[MM_Member_Data name=’firstName’],

U.S. markets were choppy again on Thursday despite the Dow closing higher for the 8th-straight session. Staples and Healthcare stocks showed strength while Energy and Materials stocks lagged.

Some of the nervousness can be attributed to tomorrow’s jobs report as Wall Street awaits the numbers ahead of the open.

Global Economy –European markets were mostly higher on positive economic news and continued low interest rates. The FTSE 100 index jumped 0.9% and France’s CAC 40 index added 0.5%. The Stoxx Europe 600 climbed 0.1% while Germany’s DAX 30 slipped 0.2%.

The Bank of England maintained its bank rate at 0.25% and kept its bond buying program unchanged.

Eurozone Jun retail sales rose +0.5% month-on-month and +3.1% year-on-year, stronger than expectations of unchanged for m/m and +2.5% y/y. The +3.1% y/y gain was the largest year-on-year increase in 23 months.

The UK July Markit/CIPS services PMI rose +0.4 to 53.8, stronger than expectations of +0.2 to 53.6.

Asian markets traded lower across the board following new sanctions on Russia, North Korea and Iran along with weaker data out of China. South Korea’s Kospi index sank 1.7% while China’s Shanghai index fell 0.4%.

Japan’s Nikkei Stock Average gave back 0.3% while holding the 20,000 level. Hong Kong’s Hang Seng Index dropped 0.3% and Australia’s S&P/ASX 200 dipped 0.2%.

The Caixin China services purchasing managers’ index edged down to 51.5 in July from 51.6 in June.

China’s official nonmanufacturing PMI, which includes the construction sector, dropped to 54.5 in July from 54.9 in


U.S. Economy-Initial jobless claims dropped 5,000 to 240,000 in the final week of July.

The ISM non-manufacturing index dropped 3.5 points to 53.9 in July, hitting an 11-month low. Factory orders rebounded 3.0% in June.

Markit’s services PMI rose 0.5 points to 54.7 in the final July reading.

U.S. NFIB small business hiring plans jumped 4 points to 19.0% in July (net), after sliding to 15% in June from May’s 18%.

Market Sentiment –The iShares 20+ Year Treasury Bond ETF (TLT) opened above the $125 level while reaching a high of $126.02 into the closing bell.

Upper resistance at $125.50-$125.75 was cleared with fresh hurdles at $126-$126.25. Rising support is now at $125-$124.50 and the 50-day moving average.


Market Analysis-The PowerShares QQQ ETF (QQQ) are still trying to recover from last week’s outside reversal on the intraday drop from $146-$142.

Near-term resistance has been solid at $144-$145.50 and has been holding for five-straight sessions. A momentum swing to the upside can’t be trusted until the QQQ’s clear and hold $146-$146.25.

The good news for the bulls is that a lower low hasn’t been set since last Thursday’s backtest to $142.30. Support is at $142.50 with today’s bottom tapping $143.13. A move below $143 likely gets $142-$141 and the 50-day moving average in play.


The Medical sector has been the weakest of the major industries with a 4.6% drop over the past week.

The iShares U.S. Medical Devices ETF (IHI) topped out at the $170 level last month and best illustrates the damage being done. IHI has fallen in six of the past eight sessions including today’s rebound.

Near-term support at $162 from late May/ early June will try to hold as a base if tomorrow’s action is positive. Otherwise, there is continued risk to $160-$159.50 and the 100-day moving average. Resistance is at $164 followed by $165-$165.50 and the 50-day moving average.


All the best,
Roger Scott