[MM_Member_Data name=’firstName’],
U.S. markets were volatile and closed the session mixed after trading to fresh all-times highs on the open.
The blue-chips closed higher but the midday day reversal did some technical damage as Tech and the small-caps led the way lower. Commodities showed strength with gold testing major resistance before pulling back.
Global Economy –European markets closed lower after a choppy session with utility and financial stocks among the leading decliners while consumer goods and basic material stocks edged higher. The FTSE 100 index, France’s CAC 40 index, and the Stoxx Europe 600, all, closed down 0.1%. Germany’s DAX 30 fell 0.8%.
Asian markets traded higher led by Hong Kong’s Hang Seng Index which gained 0.7%. Japan’s Nikkei Stock Average added 0.2% while China’s Shanghai index edged up 0.2%. South Korea’s Kospi index gained 0.5% while Australia’s S&P/ASX 200 advanced 0.2%.
U.S. Economy-U.S Jobless Claims were 244,000 versus expectations of 240,000 for the week ending 7/22.
June International Trade in Goods Balance at -$63.9 billion compared to a forecast of -$65.0 billion.
The June Chicago Fed National Activity Index Level checked in at 0.13 versus consensus of 0.10.
The July Kansas City Fed Manufacturing Index Level printed 10.
The June Wholesale Inventories was up 0.6% for the month.
U.S. durable goods orders jumped 6.5% in June following the revised 0.1% May decline that was -0.8%.
Market Sentiment –The dovish spin from the Fed’s policy statement has largely confirmed market expectations that the FOMC is unlikely to be hiking rates again this year.
Implied rates are suggesting only about a 40% chance for another tightening in 2017. It’s still the case, though, that balance sheet normalization is likely to begin in the next few months.
The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory throughout the session with the low reaching $122.82. Lower support at $123-$122.50 and the 100-day moving average held.
Lowered resistance is at $123.50-$124.
Market Analysis-The PowerShares QQQ ETF (QQQ) opened above resistance at $145-$146 and traded to an all-time high of $145.96 shortly after the open.
However, the midday reversal and plunge to $142.30 created an outside reversal candlestick. An outside candlestick is a two-bar pattern consisting of an open and a close that create a range that’s above and below the prior day’s open/close range.
Additionally, a higher high AND a lower low on the second day compared to the first bar, is needed. Although one day doesn’t make a trend, current support at $142.50-$142 needs to hold into the weekend.
Commodities have been rebounding of late with Gold getting a nice pop in recent weeks. The yellow metal has been struggling to clear the $1,260 level but did so today before pulling back.
Continued closes above $1,260 would be a bullish sign for another possible run at $1,300.
While the short-term outlook is playing out, the longer-term outlook would be what happens if $1,300 does come into play on a triple-top formation.
The 50/100-day moving averages are turning higher so there could be a bullish trade from $1,260-$1,300 over the near-term.
All the best,
Roger Scott