HI Financial Services
When Donald Duck traded his wings for arms, was he trading up or
trading down? Douglas Coupland
What has been happening
so far this week?
Pretty flat for right now.
Waiting for economic news again. On Monday the Empire Manufacturing came in at
19.3 vs an estimated 12.8 and Industrial Production came in at .6 vs an
estimated .5. Manufacturing last month
came in much better than expected which boosts the GDP “expectation”. Capacity Utilization came in at 79.1 vs an
estimated 78.9 but it is not considered a reliable indicator. Why?
IT is awfully hard to truly gauge the “slack” in the economy so I wouldn’t
put any weight in the numbers. The NAHB
Housing Index did come in at 49 vs an estimated 46. Anything above 50 shows expansion and we are
almost up to an expansion level in the housing market again which boost the
economy as a whole.
Tuesday economic news was a bit different. Housing starts and
Building permits came in lower than the estimates. This changed the futures to
have our market open negative. The CPI
was .4 vs an estimated .2 and the Core CPI came in at .3 vs and estimated
Where will our market
end this week?
We should not guess and we do not know. We can expect the FOMC rates to stay the same
and probably we will hear another 10 billion decrease in mortgage back
securities. The key will be is any terms
appear in the printed notes that appear hawkish or indicating rates may
increase sooner will send the market into a bearish tail spin. Also, the Bank of England minutes come out
giving an indication on the England and Euro economic conditions. I think we are subject to headline risk from
Iraq crisis even though they only provide 4 million daily barrels to the world
supply. None of the oil in Iraq is used
or bought by the US and it is a small amount in general but why not over react
to help the markets grind higher.
DJIA–We have has a 250
point pullback and it looks like 16,700 is a new support level for the
Dow. Maybe we get over the crisis and we
can now create another leg higher with the small sell off.
SPX – The SPX held the
1930 level which was where smart money drew a line in the sand. It appears to be building a base and we will
see if it can withstand the headline news.
COMP – We had a one day
pullback from on over bought level on the RSI.
This strength shows the technology sector is ready for another leg
Where Will the SPX end June
I have not changed my expectation
from the first week. 1950 on the SPX and
let’s see us test 17,000 on the Dow.
I would expect to
continue to melt up in the indexes. I
think we lack a stimulus so I would not go much higher than 1950 or roughly a
1% gain for June
What is on tap for the
rest of the week?
Wed: FDX, JBL
Thur: BBRY, KR, ORCL, RAD, SWHC
Fri KMX, DRI
Starts, Building Permits, CPI, Core CPI
Wed: MBA, Current
Account Balance, FOMC Rate Decision
Thur: Initial Claims, Continuing
Claims, Phil Fed, Leading Indicators
Tues – GB:
Wed – GB:
Thurs – JP: All Industry
Index, GB: Retail Sales
Friday –DE: PPI, EMU: EC
Consumer Confidence Flash
Sunday – JP: PMI Manufacturing, CN: PMI Flash Mfg
How I am looking to
Right now I feel like I
am letting a lot of stocks Run – AAPL, CLDX, DIS, D, TSLA, F, NVDA, VZ, V,
Collar: BIDU, MS, SBUX,
Covered Calls: ½ AAPL
positions, TSLA (@200 and 250 in June for 500), SNDK Jul 87.50 with a 6.36
positions: AAPL, DIS, D, F, VZ, V, LNCO,
Protective Puts: MEI,
An article suggest’g to buy puts on SPY
the Nasdaq ( what is the ticker ? ) and
buy Calls on the Vix .
He showed a chart
that mirrors the 2007 lead up to the 2008 recession. Suggests going to cash, I
don’t remember the %.
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