P. Italy's MIB -0.7%, Spain's IBEX -0.3%, and Greece's ASE -2.2%.
    European Markets Closing Prices
    UK's FTSE: -0.1%
    Germany's DAX: -0.1%
    France's CAC: -0.1%
    Spain's IBEX: -0.3%
    Portugal's PSI: + 0.1%
    Italy's MIB Index: -0.7%
    Irish Ovrl Index: -0.6%
    Greece ASE General Index: -2.2%
    IN OTHER NEWS ...
    Fed releases FOMC minutes
    Discussion on rates rising
    In their discussion of financial market developments over the intermeeting period, participants weighed the extent to which the rise in market interest rates and increase in volatility reflected a reassessment of market participants' expectations for monetary policy and the extent to which it reflected growing confidence about the economic outlook. It was noted that corporate credit spreads had not widened substantially and that the stock market had posted further gains, suggesting that the higher rates reflected, at least in part, increasing confidence that moderate economic growth would be sustained.

    Several participants worried that higher mortgage rates and bond yields could slow the recovery in the housing market and restrain business expansion. However, some others commented that any adverse effects of the increase in rates on financial conditions more broadly appeared to be limited. A number of participants offered views on risks to financial stability.

    A couple of participants expressed concerns that some financial institutions might not be well positioned to weather a rapid run-up in interest rates. Two others emphasized the importance of bolstering the resilience of money market funds against disorderly outflows. And a few stated their view that a prolonged period of low interest rates would encourage investors to take on excessive credit or interest rate risk and would distort some asset prices. However, others suggested that the recent rise in rates might have reduced such incentives. While market volatility had increased of late, it was noted that the rise in measured volatility, while noticeable, occurred from a low level, and that a broad index of financial stress remained below average.

    One participant felt that the Committee should explore ways to calibrate the magnitude of the risks to financial stability so that those considerations could be more fully incorporated into deliberations on monetary policy.

    Appropriate Path
    Participants also described their views regarding the appropriate path of the Federal Reserve's balance sheet. Given their respective economic outlooks, all participants but one judged that it would be appropriate to continue purchasing both agency MBS and longer-term Treasury securities. About half of these participants indicated that it likely would be appropriate to end asset purchases late this year. Many other participants anticipated that it likely would be appropriate to continue purchases into 2014. Several participants emphasized that the asset purchase program was effective in supporting the economic expansion, that the benefits continued to exceed the costs, or that continuing purchases would be necessary to achieve a substantial improvement in the outlook for the labor market. A few participants, however, indicated that the Committee could best foster its dual objectives and limit the potential costs of the program by slowing, or stopping, its purchases at the June meeting.

    Click here for complete text.
    Fed Chairman Ben Bernanke NBER Speech
    Click here for transcript
    At Q&A asked about 'hawkish' fed: notes Fed dual mandate; says that current employment level is overstating the health of the jobs market; notes low inflation; so both say we need to be more accommodative.

    Raytheon (RTN) received an $80.5 mln production contract award from the U.S. Navy to procure Joint Standoff Weapon C-1's.

    Sprint Nextel (S) and SoftBank announce completion of merger
    Co and SoftBank announced the completion of their merger whereby SoftBank has invested approximately $21.6 billion in Sprint, consisting of approximately $16.6 billion to be distributed to Sprint stockholders and an aggregate $5 billion of new capital ($1.9 billion at closing) to strengthen Sprint's balance sheet. Sprint stockholders voted to approve the transaction at a special meeting of stockholders held on June 25, 2013.

    S&P raises Sprint Nextel Corp. (S) Rating To 'BB-' From 'B+' On Completed SoftBank And Clearwire Transactions; Outlook Stable

    Portugal president says risk of country requesting a new bailout is considerable crossing

    Tobacco: WSJ.com reporting that the EU approved the ban today
    Concerns remain with FDA decision -- expected next month. (LO, RAI, BTI, CIGX, MO)
    EARNINGS CALL ...
    Before market open
    ADTRAN (ADTN) beats by $0.02, beats on revs
    Reports Q2 (Jun) earnings of $0.21 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.19; revenues fell 11.8% year/year to $162.2 mln vs the $154.08 mln consensus.

    "Continuing improvement in our Internetworking and Broadband Access product areas led revenues which exceeded estimates for the quarter. During the quarter we benefited from market share gains, the geographic expansion we began last year and an improved spending environment."

    Family Dollar (FDO) beats by $0.03, reports revs in-line; guides Q4 EPS in-line
    Reports Q3 (May) earnings of $1.05 per share, $0.03 better than the Capital IQ Consensus Estimate of $1.02; revenues rose 9.0% year/year to $2.57 bln vs the $2.57 bln consensus. Comparable store sales in the quarter increased 2.9%. The increase in comparable store sales was a result of an increase in the average customer transaction value and higher customer traffic. Sales were strongest in the Consumables category, which increased 14.8% during the quarter, driven primarily by strong growth in food, health and beauty aids, and tobacco.

    Gross profit for the quarter increased 5.6% to $892.5 million, or 34.7% of net sales, compared to $845.3 million, or 35.8% of net sales, in the third quarter of fiscal 2012. As a percentage of sales, the impact of stronger sales of lower-margin consumables, increased inventory shrinkage and higher markdowns was partially offset by higher purchase markups and lower freight expense.

    Co issues guidance for Q4, guides EPS to $0.82-0.87 from $0.85-0.95 vs. $0.85 Capital IQ Consensus. In Q4, the co expects to anniversary many of the sales-driving initiatives that were launched in the fourth quarter of fiscal 2012. Additionally, the co believes that sales in more discretionary categories will continue to be pressured. Based on June sales trends, the co expects that comparable store sales in the fourth quarter of fiscal 2013 will increase around 2%. The co also expects that gross margin pressure and SG&A leverage in the quarter will be minimal.

    Co narrows FY13 EPS guidance to $3.77-3.82 from $3.73-3.93 vs. the $3.77 consensus; reaffirms comps +3-4%.
    After market close
    YUM! Brands (YUM) beats by $0.02, reports revs in-line; reaffirms FY13 EPS decline; June China comps improve
    Reports Q2 (Jun) adj. earnings of $0.56 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.54; revenues fell 8.3% year/year to $2.9 bln vs the $2.93 bln consensus. Same-store sales declined 20% in China. Same-store sales grew 1% at YRI and 1% in the U.S. June same-store sales declined an estimated 10% for the China Division, improving from a 19% decline in May. This included an estimated decline of 13% at KFC and 6% growth at Pizza Hut Casual Dining. June sales are included in the China Division's third-quarter results.

    Worldwide restaurant margin declined 2.7 percentage points to 12.5%, including a decline of 5.0 percentage points in China. Restaurant margin increased 0.8 percentage points at YRI and 0.8 percentage points in the U.S.

    Co's estimated mid-single-digit full-year EPS decline YoY, excluding Special Items, remains unchanged. China Division same-store sales are expected to continue to recover over the course of the year and be positive in Q4.

    "We expect a strong bounce-back year in 2014 as we continue to aggressively invest behind our core strategies and capitalize on the enormous growth opportunities we see around the world... Second-quarter EPS declined 16%, which was generally in line with our expectations. KFC sales and profits in China were significantly impacted by intense media surrounding Avian flu, as well as the residual effect of the December poultry supply incident. The good news is that China sales are recovering as expected. The extensive media surrounding Avian flu in China has subsided and same-store sales at KFC are clearly improving."

    YTD through July 9, 2013, co repurchased 5.7 mln shares totaling $390 mln at an average price of $68.
    ___________________________________________

    TECHNICAL UPDATE

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,291.66 -8.68 (-0.06%)
    Volume: 105,045,250 from 109,265,860 the previous day
    Range: 15,258.89 - 15,348.95



    Quote Originally Posted by Conrad on Wednesday 10 July, 2013 View Post
    NASDAQ made a new multi-year high close. You have to go back to 10 April 2000 to see a previous higher close. This sets the tech-heavy index up for a Double Top. Now that its closed with a Hanging Man, We could either get a consolidation for a reversal. Seeing that DOW and S&P have had four straight days of gains, this sets them up for a possible Fifth Candle Reversal. DOW is up against its 15,300 resistance while S&P will test its own 1,654. DOW's and S&P's 10DSMA looks ready to cross over their 20DSMA on Wednesday while NASDAQ 10DSMA has already crossed back above its 20 and 50 DSMAs.
    As expected, DOW stalled at 15,300 on a Fifth. This sets up a consolidation or reversal (into an Evening Star) for Thursday. NASDAQ broke to a new multi-year high and sets up a possible Third Candle Reversal and a Double Top.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,520.76 +16.50 (+0.47%)
    Volume: 372,419,079 from 385,579,019 the previous day
    Range: 3,502.00 - 3,522.99


    S&P 500 INDEX (SPX: CBOE)
    1,652.62 +0.30 (+0.02%)
    Volume: 498,099,000 from 507,487,000 the previous day
    Range: 1,647.66 - 1,657.92


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 670 mln vs. avg. of 782
    Advancers outpaced Decliners (adv/dec): 1618/1427
    New highs outpaced new lows (hi/lo): 189/37

    NASDAQ :
    Lower than avg volume @ 1509 mln vs. avg. of 1686
    Advancers outpaced Decliners (adv/dec): 1426/1024
    New highs outpaced new lows (hi/lo): 246/14

    Quote Originally Posted by Conrad on Wednesday 10 July, 2013 View Post
    Advancers outpaced Decliners by an average 2.15 to 1 on lower average volumes (-8.43%) on Tuesday (avg +0.59%).

    Up volumes printed a marked improvement from Monday outpacing Down volumes by 3.86 to 1. The VIX closed just above the 14.25 support at 14.35 -0.43 (-2.91%) in an Inverted Crucifix Doji which could translate into more downside on Wednesday.
    Advancers outpaced Decliners by an average 1.24 to 1 on lower average volumes (-11.71%) on Wednesday (avg +0.14%).

    $DVOL led the session from the opening hour and closed the session by outpacing $UVOL by 1.20 to 1. Volumes across the board were rather weak and participation was rather tepid. It was as if traders and investors preferred to stay sidelined for the most part. The VIX closed marginally lower at 14.21 -0.14 (-0.98%), hugging the 14.25 support.



    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    Closing Commodities: Crude Oil Soars To A 15-Month High

    NYMEX Energy Closing Prices
    Aug crude oil rose $2.97 to $106.49/barrel. Crude oil rose to 15 month highs as it gained support from a huge drop in inventories, reports of a well leak off the coast of Louisiana, and a weaker dollar index. The Dept of Energy reported that crude oil inventories for the week ending July 5 had a draw of 9.874 mln when a much smaller draw of 3.15 mln was anticipated. The energy component trended higher for most of today's floor trade as it lifted off its session low of $104.97. It touched a session high of $106.66 and settled slightly below that level, booking a gain of 2.9%. Aug natural gas rose $0.02 to $3.68/MMBtu. Natural gas rose to a session high of $3.73 but lost momentum in late morning action. It dipped to a session low of $3.64 and eventually settled with a 0.5% gain. Aug heating oil rose 1 cent to $3.00/gallon. Aug RBOB gasoline rose 8 cents to $3.01/gallon.

    COMEX Metals Closing Prices
    Aug gold rose $1.30 to $1247.60/ounce. Gold traded higher today as investors awaited the 14:00 ET release of the FOMC minutes and a weaker dollar index supported prices. It climbed to a session high of $1260.80 in morning action but sold off moments before pit trade closed. In the end, the yellow metal reduced gains to just 0.1%. Sep silver rose $0.02 to $19.16/ounce. Silver touched a session high of $19.33 in morning action but spent the remainder of its session trending lower. Like gold, it erased most of its earlier gains and settled just 0.1% higher. Sep copper rose $0.02 to $3.09/lb.

    CBOT Agriculture and Ethanol Closing Prices
    Dec corn fell 1 cent to $5.22/bushel
    Sep wheat rose 2 cents to $6.78/bushel
    Nov soybeans rose 8 cents to $12.85/bushel
    Aug ethanol rose 1 cent to $2.44/gallon

    Currencies: Dollar Weakens Post-FOMC Minutes
    The Dollar Index slumped to session lows near 83.80 following the release of the June FOMC minutes, but has managed to win back some of the losses as trade probes the 84.00 level. The minutes continued to point to a potential tapering later this year with some members even suggesting the pullback to come at the June meeting.
    • EURUSD is +95 pips at 1.2880 with trade surging to its best levels of the session (1.2945) following the minutes. The single currency was firm ahead of the release, but has seen an aggressive bid develop over the past half hour. Earl buying provided support near the key 1.2750 level, and buyers have maintained control throughout the session. Near-term resistance will come into play in the 1.3000 region. The ECB Monthly Bulletin will cross the wires tomorrow. Click here to see a 5 minute EURUSD chart.
    • GBPUSD is +70 pips at 1.4935 after early buying supported the 1.4850 level. Today's bid has more than erased yesterday's losses with action now looking to reclaim the 1.5000 level.
    • USDCHF is -115 pips at .9610 as trade has pulled back sharply from the May highs. Participants will be watching the .9500 area closely as support in the vicinity is aided by both the 50- and 100-day moving averages.
    • USDJPY is -100 pips at 100.05 amid a volatile trade following the release of the FOMC minutes. The pair was in the midst of a slow climb off its overnight lows before the minutes hammered to session lows near 99.60. Buying has ensued following the selloff with trade reclaiming the majority of post-minutes losses. The Bank of Japan will opine tonight with markets expecting no deviation from the status quo. Japan's core machinery orders are scheduled for release.
    • AUDUSD is flat at .9170 as action holds in the middle of today's range. The hard currency firmed in early trade despite the disappointing Chinese trade data as rumors of a potential PBOC Reserve Requirement Ratio cut surfaced, but that action has yet to develop, causing the pair to give up its early gains. Australian data out tonight includes employment change, the unemployment rate, and MI Inflation Expectations.
    • USDCAD is -45 pips at 1.0480 as trade slides to its worst level in almost two weeks. The 1.0450 area will be watched closely in the near-term, but the 1.0400 level is far more significant. Canadian data is limited to the New Home Price Index.

    Bonds: Treasuries Slide Following FOMC Minutes
    Treasuries ended on their worst levels of the session as sellers took control following the release of the June FOMC minutes. The minutes suggested tapering could begin later this year and that some members were calling for it to start at the June meeting. Sellers were in control early in the U.S. session, dropping the complex onto its lows ahead of the wholesale inventories miss (-0.5% actual v. +0.3% expected). Some light buying surfaced following the data, but sellers managed to regain control, dropping maturities to fresh lows ahead of this afternoon's in-line $21 bln 10-yr reopening. The reopening drew 2.670% and a weak 2.57x bid/cover as indirect bidders took down 38.6% of the offering (12-auction average 37.5%) and direct bidders bought 16.3% of the supply (12-auction average 22.4%). Buyers flexed their muscles following the auction with Treasuries paring their losses ahead of the minutes. Trade was whippy following the release of the minutes with sellers eventually retaking control and dropping the complex to new lows at the cash close. The long bond finished with a loss of nearly one full point, but it was the belly of the curve that saw the biggest jump in yield. The benchmark 10-yr yield ended the day higher by 5 bps at 2.680%, just 3.5 bps below Friday's two-year closing high. Selling swung the yield curve steeper as the 2-10-yr spread widened to 231.5 bps.

