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InvestmentHouse Weekend Market Summary:

http://www.investmenthouse.com/weekendmarketsummary.htm

- After lagging, tech and chips take the lead as the rally continues, at least for techs, energy, and other leaders.
- Earnings are mixed, no positives on Europe or the budget deal (no negatives either), so the leaders continue higher.
- The issue that won't die: big companies don't hire because they cannot do that and maintain profits growth.
- Monday blues once more? Indices approaching the top of the range, but the leaders, and some new additions, are running nicely.

MARKET SUMMARY

Nothing to drive the market on Friday, but techs and leaders rally nonetheless.

Friday was an up day for a lot of our positions, but it was a mixed day in the market overall. Technology and the semiconductors continued to lead to the upside with their recovery rally. There is a nice one ongoing in the semiconductors. The NYSE indices struggled, but just modestly. A lot of this was due to the earnings of a few key players, one of them being CAT. It burned a lot of its nine lives on this rally as it reported results that missed the mark. It was complaining that costs were rising and imploring the administration to provide some clarity as to what will happen ahead.

They were not necessarily talking about the debt issue; they were talking about clarity with respect to regulation. A lot of regulations have been passed but have not been implemented yet, or they have not even had the regulations written. Businesses cannot do anything. They may have a lot of money, but they do not want to spend it. They would be foolish and breaching their fiduciary duty to their investors if they spent money without knowing what the regulations hold. Thus we are seeing this slowdown. I will talk more about this later because I keep hearing commentary about it that is absurd.

Earnings were out, and they were mixed. There was really no other economic news out. Europe was quiet, and I suppose it will come around again on Monday. The debt ceiling negotiations stalled as Boehner said there was no deal and supposedly he walked away. The President came out after the market closed and held a "press conference" where he basically derided the republicans saying they do not want anything. I thought that was rather ironic after he said he is not interested in pointing fingers or naming blame. In the first 15 minutes of his press conference, that was all he did. He talked about the lack of leadership in the Republican Party, but you have to ask where the leadership is from the President. Whether republican or democrat, the President is supposed to be the negotiator who can bring the different sides together.

He talks about the country being tired of Congress and the administration not being able to get anything done. One of the things we are most tired of is them calling each other out all the time. The worst is when they claim to disapprove of the exact thing they are doing. It has really become absurd. I just love it when both sides say that the American people want them to do "X". They say Americans want them to raise the debt ceiling and solve the problem in any way they can. Nope. The American people want them to stop spending our money. That is what poll after poll says, and they have to figure out the way to do it. Obviously they are not there yet. But I digress.

Things were mixed. Earnings were mostly driving the market, but they were not really pushing things given that there were some big misses and big gains. You can understand why the markets were mixed. Tech had good earnings throughout the week. Sans INTC and a few other cloud computing companies, they performed quite well. MCD performed well again, blowing away its worldwide comparisons. It posted 7.7% growth versus the 3.8% prior. Unbelievable growth from MCD and the McCafe with its drinks. I have to admit that I have added to MCD's bottom line because I like the drinks they are pouring over there. I probably added to my waistline as well, although I do order non-fat milk.

Futures were not looking that great early on, but that is often the case with such a big surge. We had a nice rally on Tuesday, a pause Wednesday, and a resumption of a move higher on Thursday. It is good to have a little softness after a pause when the market is rallying back to the upside. It allows stocks to build into the session. That is what I said in the morning alert, and that is what happened. Yes, they trended lower into the first half hour of the day, but then they rebounded. In the case of NASDAQ and the semiconductors, they moved positive. All of the indices moved back to the upside. A nice benefit of the day and having a good uptrend established. That uptrend is off of a mid-range support level in the trading range.

Remember, we are watching this because often a bounce at an important support level in a trading range or in a pattern (such as a triangle) will lead to a breakout. The indices surged up off of that higher low, and now we will see if they can make the breakout. They are doubters, and I am a doubter. I still say it has a trading range until it proves otherwise. I am a "show-me" sort of guy. I am into the technical more than the fundamentals, although I do like to play the technical patterns on fundamentally sound stocks. It is a combination, but I will never buy a stock just because it is a "great value."

