Sunday, June 2, 2013

Keystone's Key Events and Market Movers for Trading the Week of 6/3/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: The ‘sell in May and go away’ scenario makes an appearance last week. The weakest returns in the stock market occur from May to October. After all, who would blame any long trader for cashing in this year’s gains and simply taking the summer off? Perhaps a new adage is 'sell in June to avoid the swoon'? The new week begins with PMI data that will set the tone for Monday morning. Markets will pivot at 10 AM EST Monday on the ISM Mfg Index. The ECB’s Rate Decision is huge this week on Thursday morning and the Monthly Jobs Report on Friday will round out the week.  The Sequestration budget cuts create concern over a second half slowdown this year. The Debt Ceiling limit and CR (Continuing Resolution to fund the government) deadlines are pushed into September after Labor Day. Politicians must solve the U.S. fiscal mess during June, July and August, reminiscent of 2011 which did not end so well. There is growing worry that the Whitehouse scandals will distract politicians from addressing the fiscal mess. Traders remain complacent since the politicians will always kick the can down the road. Of course, if a stumble occurs, it would impact markets severely. Congress is in session during June which is a negative for markets. The European debt crisis is ongoing but the BOJ easy money has flooded into European stocks and bonds causing bond yields to drop and create calm. The ECB’s OMT bond-buying program is in place and not fully accessed as yet also creating a faux stability. Merkel (Germany) does not want any nation to exit the euro before her re-election in September but will not care afterwards. The next ECB Rate Decision and Press Conference is Thursday, 6/6/13.  Draghi lowers rates one-quarter point to 0.5% on 5/2/13 to help the European manufacturing, export and automobile sectors, and compete with the currency debasement ongoing around the world.  Another cut may be on tap. The euro should move lower which moves the dollar higher and should move commodities and U.S. equities lower, however, weak commodities are not having a negative effect on markets due to the Fed and BOJ money-printing.  The China hard versus soft landing saga continues. Copper and commodities have tumbled lower for two months but surprisingly have not created any equity market weakness.  Dr. Copper used to be a valuable market indicator but the Fed and BOJ central banker policies are distorting markets and masking price discovery. The BOJ (Japan) is the single most important bullish influence on markets over the last three months; weaker yen = higher dollar/yen = higher equities while stronger yen = weaker dollar/yen = weaker equities. The equity markets continue to ignore the geopolitical landscape. Syria is out of control with 100,000 dead from this bloody civil war. Israeli airstrikes, U.S. and U.K. evacuations in Libya, Egypt unrest, and now civil unrest in Turkey is destabilizing the Middle East and Northern Africa regions.  Syria refugee’s flood into Jordan and other neighboring countries unable to handle the huge influx of people. North Korea theatrics keep popping up from time to time. Geopolitical risk is not priced into the markets.  Q1 earnings season winds down but DG, ASNA, HOV, COO and TITN are of interest this week.  The theme of companies coming in light on top line revenue continues but traders are focused on the EPS beats and ignoring sales.  A strong economy should show ever increasing revenue numbers, not flat to lower sales. Companies are booking profits by squeezing every last drop of blood from existing employees rather than growing sales. The Fed and BOJ easy money continues to create new asset bubbles in dividend stocks, healthcare, staples, utilities (now retreating like a parabolic commodity stock), telecoms, REIT’s, MLP’s, high-yield instruments, home builders and blue chips in general. The interest rate sensitive sectors such as utilities, REIT’s and telecom are hit hard due to rising Treasury yields. Volatility finally makes a move higher with the VIX moving above 16.  Higher volatility will create wilder and larger intraday and day to day point swings.  Broad market topping and roll over action is anticipated moving forward for the days and weeks ahead.  The month of May logs another positive month.  Keybot the Quant trading algorithm remains short. Keybot is tracking volatility (watch VIX 13.23), copper (watch JJC 41.50) and utilities (watch UTIL 481 and 478) as the most important influences on broad market direction. The bears need UTIL under 481 then 478 and the SPX will be headed towards 1600. The bulls need to achieve VIX 13.23 or JJC 41.50 to signal the all-clear for upside again. The next Bradley turn is a major turn on 6/22/13 (Bradley turns do not forecast direction only that a major trend change or melt-up, or melt-down, in markets may occur +/- 7 days around the turn date). Keystone’s Eclipse Indicator targets this June period as having potential for a significant market selloff. The 4/10/13, and 6/10/13 dates, allowing +/- 2 weeks before and after these dates, are the key windows targeted for a major market pullback. Interestingly, the 4/10/13 date, forecasted months in advance by Keystone, identified the exact market top in April. A major market selloff can occur at anytime forward but the window between now and 6/24/13 is particularly important. Solar flare activity is increasing and may affect electronics, communications and markets as the year moves along. June through August may be an epic period for markets and economic history.


