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All Eyes Are On Jackson Hole

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If it’s Friday then there must be new developments in the Russia/Ukraine situation for traders to worry about. Sure enough, this morning there is word that Russia has ordered a convoy of between 70 and 90 aid trucks to cross over the border into eastern Ukraine without approval from Ukrainian officials or the Red Cross. According to reports, Kiev said the move represents a “direct invasion” of Ukraine by Russia.
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SP500 Logged a New All Time High

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MARKET SUMMARY

- Not powerful moves but SP500 joins NASDAQ with a higher high, posting a new all-time high.
- Large cap NYSE leads again with financials, some tech outperforming.
- Economic data shows improvement on the one hand, same old issues on the other.
- Nobel economist exasperated by the US’ pathetic recovery, states the obvious but misses the key summation: we are so used to bad numbers we are beguiled by modestly better results.
- Mediocre moves for the most part but still higher.  Friday if the move starts to the upside again, we will see what gain we can take.
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A Strong List of Strong Results

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MARKET SUMMARY

- Stocks start lower, recovery, fight off the FOMC, rally back.
- NASDAQ takes a pause, other indices continue upside.
- FOMC talks of a faster than believed jobs recovery, some want a rate hike soon, others want more data before they agree to that.
- The dichotomy continues: some discretionary stocks reporting good results, others in a complete meltdown.
- Letting positions run as long as the market does.  SP500 still has an important test at the old high.

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Stocks Felt No Headwinds

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MARKET SUMMARY

- Another new post-bear market high for NASDAQ, SP500 not far from one, the others working on resistance.
- Economic news looks better and not better, showing the same dichotomy between the high end and everyone else.
- Strong price moves, still low volume, quiet on the geopolitical front.
- As the upside continues it is time to we look to take some gain on the move.

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Better To Be A Bit Patient

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MARKET SUMMARY

- NASDAQ to a new post-bear market high, SP500, DJ30, SOX at resistance.
- Lack of negative geopolitical news helps market pick up from pre-Ukraine news Friday.
- IP says box sales are not indicating a strong economy, certainly not a surge.
- Market up more than a week, NASDAQ over next resistance.  Not the best time to enter, but we will see.

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Robert Shiller is Very Worried

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The topic of the day from a short-term perspective is the state of the geopolitical issues in Ukraine/Russia and to a lesser extent Iraq and Gaza/Israel. The way this game is played is simple, really. When headlines speak of troop movements, stocks go down. Then when the news wire reports that tensions have eased (as is the case this morning), stocks go up. And most importantly, it is vital to remember that once the geopolitical issue that captured the market’s attention for a spell is over, oftentimes so too is the corrective phase brought on by the bad news.
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Institutions Still Selling, Companies Still Buying

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MARKET SUMMARY
- Stocks cruise to more gains, toppled by Ukraine news, fight back.
- Indices recover to take on resistance again, leadership hanging in with new entries.
- Production and Capacity stronger, reality maybe not so.
- China power consumption flops.
- Institutions still selling, companies still buying, retail investors edges back in after a month of flight.

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Bounce Rally Continues

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MARKET SUMMARY

- More bad economic news but stocks are un-phased.
- Indices pushing toward next resistance.
- Leadership still showing up as new stocks break higher from good patterns, try to add to leadership.
- Market needs the new leaders as indices approach resistance.
- Bonds exploding higher.

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Are Stocks Really Overvalued?

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Everybody knows that the current bull market has been one for the ages. Everybody who has been long stocks for the last few years has likely enjoyed the ride. Everybody knows that the current bull market is getting old. And yet, everybody also knows that this market has some “issues.”
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Stocks Continued The Move Higher

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MARKET SUMMARY

- Some bad economic news but stocks resume the move.
- Retail Sales flat in July as no rebound to start the second half.
- Japan GDP stinks, EU Industrial production flips unexpectedly negative.
- Ready to bounce: Indices post solid gains, leadership jumps ahead.