    Treasury Yields:
    • 2 Year Note 0.38% +0.01
    • 5 Year Note 1.54% +0.04
    • 10 Year Note 2.70% +0.05
    • 30 Year Bond 3.68% +0.04
    2/30 Spread : 330bps ( +3 ) ... 2/10 Spread : 232bps ( +4 )

    Quote Originally Posted by Conrad on Wednesday 10 July, 2013 View Post
    Status Quo. Bond traders were either confused or they ran out of ideas. Not a good thing to have while risk is bouncing up. But then again, the bond traders haven't been quite rational lately.
    Bond sold off again as tapering get more and more real by the end of this year. But what I would like to confirm is where the money is going? It can't all be flooding into currencies, can it? Because it sure as hell ain't going into equities.

    ___________________________________________

    PREVIEW FOR THURSDAY 11 JULY, 2013

    Data remains slow on Thursday with initial and continuing claims, import/export prices (8:30), and the Treasury budget (14). Treasury will reopen $13 bln 30-yr bonds.

    Earnings Highlights
    BMO: CBSH, PGR, LEDS
    AMC: ANGO, FLOW

    Economic Events
    08:30 Export Prices ex-ag.
    08:30 Import Prices ex-oil
    08:30 Initial Claims
    08:30 Continuing Claims
    10:30 Natural Gas Inventories
    14:00 Treasury Budget

    Conferences and Shareholder/Analyst Meetings of Interest
    • BOJ Decision and Kuroda Press Conference (released overnight)
    • 2013 MotionTracking Developers Conference
      Scheduled to appear: SGEN, OMER, GE, JPM, NVS, FOLD, OGXI, JPM, OGXI
    • Vitesse Semiconductor (VTSS) timing is everything seminar

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Wednesday 10 July, 2013 View Post
    This was a convincing session by the bulls with good leadership from Materials and Industrials. Telcos lagged for the second time in two sessions. Looks like we're really going for that Double Top.
    So why are the futures up by +1% now? Good question;
    The Fed, after much scrutinizing of their minutes, is more hawkish than they would like to admit ... Japan lowered its economic forecast (and is being punished for it as we read this) ... in a little more than 24 hours, the dollar has tanked from 84.90 to 82.80 making it its worst two-day drop in more than a year ... oil has surged past $106pb ...

    ... all because Bernanke has a sweet tongue.

    Direction for Thursday 11 July, 2013; Down

    2013 Daily Directional Accuracy: 54/79 (68.35%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  8. #8

    Thumbs down Friday 12 July, 2013 - BMO

    U.S. MARKETS - THURSDAY 11 JULY, 2013 AMC

    Quote Originally Posted by Conrad on Thursday 11 July, 2013 View Post
    So why are the futures up by +1% now? Good question;
    The Fed, after much scrutinizing of their minutes, is more hawkish than they would like to admit ... Japan lowered its economic forecast (and is being punished for it as we read this) ... in a little more than 24 hours, the dollar has tanked from 84.90 to 82.80 making it its worst two-day drop in more than a year ... oil has surged past $106pb ...

    ... all because Bernanke has a sweet tongue.

    Direction for Thursday 11 July, 2013; Down
    I guess Bernanke's tongue should not have been underestimated. Man, this makes me look bad ...

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Dow Jones and S&P 500 Close on Record Highs

    The major averages saw gains between 1.1% and 1.6% with the Dow Jones and S&P 500 closing at fresh record highs.

    Equities registered the bulk of their advance at the open after yesterday's comments from Federal Reserve Chairman Ben Bernanke created some push back against the idea the Fed may begin slowing the pace of its asset purchases at the September meeting.

    Mr. Bernanke commented on the economic landscape by saying the current employment level is overstating the health of the job market and that rates may be kept low even after the previously mentioned unemployment threshold of 6.5% is reached.

    The comments caused market participants to shift into risk assets and away from the U.S. dollar. The foreign exchange market was the first to respond to the remarks as the greenback weakened against all major currencies. Selling dropped the Dollar Index by nearly 2.0% to 82.40.

    Notably, dollar/yen fell almost 200 pips to 98.60 with price action resembling the late-May move attributed to large unwinds of the yen carry trade. The pair was able to rebound into the afternoon, but fell back near its lows before the close. On a related note, some of Chairman Bernanke's comments focused on the carry trade, suggesting that when the Fed doesn't provide any information, "It's very likely that more highly levered, risk-taking positions might build up, reflecting some expectation of an infinite asset purchase program."

    Elsewhere, Treasuries received a solid bid following Chairman Bernanke's remarks, sending the 10-yr yield lower by 11 basis points to 2.572%.

    The Dow and S&P ended at fresh record highs as growth-sensitive sectors paced the advance. The tech sector (+1.7%) finished atop today's leaderboard, which helped the Nasdaq outperform the other two major averages. Chipmakers displayed significant strength as the PHLX Semiconductor Index added 2.1%.

    The tech sector was followed closely by materials and industrials. Producers of basic materials received a significant boost from steelmakers and gold miners. The Market Vectors Steel ETF (SLX 39.84, +1.52) jumped 4.0% and the Market Vectors Gold Miners ETF (GDX 24.97, +1.78) surged 7.7%. Meanwhile, gold futures climbed 3.0% to $1284.50 per troy ounce.

    Industrials also displayed broad strength. Transportation-related names provided the sector with solid support as the Dow Jones Transportation Average advanced 1.2%.

    However, another commodity-related sector, energy, underperformed with a gain of 0.9%. Crude oil fell 1.8% to $104.62 per barrel, but the energy component remains higher by 11.7% since June 21.

    Financials also trailed behind the broader market as the sector added 0.9%. Tomorrow morning, JPMorgan Chase (JPM 55.14, +0.32) and Wells Fargo (WFC 41.89, -0.18) will report their quarterly results ahead of the open.

    The initial claims level rose from an upwardly revised 344,000 (from 343,000) for the week ending June 29 to 360,000 for the week ending July 6. The Briefing.com consensus expected the initial claims level to increase to 345,000.

    The Department of Labor reported that seasonal adjustment biases from the July 4 holiday may have played a role in the unexpected jump in claims. If this is true, then the initial claims level should fall back below 350,000 next week.

    Separately, export prices, excluding agriculture, decreased by 0.2% in June after they had decreased 0.7% during the prior month. Excluding oil, import prices declined 0.3%, which follows last month's decline of 0.3%.

    The June Treasury Budget showed a surplus of $116.5 billion, which was slightly ahead of the surplus of $115.0 billion expected by the Briefing.com consensus.

    Tomorrow, June PPI and core PPI will be reported at 8:30 ET while the preliminary University of Michigan Consumer Sentiment Survey for July will be released at 9:55 ET.
    Sector Leaders/Laggards
    Leading Sectors: Tech (+1.71%), Materials (+1.63%), Utilities (+1.63%), Industrials (+1.58%), Consumer Staples (+1.53%), Consumer Discretionary (+1.44%), Telecom (+1.40%), Health Care (+1.25%), Energy (+0.93%), Financials (+0.91%)
    Leading Industries/ETFs : Thailand-THD +8.2%, Junior Gold Miners-GDXJ +8.06%, Gold Miners-GDX +7.68%, Silver Miners-SIL +7.40%, Indonesia-IDX +7.06%, Silver-SLV +5.47%, South Korea-EWY +5.41%, U.S. Home Construction-ITB +5.40%, China 25 Index-FXI +5.24%, Poland-EPOL +5.10%.
    Lagging Sectors: None.
    Lagging Industries/ETFs : Volatility-VXX -2.72%, Cotton-BAL -2.12%, Regional Banks-KRE -1.65%, U.S. Dollar-UUP -1.60%, Natural Gas-UNG -1.39%, Egypt-EGPT -0.70%, Greece-GREK -0.07%.

    Other Market Moving Factors:
    • The Bank of Japan made no changes to its policy but did raise its economic assessment for the seventh month in a row. However, the central bank did lower its GDP growth forecast to 2.8% from 2.9%. In addition, core machinery orders rose 10.5% month-over-month (1.3% expected, -8.8% prior) while the year-over-year reading climbed 16.5% (2.5% forecast, -1.1% previous).
    • In Australia, the unemployment rate ticked up to 5.7% from 5.6% despite a better-than expected employment change of 10,300 (-2,500 expected, -700 prior).
    • Germany's Wholesale Price Index decreased 0.4% month-over-month (-0.1% expected, -0.4% prior).
    • French CPI ticked up 0.2% month-over-month (0.1% expected, 0.1% previous).
    • Risk-on mentality takes hold after Ben Bernanke says the current employment level is overstating the health of the job market. The inference drawn by the market is that the Fed is unlikely to slow its asset purchases in the near future.

    Futures are lower at 23:00 EST:
    DOW futures are down -19.00 (-0.12%)
    S&P 500 futures are -2.25 (-0.13%)
    Nasdaq100 futures are -1.50 (-0.05%)

    Companies trading higher in after hours in reaction to earnings: CPHD +0.6%, ANGO +0.2%
    Companies trading higher in after hours in reaction to news:
    • IGOI +65.9% (announced Steel Excel will acquire up to 44% of outstanding shares at $3.95 per share)
    • RSH +2.7% (CNBC reporting that co said it has a strong balance sheet with total liquidity of $820 mln)
    • DV +1.2% (Carrington College California, a part of DeVry (DV), announced it recently received reaffirmation of accreditation for the next six years by the Accrediting Commission for Community and Junior Colleges of the Western Association of Schools and Colleges)
    • GPS +1.0% (reported June same store sales +7.0% vs +4.7% Retail Metrics consensus)
    • HRB +0.8% (announced agreement reached to sell assets and transfer liabilities of H&R Block Bank to Republic Bank and Trust Company (RBCAA))
    • RLD +0.7% (announces June 2013 box office on RealD-enable screens is estimated to be ~$291 mln)
    • BKS +0.7% (disclosed that the outcome of the evaluation of certain prior year amounts is expected to be non-material)
    Companies trading lower in after hours in reaction to earnings: CERE -16.9%, VLO -4.6%, PPHM -3.3%
    Companies trading lower in after hours in reaction to news:
    • AVEO -13.4% (disclosed it received a subpoena from the SEC)
    • CSIQ -5.4% (filed $200 mln mixed shelf offering)
    • WNR -3.4% (trading lower following weak guidance from peer Valero; TSO, MPC also lower)
    • AEL -1.4% (announced relaunch of proposed $400 mln offering of notes)
    • CODI -1.3% (announced promotion of Ryan J. Faulkingham to Chief Financial Officer following retirement of James J. Bottiglieri)
    • TRNO -1.0% (announced public follow-on offering of 5 mln shares of common stock)

    ___________________________________________

    ECONOMIC COMMENTARY
    Japan Economic Data
    - May Machine Orders +10.5% vs-8.8%
    - BOJ rate decision and Monetary base target Unchanged; for details, click here
    Australia Economic Data
    - Jun Unemployment rate 5.7% vs 5.6% ub May
    - Jun Employment Change 10.3K vs -0.7K in May
    Germany Economic Data
    - Jun Wholesale Prices Index -0.4% vs -0.4% in May
    U.S. Economic Data
    - Initial Claims 360K vs 345K; Prior revised to 344K from 343K
    - Continuing Claims rises to 2.977 mln from 2.953 mln
    - June Import Prices ex-oil -0.3%, Prior -0.3%
    - June Export Prices ex-ag -0.2%, Prior -0.7%
    - June Treasury Budget +$116.5 bln vs +$115.0 bln

    Increase in Initial Claims Likely Due to Seasonal Adjustment Issues
    The initial claims level rose from an upwardly revised 344,000 (from 343,000) for the week ending June 29 to 360,000 for the week ending July 6. The Briefing.com consensus expected the initial claims level to increase to 345,000.The Department of Labor reported that seasonal adjustment biases from the July 4 holiday may have played a role in the unexpected jump in claims. If this is true, then the initial claims level should fall back below 350,000 next week.Even if the holiday did not bias the data, the initial claims level has trended sideways for the past several weeks with small up-and-down movements. The increase in claims this week continues to follow that pattern. Overall, labor market conditions have not materially changed.The continuing claims level rose to 2.977 mln for the week ending July 29 from an upwardly revised 2.953 mln (from 2.933 mln) for the week ending July 22. The consensus pegged the continuing claims level at 2.949 mln.

    Treasury Budget Shows Third Monthly Surplus in the Year
    The Treasury Budget showed a surplus of $116.5 bln in June following a deficit of $69.6 bln in June 2012. Since the Treasury data are not seasonally adjusted, the data cannot be compared with the May level. The Briefing.com consensus expected the budget to show a surplus of $115.0 bln. The Congressional Budget Office released their budget preview last week and predicted a surplus of $115 bln. The market is well aware of the CBO's forecast and the reaction to the budget data is limited.Total revenues increased by $26.5 bln, from $260.2 in May 2012 bln to $286.6 bln in May 2013.Total outlays fell to $170.1 bln in May 2013 from $319.9 bln in May 2012, a drop of $149.8 bln. Fiscal year-to-date, the deficit is $509.8 bln, $394.4 bln less than FY 2012.
    Natural Gas Inventory Data
    Natural gas inventory showed a build of 82 bcf vs expectations for a build of 81 bcf.
    Working gas in storage was 2,687 Bcf as of Friday, July 5, 2013, according to EIA estimates. This represents a net increase of 82 Bcf from the previous week. Stocks were 443 Bcf less than last year at this time and 22 Bcf below the 5-year average of 2,709 Bcf. In the East Region, stocks were 89 Bcf below the 5-year average following net injections of 53 Bcf. Stocks in the Producing Region were 33 Bcf above the 5-year average of 965 Bcf after a net injection of 27 Bcf. Stocks in the West Region were 34 Bcf above the 5-year average after a net addition of 2 Bcf. At 2,687 Bcf, total working gas is within the 5-year historical range.
    Asian Markets Close; Nikkei +0.4%, Hang Seng +2.6%, Shanghai 3.2%
    It was a sea of green across Asia as all of the major bourses ended with gains following Fed Chairman Ben Bernanke's dovish commentary. Most of the region's bourses saw gains of at least 1% as China's Shanghai Composite (+3.2%) led the majors and Thailand's SET (+4.2%) was the top performer. Interestingly, Japan's Nikkei (+0.4%) saw a more muted advance as the stronger yen weighed. Overnight, the Bank of Japan held policy unchanged while upgrading its economic assessment, noting the recovery is in its early stages. However, the central bank also cut its GDP forecast to 2.8% from 2.9%. Other central bank decisions saw the Bank of Korea hold steady at 2.50%, Malaysia's central bank stand pat at 3.00%, and Bank Indonesia surprise with a 50 bp hike to 6.50% (6.25% expected). Data out overnight showed the Australian economy added 10.3K jobs (0.3K expected), but the devil was in the details as full-time employment fell 4.4K and part-time help increased 14.8K. The unemployment rate ticked up to 5.7% (5.6% previous). Looking at the currencies...USDCNY slipped to 6.1349; USDINR fell to 59.67; USDJPY is weaker at 99.30; AUDUSD is lower near .9205.
    In Japan, the Nikkei closed +0.4% amid a choppy trade. Real estate stocks outperformed as Mitsui Fudosan added 1.3% and Sumitomo Realty & Development gained 2.5%. Elsewhere, exporters lagged thanks to the stronger yen as Canon fell 1.5% and Toyota Motor slipped 0.2%.