I see it as a trading range but with the possibility of a breakout. That kept us riding a lot of our positions today even though they were up 2-3 days straight and the indices are approaching their former highs. That is okay with me because we may get the breakout. We may also have a problem on Monday. Monday's have been downers with the debt issues and with the EU coming out with new problems every Monday. This afternoon after the market closed, the President was bad-mouthing everybody he could think of with respect to the deficit deal. These are always problems we have to deal with, but as I'll talk about in leadership, our positions were running well. Why take them after the table? Particularly since we have already banked quite a bit of gain on this nice move we were playing on the rally. Getting back to the intraday action, there was a selloff and recovery. While it did not keep a lot of the indices positive, they did not suffer on the day.

SP500, +0.1%; NASDAQ, +0.85%; Dow, -0.35%; SP600, -0.2%; SOX, +2.5%; NASDAQ 100, 1%.

NASDAQ 100 was doing quite well with the likes of GOOG pushing it higher. Very solid moves for technology and, again, the semiconductors leading the way. These were laggards of late, but now they are trying to make their move. The semiconductors have inverted head and shoulders forming in several patterns and ready to make the move higher. This is very much akin to the mid-summer 2010 action on the SP500 and many other stocks where we had inverted head and shoulders form after a selloff. That led to a break higher. There are definitely some positives in terms of leadership.

OTHER MARKETS

Dollar: 1.4364 versus 1.4379 Euro. Overall, the DXY0 fell. Why? The dollar fell against the other currencies while it was up slightly against the Euro. It is struggling mightily against all currencies now, and it really broke lower when the EU announced it was bringing more money to Greece. That broke the index down Wednesday and Thursday. It broke its trend, and the dollar will fall now. It may continue to fall if we cannot get the budget deal, and that will force the Fed into action. The government may not be able to do anything, but the Fed will. The Fed would rather wait until we get a budget deal and then step in with QE3, but Congress and the President are not playing along. They both want what they can get out of this. Maybe the government will shut down a bit. It might not be good for the market, and we may have repercussions on Monday. We will see. We have been having problems all through this negotiation, and the market has continued to the upside.
Click to view the chart

Bonds: 2.96% versus 3% 10 year US Treasury. It was rebounding a bit from steep selling that started on the European bailout. The bonds still remain in the upper reaches of their trading range after breaking the downtrend back in early 2011. Now they are trying the hold up and bounce, but it is not a pretty pattern. It is gotten ugly and choppy. It is not the picture of strength. If it was a stock, you surely would not want to put your money in it right now. Looks like it could fall back down because we have had an attempt at a new high that failed. Lower MACD. It is definitely losing momentum on this rally in bonds.

That would make sense if the economy is recovering, if the Fed is not going to produce a lot more money, and if we get a decent budget deal that would cut the deficit and cap spending. But it does not look like that is happening right now. I guess the market is figuring it will. Bonds are struggling and unable to move higher. That would make sense if things were going to "get better" in the economy. That would push bonds lower and interest rates higher, which is the way it usually works when an economy is recovering. That makes this rise in bonds peculiar, but we know our economy is not recovering. I have been talking about for the last several months.
Click to view the chart

Gold: $1,601.30, +14.30. Gold got back in the game again. It has been moving laterally, consolidating this strong, two-week run that started July. It broke to a new all-time high and it is absolutely normal for it to consolidate. Up one day and down the next. It is consolidating, and that is what happens. I still expect it to break higher. It could still come back near term, but overall the trend is up for gold. Just as CAT said, the gold investors are a lot of the people who run companies and everyday people; they do not know what is going to happen with these regulations, new bills, and spending. That is why gold is running up on fear as well as fear of inflation.
Click to view the chart

Oil: $99.87, +0.74. Oil also managed another gain. Very solid as it breaks through the 50 day EMA and makes a higher high on this recovery. Golly, Beaver, it does not look too good for oil prices staying low. Energy stock prices are running higher across the board as well. It could be a similar pattern like we saw in May and June. Something of an ABCD to the downside, although it did not really form it. Here we have a stock selloff, a rebound, a higher low, and a higher high. It is all still contained within this peak that was hit the second week of June. There is the selloff and the ABCD pattern. This is to the downside. If it would hold, oil would stall out around $100-101 and then fall back to the downside. $100 is an important level for oil. We will see if that holds it again and sends it lower. If it is to work, it will work fairly quickly and oil will fall to the downside. We will see. Oil stocks are belying that theory, running higher as oil sets up this potentially downside pattern.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS.