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Losses Were Modest

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MARKET SUMMARY

- Stocks struggle but hold on, looking like a pause in the bounce.
- Leadership performs but narrows as small caps struggle.
- JOLTS shows promise but pay rates are way down along with confidence as to the economic growth.
- Indices look ready to continue the Friday rally, but in the bigger context it is also likely still just a bounce.

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Enjoy the Ride While it Lasts

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When trying to succeed in the stock market, at least half of the battle is learning to identify the type of environment you are dealing with. If the two devastating bear markets that occurred since the turn of the century taught investors anything, it was that employing the same pedal-to-the-metal growth approach that can produce strong gains during a bullish market can be a recipe for disaster in a bearish environment.
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Still Some Quality Leadership

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MARKET SUMMARY

- Stocks continue Friday bounce, look impressive, then fade much of the gain.
- Lake of any new problems helps stocks rise, but even then they try and toss gains.
- Still some quality leadership, still laggards bouncing after damaging declines.
- Lower volume, gave back a lot of gains, looks still to be a bounce.
- Up to NASDAQ, SOX as the Monday best performers.

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The Current State of the Market

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Last week, I had the pleasure of driving up California’s coast from Los Angeles to San Francisco. While the traffic outside of L.A. is numbing, the rest of the trek is a delight (if you aren’t in a hurry). There were business meetings in San Luis Obispo (an undiscovered destination that is worth a visit – the area has its own “wine country”) and San Jose (where business is BOOMING btw) as well as more than a few impromptu stops along the way to marvel at the beauty of the coast.
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Still Split Leadership and a Split Market

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MARKET SUMMARY
- Air strikes in Iraq send market down, Russia ending another military exercise bounces it back up.
- NASDAQ moves back up into its range after cracking the bottom of it Thursday, but DJ30 leads the Friday move.
- Expiration week and stocks are bouncing into it.
- Still split leadership and a split market.  This week it looks as if they want to come together a bit, but that is likely just temporary.

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High to Low Action, This Time with no Recovery

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MARKET SUMMARY

- Stocks start higher, building on the Wednesday recovery.  That lasted less than 5 minutes.
- NASDAQ breaks its trading range: serious break or just a shakeout.
- Other indices still in position to bounce from oversold condition as SOX gaps higher, reverses to a lower low.
- With NASDAQ breaking its range ahead of a Friday, the waters are a bit deceptive.
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NASDAQ Stumbling Some as it Holds Range

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MARKET SUMMARY

- Stocks bounce from early weakness, but still don’t show any upside power.
- M&A remorse: Fox, Sprint rethink their mergers.
- EU retail sales fade, Italy triple dips into recession.
- NASDAQ stumbling some as it holds range, still hard to get it going while SP500, DJ30 still look ripe to bounce.
- Leaders still show some decent patterns but consumer staples rise, showing some concern and defense.
- NASDAQ is holding on as a leader, but may need SP500, DJ30 to help push it.

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Another Test of Support

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MARKET SUMMARY

- More selling but NASDAQ again holds, other indices make better tests of support.
- Economic news not bad but Russian threatens to invade.  Stocks sell.
- Erroneous models overstate jobs by incredible amounts.
- Another test of support, still oversold.  Stocks either start to bounce or the selloff will be sharp.

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Some Very Solid Moves By Some Solid Leaders

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MARKET SUMMARY

- Stocks bounce after NASDAQ held its range in last week’s selling.
- Bounce has the indicia of a relief move given narrow breadth, lower upside volume.
- Some very solid moves by some solid leaders. More will be needed for the move to hold and continue.

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Stocks Still Unsure of Next Step

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MARKET SUMMARY
- Stocks sell, recover off lows, still unsure of next step, still consolidating.
- Mixed economic data: some good, some bad, some viewed as good that is actually bad.
- Jobs data termed ‘just right,’ but market struggles and the jobs created and those employed again tell another story.
- Construction non-spending rises.
- ISM hits a 3 year high driven by new orders that hit a new 2014 high if adjusted, a new 2014 low if unadjusted.
- Indexes oversold near term, NASDAQ holding its range, likely leading a relief bounce attempt this week.
- Stocks likely try to bounce, and some more selling early in the week would not be a bad way to deliver that bounce.

