Stock Market Outlook for August 16, 2010
Upcoming Events for Today:
- The Empire Manufacturing Index for August will be released at 8:30am. The market expects 7.5 versus 5.08 previous.
- The Homebuilders Index for August will be released at 10:00am. Market expects no change from the reading of 14 reported previously.
The Markets
| Market | Close | % Change | Expected ST Low | Expected ST High |
| Dow Jones Industrial Average (^DJI) | 10,303.15 | -0.16% | 9,952.83 | 10,637.52 |
| Dow Jones Transportation Average (^DJT) | 4,201.81 | -0.83% | 4,048.39 | 4,475.35 |
| Dow Jones Utility Average (^DJU) | 387.70 | 0.29% | 369.19 | 393.44 |
| S&P 500 (^GSPC) | 1,079.25 | -0.40% | 1,051.42 | 1,121.55 |
| S&P/TSE Composite (^GSPTSE) | 11,528.25 | 0.04% | 11,315.86 | 11,796.98 |
| NASDAQ Composite (^IXIC) | 2,173.48 | -0.77% | 2,145.00 | 2,291.09 |
| Austrian Traded Index (^ATX) | 2,416.74 | 0.64% | 2,283.73 | 2,526.01 |
| French CAC 40 (^FCHI) | 3,610.91 | -0.28% | 3,450.48 | 3,741.96 |
| German DAX (^GDAXI) | 6,110.41 | -0.40% | 5,961.80 | 6,304.34 |
| UK FTSE 100 (^FTSE) | 5,275.40 | 0.18% | 5,018.55 | 5,374.80 |
| Swiss Market Index (^SSMI) | 6,294.30 | 0.24% | 6,086.48 | 6,354.32 |
| Brazilian IBOVESPA (^BVSP) | 66,264.00 | 0.45% | 62,219.35 | 67,994.14 |
| Mexico’s IPC (^MXX) | 32,099.75 | 0.18% | 31,768.05 | 32,846.49 |
| Amsterdam Exchange Index (^AEX) | 323.92 | -0.06% | 317.09 | 337.87 |
| Shanghai – SSE Composite Index (000001.ss) | 2,606.70 | 1.21% | 2,409.65 | 2,644.69 |
| New Zealand NZX 50 INDEX GROSS (^NZ50) | 3,015.13 | 0.27% | 2,967.54 | 3,047.55 |
| China HANG SENG INDEX (^HSI) | 21,071.57 | -0.16% | 20,055.95 | 21,541.11 |
| Korea KOSPI Composite Index (^KS11) | 1,746.24 | 1.42% | 1,697.11 | 1,783.93 |
| Tokyo NIKKEI 225 (^N225) | 9,253.46 | 0.44% | 9,228.68 | 9,692.31 |
North American markets closed out a tough week for investors on Friday that saw key indices record losses of more than 2% for the five day period. The S&P 500 was down 3.78% while the TSE Composite Index was down only 2.3%. The week ahead presents the final opportunity to get a clear reading of economic conditions from the quarter past with reports from Home Depot, Walmart, Deere & Co., Target Corp., Hewlett Packard, and Dell. This period in mid-August is typically the breakdown period in the market during mid-term election years that sees major indices decline to lows typically experienced by October. With indices currently indicating signals to “sell” according to the technicals, will history repeat?
Options volumes on Friday indicated an undecided market with an equivalent volume of puts and calls trading hands. The 10-day moving average has begun to increase once again, a situation that occurs upon a market peak and subsequent decline. Despite stochastics indicating oversold conditions, a downward trending market is looking more and more plausible as we enter the last half of August as well as the third quarter.
Sectors that Moved the Market
| Sector | % Price Change | % Volume Change |
| Energy Sector (XLE) | -0.17% | -40.35% |
| Basic Materials Sector (XLB) | -0.48% | -46.35% |
| Financial Sector (XLF) | -0.28% | -27.90% |
| Health Care Sector (XLV) | -0.38% | -54.57% |
| Consumer Discretionary Sector (XLY) | -1.13% | -28.52% |
| Industrials Sector (XLI) | -0.14% | -49.77% |
| Technology Sector (XLK) | -0.47% | -60.12% |
| Utilities Sector (XLU) | 0.36% | -8.98% |
| Consumer Staples Sector (XLP) | -0.04% | -30.71% |
Consumer stocks took a hit on Friday following less than stellar retail sales numbers for July that marginally missed expectations. This led to a downfall in the sector by just over one percent. Utilities managed to dodge the losses on the day as natural gas gained, leading to an appreciation of stock prices of companies that deal in the commodity.
S&P 500
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 1074.25 | 1076.75 | 1081.50 | 1084.00 | 1088.75 |
Total Returns
Yesterday: –0.40% – Trailing 5 days: –3.78% – Trailing 30 days: –1.45%
Averages for current day based on past 20 years of data
- Current Day: 0.01% with 64.29% of sessions gaining
- Next 7 days: 0.65% with 61.00% of sessions gaining (Max return: 1.37% by August 19 on Average)
- Next 30 days: 0.47% with 55.51% of sessions gaining (Max return: 2.83% by September 1 on Average)
TSE Composite
Chart Courtesy of StockCharts.com
| Support 2 | Support 1 | Pivot Point | Resistance 1 | Resistance 2 |
| 11465.13 | 11496.69 | 11522.63 | 11554.19 | 11580.13 |
Total Returns
Yesterday: 0.04% – Trailing 5 days: –2.30% – Trailing 30 days: –0.79%
Averages for current day based on past 10 years of data
- Current Day: –0.09% with 57.14% of sessions gaining
- Next 7 days: 1.30% with 68.00% of sessions gaining (Max return: 1.51% by August 19 on Average)
- Next 30 days: 0.54% with 54.40% of sessions gaining (Max return: 3.53% by September 4 on Average)
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