Volume. It was a very interesting day. Volume plunged again. It is Friday, late July, mid-summer, and people are getting those last vacations in before school starts. It was down 30% on NASDAQ and down 25% on the NYSE.

Breadth. The advance/decline line is not even worth mentioning. It was flat on both NASDAQ and the NYSE.

CHARTS

SP500. SP500 is approaching its July peak, but it is having a bit of trouble with its February peak. It broke through it in July and could not hold it, and now it is back and having a bit of an issue once more. It does not have too much further to get through to the highs of the trading range at 1371. It closed at 1345, so that puts it around 25-points off. Room to run, but remember volatility. It does not look like it will make it to that other point. Plus it has some issues with respect to the financials. If financials do not help out, it will be hard for the index to make a breakout.

NASDAQ. NASDAQ has gone from laggard to saintly leader. It really has performed well, showing a nice reversal doji off of the 50 day EMA. Mid-range of the pattern and running right toward the top of its range as well. It hit a high at 2888 back in early May. It closed at 2858, so that gives it about 30 points to the upside. That is about what it put in on Friday. We might see a reversal here. It is still range trading. Yes, it made that higher low, and that higher low can have consequences just as elections can have consequences. We have heard that from both sides of the aisle over the last several months. We will see if the consequence is a breakout or if it just gave us another nice bounce to the upside that we can bank some profit on and then it reverses. If it does not make it through here, you can bet we will take more gain off the table. Then we will play it to the downside until the range can prove it can make the breakout.

Even if it does break out here, watch out. We have a lot of false breakouts and false breakdowns. You have to watch out for those in this market. We will be keeping an eye on the VIX as well. If it hits bottom and they start to stagger around a bit, then we may just have that reversal we were looking for.

SP600. Not much of a move. Basically flat on the day. It made a good recovery off the early selling. It remains right in the upper reaches of its range, but it is struggling. It has a higher low as well, but it has just a wad that is the technical term of resistance immediately overhead. One is from April and another is from early-May. Another is from late-May/early-June, and then there is the old high in early-May that was matched and slightly broken in early July. That is that false breakout. In any event, it is trying to bounce but is struggling.

I want to see the small caps break out, and I am not sure they will. Again, this is a "show me" time. We are still in a trading range, and we have been for months. Until things change and it shows something is going to stick, I am going to stick with my trading range mantra.

SOX. SOX makes it more interesting. It is making a nice bounce. It had a false breakdown this week of its own, and it reversed off of that. A lot of those semiconductors stocks are putting in interesting patterns at the bottom of their selloffs. Classic positioning to move higher. Many of them have earnings coming this week. If they are solid, they have room to run to the upside and provide leadership in a continued move for the market. The question is whether they will break the market out in other words, break the other indices out of their ranges. I do not think so, but I could be wrong.

I will take whatever the market gives me. If they make the breaks, that is fine. I am willing to play some of these to the upside simply because they have sold off, they formed up good patterns at the bottom of their bases, and they are moving to the upside nicely. They have room to run. The bad news has been built into them pretty much. I am looking for upside from them and the leadership that could take the other indices to the top of the range. We will have to reevaluate after that because at that point it gets problematic.

LEADERSHIP

Industrial. The big news on the day was CAT. Earlier I said it burned several of its nine lives on this rally as it gapped lower on that earnings miss. That was disappointing. There are reasons for it, but we will see how it affected the others in the sector. CMI is still working laterally in this three-week range, trying to make a higher low and break to the upside. I have been contemplating a play here. It is a possibility, but there is a lot of resistance at 112. When it is trading near 107, that does not give it a lot of leg room to the upside. It had one big move, but really the range is defined by this gap up point in late April. That is defining this move, and that is where it will find resistance in other words, around 114. You can make a trade off of that, and it is at a good support level. It would be tough to get a 3:1 ratio out of that. Just throwing that out there. I am contemplating it, but it is tougher to make that play.