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Have the Bears Emerged From Hibernation?

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For the past four days, this missive has offered up a baker’s dozen reasons why it might be time to be cautious on the stock market. It would appear that Thursday’s action proved to be an exclamation point on the theme.
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Another Thursday Showing Heavy Selling

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MARKET SUMMARY
- Another Thursday showing heavy selling as the downside got going.
- Stocks couldn’t rally on good news Wednesday and they couldn’t rally on bad news Thursday.  Pretty clear they just wanted to sell.
- Chicago PMI dives 10 points.
- Sellers took control but market is quite oversold heading into the Jobs Report.
- A bit more downside could lead to a rebound ahead of the weekend.

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Four More Reasons To Be Concerned About The Market

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Five short days ago, the S&P 500 hit a new all-time high at 1987.98. The move appeared to be a breakout, albeit a modest one, from the recent range. And a great many analysts – particularly those possessing the rose-tinted Revo’s – professed that 2000 was the next stop for the venerable market index.
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FOMC a Bit More Hawkish on Inflation

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MARKET SUMMARY

- News appears to deliver what investors want, but stocks reluctant.
- Q2 GDP beats at 4%, adjustments, new calculations, inventories, and all.
- ADP jobs survey at 218K, but no one noticed.
- FOMC a bit more hawkish on inflation, still dovish on low rates.
- Jobs report holding investors back even with GDP beat and FOMC laissez faire?

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Why You Should Exhibit Some Caution

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Tuesday’s stock market action was interesting on several fronts. In the morning, it appeared that the bulls were about to recover their lost momentum mojo in response to a second consecutive monthly surge in Consumer Confidence. But then the politicians started making headlines about new sanctions for Russia – and the bottom line is, yes, the algos noticed each and every one of those headlines.
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Stocks Bounced Up and Down on the Session

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MARKET SUMMARY

- Decent data, as far as the headlines are concerned, bad price action, bad price/volume action.
- Earnings about half and half on the day.  Half beats, half misses.
- Case-Shiller sees slowdown but not sure what the heck it means.
- Consumer Confidence surges, just no one putting their money up.
- CAT earnings were not great, so buy back $2.5B in stock.
- Lousy action, but that does not mean the market crashes.

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Three More Reasons to be Cautious

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Save the usual intraday algo runs that move the market up and down 1 percent or so just for the heck of it, the stock market has been pretty dull lately. In fact, as defined by the S&P 500 index, the market finished Monday less than 6 points (0.3 percent) from where it closed on July 1. Yippee.
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Decent Recoveries for Most Indices

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MARKET SUMMARY

- Stocks reach lower, continuing the Friday selling, but then rebound once more.
- M&A strikes again, keeping investors interested.
- China stimulus hopes rise even as Chinese stock market breaks its downtrend.
- More data on the ‘lack’ of skilled US workers.
- Still in the process of consolidating.
- 25 IPO’s this week, the highest since 8/2000.  Short term ramifications yes; longer term?  It’s happened before.

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A Few Stock Market Worries

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A colleague recently issued me a challenge. In short, my long-time friend teased that I needed to remove my rose-colored Revo’s, if only for a moment or two, and try to look at the stock market environment from a member of the bear camp’s perspective. Although I am indeed a card-carrying member of the glass-is-at-least-half-full club when it comes to the outlook for the U.S. economy and, in turn, the stock market, I am also a professional risk manager. And since removing emotional bias is part of the game, I welcomed the challenge.
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Volatility Continues as Does the Pullback

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MARKET SUMMARY
- AMZN, Durable Orders blamed for selling, but good data was credited for the Thursday move higher.  In short, the volatility continues as does the pullback.
- DJ30 breaks the 20 day EMA for the first time since May.
- Jobless claims heralded as an all clear.  Perhaps there is no one left to fire.
- Economic data continues its mediocre showing.
- Earnings reflect the economic data: bottom line beats are not the best indicator of economic status.
- SP500, 2+ years without a 10% correction, is the lone index holding its May uptrend.

