Stock Market Outlook for July 28, 2010
Upcoming Events for Today:
- The Department of Commerce will release the Durable Goods Orders for June at 8:30am. Market expects an increase of 1.0% versus a decrease of 0.6% reported previous. Excluding transportation and the increase is expected to come in at 0.6% versus an increase of 1.6% reported previously.
- Weekly crude inventories will be released at 10:30am
- The Fed’s Beige Book for July will be released at 2:00pm
The Markets
| Market | Close | % Change | Expected ST Low | Expected ST High |
| Dow Jones Industrial Average (^DJI) | 10,537.69 | 0.12% | 9,844.94 | 10,451.01 |
| Dow Jones Transportation Average (^DJT) | 4,423.50 | -1.31% | 4,018.06 | 4,431.58 |
| Dow Jones Utility Average (^DJU) | 395.34 | 1.69% | 360.62 | 386.37 |
| S&P 500 (^GSPC) | 1,113.84 | -0.10% | 1,039.07 | 1,112.66 |
| S&P/TSE Composite (^GSPTSE) | 11,716.69 | -0.25% | 11,285.00 | 11,898.89 |
| NASDAQ Composite (^IXIC) | 2,288.25 | -0.36% | 2,123.83 | 2,297.54 |
| Austrian Traded Index (^ATX) | 2,483.29 | 1.07% | 2,261.81 | 2,443.11 |
| French CAC 40 (^FCHI) | 3,666.40 | 0.83% | 3,397.60 | 3,688.06 |
| German DAX (^GDAXI) | 6,207.31 | 0.21% | 5,909.68 | 6,234.43 |
| UK FTSE 100 (^FTSE) | 5,365.70 | 0.27% | 4,903.68 | 5,308.08 |
| Swiss Market Index (^SSMI) | 6,275.20 | 1.22% | 6,039.89 | 6,455.70 |
| Brazilian IBOVESPA (^BVSP) | 66,674.00 | 0.35% | 61,665.29 | 65,690.81 |
| Mexico’s IPC (^MXX) | 32,695.31 | -0.80% | 31,416.41 | 32,812.35 |
| Amsterdam Exchange Index (^AEX) | 338.08 | 0.08% | 313.05 | 338.02 |
| New Zealand NZX 50 INDEX GROSS (^NZ50) | 3,008.43 | -0.42% | 2,954.49 | 3,055.99 |
| China HANG SENG INDEX (^HSI) | 20,973.39 | 0.64% | 19,964.83 | 20,842.79 |
| Korea KOSPI Composite Index (^KS11) | 1,768.31 | -0.04% | 1,681.33 | 1,756.93 |
| Tokyo NIKKEI 225 (^N225) | 9,496.85 | -0.07% | 9,246.76 | 10,035.02 |
Stocks struggled on Tuesday, despite upbeat earnings from Dow component DuPont. The company reported earnings that beat expectations and offered guidance that painted an optimistic growth picture moving forward. As a result, shares of DuPomt rallied to gains of 3.5%, influencing the Dow Jones Industrial Average to end in positive territory. In spite of this upbeat news, investors were confronted with an economic report that instilled caution back into the market following three days of superior gains. Consumer confidence came in lower than expected, dipping to the lowest level since February. Investors were torn between the two opposing news bites. Key indexes ended relatively flat on the day.
Despite the struggling market action on the day, there is reason to be optimistic: investors didn’t panic. In a market environment where investors remain uncertain of economic/market prospects, the slightest bit of negative news could potentially derail any new-found strength amongst key indexes. But markets held the gains attained over the last few days, keeping overbought indications in place. Markets will once again be tested in the last half of this week as economic news pertaining to durable good orders, jobless claims and gross domestic product will be released.
As already mentioned, technicals indicate that the market continues in overbought territory. Canadian markets are showing the initial signs of a sell signal, while American markets have yet to confirm a top. Sentiment looking at options volumes has pushed further into bullish territory with the ratio of puts trading hands for each call sitting at 0.83.
Sectors that Moved the Market
| Sector | % Price Change | % Volume Change |
| Energy Sector (XLE) | -0.48% | 37.42% |
| Basic Materials Sector (XLB) | -0.81% | 22.41% |
| Financial Sector (XLF) | 0.27% | 17.79% |
| Health Care Sector (XLV) | 0.10% | -39.33% |
| Consumer Discretionary Sector (XLY) | -1.28% | 19.63% |
| Industrials Sector (XLI) | -0.69% | -19.43% |
| Technology Sector (XLK) | 0.27% | 18.52% |
| Utilities Sector (XLU) | 1.47% | 328.57% |
| Consumer Staples Sector (XLP) | 0.37% | 125.20% |
Utilities showed the greatest gains on the day as key companies in this space get set to report earnings on Wednesday. Reports expected before the opening bell include The Southern Company (SO), Dominion Resources (D), CMS Energy (CMS) and Constellation Energy (CEG), all of which produced gains topping 1% on the day. Consumer discretionary stocks took a hit following the lower than expected consumer confidence numbers. Wednesday will test this sector once again as durable good orders are released.
S&P 500
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 1103.69 | 1108.76 | 1114.86 | 1119.93 | 1126.03 |
Total Returns
Yesterday: –0.10% – Trailing 5 days: 2.80% – Trailing 30 days: 3.44%
Averages for current day based on past 20 years of data
- Current Day: –0.21% with 42.86% of sessions gaining
- Next 7 days: 0.30% with 56.00% of sessions gaining (Max return: 1.50% by July 31 on Average)
- Next 30 days: 0.80% with 54.67% of sessions gaining (Max return: 2.90% by August 13 on Average)
TSE Composite
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 11602.22 | 11659.45 | 11741.07 | 11798.30 | 11879.92 |
Total Returns
Yesterday: –0.25% – Trailing 5 days: 0.75% – Trailing 30 days: 0.08%
Averages for current day based on past 10 years of data
- Current Day: –0.55% with 57.14% of sessions gaining
- Next 7 days: 0.55% with 58.00% of sessions gaining (Max return: 1.17% by July 31 on Average)
- Next 30 days: 1.56% with 53.03% of sessions gaining (Max return: 3.00% by August 11 on Average)
Editors Note: EquityClock.com will be on vacation for the next two weeks. Reports will resume once again around the 15th of August. We invite you to utilize the chart database free of charge over this time to obtain all of your seasonality analysis as it pertains to your equity of choice. Details will follow.
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