Sunday, June 15, 2014

* 6-15-14: Market Focus: Prepare for The Week to Come

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Last week all of the major stock indices were down as Crude Oil prices popped on tensions in Iraq.

Data provided by MarketWatch, Yahoo! Finance, Charles Schwab optionsXpress

Major headlines from last week:
Obama rules out immediate military action to back Iraq government (6-13-14)

Stocks slide on retail data; oil lifts energy shares (6-12-14)

Are stocks getting into 'dangerous territory'? (6-11-14)

Fewer good jobs in the new economy (6-10-14)

As stocks hit record highs, a correction may be due (6-9-14)

As we have seen for a while now, the sentiment in the news and headlines has been rather bearish though the market and VIX havebeen shrugging it off.  One could argue that bearish sentiment is in fact bullish for the market.  Of course, one could argue lots of things...

The Chinese Large Cap ETFs continue to show technical breakouts to the upside (see details below) and substantially outperformed the US.

Last week the VIX hit a seven-year low, but did bounce off of those lows in the rest of the trading week. Here's the VIX chart over 7+ years ending on June 6th.

And for this week....

Eyes will be focused on some economic data (calendar below), Iraq (and Iran, Afghanistan and Pakistan), oil prices and of course, jobs and inflation readings.  Note also that economic bellwether FedEx reports earnings this week.

Thus far, fear is low, both the realized volatility (realized risk) in the market and the implied volatility (forward looking risk) are still remarkably low.
The question remains: Is this complacency or equilibrium?

Below you will find all that we need to prepare for the week to come

All data and images for this report are provided by Charles Schwab optionsXpress

Economic Calendar
CPI, jobs and leading economic indicators are in focus for this week along with housing starts and building permits.  There is an FOMC Rate Decision, but that feels like 'much a do'...

Partial List of Noteworthy Earnings This Week
The 15 most optionable earnings events; a relatively quiet week as we have moved well out of earnings season.  But, if you have the will to trade, there are company specific events to analyze.  Check out ADBE, ORCL for technology, and a major bellwether FDX.

Technical / Pattern Breakouts to Watch: Up-trends
Note again, repeats for several weeks now, the China large cap ETFs have bullish break outs, and last week there was a substantial out-performance relative to the S&P 500.  Also note Sothebys (BID) is in a precarious position.

Bubble, new bull market, or randomness?

S&P 500: -0.7%

FXI: +1.65%
XPP: +3.15%

Technical / Pattern Breakouts to Watch: Down-trends
Note MOMO favorites EBAY and  SKUL and of course a short oil fund.

This is trade analysis, not a recommendation.

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