·         Monday, 6/3/13: Asia PMI’s. Europe PMI’s. Fed’s Williams speaks 7:20 AM. Construction Spending and ISM Mfg Index 10 AM—market pivot point. New money tends to enter the markets and create buoyancy the first couple days of the month. Earnings: JOSB, NAV, SAI, SCLN, THO, VRNT.

·         Tuesday, 6/4/13: Motor Vehicle Sales. International Trade 8:30 AM. Fed’s Raskin speaks at 12:30 PM, George at 1:30 PM and Fisher at 8 PM. Earnings: BOBE, DG.

·         Wednesday, 6/5/13: Mortgage Applications 7 AM. ADP Jobs Report 8:15 AM—losing credibility as an indicator. Productivity and Costs 8:30 AM. ISM Non-Mfg Index and Factory Orders 10 AM—market pivot point.  Oil Inventories 10:30 AM. Beige Book 2 PM-market pivot point. Earnings: ASNA, CSUN, CWTR, CYBX, FGP, FCEL, HOV, RUE, SIGM, VRA, PAY.

·         Thursday, 6/6/13: BOE rate decision—Mervyn King’s last meeting. ECB Rate Decision 7:30 AM EST and Draghi Press Conference 8:30 AM. Chain Store Sales. Challenger Job Report 7:30 AM. Jobless Claims 8:30 AM. Fed’s Raskin 8:30 AM. Fed’s Plosser speaks 12:00 PM. Natty Gas Inventories 10:30 AM. Markets tend to be bearish moving through the new moon. Earnings: ANN, CIEN, COO, MTN, SJM, TITN.

·         Friday, 6/7/13: Monthly Jobs Report 8:30 AM—market pivot point. Consumer Credit 3 PM.  Earnings: CBK, JKS.

·         Saturday, 6/8/13: New moon.


·         Monday, 6/10/13: Earnings: ANFI, CPST, DMND, ENZ, PRLS, PIR, RH.
·         Tuesday, 6/11/13: NFIB Small Business Optimism Index 7:30 AM. JOLTS and Wholesale Trade 10 AM—market pivot point. 3-Year Note Auction 1 PM. Earnings: LDK, ULTA.
·         Wednesday, 6/12/13: Mortgage Applications 7 AM.  Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. Treasury Budget 2 PM. Earnings: HRB, MW, PVH.
·         Thursday, 6/13/13: Jobless Claims, Import and Export Prices and Retail Sales 8:30 AM.  Business Inventories 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Earnings: SFD.
·         Friday, 6/14/13:  Current Account data and Producer Price Index (PPI) 8:30 AM. Industrial Production 9:15 AM. Consumer Sentiment 9:55 AM—market pivot point. Bradley major turn window opens from 6/14/13 through 6/28/13 for a market trend change to occur.


