Thursday, July 3, 2003
Issue Contents:
| 01:43 | U.S. Economic Calendar |
| 01:46 | Technical Commentary |
This is the list of U.S. economic data and events scheduled for release this week. Please refer to the WSJ Online Earnings Calendar for a list of scheduled earnings reports.
Thursday, July 3, 2003
- 8:30AM: Initial Jobless Claims for June 28 week. Consensus: +6K. Previous: -22K.
- 8:30AM: Nonfarm Payrolls Report for June. Consensus: Unch. Previous: -17K.
- 8:30AM: Unemployment Rate for June. Consensus: 6.2%. Previous: 6.1%.
- 9:40AM: ECRI Inflation Gauge for June. Previous: 116.6.
- 10:00AM: DJ BTM Business Barometer for June 21 week. Previous: +0.1%.
- 10:00AM: Institute for Supply Management Non-Manufacturing Index. Consensus: 55. Previous: 54.5.
- 2:00PM: Bond markets close.
- 4:30PM: Money Supply.
Friday, July 4, 2003
- Independence Day holiday. Markets, banks, businesses and government offices are closed.
We'll have much more to say as we get up to speed with the new website. Let's take a quick look at the major market indices, starting with the daily chart of the $INDU Dow Jones Industrial Average below.
Starting late last week, most major indices began testing a few areas of potential support as the pullback after the June 17 swing high reached the June 9 swing low, the 20-day EMA and the 50-day EMA. With three areas of potential support so closeby, it was no surprise to see buyers show up on Tuesday to create a reversal day. Today, we saw the continuation of the move to the upside, creating a potential "breakout" pattern that is easily recognized by most traders and investors.
Using Japanese candlestick charts, you can see the "hammer" form at the areas of potential support quite clearly, by the white arrow. One of the concerns we always have is the fact that hammers are so easily recognized that it's actually not a surprise to see buyers come in. The big question now is if the major market indices can reach the overhead targets or if they are going to fail on the test, and surprise with a deeper pullback or an outright reversal. For the Dow Industrials, the target overhead is a test of the June 17 high of $INDU 9,352.77. For the $SPX S&P 500 Index (not shown), the target overhead is also a test of the June 17 high of $SPX 1,015.33.
Next up is the $NDX NASDAQ 100 Index. There are two targets overhead. The first is the June 18 swing high of 1,255.39; the second is the June 6 swing high of 1,265.69.
Other popular sectors that have seen a lot of speculation take place have also begun the bounce off support areas. Of note is the $SOX Semi-conductor Index, which formed a very large ABC Correction into the 50-day SMA, a retracement pattern when viewed in the context of a deep pullback in an uptrend. There are two upside targets. The first one is the June 19 swing high at $SOX 385.32. The second one is the June 6 swing high at $SOX 412.66.
The other sector of note is the $BTK Biotechnology Index, which formed a descending wedge into the 50-day SMA, the very largest formation that we consider a retracement pattern when viewed in the context of a deep pullback in an uptrend. Typically, these large patterns take place after a long move upward, in euphoric conditions, which is what the June 6 high was all about. The descending wedge on the $BTK is connected by three swing highs, and form the three targets overhead. The first upside target is the June 27 swing high at $BTK 452.68. The second upside target is the June 17 swing high at $BTK 488.54. The last upside target is the June 6 swing high at $BTK 514.11.
From our trading experience, we note that these large retracement patterns are typical of late-stage moves, and quite often fail to meet more than one upside target. Strategically speaking, this market needs to show us that it's got some new legs after such a big breather.
And on that note, have a good evening.