    In Hong Kong, the Hang Seng finished +2.6% as shares rallied to a one-month high. Mainland financials were strong as Agricultural Bank of China jumped 3.6% to lead the sector's advance.

    In China, the Shanghai Composite settled +3.2% after dovish comments from Chinese Premier Li Keqiang. Financials were the beneficiary as Ping An and ICBC both closed limit up, 10%. Click here to see a daily Shanghai Composite chart.

    In India, the Sensex closed +2.0% as blue chips paced the advance. Infosys tacked on 1.1% and HDFC Bank rallied 3.6%.

    In Australia, the ASX finished +1.3% as trade managed to retake the 50-day moving average. Miners and financials paced the advance with Rio Tinto climbing 3.7% and NAB adding 1.8% to lead their respective sectors higher.

    In Taiwan, the Taiex settled +2.1% as Formosa Petrochemical jumped 6.8%.

    In South Korea, the Kospi closed +2.9% as Hyundai Merchant Marine surged 7.4%.
    In other regional markets...
    Vietnam UNCH
    Malaysia +0.7%
    Philippines +1.6%
    Singapore +1.9%
    Indonesia +2.8%
    Thailand +4.2%

    European Markets Update:
    Key European indices trade with gains, but have retreated off their best levels of the session. Bundesbank chief Jens Weidmann joined last night's central banker parade by saying the current economic outlook warrants low rates, but that may change if inflationary pressures make themselves known. Economic data was limited to just two points. Germany's Wholesale Price Index decreased 0.4% month-over-month (-0.1% expected, -0.4% prior) and French CPI ticked up 0.2% month-over-month (0.1% expected, 0.1% previous).
    • Great Britain's FTSE is higher by 0.6% as miners pace the advance. Antofagasta, Fresnillo, and Vedanta Resources are all up between 5.0% and 11.0%. Industrial names are among the laggards as Bunzl and Meggit trade with respective losses of 0.7% and 2.1%.
    • In France, the CAC trades up 0.7% with growth-oriented names in the lead. ArcelorMittal and Technip are higher by 3.9% and 2.2%, respectively. On the downside, Renault trades lower by 2.1%.
    • Germany's DAX is higher by 1.1% amid broad strength. Chemical producers BASF and Lanxess are among the top advancers with respective gains of 1.9% and 3.4%.
    European Markets Closing Prices
    UK's FTSE: + 0.6%
    Germany's DAX: + 1.1%
    France's CAC: + 0.7%
    Spain's IBEX: + 0.5%
    Portugal's PSI: -2.0%
    Italy's MIB Index: 0.0%
    Irish Ovrl Index: -0.1%
    Greece ASE General Index: -1.0%
    IN OTHER NEWS ...
    Markets rally following dovish Bernanke comments in last night's speech
    While Bernanke's prepared remarks (see speech here) was largely a background of the history of the Federal Reserve, S&P futures spiked following the start of Q&A. In the Q&A he was asked about the dual mandate. Bernanke said that the current employment level (7.6%) is overstating the health of the jobs market.

    He also noted that current inflation levels are below the Fed's target of 2%. He said both of these factors say the Fed needs to be more accommodative. He finished by saying that highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy.

    Bernanke also gave some additional color on the 6.5% threshold for raising rates. He indicated that may be 'well some time after' the 6.5% unemployment threshold is achieved before interest rates reach 'any significant level'.

    June Same Store Sales Review—discounters prevail
    Retailers reported June Same Store Sales before the open today (ZUMZ and PSMT reported yesterday after the close, WAG and RAD last week, GPS will report after the close today). Results can be accessed on our Same Store Sales calendar.

    Discount retailers continued to outperform in June with Fred's (FRED), Stein Mart (SMRT) and PriceSmart (PSMT) all topping estimates, while more clothing-focused retailers Limited (LTD), Zumiez Inc (ZUMZ), Buckle (BKE), Cato (CATO) came up short. Today's stock action does not directly reflect the monthly results. GUIDANCE UPDATES: CATO and FRED both reaffirmed their earnings guidance this morning, while DEST issued upside earnings and sales outlook. Going forward, the July retail period is four weeks ending on Saturday Aug 3. The month is typically a period to clear merchandise ahead of Back to School shopping season. Most retailers report earnings in August and will update EPS/qtrly sales expectations with next month's sales results.

    Overall the retail sector is in-line with the overall market following June comps. The retail sector had already been on the move—month-to-date the SPDR Retail (XRT) was already up ~5%, Retail HOLDRS Trust (RTH) up more than 4% vs S&P500 index (SPX) up ~3%.... Today the SPDR Retail (XRT) is slightly trailing at +0.7%, Retail HOLDRS Trust (RTH) is +1.4%, the Consumer Dis Spdr (XLY) +1.4% vs S&P500 index (SPX) 1.3%.

    Some cos that beat June Same-Store Sales estimates include (listed according to the magnitude of the beat):
    • Discount retailers Fred's (FRED), Stein Mart (SMRT) and PriceSmart (PSMT) all topped expectations. FRED reported June comps of 4.5% vs 0.9% consensus and reaffirmed Q2 earnings guidance. Co said June comps exceeded its expectations and reflected increased customer traffic and higher transaction amounts. The stock is up ~1% today. SMRT reported comps of 6.5% vs 4.5% consensus and is now more than 5% higher. PSMT reported comps with its earnings yesterday after the close. The stock is trading lower after it missed quarterly earnings estimates but the co did top June comps estimates (+9.7% vs +8.8% consensus.
    • Big box retailer Costco (COST) reported comps of 6% vs 5.3% consensus. The stock opened 1% higher and is now up ~1.6%.
    • Drugstore names Walgreen's (WAG) and Rite Aid (RAD) reported last week—both topped monthly expectations for second consecutive month.
    Missed June Same-Store Sales estimates:
    • Limited (LTD) reported flat comps vs +2.3% consensus. Despite the sales, the stock opened 1.2% higher and is now higher by more than 2%.
    • Zumiez Inc (ZUMZ) reported comps after the close of 1% vs 2.1%--second consecutive month it missed estimates. The stock is in the red.
    • Cato (CATO) reported comps of 1% vs 1.5% consensus and reaffirmed guidance. The co noted that "while June same-store sales were above trend, higher markdowns will affect our results for the quarter." The stock is now up ~2%.
    • Buckle (BKE) reported June comps of 3.4% vs 3.8% consensus (as usual co did not issue guidance/commentary) and said . The stock opened flat but is now modestly higher.
    ___________________________________________

    TECHNICAL UPDATE

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,460.92 +169.26 (+1.11%)
    Volume: 124,952,994 from 105,045,250 the previous day
    Range: 15,298.00 - 15,483.55



    Quote Originally Posted by Conrad on Thursday 11 July, 2013 View Post
    As expected, DOW stalled at 15,300 on a Fifth. This sets up a consolidation or reversal (into an Evening Star) for Thursday. NASDAQ broke to a new multi-year high and sets up a possible Third Candle Reversal and a Double Top.
    New historical highs for DOW and S&P and a new multi-year high for NASDAQ. For now, all I am focused on is NASDAQ's massive gap and the Double Tops on S&P and DOW - every time NASDAQ gaps into a new high, it almost always rallies like mad ... and every time DOW and S&P fail to break their Double Tops, they always tank like mad.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,578.30 +57.54 (+1.63%)
    Volume: 404,139,461 from 372,419,079 the previous day
    Range: 3,552.52 - 3,579.29


    S&P 500 INDEX (SPX: CBOE)
    1,675.02 +22.40 (+1.36%)
    Volume: 554,747,000 from 498,099,000 the previous day
    Range: 1,657.41 - 1,676.63


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 742 mln vs. avg. of 779
    Advancers outpaced Decliners (adv/dec): 2713/413
    New highs outpaced new lows (hi/lo): 368/11

    NASDAQ :
    Lower than avg volume @ 1673 mln vs. avg. of 1682
    Advancers outpaced Decliners (adv/dec): 1801/716
    New highs outpaced new lows (hi/lo): 396/10

    Quote Originally Posted by Conrad on Thursday 11 July, 2013 View Post
    Advancers outpaced Decliners by an average 1.24 to 1 on lower average volumes (-11.71%) on Wednesday (avg +0.14%).

    $DVOL led the session from the opening hour and closed the session by outpacing $UVOL by 1.20 to 1. Volumes across the board were rather weak and participation was rather tepid. It was as if traders and investors preferred to stay sidelined for the most part. The VIX closed marginally lower at 14.21 -0.14 (-0.98%), hugging the 14.25 support.
    Advancers outpaced Decliners by an average 3 to 1 on Lower average volumes (-1.87%) on Thursday (avg +1.37%).

    Up volumes finally decided to show up and Down volumes finally retreated for $UVOL to run down $DVOL by 7.55 to 1, by far one of the most lop-sided bullish sessions to year-to-date. The VIX closed above its lows at 14.01 -0.20 (-1.41%).



    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    USDA releases WASDE report- grains initially decline to new session lows following report (corn, wheat and soybeans); Corn and wheat acreage each climb 0.1 mln acres
    Click here for report.

    Precious Metals Register Gains On Bernanke Comments

    NYMEX Energy Closing Prices
    Aug crude oil fell $1.61 to $104.88/barrel. Crude oil fell for the first time in three sessions as initial claims data released this morning showed a higher than expected rise in Americans filing for unemployment benefits. The energy component dipped to a session low of $104.31 and stayed in negative territory despite a weaker dollar index. Unable to gain much momentum, it settled 1.5% lower. Aug natural gas fell $0.07 to $3.61/MMBtu. Natural gas slid from its session high of $3.70 into the red following inventory data that showed a build of 82 bcf when a build of 81 bcf was anticipated. It dipped to a session low of $3.57 in late morning action and eventually settled with a 1.9% loss. Aug heating oil settled unchanged at $3.00/gallon. Aug RBOB gasoline rose 1 cent to $3.02/gallon.

    COMEX Metals Closing Prices
    Aug gold rose $32.60 to $1280.20/ounce. Gold rose for a fourth consecutive session as the dollar index traded lower following Ben Bernake's dovish comments suggesting that the Fed will not taper its asset purchases in the near future. The Chairman stated that highly accommodative monetary policy for the foreseeable future is needed for the U.S. economy. The yellow metal spent its entire session trading in a consolidative pattern near the $1280 level and settled with a 2.6% gain. Sep silver rose $0.79 to $19.95/ounce. Silver also traded higher today. It brushed a session high of $20.14 and eventually settled with a solid 4.1% gain. Sep copper rose 9 cents to $3.18/lb.

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn rose 4 cents to $5.26/bushel
    Sep wheat rose 4 cents to $6.82/bushel
    Nov soybeans rose 6 cents to $12.91/bushel
    Aug ethanol rose 3 cents to $2.47/gallon
    Sep sugar (#16 (U.S.)) rose 0.03 of a penny to 18.98 cents/lbs

    Currencies: Dollar Looks to Retake 83.00
    The Dollar Index tumbled to a low of 82.40 in overnight trade before recovering some of its losses and climbing to 83.20. The Index has seen a choppy trade throughout the U.S. session with action centering on the 83.00 level.
    • EURUSD is +35 pips at 1.3055 as trade probes the 50-day moving average. Yesterday's late-day bid ran the single currency to a high of 1.3205, up more roughly 450 pips from Tuesday's lows, but the bid was unable to hold and action dropped back below the 200-day moving average. Eurozone data is limited to industrial production.
    • GBPUSD is +80 pips at 1.5140 as trade flirts with early July resistance. The current two-day win streak has sterling up 300 pips from Tuesday's lows.
    • USDCHF is -50 pips at .9485 as trade tests the 50-day moving average. Current levels are under careful scrutiny as key support rests in the vicinity.
    • USDJPY is -45 pips at 99.05 with today's selling dropping the pair below the 50-day moving average. The pair has managed to recover a good portion of its overnight losses as a test of the 98.00 level was quickly bought.
    • AUDUSD is -60 pips at .9160 as trade recovers off session lows. The hard currency saw an early bid following the better than expected headline employment change, but sellers have been in control for most of the session as the early gains were unwarranted. The data showed full-time jobs declining with all of the gains coming from part-time help. Australia's home loans will cross the wires tonight.
    • USDCAD is -40 pips at 1.0390 as action continues to test key support in the 1.0380/1.0400 region. Action saw little reaction to Canada's disappointing New Home Price Index (0.1% MoM actual v. 0.3% MoM expected) as sellers managed to take control a couple hours later.

    Bonds: Treasuries Book Solid Gains
    Treasuries saw strong gains as yesterday's late day comments from Fed Chairman Ben Bernanke pushed back against the tapering talk that has dominated trade over the past few weeks. The complex hit its best levels of the session as traders began to settle into their desks and trade slipped over the course of the morning and into the afternoon. However, bulls came out of the woodwork following this afternoon's in-line $13 bln 30-yr reopening. The reopening drew 3.660% and a weak 2.26x bid/cover (12-auction average 2.58x) as both indirect (40.2%) and direct (16.3%) bidders took down more than their 12-auction averages. Buyers remained in control for the remainder of the session, and yields ended at their lowest levels since early in U.S. trade. Today's bid had the biggest impact on the belly of the curve as yields there fell as much as 12 bps. The 5-yr yield saw the biggest drop, as it plunged to 1.396%, posting its lowest close in over a week. Elsewhere, the 10-yr yield shed 10.5 bps to finish at 2.574%, a one-week low. Underperformance came from the wings over the curve as the 30-yr witnessed a more modest decline of 6.3 bps. The long yield ended the day at 3.625% after hitting 3.70% during yesterday's session. Aggressive flattening took hold along the yield curve as the 2-10-yr spread narrowed to 225 bps.

    Treasury Yields:
    • 2 Year Note 0.34% -0.04
    • 5 Year Note 1.40% -0.14
    • 10 Year Note 2.60% -0.10
    • 30 Year Bond 3.64% -0.04
    2/30 Spread : 330bps ( UNCH ) ... 2/10 Spread : 226bps ( -6 )

    Quote Originally Posted by Conrad on Thursday 11 July, 2013 View Post
    Bond sold off again as tapering get more and more real by the end of this year. But what I would like to confirm is where the money is going? It can't all be flooding into currencies, can it? Because it sure as hell ain't going into equities.
    Once again the belly of the curve saw most of the action. This time, it it fell instead of rising. Knee Jerk? or Irrational Buying? or Misplaced Euphoria? We'll find out in the next few sessions to come.

