Sunday, July 13, 2014

* Preparation: Must Know for the Week to Come; Must Know from Last Week

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This week it's earnings, and momentum.

Last Week: Must Know
 Last week we saw, for the first time in a while, all four major indices down, with the largest losses seen in the NASDAQ Composite.

Data provided, Yahoo! Finance, Charles Schwab optionsXpress

The drop in the indices in and of itself was not particularly alarming, but the shift in momentum (discussed below) demonstrates that an abrupt move (one way or the other) is in fact possible and increasing in likelihood. Pay attention to market internals!

Last Week: Phenomena We Must Know
How Garbage Stocks, Schemes & Violent Backlash Can Lose You Everything

FOMC Minutes - Not Just Headlines but also Details

AAPL - Earnings Preview: It's Time, Again, to Pay Attention to the Largest Company in the World

Why Bank of America is Different than any Other Bank

Last Week: Stats Must Know
Momentum has totally flipped in just one week of trading.

* As of Friday: 58.2% of stocks are now trading above their 50-day MA
* As of last Friday: 79.5% of stocks are now trading above their 50-day MA
* As of 7-weeks Ago: 40.8% of stocks were trading above their 50-day MA

Provided by

But there's more... Check out the 20-day moving average numbers:
* As of Friday: 36.4% of stocks are now trading above their 20-day MA
* As of last Friday: 75.9% of stocks were trading above their 20-day MA

That's incredible... in one week short-term momentum went from very positive to significantly negative.  That's how quickly this market can shift.

A little perspective is needed given those enormous change in momentum, and here it is.  A one-year chart of the percentage of companies trading above their 50 day moving average.

Provided by

Look at the one-week move in the 50-dma, from right at an annual high, to filling a gap now just barely "bullish" (above 50% could be considered the "neutral" zone).

Last Week: Must Know Headlines:

* The correlation between stocks and bonds is spiking

* ‘Rotten rotation’ could signal bull market living on borrowed time

* Today’s bubbles aren’t like those of the past

* The U.S. housing market is a 'crap shoot' right now

This Week: Must Know
This week has lots of economic data and more than anything, LOTS OF EARNINGS.

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

This Week: Economic Calendar

Note the retail numbers (that's a consumer measure), jobs and housing.

Partial List of Noteworthy Earnings This Week
Technology, baby... oh, and financials:

Fact #1: The Technology sector has the highest projected earnings growth rate among the 10 S&P sectors.

Fact #2: Implied EPS growth for the tech sector has been 5.4 percentage points above the S&P 500 on average over the past 10 years, but it is now just 1.0 percentage point above the benchmark index.

Fact #3: Among the 10 S&P 500 sectors, financials have the worst earnings forecast with a decline of 3.5 percent from a year ago, according to Thomson Reuters data.

NEW YORK (Reuters) - Earnings from some of the biggest U.S. technology companies will take center stage next week, giving investors a chance to re-evaluate the sector's health.

The tech sector has the highest projected earnings growth rate among the 10 S&P sectors for the second quarter at 12.3 percent, its best quarter since the first quarter of 2012.

This forecast marks a sharp rebound from a drop of 3.2 percent just a year ago, according to a Thomson Reuters poll.

Source: Tech earnings take center stage next week via Yahoo! Finance, written by Angela Moon.

* YHOO (Tuesday)
* INTC (Tuesday)
* eBay (Wednesday)
* GOOG/L (Thursday)
Google (GOOG) - Earnings Preview: Something We Haven't Seen in 2-years. Did You Know This?

* C (Monday)
* JPM (Tuesday)
* BAC (Wednesday)
* MS (Thursday)

And a more complete list:

This is trade analysis, not a recommendation.

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