S&P 500 (JUN) -2.75 NASDAQ 100 (JUN) -4.75 Dow ($5) (JUN) -24.00
Treasury Bonds
5 yr note 4.92 +0.07 10 yr note 4.95 +0.06 30 yr note 5.05 +0.04
Currencies
US vs Euro 1.3463 +0.17%
US vs Yen 0.0082 -0.02%
US vs GBP 1.99 +0.23%
Commodities
Gold (CMX ) 676.90 +10.20
Light Crude (NYM ) 65.08 +1.07
Another Temporary Dip?
Stock futures are lower, but not by much. The Shanghai index "plunged" 8.3% on Monday. Russia is making threatening statements about aiming missiles at Europe.
This has the S&P futures indicating a lower open of about 3 points. This is the third time in recent months that the futures are noticeably lower because of a drop in the Shanghai market. On February 27, the Shanghai market dropped 8.8% and the S&P ended up losing 50 points that day to 1399. But the market started rebounding the next day and that simply proved a buying opportunity. The S&P 500 is up 137 points since then.
More recently, on May 30, the S&P opened 7 points lower after a 6.5% drop in the Shanghai market. By early afternoon the S&P was up 3 points, and ended the day up 12 points after the release of the FOMC minutes.
Traders may be trained to look at dips based on a decline in the Shanghai market as a quick buying opportunity. The negative impact may not last long.
The seemingly large 8.3% drop in the Shanghai index also has to be put in context. The index is now at 3670. It went through 2000 just six months ago. It could plunge a LOT further and still be up on the year. This 8.3% move is barely a blip on the chart.
The merger news is light for a Monday. Palm is raising $940 million in a deal that involves selling a 25% stake to a private equity firm. This is more of a bailout situation than a premium bid, however. Flextronics is buying Solectron for $3.6 billion. There are also reports that Avaya and Cadence Design Systems are in talks that might lead to buyouts.
The economic calendar has just the April factory orders report at 10:00 ET. This is a combination of durables and nondurables orders. The more important and volatile durables data are already out, so the market tends to ignore this report. The earnings calendar has nothing of note for today.
The market rally is pushing the price/earnings multiple higher. As discussed in this morning's Big Picture column, this is not unjustified and might continue a while longer.
_____________________________________________________________Monday, June 4:
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Earnings: Krispy Kreme (KKD), Bob Evans (BOBE), Credence Systems (CMOS)
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Economic Data: Factory Orders
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Events: Pfizer (PFE) Analyst Meeting
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Conferences: Deutsche Bank Securities Media & Telecommunications Conference; Goldman Sachs Lodging, Gaming, Restaurant and Leisure Conference
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Fed Speakers: None
This monday will be a correction day, as shown by index futures and the light calender. With no big companies schedule for earnings, there are no huge market movers tonight. It shall be a dip with not much downside.
Dow Jones Industrial Index 13,668.11 +40.47
No candlestick patterns.just a continuation of an uptrend.1st intraday resistance: 13,677
2nd intraday resistance: 13,686
1st intraday support: 13,663
2nd intraday support: 13,638
5 day interday high(resistance): 13,692
5 day interday low(resistance): 13,451
Direction for 290507: FLAT
NASDAQ Composite Index 2,613.92 +9.40
A rickshawman on the top of an up trend. Must be a down.1st intraday resistance: 2,617
2nd intraday resistance: 2,619
1st intraday support: 2,608
2nd intraday support: 2,600
5 day interday high(resistance): 2,627
5 day interday low(resistance): 2,544
Direction for 290507: DOWN
S&P500 Index 1,530.62 +0.39
Ok. Looks like it has no strength to climb up the 161.8% retracement level.1st intraday resistance: 1,533
2nd intraday resistance: 1,535
1st intraday support: 1,531
2nd intraday support: 1,530
5 day interday high(resistance): 1,541
5 day interday low(resistance): 1,508
Direction for 290507: Down
The Fear Gauges...
The $VIX...
...& $VXN
Both shows a doji at the bottom of a support or resistance level. I'm not very good at drawing S&R so maybe the VXN is sitting on a support. Anyway, they are both going up.
Market Direction for 040607: DOWN
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