    ___________________________________________

    PREVIEW FOR FRIDAY 12 JULY, 2013

    Friday's data is the most anticipated of the week with PPI, core PPI (8:30), and Michigan Sentiment (9:55) due out. STL's Bullard and Philly's Plosser will give their economic outlooks at the Rocky Mountain Economic Summit in Jackson Hole, WY (14:45). SF's Williams will be in in Vancouver, British Columbia discussing "A Defense of Moderation in Monetary Policy" (17:15).

    Earnings Highlights
    BMO: INFY, JPM, WFC, WBS

    Economic Events
    08:30 PPI
    08:30 Core PPI
    09:55 Mich Sentiment

    Conferences and Shareholder/Analyst Meetings of Interest
    • 5th Annual CEO Investor Summit 2013
    • Saint Louis Fed President James Bullard (voting FOMC member, recently dovish) to speak at 14:45
    • San Francisco Fed President John Williams (not a voting FOMC member, typically dovish) to speak at 17:15

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Thursday 11 July, 2013 View Post
    This (Wednesday) was more bearish than meets the eye. Don't let the indices fool you - the bears owned Wednesday. Healthcare, Utilities and Staples led while Financials lagged.
    JPM holds the key to Friday's close. I reckon the PPI and Mich Sentiment reports are going to be nothing more than noise after JPM's numbers are released BMO. I am very tempted to go with the flow and call an Up day. But common sense and a gut feel tell me that after a solid week of gains, its time to take money off the table ahead of a potentially volatile week ahead.

    Direction for Friday 12 July, 2013; Down

    2013 Daily Directional Accuracy: 54/80 (67.50%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  9. #9

    Thumbs down Monday 15 July, 2013 - BMO

    U.S. MARKET RECAP - MONDAY 08 JULY TO FRIDAY 12 JULY - AMC

    Quote Originally Posted by Conrad on Monday 08 July, 2013 View Post
    The second week is usually bullish but can be volatile as earnings season begins. Already, the volatility and absurdness of July is taking a grip on the market - Crude Oil is above $103pb, Gold and Silver are at their lowest levels since August 2010, Wheat has fallen to last year's June levels, Corn has spectacularly collapsed to September 2010 levels and Sugar is down to June 2010 levels after a steady downtrend that started at a Double Top two years ago.

    With most major commodities at multi-year lows, a 1.4% inflation rate, improving Consumer Confidence and Consumer Spending, there is no excuse for earnings and revenues to suck in Quarter 2. The only hold back could be guidance going forward as companies tend to avoid announcing guidance in Q3 and the few who do tend to be hawkish on guidance.

    Direction for the week Monday 08 July to Friday 12 July, 2013; Up
    That wasn't so painful ... Copper came off its lows, Gold is on higher highs and threatening $1,300, earnings thus far have been promising ... now we go into the second week of earnings season where the numbers start getting serious.

    __________________________________________________ ________

    U.S. Markets - Friday 12 July, 2013 AMC

    Quote Originally Posted by Conrad on Friday 12 July, 2013 View Post
    JPM holds the key to Friday's close. I reckon the PPI and Mich Sentiment reports are going to be nothing more than noise after JPM's numbers are released BMO. I am very tempted to go with the flow and call an Up day. But common sense and a gut feel tell me that after a solid week of gains, its time to take money off the table ahead of a potentially volatile week ahead.

    Direction for Friday 12 July, 2013; Down
    Before you get all happy and assume that Friday was a bullish victory, read closer. For starters, Healthcare, Energy, Utilities and Staples were four of the seven leading sectors and the internals didn't favor the bulls as much as the indices would have you believe.

    __________________________________________________ ________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: Dow Jones and S&P 500 Notch Fresh Record Highs

    The major averages registered gains after a final hour rally pushed the S&P 500 and Nasdaq to their highs. For its part, the Dow ended flat.

    Quarterly earnings were in focus this morning after JPMorgan Chase (JPM 54.97, -0.17) and Wells Fargo (WFC 42.63, +0.74) announced their results. Both banks reported bottom-line beats on in-line revenues. However, JPMorgan Chase saw a 7.0% quarter-over-quarter decrease in mortgage originations while Wells Fargo reported a 2.7% increase. The results provided support for other bank shares and the financial sector settled atop the sector leaderboard with a gain of 0.5%.

    Discretionary shares also outperformed the broader market as online retailers displayed strength. Amazon.com (AMZN 307.55, +7.89) jumped 2.6% and shares of the online auction site eBay (EBAY 57.04, +1.16) advanced 2.1%. However, traditional retailers did not fare as well and the SPDR S&P Retail ETF (XRT 80.81, -0.20) shed 0.3%.

    Equities slipped to their lows following comments from Philadelphia Fed President Charles Plosser, who said the Federal Reserve should begin reducing the pace of its asset purchases in September and end the program by year's end. Mr. Plosser followed those remarks by saying the Fed does not "want to create another housing boom."

    Shortly after Mr. Plosser's comments, St. Louis Fed President James Bullard reiterated his opposition to dialing down the stimulus. It should be noted Mr. Bullard is a voting member of the Federal Open Market Committee this year while Mr. Plosser will not have a vote until next year.

    Early afternoon action saw the health care sector jump to fresh highs after Bloomberg reported Roche Holdings (RHHBY 64.00, -0.12) is seeking financing for a potential takeover of Alexion Pharma (ALXN 114.26, +12.82). The news also provided a boost to biotech names, sending the iShares Nasdaq Biotechnology ETF (IBB 193.03, +4.66) to its session high.

    On the downside, the industrial sector was pressured by the underperformance of two large components. United Parcel Service (UPS 86.12, -5.33) fell 5.8% after issuing cautious second quarter and full year earnings guidance due to a slowing US industrial economy. This also weighed on the Dow Jones Transportation Average, which slumped 0.6%.

    In addition, Dow component Boeing (BA 101.87, -5.01) tumbled on heavy volume after a fire took place aboard a 787 Dreamliner at London's Heathrow Airport. Shortly after the news broke, separate reports indicated a Florida-bound 787 was forced to return to its home port in Manchester, U.K. due to a technical issue.

    The materials sector also finished among the laggards after pacing yesterday's advance. Steelmakers underperformed and the Market Vectors Steel ETF (SLX 39.06, -0.78) fell 2.0%.

    Today's economic data revealed the largest increase in producer prices since September 2012 due to an unexpected jump in energy prices. June PPI rose 0.8%, up from a 0.5% gain in May, and well above the Briefing.com consensus expectation of a 0.3% rise. The energy index rose 2.9% in June after increasing 1.3% May. That is the biggest monthly increase since February. The pickup in energy costs was due to a 7.2% increase in gasoline prices.

    Excluding food and energy, core prices remain on a weak trend. Prices increased 0.2% in June after increasing 0.1% in both April and May. The consensus expected these prices to increase 0.1%.

    The preliminary reading of the July University of Michigan Consumer Sentiment Index softened a bit and fell from 84.1 in June to 83.9 (85.0 Briefing.com consensus). While employment levels have generally strengthened over the past few weeks, recent volatility in the stock market coupled with increases in oil and gasoline prices likely reduced overall sentiment levels.

    The Current Conditions Index rose to 99.7 in July from 93.8 in June. That is the highest level since July 2007. Meanwhile, consumers became more concerned about the future. The Expectations Index fell to 73.8 in July from 77.8 in June.

    On Monday, June retail sales, retail sales ex-auto, and the July Empire Manufacturing Index will be reported at 8:30 ET while the May business inventories report will cross the wires at 10:00 ET.
    Sector Leaders/Laggards
    Leading Sectors: Financials (+0.80%), Health Care (+0.68%), Consumer Discretionary (+0.55%), Energy (+0.39%), Utilities (+0.34%), Tech (+0.23%), Consumer Staples (+0.12%).

    Lagging Sectors: Materials (-0.32%), Industrials (-0.58%), Telecom (-0.59%).

    Other Market Moving Factors:
    • Japan's industrial production rose 1.9% month-over-month (0.0% expected, 1.9% previous)
    • Japan's capacity utilization climbed 2.3% (1.6% previous)
    • Australia's home loans increased 1.8% month-over-month (2.5% expected, 1.2% prior)
    • Singapore GDP rose 3.7% year-over-year (1.9% expected, 0.2% previous)
    • Eurozone industrial production decreased 0.3% month-over-month (-0.2% expected, 0.5% prior)
    • JPMorgan Chase (JPM) and Wells Fargo (WFC) report bottom-line beats on in-line revenue, providing support to financials.
    • United Parcel Service (UPS) weighs on industrials after lowering Q2 and FY13 earnings below consensus, citing slowing US industrial economy.
    • Boeing shares dropped by 5.5% following headlines of a fire on a BA 787 at Heathrow Airport

    BRIEFING.COM
    Weekly Wrap: S&P 500 and Dow Climb to New All-time Highs

    On Monday, the S&P 500 settled higher by 0.5% as eight of ten sectors ended in the green. Stocks registered the bulk of their gains in the opening minutes and the S&P 500 notched its session high within the first hour of action before spending the remainder of the day in a six point range. The upbeat open was aided by a strong showing in Europe where major averages overlooked disappointing German industrial production data (-1.0% actual, -0.5% expected) and rallied on indications the next tranche of Greek aid will be approved by Eurozone officials. While most sectors were able to hold their opening gains, technology and telecom services underperformed from the start and pressured the tech-heavy Nasdaq. Chipmakers ended broadly lower after Evercore downgraded Intel (INTC 23.90, -0.09) to Underweight' from Equal Weight.' Shares of Intel fell 3.6% while the broader PHLX Semiconductor Index slid 2.0%.

    Tuesday's session saw the S&P settle higher by 0.7%. Growth-oriented groups paced the advance even after the International Monetary Fund cut its 2013 global growth outlook to 3.1% from 3.3%. The materials sector gained 1.6% as steelmakers and gold miners outperformed. The Market Vectors Steel ETF settled higher by 1.5% while miners displayed strength as gold futures added 0.9% to almost $1250 per ounce. Also of note, Dow component Alcoa (AA 8.10, 0.00) shed 0.1% after its slim earnings beat was overshadowed by a 1.9% year-over-year decline in revenue. In addition, the aluminum producer reaffirmed its global aluminum demand growth forecast at 7.0%.

    On Wednesday, the major averages ended in mixed fashion. The Dow shed 0.1%, Nasdaq added 0.5%, and the S&P 500 ended flat. Equities held their levels into the afternoon as market participants awaited the Minutes from the June 18/19 meeting of the Federal Open Market Committee. Most notably, the Minutes indicated several members judged a reduction in asset purchases would be warranted soon.' However, the Minutes were overshadowed by Ben Bernanke's speech after the close, which contributed to a sharp rally on Thursday.

    Following the comments from Chairman Bernanke, the major averages saw gains between 1.1% and 1.6% with the Dow Jones and S&P 500 closing at fresh record highs. Equities registered the bulk of their advance at the open after remarks from the Fed Chairman created some push back against the idea the Fed may begin slowing the pace of its asset purchases at the September meeting. Mr. Bernanke commented on the economic landscape by saying the current employment level is overstating the health of the job market and that rates may be kept low even after the previously mentioned unemployment threshold of 6.5% is reached. The comments caused market participants to shift into risk assets and away from the U.S. dollar. Elsewhere, Treasuries received a solid bid, sending the 10-yr yield lower by 11 basis points to 2.572%.

    ___________________________________________

    ECONOMIC COMMENTARY
    Japan Economic Data
    - May final Indust Prod -1.1% vs -1.0% prelim
    China Economic Data
    - Jun New Yuan Loans 860.5 bln vs 667.4 bln in May
    - Jun Foreign Reserves $3500.0 bln vs $3442.6 bln
    Eurozone Economic Data
    - May Indust Prod -1.3% vs -0.6% in May 2012
    U.S. Economic Data
    - June PPI M/M +0.8% vs +0.3%
    - June Core PPI M/M +0.2% vs +0.1%
    - July Michigan Sentiment- prelim 83.9 vs 85.0; June 84.1

    Unexpected Spike in Gasoline Prices Leads to Big Increase in the PPI
    An unexpected increase in energy prices in June caused the largest increase in producer prices since September 2012. The PPI rose 0.8% in June, up from a 0.5% gain in May and well above the Briefing.com consensus expectation of a 0.3% rise.The energy index rose 2.9% in June after increasing 1.3% May. That is the biggest monthly increase since February. The pickup in energy costs was due to a 7.2% increase in gasoline prices. Surprisingly, the EIA showed that gasoline prices increased only 0.7% in June. The entire gain registered in the PPI came from seasonal adjustments.Food prices rose 0.2% in June. That was down from a 0.6% gain in May.Excluding food and energy, core prices remain on a weak trend. Prices increased 0.2% in June after increasing 0.1% in both April and May. The consensus expected these prices to increase 0.1%.There were no outliers in the data. Year-over-year, core prices increased only 1.7% and are not showing any signs of accelerating.Pipeline pressures remain muted. Both core intermediate and crude goods prices increased 0.1% in June.

    Concerns About the Future Weigh Down Consumer Sentiment in July
    The preliminary reading of the July University of Michigan Consumer Sentiment Index softened a bit and fell from 84.1 in June to 83.9. The Briefing.com consensus expected the index to increase to 85.0.While employment levels have generally strengthened over the past few weeks, recent volatility in the stock market coupled with increases in oil and gasoline prices likely reduced overall sentiment levels.The Current Conditions Index rose to 99.7 in July from 93.8 in June. That is the highest level since July 2007.Meanwhile, consumers became more concerned about the future. The Expectations Index fell to 73.8 in July from 77.8 in June.The drop in consumer sentiment has little impact on consumption. As long as the labor market continues to improve and incomes grow in response, spending levels will strengthen.
    Asian Markets Close: Nikkei +0.2%, Hang Seng -0.8%, Shanghai -1.6%
    Asian markets ended in mixed fashion. India's Sensex (+1.4%) was a notable advancer while Chinese indices underperformed as investors showed caution ahead of the Monday release of China's second quarter GDP after the recent string of data suggested the reading could disappoint. On a related note, Finance Minister Lou Jiwei said he is confident the country can achieve 7.0% GDP growth, but 2013 growth of 6.5% would not be a big problem.' Regional economic data was limited. Japan's industrial production rose 1.9% month-over-month (0.0% expected, 1.9% previous). Meanwhile, capacity utilization climbed 2.3% (1.6% previous). Australia's home loans increased 1.8% month-over-month (2.5% expected, 1.2% prior). Singaporean GDP rose 3.7% year-over-year (1.9% expected, 0.2% previous). Looking at the currencies...USDCNY ticked up to 6.1375; USDINR fell to 59.566; USDJPY is stronger at 99.52; AUDUSD is lower near .9035.
    In Japan, the Nikkei closed +0.2% as growth-sensitive names outperformed. Nippon Sheet Glass, Nippon Soda, and Toho Zinc gained between 5.2% and 10.8%. On the downside, Fast Retailing fell 6.2% after its quarterly results disappointed.