DE has already been beaten down. It did not dive on the news, but it is not exactly a pattern for your mother. As I often say, maybe it can be for your mother-in-law. JOYG is doing just fine. It is up to a prior peak right now, testing it. MACD is about where it was before, so it looks very rangy right now. You would not want to move into it. Obviously if you got in on this false breakdown, if you had the courage to get in, then you did well. It really was not that bad of a move. If we had been on the ball, we would have caught it. There is a gap point here, the bottom gap, the upper gap line, and it broke into that and then reversed right back up. It would have been a good play.

That is what I am talking about with the false breakdown. If you see something like that, particularly at gap points or other areas that have been intense support before, then that is great. If it makes the reversal, you can be in on it. The beautiful thing is, you see this break and you might have thought you missed it. Then it came back and fully tested and gave you the shot to get back in. Keep that in mind, and I promise I will continue to do that as well and try not to miss those easy ones like on JOYG.

Technology. AAPL continues the move. We covered up some of our positions in the stock, and now the stock is rising higher. We will see what happens when it gets to that gap up high on earnings and then decide what we will do with those. It is still moving up, showing strength. No complaints with what GOOG is doing for us. It is moving higher and getting close to the early-2011 peaks.

BRCM had an inverted head and shoulders breaking to the upside. KLAC was the same type of action. SNDK gapped to the upside on Friday. BRKS is not doing much for us. Not much of a pattern to play, but then again, what do you see? We have a gap point. It has undercut it, but it has reversed over that. If you get a test back that holds in this general area again or maybe the 200 day EMA, BRKS is one to watch to perhaps take off to the upside. KLIC may be an ABCD. Big move. Look how the D-point held roughly right at the gap point. Very interesting. It is something to consider as well, at least to keep an eye on. It had a big gap on Friday. If it comes back a little and then holds, it could be an interesting play to try that ABCD pattern. It has a move up to 1275 on the high from 1030. It is a decent bounce.

Energy. GLF made us some money today. Great earnings. What a classic cup-with-handle pattern. Look at the break on Thursday in anticipation, and then the gap Friday. Sometimes, as Andy Schleck said yesterday in the Tour de France, it is "No guts no glory." That is why we stepped in with some positions right before the close along with some we already had from a long time ago. We had a nice break to the upside. HAL continues its run, showing a doji on Friday. That can suggest it has a near-term pullback after a solid run to the upside. But it had the breakout, the test of the breakout, and a solid run. You do not really want to cut that one off. Maybe we take some gain on it as it continues. It is looking great.

CRR is continuing its move to the upside. A huge move for us thus far. WTI is breaking to a new closing high. It is moving well for us. I do not want to step in its way. SPN is moving higher as well, posting a nice move this week and a break to a new closing high for this move on Friday with great volume. MACD is leading the way, breaking out as well. That is what you want to see. There is no divergence there. It is showing you what it should be showing. Very nice as energy continues to lead.

Healthcare/Medical. Healthcare looks good. EXAS is rallying nicely this week. It tested the breakout, rebounded, and now it put in a closing high. Now we will see if it can continue the move to the upside. ISRG had a big week on strong earnings, gapping to the upside. It was off a bit on Friday, but it is a breakaway gap. You always watch breakaway gaps for continuing in the direction of the gap once they finish their consolidation. We want to watch ISRG to see if it can complete its gap and continue higher.

I put ZOLL on last night. It looked as if it was ready to continue its gap move. It was coming off the 50 day EMA, and it showed a good volume reversal on Wednesday when it did that. We were ready, and Friday it made the move higher. We were ready to move in. BIOS had a good week. It set up beautifully, came back to test, and a massive breakout on Thursday. It was off a bit on Friday, but who cares? Lots of leadership leading the market to the upside.

Retail. AMZN had a decent week. It was up but struggling a bit. It has had a big run and it is consolidating. No problem with that. PNRA might be interesting for a break higher. It is one to consider as it is testing nicely after breaking out of its trading range. How many stocks have we seen break out of the trading range and move higher? We just looked at several of those in the energy sector.

