Stock Market Outlook for June 22, 2010
Upcoming Events for Today:
- The National Association of Realtors will release the Existing Home Sales for May at 10:00am. The market expects 6.10M versus 5.77M previous.
The Markets
| Market | Close | % Change | Expected ST Low | Expected ST High |
| Dow Jones Industrial Average (^DJI) | 10,442.41 | -0.08% | 9,972.33 | 10,705.71 |
| Dow Jones Transportation Average (^DJT) | 4,433.60 | 0.00% | 4,144.65 | 4,533.19 |
| Dow Jones Utility Average (^DJU) | 380.27 | -0.81% | 356.70 | 382.24 |
| S&P 500 (^GSPC) | 1,113.20 | -0.39% | 1,065.58 | 1,148.47 |
| S&P/TSE Composite (^GSPTSE) | 11,936.08 | 0.07% | 11,491.31 | 12,028.35 |
| NASDAQ Composite (^IXIC) | 2,289.09 | -0.90% | 2,193.04 | 2,371.49 |
| Austrian Traded Index (^ATX) | 2,448.18 | 0.83% | 2,281.54 | 2,488.64 |
| French CAC 40 (^FCHI) | 3,736.15 | 1.33% | 3,397.81 | 3,698.82 |
| German DAX (^GDAXI) | 6,292.97 | 1.22% | 5,797.76 | 6,212.24 |
| UK FTSE 100 (^FTSE) | 5,299.10 | 0.92% | 5,034.08 | 5,333.91 |
| Swiss Market Index (^SSMI) | 6,519.60 | 1.12% | 6,203.36 | 6,506.97 |
| Brazilian IBOVESPA (^BVSP) | 64,829.00 | 0.61% | 59,677.02 | 64,872.27 |
| Mexico’s IPC (^MXX) | 32,882.00 | 0.21% | 30,694.29 | 32,649.65 |
| Amsterdam Exchange Index (^AEX) | 341.04 | 1.48% | 312.02 | 336.19 |
| New Zealand NZX 50 INDEX GROSS (^NZ50) | 3,068.25 | 0.68% | 3,012.07 | 3,176.44 |
| China HANG SENG INDEX (^HSI) | 20,912.18 | 3.08% | 19,304.53 | 20,407.27 |
| Korea KOSPI Composite Index (^KS11) | 1,739.68 | 1.62% | 1,593.44 | 1,703.35 |
| Tokyo NIKKEI 225 (^N225) | 10,238.01 | 2.43% | 9,535.97 | 10,394.88 |
North American markets opened significantly higher upon news of China unpegging the Yuan from the dollar. But opening bell tuned out to be the highs of the day as investors sold off the market as the day progressed, putting American markets firmly into negative territory and the Canadian counterparts just slightly above even. Pressures on the Euro yet again strained North American indices as the day progressed, almost to let investors know that it remains in charge and not the Yuan.
The markets as of recent have certainly been choppy, despite the decline in the volatility as recorded by the VIX. Over the past few weeks this “fear index” has come come down from as high as 37.5 all the way to around 23.12, coincidentally the 200-day moving average. And over this time of decreased volatility we’ve seen intraday moves reaching 3% and beyond, despite what the closing percentage return indicates. Today was no different with a 2.1% trading range that kept investors on their toes. Regardless of what analysts forecast for the market going forward, whether it be up or down, this market is not to be trusted.
Monday offered yet another hint of the tightening of consumer spending with lowered guidance from restaurant chain California Pizza Chicken. The company echoed concerns previously released by Callaway Golf that consumer spending would impact their bottom line. The coming days will offer further understanding of what to expect during the pending earnings season. Earnings due out Tuesday include Walgreen, Jabil Circuit, and Adobe.
Market sentiment looking at options volumes is relatively neutral at 0.93 puts trading hands for each call on Monday. The 10-day moving average has shown a gradual decline as of recent, now below 1. Should this trend continue, a bottoming in this average will present an intermediate sell signal, as was presented at the end of April, the last time this average was less than 1.
Sectors the Moved the Market
| Sector | % Price Change | % Volume Change |
| Energy Sector (XLE) | -0.22% | 23.17% |
| Basic Materials Sector (XLB) | 0.61% | 27.92% |
| Financial Sector (XLF) | -0.13% | 28.30% |
| Health Care Sector (XLV) | -0.17% | 7.12% |
| Consumer Discretionary Sector (XLY) | -0.80% | 15.12% |
| Industrials Sector (XLI) | 0.17% | 4.89% |
| Technology Sector (XLK) | -0.72% | 24.10% |
| Utilities Sector (XLU) | -0.70% | 29.59% |
| Consumer Staples Sector (XLP) | -0.26% | -30.48% |
Materials saw the largest gains on the day as China’s currency decision influenced investors to buy material manufacturers. Investors are expecting domestic materials to become competitively priced for Chinese importers, hence increasing demand within this sector. Discretionary stocks saw the greatest weakness on fears that corporations will issue lowered guidance as a result of the tightening of consumer spending.
S&P 500
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 1094.57 | 1103.88 | 1117.56 | 1126.87 | 1140.55 |
Technicals continue to provide investors with bearish signals. Stochastics are indicate the market is overbought and upward momentum is showing signs of fading. The 200-day moving average is proving to be a difficult level to surpass with any significant strength. Investors are extremely cautious and indecisiveness continues to plague the market. This is severely limiting key indices from charting new ground.
Total Returns
Yesterday: –0.39% – Trailing 5 days: 2.16% – Trailing 30 days: 2.35%
Averages for current day based on past 20 years of data
- Current Day: –0.56% with 35.71% of sessions gaining
- Next 7 days: –0.57% with 42.00% of sessions gaining (Max return: 0.15% by June 24 on Average)
- Next 30 days: –0.44% with 51.07% of sessions gaining (Max return: 2.34% by July 10 on Average)
TSE Composite
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 11801.55 | 11868.82 | 11972.91 | 12040.18 | 12144.27 |
Total Returns
Yesterday: 0.07% – Trailing 5 days: 2.31% – Trailing 30 days: 4.65%
Averages for current day based on past 20 years of data
- Current Day: –0.61% with 57.14% of sessions gaining
- Next 7 days: –0.26% with 50.00% of sessions gaining (Max return: 0.65% by June 24 on Average)
- Next 30 days: 0.39% with 55.74% of sessions gaining (Max return: 2.64% by July 10 on Average)
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