    In Hong Kong, the Hang Seng finished -0.8% as energy and property names lagged. China Coal Energy fell 3.4% and Hang Lung Properties settled lower by 2.9%. Lenovo Group displayed relative strength, climbing 0.6%.

    In China, the Shanghai Composite settled -1.6% as miners lagged. Xiamen Tungsten and Yanzhou Coal Mining both dropped near 5.0%.

    In India, the Sensex closed +1.4%. Infosys paced the advance with a gain of 10.9% after beating on earnings.

    In Australia, the ASX ended +0.2% as miners rallied while energy names lagged. Perseus Mining jumped 13.3% and Dart Energy fell 5.7%.

    In Taiwan, the Taiex finished +0.5% as Bizlink Holding led with a gain of 7.0%.

    In South Korea, the Kospi settled -0.4% as Hyundai Motor fell 5.9%.
    In other regional markets...
    Vietnam +2.0%
    Malaysia +0.3%
    Philippines +2.6%
    Singapore -0.4%
    Indonesia +0.6%
    Thailand +0.5%.

    European Markets Update
    Core European indices trade with gains while peripheral indices underperform. Among news of note, the ongoing political turmoil in Portugal caused the Troika to push back its aid review to September from mid-July. Elsewhere, Standard & Poor's affirmed Germany's AAA' sovereign debt rating. Regional economic data was limited. Eurozone industrial production decreased 0.3% month-over-month (-0.2% expected, 0.5% prior) while the year-over-year reading pointed to a decline of 1.3% (1.3% expected, -0.6% prior). Great Britain's CB Leading Index ticked up 0.4% (0.2% prior). Elsewhere, Spain's CPI increased 0.1% month-over-month (0.2% expected, 0.2% prior) while the year-over-year reading rose 2.1%, as expected.
    • France's CAC is lower by -0.4%. STMicroelectronics leads the advancers with a gain of 3.9% after its peer Infosys reported better-than-expected earnings. On the downside, Schneider Electric is lower by 4.3% amid reports the company is considering a bid for Britain's Invensys.
    • Great Britain's FTSE is unchanged at 0.0% as financials lead. Aberdeen Asset Management, Royal Bank of Scotland, and Standard Life are all up between 1.9% and 2.5%. Miners are among the decliners with Rio Tinto off by 1.0%.
    • In Germany, the DAX sports a gain of 0.7%. Daimler is higher by 4.9% after beating earnings expectations. Chemical producer K+S leads the decliners with a loss of 2.4%.
    • On the periphery, Italy's MIB is lower by 1.6% and Spain's IBEX trades down -2.3%.
    European Markets Closing Prices
    UK's FTSE: 0.0%
    Germany's DAX: +0.7%
    France's CAC: -0.4%
    Spain's IBEX: -2.3%
    Portugal's PSI: -1.1%
    Italy's MIB Index: -1.6%
    Irish Ovrl Index: + 0.4%
    Greece ASE General Index: -0.9%
    IN OTHER NEWS ...
    Larry Summers has indicated that he would like to become Fed Chairman, according to reports
    Click Here for the Bloomberg.com Article

    Fitch downgrades France to 'AA+'; Outlook Stable

    Boeing (BA) shares lower by 5% following headlines of a fire on a BA 787 at Heathrow Airport
    TUI Travel has indicated that passengers on a Dreamliner have left the plane and engineers are now inspecting it in Manchester ... CNBC commentator is saying that the area of the fire was concentrated in the crown of the aircraft which is not an area where the battery would be located ... GE has said Boeing (BA) 787 fire doesn't involve engines.
    EARNINGS CALL ...
    Before market open
    JPMorgan Chase (JPM) beats by $0.16, reports revs in-line
    Reports Q2 (Jun) earnings of $1.60 per share, $0.16 better than the Capital IQ Consensus Estimate of $1.44; revenues rose 13.7% year/year to $25.21 bln vs the $25.04 bln consensus. JPM reported net income of $6.5 billion for Q2, compared with net income of $5.0 billion in 2Q12.

    Q2 results included the following significant items
    • $950 million pretax benefit ($0.15 per share after-tax increase in earnings) from reduced loan loss reserves in Real Estate Portfolios
    • $550 million pretax benefit ($0.09 per share after-tax increase in earnings) from reduced loan loss reserves in Card Services
    • $600 million pretax expense ($0.09 per share after-tax decrease in earnings) for additional litigation reserves in Corporate
    Fortress balance sheet strengthened
    • Basel I Tier 1 common of $147 billion, or 10.4%
    • Estimated Basel III Tier 1 common ratio of 9.3%, including the estimated impact of final Basel III rules issued on July 2, 2013
    • High Quality Liquid Assets of $454 billion; estimated Basel III Liquidity Coverage Ratio of 118%
    Dimon comments included: "This quarter, we exceeded the proposed Basel III Liquidity Coverage Ratio requirement -- as of the end of the second quarter, our estimated ratio was 118% -- and we are committed to achieving a Basel III Tier 1 common ratio of 9.5% by the end of this year. We estimate that our Basel III Tier 1 common ratio1, reflecting the final rules approved by the Federal Reserve on July 2, 2013, was approximately 9.3% at the end of the second quarter, including the reduction of the value of our investment securities that are available for sale because of higher long-term interest rates."

    Consumer & Community Banking:
    • Net income was $3.1 billion, a decrease of $193 million, or 6% compared with the prior year, due to lower net revenue and higher noninterest expense, partially offset by lower provision for credit losses. Net revenue was $12.0 billion, a decrease of $435 million, or 3%, compared with the prior year. Net interest income was $7.1 billion, down $67 million, or 1%, driven by lower deposit margins and lower loan balances due to portfolio runoff, largely offset by higher deposit balances. Noninterest revenue was $4.9 billion, a decrease of $368 million, or 7%, driven by lower mortgage fees and related income, partially offset by higher merchant servicing revenue, auto lease income and net interchange income. Return on equity was 27% on $46.0 billion of average allocated capital.
    • Mortgage Banking Mortgage originations were $49.0 billion, up 12% from the prior year and down 7% from the prior quarter, including purchase originations of $17.4 billion, up 50% from the prior year and 44% from the prior quarter.
    • Deposit margin was 2.31%, compared with 2.62% in the prior year and 2.36% in the prior quarter.
    • Mortgage Servicing pretax income was $133 million, an increase of $68 million from the prior year. Mortgage servicing revenue, including changes to the mortgage servicing rights asset fair value, was $770 million, a decrease of $15 million, or 2%, from the prior year. MSR risk management income was $78 million, compared with $233 million in the prior year. Servicing expense was $715 million, a decrease of $238 million from the prior year, reflecting lower servicing headcount and lower costs associated with the Independent Foreclosure Review.
    Corporate & Investment Bank:
    • Net income was $2.8 billion, up 19% compared with the prior year. These results primarily reflected higher net revenue, partially offset by higher noninterest expense. Net revenue was $9.9 billion, compared with $9.0 billion in the prior year. Net revenue included a $355 million gain from debit valuation adjustments on structured notes and derivative liabilities resulting from the widening of the Firm's credit spreads; the prior year included a gain from DVA of $755 million.
    • Banking revenue was $3.1 billion, compared with $2.7 billion in the prior year. Investment banking fees were $1.7 billion (up 38%), driven by higher debt underwriting fees of $956 million (up 50%) and equity underwriting fees of $457 million (up 83%), partially offset by lower advisory fees of $304 million (down 15%). Treasury Services revenue was $1.1 billion, down 2% compared with the prior year, driven by lower trade finance spreads. Lending revenue was $373 million, primarily reflecting net interest income on retained loans and fees on lending-related commitments, compared with $370 million in the prior year.
    • Markets & Investor Services revenue was $6.7 billion, up 7% from the prior year. Fixed Income and Equity Markets combined revenue was $5.4 billion, up 18% from the prior year, reflecting solid client revenue, as well as improved performance in credit-related and equities products. Securities Services revenue was $1.1 billion, up 1% from the prior year. Credit Adjustments & Other revenue was $274 million, compared with $683 million in the prior year; both periods were predominantly driven by the impact of DVA. Noninterest expense was $5.7 billion, up 8% from the prior year, primarily driven by higher compensation expense on increased revenue. The compensation ratio for the current quarter was 31%, excluding the impact of DVA.
    Book Value was $52.54 compared to $52.02 in Q1;
    Tangible Book Value per Share $40.04 compared to $39.54 in prior year.
    Companywide RoE 13% compared to 13% in Q1.
    Total Loans $725 bln compared to $728 bln in Q1.
    Wells Fargo (WFC) beats by $0.05, reports revs in-line; NIM declines 2 bps QoQ; Residential mortgage originations increased 2.7% QoQ
    Reports Q2 (Jun) earnings of $0.98 per share, $0.05 better than the Capital IQ Consensus Estimate of $0.93; revenues rose 0.5% year/year to $21.4 bln vs the $21.19 bln consensus.

    Top Points:
    • On a linked-quarter basis, the Company's net interest margin declined 2 basis points to 3.46 percent (versus expectations of a mid single digit decline).
      Residential mortgage originations were $112 bln, up slightly from $109 bln in first quarter 2013, however gain on sale margins declined as expected.
      WFC's estimated Tier 1 common equity ratio under the Basel III capital rules adopted July 2, 2013, increased to 8.54 percent this quarter, despite the increase in market interest rates late in the quarter which reduced unrealized security gains and negatively impacted the ratio by 24 basis points.
    • Revenue was $21.4 bln, up from $21.3 bln in first quarter 2013. Total revenue increased due to growth in net interest income, while growth in noninterest income fee categories, driven by trust and investment fees, was offset by lower market sensitive revenue and other income.
    • Net interest income in second quarter 2013 increased $251 mln on a linked-quarter basis to $10.8 bln largely due to higher interest income from the available-for-sale (AFS) securities portfolio as we purchased $21.1 bln in securities, largely consisting of agency mortgage-backed securities during the quarter. The provision for credit losses decreased $306 mln from second quarter 2012 due to a $246 mln reduction in credit losses and $60 mln of additional reserve release. The second quarter 2013 provision included a $35 mln reserve release, compared with a $25 mln reserve build a year ago.
    Noninterest income was $10.6 bln, down slightly from first quarter 2013. Fee income was up in many of the Company's core businesses, including solid increases in trust and investment fees, lease income, equity gains, card and other fees, service charges on deposit accounts, and insurance.

    On a linked-quarter basis, the Company's net interest margin declined 2 basis points to 3.46 percent (versus expectations of a mid single digit decline).

    Linked-quarter deposit growth caused cash and short term investments to grow despite growth in other earning asset categories including loans and AFS securities. Total loans were $802.0 bln at June 30, 2013, up $2.0 bln from March 31, 2013, driven by growth in commercial and industrial, auto, foreign, credit card, and non-conforming first mortgage, partially offset by decreases in junior lien mortgage and commercial real estate mortgage, and a decline of $3.3 bln due to the continued runoff in the liquidating/non-strategic portfolio.

    Mortgage banking noninterest income was $2.8 bln, in line with first quarter 2013. During the second quarter, residential mortgage originations were $112 bln, up slightly from $109 bln in first quarter 2013, however gain on sale margins declined as expected. The Company provided $65 mln for mortgage loan repurchase losses, compared with $309 mln in first quarter 2013 (included in net gains from mortgage loan origination/sales activities). Net mortgage servicing rights (MSRs) results were $68 mln, compared with $129 mln in first quarter 2013.

    Capital: Under the Basel III capital rules adopted July 2, 2013, the Tier 1 common equity ratio was an estimated 8.54 percent. In second quarter 2013, the Company purchased 26.7 mln shares of its common stock and an additional estimated 13 mln shares through a forward repurchase transaction expected to settle in third quarter 2013. The Company also increased its quarterly common stock dividend to $0.30 per share, up from $0.22 a year ago.

    Credit Quality: Net loan charge-offs improved to $1.2 bln in second quarter 2013, or 58 basis points of average loans, compared with $1.4 bln in first quarter 2013, or 72 basis points of average loans. The allowance for credit losses, including the allowance for unfunded commitments, totaled $16.6 bln at June 30, 2013, down from $17.2 bln at March 31, 2013. The allowance coverage to total loans was 2.07 percent, compared with 2.15 percent in first quarter 2013.

    Segments: Community Banking reported net income of $3.2 bln, up $321 mln, or 11 percent, from first quarter 2013. Revenue increased $43 mln, or 0.3 percent, primarily due to higher net interest income and mortgage banking revenue, growth in deposit service charges, and higher debit, credit and merchant card volumes, partially offset by lower deferred compensation plan investment gains. Wholesale Banking reported net income of $2.0 bln, down $41 mln, or 2 percent, from first quarter 2013. Revenue of $6.1 bln increased $49 mln, or 1 percent, from first quarter 2013 as strong growth across many businesses, including commercial banking, corporate banking, investment banking and international were partially offset by lower equity gains as well as lower sales and trading results.

    "Solid performance in the quarter reflected the strength of our broad and diverse franchise. Linked quarter we grew revenue, with higher net interest income as we grew loans and invested in securities. In addition, expenses and net charge-offs were lower in the quarter and we continued to grow capital. Our estimated Tier 1 common equity ratio under the Basel III capital rules adopted July 2, 2013, increased to 8.54 percent this quarter, despite the increase in market interest rates late in the quarter which reduced unrealized security gains and negatively impacted the ratio by 24 basis points. That's a testament to the earnings power of Wells Fargo."
    ___________________________________________

    TECHNICAL UPDATE

    Quote Originally Posted by Conrad on Friday 12 July, 2013 View Post
    New historical highs for DOW and S&P and a new multi-year high for NASDAQ. For now, all I am focused on is NASDAQ's massive gap and the Double Tops on S&P and DOW - every time NASDAQ gaps into a new high, it almost always rallies like mad ... and every time DOW and S&P fail to break their Double Tops, they always tank like mad.

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,464.30 +3.38 (+0.02%)
    Volume: 130,140,271 from 124,952,994 the previous day
    Range: 15,410.27 - 15,498.39


    DOW closed out the week at record highs but it also closed with a Doji, hinting that it could be the end of this up trend for now. It fell short of hitting its OP at 15,500. This is going to be a critical level if DOW is expected to break to higher highs - the XOP on this PHIb is at 17,150. Last week was DOW's best gaining week of the year and it is usual that after such a euphoric week that the market takes a breather.


    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,600.08 +21.78 (+0.61%)
    Volume: 421,619,138 from 404,139,461 the previous day
    Range: 3,576.57 - 3,600.08


    NASDAQ is by far the most euphoric of the three benchmarks. Like the DOW, the tech-heavy index had its best week since the last week of December last year. NASDAQ is now climbing to my upper PHIb-Fan - I will be watching this closely for any signs of an impending correction. Having tested 3,600 on Friday, this could become the next key level depending on how we fare this week.