Financial. I made reference to the financials earlier and how they are in trouble, but they had a good week. JPM was flat on Friday, but it is right at a significant resistance level. These will be important for these stocks in the coming week. WFC had a nice week, but it is up at its 200 day EMA as well. It has moved well for the last month and a half. We will see if it can continue. They need to pitch in to help the SP500. MS gapped higher on earnings on Thursday. It has had a good move, and it cleared key resistance. This is an important move for MS, and if it moved more than at a snail's pace, I would be telling you to watch to play the trend reversal. It has broken out. Now we look for a test back down into the 23-range, and then a move back to the upside. If it wants to move back up, this could be an outstanding trade. Just watch for the test that comes back. When it holds in that area and takes off, that is when you want to move in.

THE ECONOMY

The issue that won't die: are companies obligated to hire just because they are making money?

Keep hearing the argument companies have a 'moral obligation' to hire or at least not lay off workers. They are no longer growth companies. They have old, mature products and services that are their cash cows, that make them all their money. They are not in expanding markets. The only way they can grow profits and keep stock prices rising is to cut costs. Employees are costs.

The way the US has ALWAYS created new jobs is not subsidizing big companies and thus crowding out the small businesses that have better ideas, but ENCOURAGED an environment where small companies with better ideas could compete and take out the former growth companies.

Examples: DELL, AAPL, INTC, CSCO, MSFT pushed the old typewriter companies, copy companies, publishing companies, etc. aside. Indeed these companies that do not continue to innovate and create new markets will turn into mature income companies versus growth. MSFT is there already.

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:
Economy Summary Video

THE MARKET

SENTIMENT INDICATORS

VIX. Volatility is on the downswing given that the indices have been moving higher. That makes a lot of sense. It is trading in a range as have stocks. Stocks have been trading in a range and volatility is matching. We had a peak a week ago, and that is when the market bottomed at that 50 day EMA on NASDAQ and the SP500 and bounced. Now it is heading lower, but it has not hit the bottom of the range yet. That tells me there is still more upside to this move as long as nothing extraneous comes along to dump the apple cart over. Like, say, a total breakdown in government.

In any event, it looks like volatility is saying we still have a move higher up into the ranges with respect to SP500 and NASDAQ. They could move up and bump the top of the range then maybe stall out. Again, they have the potential to make a breakout. Volatility is not necessarily telling us that because it is proceeding down. When it gets to the lows, you can bet the indices will be at the highs of the rally. Unless there is something to break it out like a budget deal or really good news, then it will likely turn back down and trade lower in the range once more.

VIX: 17.52; -0.04
VXN: 19.17; -0.54
VXO: 17.25; -0.11

Put/Call Ratio (CBOE): 0.84; +0.08

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 46.2% versus 44.1%. Continuing the steady rise after bottoming in late June. Took out the early June high at 45.2% though still well below the very high 60% readings spanning December through early May 2011. The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 21.5% versus 22.6%. Bears are continuing their decline, now roughly at the average level for the period November through early April. In April they fell sharply but the market sold and they climbed to a high to start July. Trending lower since. The 35% level is considered bullish for the market overall. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: +24.4 points (+0.86%) to close at 2858.83
Volume: 1.665B (-29.54%)

Up Volume: 1.21B (-370M)
Down Volume: 422.74M (-276.8M)

A/D and Hi/Lo: Decliners led 1.03 to 1
Previous Session: Advancers led 2.11 to 1

New Highs: 84 (-8)
New Lows: 21 (-5)

NASDAQ CHART: Click to view the chart

NASDAQ 100 CHART: Click to view the chart

SOX CHART: Click to view the chart

SP500/NYSE

Stats: +1.22 points (+0.09%) to close at 1345.02
NYSE Volume: 691M (-24.65%)

Up Volume: 1.52B (-2.13B)
Down Volume: 1.71B (+959.49M)

A/D and Hi/Lo: Advancers led 1.07 to 1
Previous Session: Advancers led 3.6 to 1

New Highs: 148 (-58)
New Lows: 40 (0)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: -43.25 points (-0.34%) to close at 12681.16
Volume DJ30: 136M shares Friday versus 188M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

We have a lot of economic data next week. There will be Consumer Confidence on Tuesday, and new home sales. Durable orders come in on Wednesday. Thursday brings the jobless claims. On Friday there is the first iteration of the Q2 GDP. Remember when estimates were 2.5% to 3%? My, how time have changed. 1.6% is expected. Some very sage economists say we will be extraordinarily lucky to make 1.6% on our first iteration with GDP. We will also have the Chicago PMI. It jumped up again in the prior month, and July will be very important. Michigan Sentiment rounds things out on Friday.