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Indecision At The Next Resistance

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MARKET SUMMARY

- After a week upside, indecision at the next resistance.
- Jobless claims fall below 300K, lowest in 8 years.  With one-third of the US population that can work not working, I suppose there are no workers left to fire.
- Disconnect: Markit finds world PMI’s rallying but US fading.  But the US is so strong we hear.
- New home sales in June fall and May is written down big.
- At resistance after a recovery from the selling on geopolitical events. The lady or the tiger?

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Market Starts to Split at Prior Highs

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MARKET SUMMARY

- Stocks advance, stocks don’t advance.  Market starts to split at prior highs.
- NASDAQ advances gratis AAPL, SOX heads south, SP500 hits new highs.  Who tips the balance?
- Thursday: Facebook versus all other earnings.

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Leadership Improving

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MARKET SUMMARY

- This market is very easy to please, and that is good for the upside.
- Stocks bounce early, slow at resistance.  Solid enough but somewhat skeptical.
- Leadership improving, and that trumps gut feelings.
- CPI: what is noise to the Fed Chairman is killing a lot of Americans.
- June Existing Home Sales show third monthly advance.
- Real Wages falling under the Administration’s policies while Chinese premier sounds more free market friendly than the President.
- Follow the leaders, but keep an eye on the indices at the recent highs.

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Bears Are Getting Frustrated

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As a card-carrying member of the glass-is-at-least-half-full stock market club , I will have to admit that my bias is to lean bullish when evaluating the market/economic landscape. I learned in the mid-1990′s that it was a dumb idea to stay negative on the U.S. economy and/or stock market for long. Sure, it can pay to get negative for a while, but overstaying your welcome as a “Negative Nancy” can prove problematic in this business.
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Global Events Weigh on the Market

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MARKET SUMMARY

- Global events weigh on the market, and though they don’t get back to positive, they do recover nicely off the lows.
- Indexes hold same support, still in position.
- Leaders try to step out with some good moves.
- Revenue beats running slightly above 50%.
- Brazil 2014 GDP expectations dropped below 1%.  That BRIC has cracks in it.
- No relative change in the indices, but that is not necessarily a bad thing.

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Do Technical Levels Matter Right Now?

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After the relatively wild action seen late last week, the question of the day is if the swings we saw on Thursday and Friday are meaningful – or – simply the work of the trend-following bots doing their thing.
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Volatility Remains the Rule

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MARKET SUMMARY
- Figuring the news couldn’t get worse, stocks rebound from the Thursday selling.
- News Friday isn’t great, just not nearly as bad.
- Friday solid advance mark the end of the selling?  Doubt it as volatility remains the rule, but there are some good upside plays to consider if things stabilize.

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Headache-Inducing Headlines

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Most investors know that today’s stock market can move quickly when headlines hit the wires. And most investors are aware that the reason for the oftentimes sudden and swift movements are the headline-reading algorithms that are pre-programmed to respond to certain words within those headlines as well as the accompanying stories.
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Market Volatility Remained Even Without News

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MARKET SUMMARY
- Market volatility remained even without further news, but when the news hit things got worse.
- Malaysia Air, Israel Gaza incursion, White house lockdown.
- Unadjusted jobless claims rise to 6 month highs.  So adjust them to cycle lows!
- Housing Starts in May plummet . . . again.
- MSFT lays off 3x more workers than expected.  Rally time.
- Philly Fed swamps expectations, new orders zoom, but why no capital investment?
- Even SP500 and SOX were boxed around Thursday.
- Weekend, geopolitical intrigue, volatile and downside market.  It will take a great pattern, and some brass cajones, to move in.

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Growth Fades as NYSE Large Caps Climb

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MARKET SUMMARY
- More of the same: stocks start higher, then growth fades as NYSE large caps climb.
- PPI hotter, BRICS form their own Fed, but M&A heats up and earnings are pleasing.
- Some intraday volatility appears on top of the day to day volatility.
- Indices remain split as the March-like action continues.
- Leaders all over the map, but mostly holding some kind of support.
- Earnings taking stocks both directions after hours.