·         Monday, 6/17/13: Empire State Mfg Survey 8:30 AM. TIC data 9 AM. Housing Market Index 10 AM. Earnings: DFS, FIVE, HIS, MHR, MU, ORCL, RHT, RAD.
·         Tuesday, 6/18/13: FOMC Meeting begins. Consumer Price Index (CPI) and Housing Starts 8:30 AM. Markets are typically buoyant from Tuesday to Wednesday during OpEx week. Earnings: ADBE, BKS, LZB.
·         Wednesday, 6/19/13: ECB meeting. Mortgage Applications 7 AM.  Oil Inventories 10:30 AM. FOMC Meeting Announcement and FOMC Forecasts 2 PM—market pivot point. Chairman Bernanke Press Conference 2:30 PM—markets will react to comments. Earnings: FDX, FNSR, JBL, RSH, SCS.
·         Thursday, 6/20/13: ECB meeting. Jobless Claims 8:30 AM.  Asia Flash PMI’s. Europe Flash PMI’s. Flash PMI Mfg Index 8:58 AM. Existing Home Sales, Leading Indicators and Philly Fed 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. 30-Year TIPS Auction. Markets tend to be bullish through the full moon. Earnings: KR.
·         Friday, 6/21/13: OpEx—Quadruple Witching.  Earnings: CCL, DRI, KMX.
·         Saturday, 6/22/13: Major Bradley Turn Date—window is open from 6/14/13 through 6/28/13 for a market trend change to occur.


·         Sunday, 6/23/13: Full moon.
·         Monday, 6/24/13: Chicago Fed National Activity Index 8:30 AM. Dallas Fed Mfg Survey 10:30 AM. Earnings: AVAV, AM, APOL, FDO, FINL, FUL, NKE, OMN, STZ, TIBX.
·         Tuesday, 6/25/13: Durable Goods Orders 8:30 AM. FHFA House Price Index and Case-Shiller House Price Index 9 AM. Richmond Fed Mfg Index, New Home Sales and Consumer Confidence 10 AM—market pivot point. 2-Year Note Auction 1 PM. Earnings: WAG.
·         Wednesday, 6/26/13: Mortgage Applications 7 AM. Corporate Profits and GDP 8:30 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings: GIS, MON.
·         Thursday, 6/27/13: Jobless Claims and Personal Income and Outlays 8:30 AM.  Pending Home Sales 10 AM. Natty Gas Inventories 10:30 AM. Kansas City Mfg Index 11 AM. 7-Year Note Auction 1 PM. Farm Prices 3 PM. Earnings: CAG, MKC, UNF, WOR.
·         Friday, 6/28/13:  EOM. Chicago PMI 9:45 AM.  Consumer Sentiment 9:55 AM. Earnings: BBRY, FLOW, KBH, SCHN, WGO.


·         Monday, 7/1/13: Asia PMI’s. Europe PMI’s. Motor Vehicle Sales. Construction Spending and ISM Mfg Index 10 AM—market pivot point. New money tends to enter the markets and create buoyancy the first couple days of the month.
·         Tuesday, 7/2/13: Factory Orders 10 AM—market pivot point.
·         Wednesday, 7/3/13: : Mortgage Applications 7 AM. Challenger Job Report 7:30 AM. ADP Jobs Report 8:15 AM—losing credibility as an indicator. International Trade 8:30 AM. ISM Non-Mfg Index 10 AM. Natty Gas Inventories 10:30 AM. Oil Inventories 11 AM. Markets close Early for holiday.
·         Thursday, 7/4/13: BOE rate decision. ECB Rate Decision 7:30 AM EST and Draghi Press Conference 8:30 AM. U.S. markets are closed in Observance of July 4th Independence Day.
·         Friday, 7/5/13:  Jobless Claims and Monthly Jobs Report 8:30 AM.


·         In September:  The Debt Ceiling Limit and CR Continuing Resolution to fund the U.S. government deadlines occur.  Politicians must develop solutions over the summer time reminiscent of 2011 which did not end well. The Whitehouse scandals may distract politicians from addressing the fiscal problems.
·         In September:  Merkel (Germany) seeks re-election and will not want Greece or other nations to exit the euro before the election, but will not care afterwards.  Perhaps Greece or other nations, and/or Germany will exit the euro in the future.
·         In Q4 2013:  European bank stress tests will occur.

----------------------------  2014  ----------------------------------

·         On Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed, unless there is news during Q4 2013 that he will stay on. Will Yellen, even more dovish and likely wanting to see QE on steroids, take the reins? Equity bulls will be happy if Yellen receives the nod but bears will be happy if Yellen is not selected.
·         In March 2014: ESM is officially ‘fully operational’. The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.

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