There will also be issues with respect to what the President said on Friday. He made the comment that the market will open on Monday and they will be looking for some kind of answer over the weekend. He has called the heads of Congress to his office tomorrow morning to explain to him just what they are going to do. Not to offer anything not to take some leadership and say "Here's what I think we need to do." It is just tell them to come up with a solution. Whatever. Maybe that is his style. I do not really care, I suppose, other than that he is not showing leadership. He is just perpetuating the name calling and finger pointing. If there is anything we do not want, it is that. We want them to do what they were elected to do. That is what the House is trying to do. I do not know what the democrats want to do other than what they always want. They think they are doing the right thing, but I do not think it is helping us right now since we have problems like what CAT is showing. But I digress.

We will have to deal with Monday, and we could have a down start to the week. I just did not want to cut off the runs we were having in the positions we had as indices were stretching toward the prior peaks. The leaders are showing excellent action. I did not want to cut any off particularly since we have already taken a lot of gain on them.

We have Europe to worry about on Monday, as always. We have the debt picture to worry about as always, and then we have earnings. The good thing is we have leaders running quite nicely. I went through a long list of them tonight to show you that they are moving very well. Maybe there will be a shock to the market. The market may wake up on Monday and think that we will not get a deal, we will default, and then the sky is falling. I do not think the sky will fall at all, however. I have always said that if we cut our spending and show real restraint, then we could show the rest of the world we are serious about cutting debt versus increasing our spending limit by $2-3T and just spending some more.

I suppose reasonable minds will differ on that. We just have to deal with what the market reality is. Again, it looked solid heading into the weekend. The leadership was really impressing me. If the leaders continue to move, obviously the market will follow. If they start to struggle, obviously market will pull back. I think we will get a continued move up to the top of the range in the indices. After that, we may have a problem. As I showed you earlier, they are closing in on those highs just as volatility is heading back down toward its lows.

Volatility is a little over halfway down to its recent lows, just as indices are above halfway up to the tops of their range. I think we will get more of a bump higher. I will not say all bets are off then, but at that point the market probably struggles a bit and falls back. Maybe it is able to make the breakout as this higher low at support would suggest. History says that puts it in the higher probability of a breakout. I'll take that if we get it. If there is any sign of trouble, as far as on the debt front or with Europe, some investors will hedge their bets. Some of the big money will start hedging and start taking some profits at the top of the range. If that is the case, we will take some profits, too. We have had a bounce. If it cannot break out, then we will take the profits and let it fall back town.

As I have said all along, we are in a range. We have gotten a lot more out of this range than I ever thought we would. Maybe we do ultimately get the breakout on this move, and maybe not. It has to show it to us. By looking at the VIX, looking at where the indices are, and looking at what is happening with Congress, you have to surmise that there would be a stumble. On the other hand, there is that leadership that has been performing superbly. Can they continue to do that after such a long run? Keep in mind that not all the leadership has made such a long run. They have broken out and tested and are starting back up. They are in excellent shape.

We have the scales of the market, and we will see which one wins out. We have a lot of gain, and we have taken a lot of gain. We will take more if need be. If not, we will let it run and take partials as it comes. We will be ready to play it either way. I hope you are ready to have a great weekend and then another interesting week in the stock market and the game of world finance.

