Outlook
Short term indicators
Bearish indicators
Yesterdays MASSIVE Dow rise was on low volumes and v. unlikely to be sustainable.
Wave C targets met and criteria for vertical launch met.
Targets for Thu/Fri consolidation met.
Short term overbought conditions.
Vix gapped down to 32 indicating complacency.
Dollar has not managed to reach consolidation target of 107.7 and looks toppy. Major resistance at 107.8
Nikkei fails to break 10,000
Goldman Sachs buys 10,000 Sox ADR contracts on Thu. (Normal open interest 1,400 contracts.)
Sox falls.
GS upgrades sox components on Fri, resulting in a damp squib rally. (Upgrade sounded more like a reason to sell.)
The fall on Thu was caused by a major Taiwanese manufacturer indicating there was no demand for chips.
Bullish indicators
None in the v short term.
Watch out for a parallel up trend to form. Upper line defined. Lower line needs to be guessed. This could be very bullish.
Likely bounce areas :
38.2% retrace / Fridays highs
Dow 8270 (8280-8300)
S&P 952
Nasdaq 1280
50% retrace / Fridays lows
Dow 8122
S&P 837
Nasdaq 1263 (Fri high)
Forthcoming events
US consumer confidence 10am (US time)
Klac results after the bell
French business confidence (before European open)
Around 31/7. Revision of US GDP for last 5 years. Unlikely to be good news.
US CEO's to sign off accounts - deadline 14/8.
Longer term
Pressure to expense stock options
Pressure to revise pension assumptions downwards
Regards,
Ian