    S&P 500 INDEX (SPX: CBOE)
    1,680.19 +5.17 (+0.31%)
    Volume: 575,988,000 from 554,747,000*the previous day
    Range: 1,672.33 - 1,680.19


    It's seven straight sessions of gains for S&P and an Eighth Candle is due. The level to watch for this week will be its intra-day high of 1,684 from 22 May (my readjusted OP level). And it looks like I might have to redraw those waves too.

    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 652 mln vs. avg. of 760
    Advancers outpaced Decliners (adv/dec): 1504/1483
    New highs outpaced new lows (hi/lo): 239/14

    NASDAQ :
    Lower than avg volume @ 1536 mln vs. avg. of 1677
    Advancers outpaced Decliners (adv/dec): 1354/1104
    New highs outpaced new lows (hi/lo): 282/8

    Quote Originally Posted by Conrad on Friday 12 July, 2013 View Post
    Advancers outpaced Decliners by an average 3 to 1 on Lower average volumes (-1.87%) on Thursday (avg +1.37%).*

    Up volumes finally decided to show up and Down volumes finally retreated for $UVOL to run down $DVOL by 7.55 to 1, by far one of the most lop-sided bullish sessions to year-to-date. The VIX closed above its lows at 14.01 -0.20 (-1.41%).
    Advancers barely outpaced Decliners by an average 1.10 to 1 on lower volumes (-10.22%) on Friday (avg +0.31%).

    Down Volumes dominated almost the entire session but was pipped in the last 15 minutes of the session as Up Volumes suddenly surge such that $UVOL looked as if it had outpaced $DVOL by 1.27 to 1. In actuality, Up Volumes were lower by 42% from Thursday while Down Volumes were higher by 244%. On a broader perspective, volumes were disturbingly low for a Friday session at the start of earnings season.

    The last 15 minutes were dominated by sellers as the TICK fell from +700 to -800 while the TRIN showed divergence by also falling from 0.97 to 0.81.



    The VIX close lower at 13.84 -0.17 (-1.21%) in a Bearish Harami implying that this could be the end of the downside proceedings for now. On the big picture, going back to March, the VIX is still on higher highs and higher lows and sitting on its critical 2-year old 13.75 retracement level which for now is acting as a support.



    ___________________________________________

    COMMODITIES, CURRENCIES & BONDS

    Crude Oil Rises 2.7% On The Week - from Briefing.com
    Commodities ended the day mixed with crude oil and natural gas posting gains while precious metals saw slight losses.

    NYMEX Energy Closing Prices
    Aug crude oil rose $1.05 to $105.93/barrel. Crude oil advanced for a third time this week despite a stronger dollar index. The energy component rose to a session high of $106.03 and settled slightly below that level, booking a 2.7% gain for the week. Aug natural gas rose $0.03 to $3.64/MMBtu. Natural gas rose to a session high of $3.69 put pulled back in afternoon action. It settled 0.8% higher, booking a slight gain of 0.6% for the week. Aug heating oil rose 3 cents to $3.03/gallon. Aug RBOB gasoline rose 10 cents to $3.12/gallon.

    COMEX Metals Closing Prices
    Aug gold fell $2.80 to $1277.40/ounce. Gold fell for the first time this week on pressure from a stronger dollar index. The yellow metal dipped to a session low of $1269.60 in early morning pit action but erased most of the loss and settled just 0.2% lower. Despite today's slight decline, gold booked a 5.4% gain for the week. Sep silver fell $0.15 to $19.80/ounce. Silver also traded in negative territory today. It brushed a session low of $19.72 and eventually closed with a 0.8% loss, bringing gains for the week to 5.7%. Sep copper fell 3 cents to $3.15/lb.

    CBOT Agriculture and Ethanol/ICE Sugar Closing Price
    Dec corn fell 18 cents to $5.08/bushel
    Sep wheat fell 1 cent to $6.81/bushel
    Nov soybeans fell 36 cents to $12.55/bushel
    Aug ethanol fell 3 cents to $2.44/gallon
    Sep sugar (#16 (U.S.)) fell 0.13 of a penny to 18.85 cents/lbs

    Currencies: Euro Ticks Higher After Fitch Downgrades France
    The Dollar Index continues to hold modest gains as action tests the 83.00 level. The Index hit a session high of 83.20 early on in U.S. trade, but was unable to retake resistance in the area as sellers stepped in to defend the level.
    • EURUSD is -35 pips at 1.3060 as trade has ticked higher throughout the course of U.S. action. The single currency was whipped around after Fitch cut France's AAA' rating to AA+,' but is actually a touch higher than before than downgrade. Traders are watching current levels closely as the 50-, 100-, and 200-day moving averages lurk in the vicinity.
    • GBPUSD is -75 pips at 1.5105 as trade gives back a good portion of yesterday's gains. The 1.5000 level will be under careful scrutiny in the days ahead as a breakdown sets up another test of the key 1.4850 area, which represents a three-year low.
    • USDCHF is -5 pips at .9460 as sellers have been in control throughout the U.S. session. The pair slumped to .9440 in reaction to the French downgrade, but buyers emerged at the level in defense the 100-day moving average. Should that level give way look for bears to press the 200-day moving average (.9355). Swiss data due out on Monday is limited to PPI.
    • USDJPY is +35 pips at 99.35 as action has recovered most of yesterday's losses. Today's bid has the pair looking to retake the 50-day moving average, and doing so would set up another test of 101.00 resistance.
    • AUDUSD is -130 pips at .9045, but action has been able to climb off its worst levels of the day. The hard currency has been under pressure throughout the session, slipping to fresh 34-month lows, as a disappointing home loans number preceded comments from China's finance minister suggesting the Chinese economy could handle a slowdown in growth to 6.5%. The .8800/.9000 area is critical in terms of support. Australia's new motor vehicle sales will be released Sunday evening. Chinese data is heavy as GDP, fixed asset investment, and industrial production are scheduled for release.
    • USDCAD is +35 pips at 1.0400 as trade continues to test, and hold, key support in the region. The pair is one to watch over the coming days as the ability to hold this level will mean another test of three-year highs near 1.0550/1.0575.

    Bonds: Treasuries See Weekly Gains
    Treasuries gained this week as mostly disappointing economic data and what were perceived as dovish comments from Fed Chairman Ben Bernanke sparked buying across the complex. Economic data mostly missed estimates as PPI ran hotter than expected (0.8% actual v. 0.3% expected) and Michigan Sentiment fell short of estimates (83.9 actual v. 85.0 expected). Wednesday's FOMC minutes continued to paint a picture of potential Fed tapering later this year, but those comments saw some push back on Thursday as Chairman Bernanke commented that the Fed is missing its dual mandate for both inflation and employment. This led to some aggressive buying as some began to speculate a tapering later this year was not a forgone conclusion.

    This week's buying had the biggest impact on the belly of the curve as yields there tumbled as much as 16 bps. The 5-yr yield hit a low of 1.349%, but Friday's selling ran it back up to 1.434% by week's end. After ending last week above 2.700%, the benchmark 10-yr yield dipped below 2.520% before settling at 2.601% on Friday. Traders will be watching the 2.450% area closely over the coming days as key support rests in the vicinity. Significant underperformance came from the wings of the curve as those yields shed only a couple of bps. The 30-yr end the week lower by just 2 bps at 3.649%.

    This week's bid flattened the yield curve as the 2-10-yr spread narrowed to 225.5 bps.

    Treasury Yields:
    • 2 Year Note 0.37% +0.03
    • 5 Year Note 1.43% +0.03
    • 10 Year Note 2.61% +0.01
    • 30 Year Bond 3.64% UNCH
    2/30 Spread : 327bps ( -3 ) ... 2/10 Spread : 224bps ( -2 )



    Quote Originally Posted by Conrad on Friday 12 July, 2013 View Post
    Once again the belly of the curve saw most of the action. This time, it it fell instead of rising. Knee Jerk? or Irrational Buying? or Misplaced Euphoria? We'll find out in the next few sessions to come.
    Ooops ... that's not good. The shorter term yields raised to flatten the curve. This is usually the kind of move that precedes short term doubt in the risk market. This happens because investors are selling off the shorter maturities for better returns in the risk-on trade. This translates into short term greed that can usually bubble the market in a hurry. Too much of this can invert the curve in a longer period. Let's hope its an anomaly and not the shape of things to come.

    ___________________________________________

    PREVIEW FOR THE WEEK - MONDAY 15 JULY TO FRIDAY 19 JULY, 2013

    Monday's data includes retail sales, retail sales ex-auto, Empire Manufacturing (8:30), and business inventories (10). Fed Governor Tarullo will be in Washington D.C. participating in Politicos Morning Money (8).

    Tuesday will see CPI, core CPI (8:30), net long-term TIC flows (9), industrial production, capacity utilization (9:15), and the NAHB Housing Market Index (10). KCs George will be on her home turf discussing Economic Conditions and Agriculture (14:15).

    Wednesday's data slate includes the weekly MBA Mortgage Index (7), housing starts, building permits (8:30), and the Feds Beige Book (14). Fed Chairman Ben Bernanke will appear before the House Financial Services Committee for his semi-annual testimony on monetary policy (10).

    Data concludes for the week on Thursday with initial and continuing claims (8:30), Philadelphia Fed, and leading indicators (10). Fed Chairman Bernanke moves to the Senate Banking Committee for his semi-annual testimony on monetary policy (10).

    There is no data on Friday.

    Earnings Highlights
    Monday: Pre Market - C
    After Hours - CTAS, BRO
    Tuesday:
    Pre Market - JNJ, KO, GS, MOS, CMA
    After Hours - CSX, URI, YHOO, PKG, IBKR, WTFC
    Wednesday:
    Pre Market - BAC, NVS, ABT, USB, PNC, BK, TXT, GWW, STJ, MAT, MTB, ASML, NTRS
    After Hours - IBM, INTC, AXP, EBAY, KMP, CCK, STLD, SNDK, NE, VMI, UFPI, SLM, ALB, PLXS, XLNX, HNI, CVA
    Thursday:
    Pre Market - TSM, ERIC, UNH, VZ, JCI, SWY, PM, MS, NOK, UNP, SVU, DHR, NUE, AN, SAP, PPG, BAX, GPC, SHW, BLK, BBT, DOV, DGX, FITB, SON, BX, APH, WSO, KEY
    After Hours - MSFT, GOOG, COF, SYK, CE, AMD, HUBG, CMG, ISRG, CYT, SWKS, CHE
    Friday:
    Pre Market - GE, SLB, HON, BHI, MAN, IR, STT, VFC, STI, ALV, IPG, LH, COL

    Economic Events
    Monday:
    08:30 Retail Sales
    08:30 Retail Sales ex-auto
    08:30 Empire Manufacturing
    10:00 Business Inventories
    Tuesday:
    08:30 CPI
    08:30 Core CPI
    09:00 Net Long-Term TIC Flows
    09:15 Industrial Production
    09:15 Capacity Utilization
    10:00 NAHB Housing Market Index
    Wednesday:
    07:00 MBA Mortgage Index
    08:30 Housing Starts
    08:30 Building Permits
    10:30 Crude Inventories
    14:00 Fed's Beige Book
    Thursday:
    08:30 Initial Claims
    08:30 Continuing Claims
    10:00 Philadelphia Fed
    10:00 Leading Indicators
    10:30 Natural Gas Inventories
    Friday:
    None Scheduled

    Conferences and Shareholder/Analyst Meetings of Interest
    Monday:
    • RBA Minutes (released overnight)
    • Angelbeat Conference Chicago
      Scheduled to appear: BMC
    • China FDI data at 21:00
    Tuesday
    • Germany ZEW Econ Sentiment (released overnight)
    • TV Xperience World
      Scheduled to appear: ADBE, AOL, ARRS, T, RNWK, VZ
    • Kansas City Fed President George (FOMC dissenter, hawkish) to speak at 14:15
    Wednesday
    • Wells Fargo Fiber Summit 2013
      Scheduled to appear: CNSL, ELNK, LMOS
    • Private Healthcare Exchanges Conference
      Scheduled to appear: WAGE
    • Fed Chairman Ben Bernanke to Address House Financial Services Committee at 10:00
    Thursday
    • Science Applications (SAI) Investor Day
    • GOG Gynecologic Oncology Group 87th Semi-Annual Meeting
      Scheduled to appear: VRML
    • Ben Bernanke to address Senate Financial Services Committee at 10:00
    Friday
    Nothing of Interest
    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Friday 12 July, 2013 View Post
    I guess Bernanke's tongue should not have been underestimated. Man, this makes me look bad ...
    The third week (Expiration Week) is prone to wild swings. The Monday of July Expiration Week has been bullish on the DOW 7 of the last 9. July Expiration Friday is bearish with DOW going down 7 of the last 12.

    A lot of big-hitters on earnings call this week. Expect volatility to pick up again. Data will be predominantly from the housing industry and Inflation. As I am not expecting anything too hawkish, we could be looking at another week of gains.

    For Monday, a Pause or Stall wouldn't hurt this uptrend. All eyes will be on Citigroup's number BMO. How this one pans out is anyone's guess but again, I am not expecting anything disappointing but guidance could be an issue that will keep the market from climbing today.

    Direction for Monday 15 July, 2013; Down or Consolidation

    Direction for the week Monday 15 July to Friday 19 July, 2013; Up

    2013 Daily Directional Accuracy: 55/81 (67.90%)

    2013 Weekly Directional Accuracy Year-To-Date: 09/18 (50.00%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

  10. #10

    Thumbs down Tuesday 16 July, 2013 - BMO

    U.S. MARKETS - MONDAY 15 JULY, 2013 AMC

    Quote Originally Posted by Conrad on Monday 15 July, 2013 View Post
    For Monday, a Pause or Stall wouldn't hurt this uptrend. All eyes will be on Citigroup's number BMO. How this one pans out is anyone's guess but again, I am not expecting anything disappointing but guidance could be an issue that will keep the market from climbing today.

    Direction for Monday 15 July, 2013; Down or Consolidation
    Once again, if you thought Monday was bullish, check out the move on the defensive Utilities sector - more than a whole percentage point gain over the rest of the sectors, a 300% advantage over its closest chasers. Given Citi's good news on the back of JPM's numbers on Friday, you'd expect the Financials to have performed better.

    Something held the market back today.

    ___________________________________________

    MARKET SUMMARY

    BRIEFING.COM
    Daily Sector Wrap: S&P 500 Settles at Fresh Record High

    The S&P 500 settled higher by 0.1% to mark its eight consecutive advance. The utilities sector ended atop today's leaderboard with a gain of 1.6%, but the relative strength of three influential sectors (financials, industrials, and technology) helped the S&P end at a fresh record high of 1682.50, less than five away from its May 22 all-time intraday high of 1687.18.

    Financials provided the broader market with an opening boost after Citigroup (C 51.81, +1.00) reported better-than-expected earnings on above-consensus revenue. Citigroup rose 2.0% while the broader sector added 0.4%, but neither was able to close above its opening high.

