Keystone presents the following underlying market currents, sometimes subtle, sometimes turbulent, that move global markets in real time. The key dates and times below typically correspond to market pivot points.
Key Dates and Times for the Week Ahead:
· Monday, 6/25/12: . The Europe drama continues to work towards a head with pressure ratcheting up on Germany day after day. Merkel, however, stands resolute in not wanting to throw good money after bad. Bank runs remain a major concern for Greece, Spain and Italy which would signal the end game. Therefore, watch for any hint that Germany is softening its stance, if so, the equity markets will launch. If European bank runs increase and Spain banks continue to fall apart, equity markets will tumble lower. The Euro Summit is on Thursday this week but traders do not expect any major news, despite the desperate need for solutions. Draghi (ECB) has held back from lowering rates over the last couple months to keep pressure on the European politico’s to find solutions. The ECB rate decision, however, occurs Thursday, 7/5/12, and time is running out for the Eurozone. The markets will decide the fate of Europe if the politico’s continue to not act, so the next 10 days are critical. Watch the European spreads closely; Spain-Germany, Italy-Germany, and France-Germany especially to directly gauge the contagion of the European debt crisis (France representing the socialistic direction and Germany representing the austerity and fiscally prudent direction). If the spreads increase, the turmoil in Europe is getting worse. If the spreads tighten, the tensions in Europe are diminishing. Watch the U.S.-Germany spread moving forward as well. The European news flow dictates global market direction. Congress is in session, for the most part, thru 8/3/12, so this is a market negative for the next six weeks. Watch for further China easing measures such as lowering triple R’s which will bounce equity markets. Watch confessional season into early July where companies will preannounce any changes to Q2 earnings projections. If there are few, this will create market buoyancy, but if many companies begin lowering guidance, a la MCD, markets will react negatively. Keystone’s Eclipse Indicator targets the period from 4/28/12 (where the market sell-off began) thru 6/28/12 for a major market sell-off so the month of June needs to play out completely even though the move off the top has already occurred as per the indicator. Keystone’s next eclipse window for a major market sell-off will occur in the Fall from 10/20/12 thru 12/20/12. The U.S. Supreme Court rules on Obamacare any day this week—healthcare stocks will react violently. Equity markets will likely respond positively if the Affordable Care Act is stricken down and likely act negatively if the Supreme Court upholds the current law. Chicago Fed Activity Index 8:30 AM-lots of Fed manufacturing data is on tap this week culminating in the Chicago PMI on Friday which will provide a strong gauge for the true strength of the manufacturing sector and hence, the employment situation. Window dressing is expected this week since this is month, quarter and half-year end, EOM, EOQ1, EOH1, respectively. Window dressing creates market buoyancy since funds gravitate towards adding the recent winners to show how smart they were (in retrospect of course). New Home Sales 10 AM-kicks off housing data and LEN and KBH earnings this week which will dramatically impact the housing sector. Dallas Fed Mfg Index 10:30 AM. Earnings: APOL, FUL, SABA.
· Tuesday, 6/26/12: S&P Case-Shiller Housing Price Index 9 AM. Richmond Fed Mfg Index and Consumer Confidence 10 AM-watch for a market pivot point. 2-Year Note Auction 1 PM. Earnings: AVAV, GRO, HRB, LDK, RBN, ZZ.
· Wednesday, 6/27/12: Mortgage Purchase Applications 7 AM. Durable Goods Orders 8:30 AM. Pending Home Sales 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings: FLOW, GIS, HOKU, LEN, MKC, MON, OMN, PAYX, PRGS.
· Thursday, 6/28/12: Euro Summit. GDP and Jobless Claims 8:30 AM. Natty Inventories 10:30 AM. Kansas City Fed Mfg Index 11 AM. 7-Year Note Auction 1 PM. Farm Prices 3 PM. Fed Balance Sheet and Money Supply 4:30 PM. Earnings: CAN, AM, FDO, MLHR-watch as a gauge on the economy if furniture is needed for offices and homes then the economy is on its way to recovery, if not, and earnings are weak, the economy has lots of pain ahead with continued high unemployment, NKE, RITT, ROSG, SCHN, TIBX.
· Friday, 6/29/12: EOM, EOQ2, EOH1. Personal Income and Outlays 8:30 AM. Chicago PMI 9:45 AM. Consumer Sentiment 9:55 AM-market pivot point. Earnings: FINL, KBH, STZ.
· Monday, 7/2/12: ISM Mfg Index 10 AM-market pivot point, watch the energy markets.
· Tuesday, 7/3//12: Markets Close Early at 1 PM due to the July 4th Independence Day holiday.
· Wednesday, 7/4/12: Markets are Closed in Observance of the July 4th Independence Day holiday.
· Thursday, 7/5/12: BOE and ECB Rate Decisions and Press Conferences. U.S. markets reopen.
· Friday, 7/6/12: Monthly Jobs Report 8:30 AM-the last three releases are a debacle starting with Good Friday, 4/6/12. This report is one of five remaining before the presidential election in November.
· Wednesday, 7/11/12: 10-Year Note Auction 1 PM. FOMC Minutes 2 PM.
· Thursday, 7/12/12: 30-Year Bond Auction 1 PM.
· Friday, 7/13/12: Friday the 13th. PPI 8:30 AM. Consumer Sentiment 9:55 AM-market pivot point.
· Friday, 7/17/12: China GDP.
KS, a week or two ago or so, you mentioned that 6/12 was a key bradely turn date (+/- 7 days) and that the FOMC mtng and subsequent FED press conference on wednesday could be key, albeit being on the very edge of that turn date (6/20).
ReplyDeleteWe all know that on wednesday the markets drifted lower (no QE3), with a big sell off on thursday, followed by the obligatory (?) bounce on Friday.
This pattern would suggest and fit with the bradely turn date and that markets are now in a down trend? This would fit well with EWT showing wave 3 of a 5-wave down pattern has started.
Thoughts?!
Arnie, the Bradley turn date was also a major turn date, with another major turn coming in July. Looking back, the case can be made that the turn off the bottom in early June, the front end of the Bradley range, placed a significant bottom. The sideways consolidation occurred as the actual turn date printed, 6/12-ish, and this resulted in a melt-up move continuing the upward trend. Probably best to not read a lot into it, but the inclination appears that it identified the early June bottom. Perhaps the Bradley sites or other Bradley followers have a different take.
ReplyDeleteThe tail end of hte Bradley range did provide the top three or four trading days ago. That is why it is an esoteric indicator, it supplied something for everyone, Keystone's inclination is that it was the up move identifying the June bottom which stopped the slide from the late April-early May top.
We will have to look to the 7/28/12 major Bradley turn date which occurs next, thus a window is opened for a major market turn between 7/20 and 8/3.
KS, thanks for the reply and interpretation. I hadn't looked at it from the angle you presented. Interesting. Though I am much of a Bradley follower as it is -as you mentioned- open to many interpretations, we can say for sure the market is in very interesting times.
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