Morning Update: 7/3/2012

The stock market started out with a topsy-turvy morning as the indices ran up early, came down hard on economic news that was less than desirable, and then bounced around in wedge formation. They broke out midday, but couldn’t get to the highs, backed off to consolidate, and then late in the day, they came on strong with the Nasdaq 100 closing at the day’s high, and the S&P 500 not far from it.

So you can see how they came back in the afternoon.

Advance-declines were nearly 21 1/2 to 9 positive on New York, and 16 to 9 positive on Nasdaq. Up/down volume was almost a little under 2 to 1 positive on New York, with total volume of 727 million shares. The Nasdaq traded a little over 1.75 billion, and had a 2 to 1 positive volume ratio.

It was a very positive day as it turned out at the end, but the question was in doubt at the end, and although the S&P 500 did close near the highs for the day, it still has not broken out above key resistance right at this level. If they move up, or gap up, tomorrow, we’ll have a key breakout from a major bottoming pattern. Nasdaq 100 needs to get over 2635 to do that, but that’s only 10 points.

Instrument Strategy Market pos. Quantity Entry price Exit price Profit
6E 09-12 Custom Long 1 1.2596 1.2596 -4.5
6E 09-12 Custom Long 1 1.2596 1.2596 -4.5
6E 09-12 Custom Long 1 1.2596 1.2597 8
6E 09-12 Custom Long 1 1.2596 1.2597 8
TF 09-12 Initiative Trade Balance Extreme Long 1 791.4 804.2 1275.5
TF 09-12 Initiative Trade Balance Extreme Long 1 791.4 804.2 1275.5
ES 09-12 Short 1 1355 1358.25 -167
ES 09-12 Short 2 1355 1358.25 -334

Tuesday, July 3

Economics
10:00 am: Factory Orders, est. 0.1%, prior -0.6%
11:30 am: U.S. to sell 4-week bills
US market closes at 1:00 p.m. ET
1:00 CNY China Non-manufacturing PMI
4:30 AUD Reserve Bank of Australia Rate Decision
8:30 GBP Purchasing Manager Index Construction
9:00 EUR Euro-Zone Producer Price Index

Earnings
Before:
No major events. 

After:
No major events. 

The ISM manufacturing index came in at 49.7, worse than the expected 52.0. Construction spending rose 0.9%, better than the consensus 0.2%. On Tuesday we will get factory orders.

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