    Technology shares (+0.3%) also outperformed the broader market as major components provided the sector with a measure of support. Apple (AAPL 427.44, +0.93), IBM (IBM 194.00, +1.93), and Microsoft (MSFT 36.17, +0.50) all gained between 0.2% and 1.4%. However, chipmakers underperformed as the PHLX Semiconductor Index slipped 0.1%.

    Industrials and materials climbed after China's second quarter GDP growth of 7.5% met expectations after some feared the reading could disappoint. In addition, the industrial sector received a boost from Dow component Boeing (BA 105.66, +3.79) after it was determined that Friday's fire aboard a 787 Dreamliner at London's Heathrow Airport was not caused by battery issues. Afternoon reports from the Wall Street Journal have suggested an emergency locator transmitter made by Honeywell (HON 82.30, -0.07) may have been the culprit.

    While most cyclical sectors finished ahead of the broader market, the energy space ended lower by 0.1% and the discretionary sector shed 0.3%. Homebuilders lagged with the iShares Dow Jones US Home Construction ETF (ITB 23.11, -0.47) falling 2.0%.

    With regards to countercyclical groups, the utilities sector stood out while consumer staples and health care were little changed. For its part, the telecom services sector lost 0.7% as AT&T (T 35.55, -0.26) and Verizon (VZ 49.96, -0.45) weighed. Over the weekend, AT&T offered to acquire Leap Wireless (LEAP 16.95, +8.97) for $15 per share, representing an 88.0% premium to Leap's Friday closing price.

    Today's session featured below-average participation as only 567 million shares changed hands on the floor of the New York Stock Exchange. This total was only 85 million above the holiday-shortened session on July 3. However, the remainder of the week should prove to be more active as second quarter earnings pour in. In addition, Federal Reserve Chairman Ben Bernanke will appear before Congress on Wednesday and Thursday to take part in a semi-annual testimony.

    Economic data of the day pointed to a 0.4% increase in June retail sales. That was below the Briefing.com consensus estimate, which called for an increase of 0.7%. Excluding autos, retail sales were flat, which was disappointing relative to the 0.4% consensus estimate.

    Separately, May business inventories ticked up 0.1% after increasing 0.2% in April. The Briefing.com consensus expected inventory levels to decline 0.1%.

    Tomorrow, June CPI and core CPI will be reported at 8:30 ET; May net long-term TIC flows will be announced at 9:00 ET; while June industrial production and capacity utilization will be released at 9:15 ET. The day's economic data will be topped off by the 10:00 ET release of the July NAHB Housing Market Index. On the earnings front, Coca-Cola, Goldman Sachs, and Johnson & Johnson will report their results before the opening bell.
    Sector Leaders/Laggards
    Leading Sectors: Utilities (+1.59%), Financials (+0.38%), Tech (+0.29%), Industrials (+0.27%), Materials (+0.20%), Consumer Staples (+0.03%)
    Leading Industries/ETFs : Telecommunications-IYZ +4.44%, Columbia Index-GXG +3.74%, Turkey-TUR +3.67%, Coffee-JO +3.49%, Clean Energy-PBW +2.97%, Latin America 40-ILF +2.68%, Chile-ECH +2.46%, Egypt-EGPT +2.45%, Social Media-SOCL +2.15%, Utilities-XLU +1.63%.

    Unchanged Sectors: Health Care (+0.00%)

    Lagging Sectors: Energy (-0.07%), Consumer Discretionary (-0.33%), Telecom (-0.69%)
    Lagging Industries/ETFs : Volatility-VXX -2.19%, U.S. Home Construction-ITB -1.99%, Greece-GREK -1.92%, Corn-CORN -1.04%, Junior Gold Miners-GDXJ -1.03%, Homebuilders-XHB -0.96%, Japanese Yen-FXY -0.38%, Swiss Franc-FXF -0.27%, Canadian Dollar-FXC -0.17%, Vietnam-VNM -0.11%.

    Other Market Moving Factors:
    • China's second quarter GDP rose 1.7% quarter-over-quarter (1.8% expected, 1.6% prior) while the year-over-year reading climbed 7.5%
    • Singapore retail sales increased 3.2% year-over-year
    • Financial sector outperforms after Citigroup (C) delivered better-than-expected earnings on above-consensus revenue.
    • U.S. May business inventories report pointed to an uptick of 0.1% after increasing 0.2% in April
    • U.S. Retail sales numbers disappoint
    • Homebuilders weigh on consumer discretionary sector.

    Futures are down at 23:00 EST:
    DOW futures are -5.00 (-0.03%)
    S&P 500 futures are -0.25 (-0.01%)
    Nasdaq100 futures are -1.00 (-0.06%)

    Companies trading higher in after hours in reaction to earnings: NQ +7.3%, BRO +1.8%, ELX +0.3%, WLL +0.06%
    Companies trading higher in after hours in reaction to news:
    • PGH +1.4% (announced 51% increase in proved plus probable reserves at Lindbergh thermal bitumen project)
    • ACT +0.6% (co's generic version of Lamictal ODT received FDA approval)
    Companies trading lower in after hours in reaction to earnings: JOEZ -12.9%, STLY -6.3%, CTAS -4.3%, MPC -3.7%, MILL -2.0%, WWAV -1.2%
    Companies trading lower in after hours in reaction to news:
    • JOEZ -12.9% (to acquire Hudson Clothing for ~$97.6 mln and will be payable in cash and convertible notes; co also reported Q2 results)
    • HSII -11.0% (announced CEO transition; sees Q2 revs at high end of previous guidance; concluded exploration of strategic alternatives and decided to remain a standalone company)
    • INSM -5.0% (announced proposed public offering of $60 mln of common stock)
    • PFLT -3.7% (announced public offering of 4.7 mln shares)
    • BERY -3.6% (announced proposed secondary public offering of 15 mln share of the co's common stock by certain funds affiliated with Apollo Global Management and certain funds affiliated with Graham Partners)
    • AMRE -2.7% (announced that it plans to sell 3 mln shares of its common stock in an underwritten public offering)

    ___________________________________________

    ECONOMIC COMMENTARY
    China Economic Data
    - Q2 GDP +7.5% vs +7.7% in 2Q12
    - Jun Retail Sales +13.3% vs +12.9% in Jun 2012
    - Jun Indust Prod +8.9% vs +9.2% in Jun 2012
    - Q2 Business Climate index 120.8 vs 125.6 in Q1
    Australia Economic Data
    - Jun New Motor Vehicle Sales +4.0% vs 0.0% in May
    U.S. Economic Data
    - June Retail Sales +0.4% vs +0.7%; Prior revised to +0.5% from +0.6%
    - June Retail Sales ex-auto 0.0% vs +0.4%; Prior +0.3%
    - July Empire Manufacturing 9.46 vs 3.6; June 7.8
    - May Business Inventories +0.1% vs -0.1%; Prior +0.3%

    Retail Sales a Mixed Bag
    Overall, the retail sales report for June was a bit of a mixed bag -- nothing great, but nothing too bad either. It pretty much fit the mold for an economy that is growing but not meeting its potential.

    Retail sales increased 0.4%. That was below the Briefing.com consensus estimate that called for a 0.7% increase. Excluding autos, retail sales were flat, which was disappointing relative to the 0.4% consensus estimate.

    With the June employment situation report showing aggregate earnings up 0.6%, retail sales did not live up to expectations in June. It might have been a case of consumers saving more of their income out of concern about job security, yet that line of thinking doesn't fit well with recent consumer sentiment surveys.

    The sales performance was spotty in June. For example, sales at furniture stores increased 2.4% from May while sales at building material and supplies dealers declined 2.2%. There was some strength in the discretionary category of clothing and clothing accessories stores (+0.7%) and some weakness at non-discretionary food and beverage stores (-0.1%). Meanwhile, sales at department stores and food services and drinking places dropped 1.0% and 1.2%, respectively.

    Core retail sales, which exclude autos, gasoline station, and building material store sales, increased a modest 0.2%.

    Business Inventories Up Slightly in May
    Business inventories increased 0.1% in May after increasing 0.3% in April. The Briefing.com consensus expected inventory levels to decline 0.1%.

    Inventories at manufacturers (0.0%) and merchant wholesalers (-0.5%) were known prior to the release. The only new information was that retailer inventories increased 0.6% in May after increasing 0.5% in April. That gain was paced by a 1.2% increase in inventories at motor vehicle and parts dealers and a 1.0% jump in inventories at food and beverage stores.

    Total business sales increased 1.1% after being unchanged in April. The inventory-to-sales ratio slipped to 1.29 in May from 1.30 in April, which was close to the highest ratio since 2009.
    Asian Markets Close; Nikkei CLOSED, Hang Seng +0.1%, Shanghai +1.0%
    It was a sea of green across Asia as all of the major averages ended with gains. China's Shanghai Composite (+1.0%) was the leader after country's Q2 GDP posted an in-line 7.5%. The reading is down slightly from Q1's 7.7%, but helped ease some fears of a deeper slowdown that developed last week when Finance Minister Lou Jiwei suggested the Chinese economy could handle growth as slow as 6.5%. Other data out of the Middle Kingdom showed fixed asset investment climb 20.1% YTDoY (20.3% YTDoY expected) and industrial production jump 8.9% YoY (9.1% YoY expected). Elsewhere, India's WPI inflation rate ticked up to 4.9% YoY (4.9% YoY expected, 4.7% YoY previous) while Singapore's retail sales rose 3.2% YoY. Looking at the currencies...USDCNY ticked up to 6.1376; USDINR slipped to 59.85; USDJPY is stronger at 100.30; AUDUSD is higher near .9045.
    In Japan, the Nikkei was closed for Marine Day.

    In Hong Kong, the Hang Seng finished +0.1% amid a choppy trade. Internet gaming co Tencent Holdings rallied 3.7% after a government agency suggested improved communications was a top priority with some believing 4G licenses will be awarded by the end of the year. Elsewhere, Angang Steel surged 8.2% on the back of better than expected quarterly results.

    In China, the Shanghai Composite settled +1.0% as brokerage and auto shares paced the advance. Citic Securities climbed 4.0% as regulators loosen restrictions on foreign investment. Meanwhile, automaker FAW gained 4.3% after upbeat guidance. Click here to see a daily Shanghai Composite chart.

    In India, the Sensex closed +0.4% as action regained the psychologically important 20,000 level. Heavyweights Reliance Industries and ITC saw in-line gains, adding 0.4% and 0.5% respectively.

    In Australia, the ASX finished +0.1% as financials led the way. All of the big four' banks ended in positive territory with Westpac climbing 0.9% to pace the advance.

    In Taiwan, the Taiex settled +0.4% as Hon Hai Precision gained 0.6%.

    In South Korea, the Kospi closed +0.3% as Hyundai Motor rose 1.7%.
    In other regional markets ...
    Vietnam UNCH
    Singapore UNCH
    Indonesia +0.1%
    Malaysia +0.1%
    Thailand +0.1%
    Philippines +0.7%

    European Markets Update:
    Major European indices trade near their lows after seeing solid gains in the first half of the session. Spain's IBEX (-0.5%) trails behind other regional indices after weekend protests called for the resignation of Prime Minister Mariano Rajoy following the release of additional evidence implicating the PM and his party in a kickback scheme. Regional economic data was limited to Swiss PPI, which increased 0.1% month-over-month while the year-over-year reading ticked up 0.2%. Both figures met expectations.
    • Germany's DAX is higher by 0.3% with financials in the lead. Commerzbank trades up 3.7% after weekend reports indicated German Finance Minister Wolfgang Schaeuble discussed selling shares to Swiss UBS. In addition, Allianz and Deutsche Bank hold respective gains of 0.5% and 1.3%. On the downside, steelmaker ThyssenKrupp is lower by 1.4%.
    • Great Britain's FTSE trades with a gain of 0.6% as bank shares outperform. Royal Bank of Scotland and Lloyds Banking Group are higher by 3.6% and 2.0%, respectively. Miners are among the laggards as Antofagasta and Randgold Resources register losses near 2.0% each.
    • France's CAC is higher by 0.6%. Food retailer Carrefour leads the index with a gain of 2.0%. On the downside, ArcelorMittal and Vallourec are lower by 1.7% and 0.6%, respectively.
    European Markets Closing Prices
    UK's FTSE: + 0.6%
    Germany's DAX: + 0.3%
    France's CAC: + 0.6%
    Spain's IBEX: + 0.1%
    Portugal's PSI: + 0.8%
    Italy's MIB Index: + 1.1%
    Irish Ovrl Index: 0.0%
    Greece ASE General Index: -0.5%
    IN OTHER NEWS ...
    Reuters discusses that battery issues have been ruled out as cause of London file but carbon-composite technology may be a concern
    Click Here for the Reuters.com Article

    Boeing (BA); Investigators are examining the 787's emergency locator transmitter as a possible cause of London fire
    EARNINGS CALL ...
    Before market open
    Citigroup (C) beats by $0.07, beats on revs
    Reports Q2 (Jun) earnings of $1.25 per share, $0.07 better than the Capital IQ Consensus Estimate of $1.18; C reported net income for the second quarter 2013 of $4.2 billion, or $1.34 per diluted share. This compared to net income of $2.9 billion, or $0.95 per diluted share for the second quarter 2012. Citigroup revenues of $20.5 bln in Q2 increased 11% from the prior year period.

    CVA/DVA Impact
    Excluding CVA/DVA and the Akbank loss in the second quarter 2012, Citigroup revenues of $20.0 bln in Q2 increased 8% from the prior year period, with increases in both Citicorp and Citi Holdings. CVA/DVA was a positive $477 million in the second quarter ($293 million after-tax). Second quarter 2012 results included a loss of $424 million ($274 million after-tax) related to the sale of a 10.1% stake in Akbank T.A.S. Excluding CVA/DVA in both periods and the Akbank loss in the second quarter 2012, second quarter 2013 revenues increased 8% from the prior year period to $20.0 billion and second quarter 2013 earnings per diluted share were $1.25, representing a 25% increase from prior year earnings per share of $1.00.

    Citicorp
    Citicorp revenues of $19.4 billion in Q2 included positive $462 million of CVA/DVA reported within Securities and Banking. Excluding CVA/DVA and the Akbank loss in the second quarter 2012, Citicorp revenues of $18.9 billion increased 7% from the prior year period. Securities and Banking revenues increased 25% (or 21% excluding CVA/DVA) and Global Consumer Banking (GCB) revenues increased 2%, partially offset by a 1% decline in Transaction Services (CTS) revenues, all versus the prior year period.

    Citi Holdings
    Citi Holdings revenues of $1.1 billion in the second quarter 2013 included positive $15 million of CVA/DVA. Excluding CVA/DVA, Citi Holdings revenues increased 17% versus the prior year period, driven by higher revenues in Local Consumer Lending and an improvement in Special Asset Pool revenues, partially offset by a decline in Brokerage and Asset Management revenues. Total Citi Holdings assets of $131 billion declined $60 billion, or 31% y/y. Citi Holdings assets at the end of the second quarter 2013 represented ~7% of total Citigroup assets.