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Is the Fed More Important Than Earnings and Data?

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The big event of Tuesday was Federal Reserve Chairwoman Janet Yellen’s semi-annual testimony on monetary policy before the Senate Banking Committee. No one really expected Ms. Yellen to break any new ground with her prepared testimony. So the key for traders was to listen to the tone of the Fed Chair’s testimony and more importantly, how she responded to the Senator’s questions.
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Yellen Has Spoken

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MARKET SUMMARY

- Stocks start positive ahead of Yellen, then Yellen undermines the move.
- Some areas recover, others try, others fail.
- Yellen keeps the same schedule, lobs stones at social media, biotech sectors.
- Retail sales miss, New York PMI beats big.
- Bank earnings push that sector higher.
- Same action as March: NYSE large caps steady, growth struggling.

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Yellen Keeps the Same Schedule

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MARKET SUMMARY
- Stocks start positive ahead of Yellen, then Yellen undermines the move.
- Some areas recover, others try, others fail.
- Yellen keeps the same schedule, lobs stones at social media, biotech sectors.
- Retail sales miss, New York PMI beats big.
- Bank earnings push that sector higher.
- Same action as March: NYSE large caps steady, growth struggling.

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Stocks Gap Upside

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MARKET SUMMARY

- Futures spark higher for the new week, stocks gap upside.  That’s it.
- M&A, anticipation of the Chairman’s testimony said to drive stocks higher.
- Has the look of an oversold bounce, but index trends are still holding.
- Leadership definitely a mixed back as some rebound, many don’t.

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Retailers Worried About Slowing Traffic

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MARKET SUMMARY
- Friday stocks pull the high to low early, but again recover.
- Recovery, but not convincing for small caps.  Much of the rest of the market looks fine, but it did that in March to May as well.
- Some nervous big names, e.g. Icahn, but this time they are nervous AFTER the market rallied to new highs.
- Retailers worried about slowing traffic.
- Stocks may try to bounce after the selling, and unless shown otherwise, we view that as only a relief move for RUTX and perhaps NASDAQ.
- Looking at some rebound plays into earnings.
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Has The European Debt Crisis Returned?

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Anyone coming into Thursday morning looking for a sleepy summer session was in for a rude awakening as S&P futures were down hard three hours before the opening bell. For example, as my 6 screens flickered on at 5:15 am Thursday, I began perusing my news feeds. Then I saw the futures and did a double take. Wait. -15? What?
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In Position To Rebound

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MARKET SUMMARY

- Bad news overseas starts US stocks sharply lower, but they stage a rebound.
- Leaders still mixed and the jury is still out on their recoveries from this selling.
- China, Japan, Portugal deliver some sad news.
- Earnings warnings in critical consumer stocks do not look good
- Wholesale inventories weak, sales weak.
- In position to rebound, and the strength will tell the tale.

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Indices Bounced Off Support

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MARKET SUMMARY

- Stocks bounce early, get a boost for some reason from the FOMC minutes.
- Lower volume, narrow breadth, leaders sluggish, defensive stocks gain.
- Fed to end QE in October, start on rates at some point.
- Indices bounced off support but hard to trust the move.

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Has The Momentum Meltdown Resumed?

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To be honest, the plan was to present an in-depth review of the outlook for inflation today. To be sure, nothing can kill a bull market faster than an uptick in inflation. And with the May data showing that there just might be some inflation percolating at the present time, it seemed a good time to broach the subject.
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Almost Everything Took Sharp Hits

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MARKET SUMMARY
- Leaders no longer split as most dive lower.
- Despite heavy selling in RUTX and recent market leaders, SP500, DJ30, NASDAQ, SOX, SP400 hold near support.
- JOLTS jolts investors with the headlines showing economy continuing to improve.  If you ignore the real data.
- Just pre-earnings nervous selling?  Perhaps, but it will have to prove it is not a March situation.