Support and Resistance

NASDAQ: Closed at 2858.83
Resistance:
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak
2956 from November 2000
3026 from October 2000 low
3042 is the May 2000 low

Support:
2841 is the February 2011 peak
2825 is the 2007 closing peak.
2816 is the early April peak.
2796 is the February gap down point
The 50 day EMA at 2769
2762 is the February low
2759 is the May low
2723 to 2705 is the range of support at the bottom of the January to May trading range
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range)
The 200 day SMA at 2695
2686 is the January 2011 closing low
2676 is the January 2010 low
2645-2650ish from December 2010 consolidation
2603 is the March 2011 intraday low (post-Japan low)
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak

S&P 500: Closed at 1345.02
Resistance:
1344 is the February 2011 peak is being challenged again
1357 is the July 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1340 is the early April 2011 peak
1332 is the early March peak
1325-27 is the March 2008 closing low and the May 2006 peak.
1318.51 is the May low
The 50 day EMA at 1315
1313 from the August 2008 interim peak
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1295.50 is the 61% Fibonacci Retracement
The 200 day SMA at 1281
1275 is the January 2010 low, early January 2011 peak
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1227 is the November 2010 peak
1220 is the April 2010 peak

Dow: Closed at 12,681.16
Resistance:
12,876 is the May high
12,754 is the July intraday peak
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,605 is the mid-May 2011 high
12,391 is the February 2011 peak
The 50 day EMA at 12,385
12,283 is the March 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The 200 day SMA at 11,944
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,555 is the March low
11,452 is the November 2010 peak

Economic Calendar

July 18 - Monday
- Net Long-Term TIC Fl, May (09:00): $23.6B actual versus $30.6B prior
- NAHB Housing Market , July (10:00): 15 actual versus 14 expected, 13 prior

July 19 - Tuesday
- Housing Starts, June (8:30): 629K actual versus 570K expected, 549K prior (revised from 560K)
- Building Permits, June (8:30): 624K actual versus 609K expected, 609K prior (revised from 612K)

July 20 - Wednesday
- MBA Mortgage Index, 07/16 (7:00): 15.5% actual versus -5.1% prior
- MBA Mortgage Purchas, 07/16 (7:00): -5.1% prior
- Existing Home Sales, June (10:00): 4.77M actual versus 4.93M expected, 4.81M prior
- Crude Inventories, 07/16 (10:30): -3.727M actual versus -3.124M prior

July 21 - Thursday
- Initial Claims, 07/16 (8:30): 418K actual versus 411K expected, 408K prior (revised from 405K)
- Continuing Claims, 07/9 (8:30): 3.698K actual versus 3700K expected, 3748K prior (revised from 3727K)
- Philadelphia Fed, July (10:00): 3.20 actual versus 0.0 expected, -7.70 prior
- Leading Indicators, June (10:00): 0.3% actual versus 0.3% expected, 0.2% prior (revised from 0.8%)
- FHFA Housing Price I, May (10:00): 0.4% actual versus 0.8% prior

July 26 - Tuesday
- Case-Shiller 20-city, May (9:00): -4.4% expected, -3.96% prior
- Consumer Confidence, July (10:00): 56.0 expected, 58.5 prior
- New Home Sales, June (10:00): 320K expected, 319K prior

July 27 - Wednesday
- MBA Mortgage Purchase Index, 07/23 (7:00): +15.5% prior
- Durable Orders, June (8:30): 0.4% expected, 2.1% prior (revised from 1.9%)
- Durable Orders -ex Transportation, June (8:30): 0.5% expected, 0.7% prior (revised from 0.6%)
- Crude Inventories, 07/23 (10:30): -3.727M prior

July 28 - Thursday
- Continuing Claims, 07/16 (8:30): 3688K expected, 3698K prior
- Initial Jobless Claims, 07/23 (8:30): 415K expected, 418K prior
- Continuing Claims, 07/16 (8:30): 3688K expected, 3698K prior
- Pending Home Sales, June (10:00): -3.0% expected, 8.2% prior

July 29 - Friday
- GDP- First iteration for Q2 (8:30): 1.6% expected, 1.9% prior
- GDP Deflator, Q2 (8:30): 2.0% expected, 2.0% prior
- Employment Cost Index, Q2 (8:30): 0.5% expected, 0.6% prior
- Chicago PMI, July (9:45): 58.0 expected, 61.1 prior
- Michigan Sentiment - Final, July (9:55): 63.8 expected, 63.8 prior