    Citigroup's capital levels and book value per share increased versus the prior year period. As of quarter end, book value per share was $63.02 and tangible book value per share was $53.10, 1% and 2% increases respectively, versus the prior year period. At quarter end, Citigroup's Basel I Tier 1 Capital Ratio was 13.3% and its Basel I Tier 1 Common Ratio was 12.2%. Citigroup's estimated Basel III Tier 1 Common Ratio was 10.0% at the end of the second quarter 2013. Citigroup's estimated Basel III supplementary leverage ratio for the second quarter 2013 was 4.9%.

    Loan Loss Allowance
    Citigroup's allowance for loan losses was $21.6 billion at quarter end, or 3.4% of total loans, compared to $27.6 billion, or 4.3% of total loans, at the end of the prior year period. The loan loss reserve release of $784 million in the quarter was 22% lower than in the prior year period. Reserve releases in Citicorp of $311 million compared to $740 million in the second quarter 2012, predominantly reflecting lower releases in North America GCB, largely related to cards, with a net build in international GCB, reflecting portfolio growth as well as builds for specific credits in the commercial market businesses. Citi Holdings recorded a net loan loss reserve release of $473 million in the second quarter 2013, compared to a net reserve release of $269 million in the prior year period.

    Securities and Banking
    Securities and Banking revenues rose 25% from the prior year period to $6.8 billion. Excluding the impact of the $462 million of CVA/DVA in the second quarter 2013 (compared to $198 million in the prior year period), Securities and Banking revenues were $6.4 billion, 21% higher than the prior year period. Investment Banking revenues of $1.0 billion increased 21% from the prior year period, with growth in all major products. Debt underwriting revenues increased 14% to $558 million and equity underwriting revenues increased 58% to $266 million. Advisory revenues of $215 million were 6% higher than the prior year period. Equity Markets revenues of $942 million in the second quarter 2013 (excluding $28 million of CVA/DVA) were 68% above the prior year period, reflecting improved derivatives performance as well as higher cash volumes. Fixed Income Markets revenues of $3.4 billion in the second quarter 2013 (excluding $433 million of CVA/DVA) increased 18% from the prior year driven by growth in all major products. Lending revenues decreased to $424 million from the prior year period, mostly reflecting a lower mark-to-market gain on hedges related to accrual loans of $23 million (compared to a $156 million mark-to-market gain in the prior year period). Excluding the mark-to-market impact on hedges related to accrual loans, core lending revenues declined 3% to $401 million versus the prior year period as lower volumes were partially offset by slightly higher spreads.
    JB Hunt Trans (JBHT) misses by $0.01, misses on revs
    Reports Q2 (Jun) earnings of $0.73 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.74; revenues rose 10.2% year/year to $1.38 bln vs the $1.4 bln consensus.

    Load growth of 12% in Intermodal (JBI) and 29% in Integrated Capacity Solutions (ICS), helped drive a 12% and 20% increase in segment revenue, respectively. Dedicated Contract Services (DCS) segment revenue increased by 13% as new, large private fleet conversions continue to be implemented, while Truck (JBT) segment revenue decreased by 20% primarily from a smaller fleet and lower utilization. Current quarter total operating revenue, excluding fuel surcharges, increased 11% vs. the comparable quarter 2012.
    ___________________________________________

    TECHNICAL UPDATE

    DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)
    15,484.26 +19.96 (+0.13%)
    Volume: 99,433,682 from 130,140,271*the previous day
    Range: 15,455.77 - 15,509.48



    Quote Originally Posted by Conrad on Monday 15 July, 2013 View Post
    DOW closed out the week at record highs but it also closed with a Doji, hinting that it could be the end of this up trend for now. It fell short of hitting its OP at 15,500. This is going to be a critical level if DOW is expected to break to higher highs - the XOP on this PHIb is at 17,150. Last week was DOW's best gaining week of the year and it is usual that after such a euphoric week that the market takes a breather.

    NASDAQ is by far the most euphoric of the three benchmarks. Like the DOW, the tech-heavy index had its best week since the last week of December last year. NASDAQ is now climbing to my upper PHIb-Fan - I will be watching this closely for any signs of an impending correction. Having tested 3,600 on Friday, this could become the next key level depending on how we fare this week.

    It's seven straight sessions of gains for S&P and an Eighth Candle is due. The level to watch for this week will be its intra-day high of 1,684 from 22 May (my readjusted OP level). And it looks like I might have to redraw those waves too.
    Volumes were woeful given that it was a Monday. S&P is now eight straight sessions without a loss and all three benchmarks are at new historical/multi-year highs. DOW is still below that 15,500 OP while S&P is very close to that intra-day high of 1,684. NASDAQ was the only benchmark to get above its objective of 3,600 but in doing so, inched closer to my upper PHIb-Fan.

    NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)
    3,607.49 +7.41 (+0.21%)
    Volume: 333,527,247 from 421,619,138 the previous day
    Range: 3,591.54 - 3,609.59


    S&P 500 INDEX (SPX: CBOE)
    1,682.50 +2.31 (+0.14%)
    Volume: 414,407,000 from 575,988,000 the previous day
    Range: 1,677.89 - 1,684.51


    ___________________________________________

    MARKET INTERNALS

    NYSE :
    Lower than avg volume @ 565 mln vs. avg. of 776
    Advancers outpaced Decliners (adv/dec): 1900/1169
    New highs outpaced new lows (hi/lo): 319/21

    NASDAQ :
    Lower than avg volume @ 1398 mln vs. avg. of 1670
    Advancers outpaced Decliners (adv/dec): 1620/873
    New highs outpaced new lows (hi/lo): 352/15

    Quote Originally Posted by Conrad on Monday 15 July, 2013 View Post
    Advancers barely outpaced Decliners by an average 1.10 to 1 on lower volumes (-10.22%) on Friday (avg +0.31%).

    Down Volumes dominated almost the entire session but was pipped in the last 15 minutes of the session as Up Volumes suddenly surge such that $UVOL looked as if it had outpaced $DVOL by 1.27 to 1. In actuality, Up Volumes were lower by 42% from Thursday while Down Volumes were higher by 244%. On a broader perspective, volumes were disturbingly low for a Friday session at the start of earnings season ... The last 15 minutes were dominated by sellers as the TICK fell from +700 to -800 while the TRIN showed divergence by also falling from 0.97 to 0.81 ... The VIX close lower at 13.84 -0.17 (-1.21%) in a Bearish Harami implying that this could be the end of the downside proceedings for now. On the big picture, going back to March, the VIX is still on higher highs and higher lows and sitting on its critical 2-year old 13.75 retracement level which for now is acting as a support.
    Advancers outpaced Decliners by an average 1.72 to 1 on lower average volumes (-19.74%) on Monday (avg +0.16%).

    $UVOL narrowly outpaced $DVOL for most of the session and closed out with a 1.75 to 1 advantage. Volumes were weaker across the board with $UVOL lower by -5.11% from Friday's volumes and $DVOL -31.05%. The VIX closed fractionally lower after trading higher for the first four hours on Monday. Between 13:00 and 15:00 hours, the VIX fell from 13.80 to 13.50 but recovered most of those losses by the close to finish the session at 13.79 -0.05 (-0.36%).



    ___________________________________________

    BONDS, COMMODITIES & CURRENCIES from Briefing.com

    Crude Ends Above $106, Nat Gas Rallies Into The Close

    Commodities ended the day mostly higher, with crude oil and natural gas gaining steam in the afternoon session and nat gas rallying into the close. Natural gas rallied into the end of floor trading, rising 3.7% off its LoD to finish the day $0.03 higher at $3.67/MMBtu. Crude oil rose in the afternoon and into the close as well, coming back from below the $105 level and ended $0.37 higher at $106.30/barrel.

    NYMEX Energy Closing Prices
    Aug crude oil rose $0.37 to $106.30/barrel
    Aug natural gas rose $0.03 to $3.67/MMBtu
    Aug heating oil remained unchanged at $3.03/gallon
    Aug RBOB gasoline fell 2 cents to $3.10/gallon

    In the metals space, precious metals ended modestly higher, while copper prices lost one penny. Aug gold finished $6.30 higher at $1283.70/oz, while Sept silver ended $0.04 higher at $19.84/oz. Sept copper fell one penny to finish at $3.14/lb.

    COMEX Metals Closing Prices
    Aug gold rose $6.30 to $1283.70/ounce
    Sep silver rose $0.04 to $19.84/ounce
    Sep copper fell 1 cent to $3.14/lb

    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    Dec corn fell 4 cents to $5.04/bushel
    Sep wheat fell 11 cents to $6.70/bushel
    Nov soybeans rose 7 cents to $12.62/bushel
    Aug ethanol rose 5 cents to $2.49/gallon
    Sep sugar (#16 (U.S.)) rose 0.11 of a penny to 18.96 cents/lbs

    Currencies: Dollar Gives Up Gains
    The Dollar Index climbed to 80.45 early in the U.S. session, but slipped off its best levels following the disappointing retail sales data. Sellers have been in control throughout the session with the Index holding onto small gains near 83.10.
    • EURUSD is flat at 1.3060 after shrugging off Fitch's downgrade of the European Financial Stability Fund. The rating agency cut its ‘AAA' rating one notch to ‘AA+' suggesting, "Following the downgrade of France's IDR, the EFSF's long-term debt issues are not fully covered by 'AAA' guarantees and over-guarantees and, for debt issued before October 2011, by the cash reserve." Current levels remain in focus as the 50-, 100-, and 200-day moving averages provide some help near the key 1.3000 level. Eurozone data is heavy with ZEW Economic Sentiment, CPI, core CPI, and German ZEW Economic Sentiment.
    • GBPUSD is -5 pips at 1.5095 amid a rather uneventful session. Today's action has seen a 100 pip range despite the lack of news and data with trade holding above the important 1.5000 area. A breakdown of that level sets up a test of last week's three-year lows near 1.4850. Britain's CPI, PPI input, and RPI are due out tomorrow.
    • USDCHF is +30 pips at .9490 as trade holds near-term support in the vicinity. Today's bid has run the pair back above its 50-day moving average, and has bulls setting their sights on the July highs near .9750.
    • USDJPY is +70 pips at 99.90, but has given up nearly half of its earlier gains. Buying early in the U.S. session ran the pair to 100.50, but that level was unable to hold as sellers emerged following this morning's disappointing data. The 101.00 area remains key in terms of near-term resistance.
    • AUDUSD is +50 pips at .9090 as trade holds near 34-month lows. The hard currency saw some overnight buying following the in-line Chinese GDP figure, but ran into some selling ahead of the U.S. open before climbing back towards its best levels. Any close in the red will be the worst in nearly three years. The latest Reserve Bank of Australia minutes will cross the wires tonight.
    • USDCAD is +25 pips at 1.0425 as trade ticks higher for a second session. The pair has seen buyers came out in defense of the 1.0350/1.0400 support area as bulls look to retest the recent highs in the 1.0550/1.0600 region. Canada's manufacturing sales will be released tomorrow.

    Bonds: Treasuries Finish Near Highs
    Treasuries ended just off their best levels of the session as light buying persisted over the course of the session. The complex slipped to session lows ahead of today's mixed retail sales (+0.4% actual v. +0.7% expected) and Empire Manufacturing (9.46 actual v. 3.6 expected) data produced a strong bid. Treasuries reversed from session lows to session highs as trade quickly retook the flat line. The bid dropped the benchmark yield to 8 bps off its highs as trade probed the 2.550% level before settling down. A choppy trade ensued over the remainder of the session as yields held in a 2 bp range. The 10-yr yield would end the cash session at 2.556%, posting its lowest close in one and a half weeks. Slight under-performance was seen in the wings of the curve as the 30-yr yield slipped 3.8 bps to 3.611%. The bid caused modest flattening along the yield curve as the 2-10-yr spread narrowed to 223.5 bps.

    Treasury Yields:
    • 2 Year Note 0.34% -0.03
    • 5 Year Note 1.40% -0.03
    • 10 Year Note 2.57% -0.04
    • 30 Year Bond 3.61% -0.03
    2/30 Spread : 327bps ( UNCH ) ... 2/10 Spread : 223bps ( -1 )

    Quote Originally Posted by Conrad on Monday 15 July, 2013 View Post
    Ooops ... that's not good. The shorter term yields raised to flatten the curve. This is usually the kind of move that precedes short term doubt in the risk market. This happens because investors are selling off the shorter maturities for better returns in the risk-on trade. This translates into short term greed that can usually bubble the market in a hurry. Too much of this can invert the curve in a longer period. Let's hope its an anomaly and not the shape of things to come.
    The whole curve dropped and the spreads remained largely unchanged but the drop has put the curve lower than where it started last week. Looks like the bond traders are still not in sync with the risk trade ... or is it the other way round? ...

    ___________________________________________

    PREVIEW FOR TUESDAY 16 JULY, 2013

    Tuesday will see CPI, core CPI (8:30), net long-term TIC flows (9), industrial production, capacity utilization (9:15), and the NAHB Housing Market Index (10). KCs George will be on her home turf discussing Economic Conditions and Agriculture (14:15).

    Earnings Highlights
    BMO: JNJ, KO, GS, MOS, CMA
    AMC: CSX, URI, YHOO, PKG, IBKR, WTFC

    Economic Events
    08:30 CPI
    08:30 Core CPI
    09:00 Net Long-Term TIC Flows
    09:15 Industrial Production
    09:15 Capacity Utilization
    10:00 NAHB Housing Market Index

    Conferences and Shareholder/Analyst Meetings of Interest
    • Germany ZEW Econ Sentiment (released overnight)
    • TV Xperience World
      Scheduled to appear: ADBE, AOL, ARRS, T, RNWK, VZ
    • Kansas City Fed President George (FOMC dissenter, hawkish) to speak at 14:15

    ___________________________________________

    SUMMARY
    Quote Originally Posted by Conrad on Monday 15 July, 2013 View Post
    Before you get all happy and assume that Friday was a bullish victory, read closer. For starters, Healthcare, Energy, Utilities and Staples were four of the seven leading sectors and the internals did favor the bulls as much as the indices would have you believe.
    Half the month of July has gone and it is already turning out to be more profitable than any other month's first two weeks in the past one year; May +2.5%; March +3.4%; January 3.3%. Not even September 2012 (+3.52%) can match this July's first ten days' performance of +3.84%.

    The only time in the past year that the market outperformed July's first ten days was in November last year - but that was a loss of -4.2%.

    Today before the open, the market will face a lot of music in the form of key data and major earnings especially from JNJ, KO and GS. I have no idea where this will go but given the nervousness I saw on Monday, I reckon one slight bit of news either way is going to make the market over-react on Tuesday.

    Direction for Tuesday 16 July, 2013; Down

    2013 Daily Directional Accuracy: 55/82 (67.07%)
    Conrad Alvin Lim
    Blog: conradalvinlim.com Site: Pattern Trader Tools
    "Its not about being right or wrong, rather, its about how much money you make when you're right
    and how much you don't lose when you're wrong." ...
    George Soros

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