HI Financial Services Mid-Week 07-15-2014
“Just wondering when we are going to have a 20% correction. But, we still have stimulus in the system so I wouldn’t really expect a pullback until the beginning of next year. “ – Kevin Hurley
What has been happening so far this week?
We are fighting to move higher. After the last week of light volume we are into the swing of earnings. We are back above 17,000 on the DJIA!! We had Yellen speak to us moving our market down on very positive comments in general which is a little ridiculous. Welcome to the building of a base at a round number on the DJIA and expect the same to come on 2000 on the S&P and 4500 on the COMP Nasdaq index.
Where will our market end this week?
I am expecting a flat week to very slightly up week in general. My thought process is based on a better than expected earnings and the move higher in the financial sector. This week is the first week of the big financials. Next week is usually the 2nd and last week of financials with four weeks of the S&P 500 reporting (86%). Expectations are low, BUT we have more reasons to go bearish than bullish.
Seasonal Summer Doldrums – July is the most volatile month since the 1950’s
DJIA YTD +2.89%, S&P 500 ytd +6.92%, Nasdaq COMP 6.2%
No Correction for 33 months with only one 7% pullback
Ending of QE to infinity and beyond
Fear of rising Interest rates
Bullish Reasons to go higher:
Better than expected earnings
Money Supply or stimulus still in the system that has an expected push 6 months to 2 years out in time.
Market still isn’t at full valuation
My belief is the growth in the economy is still coming the last half of the year
Q1 = -2.9 and Q2 est on May 29th = – 1.0 which means the second half has to be 7.0 to meet expectations of 3%
DJIA– Still bullish with a little pullback which usually indicates another leg up. We are testing the 17,000 Dow “round number” mark yet again and expect another couple of tests in the next couple of weeks. Higher highs and higher lows
SPX – Melting up higher with higher highs and higher lows
COMP – Building a base at 4400 and holding 4350 as support
Where Will the SPX end July 2014?
We are still testing 17,000 so I am standing by my expectation on July 1st.
I think we are going to test the 2000 on the SPX and test 17,000 on the DJIA. We might be slightly higher but I would say a 1% up month.
My guess is 2000 on SPX, 17,100 on the DJIA and 4500 on the COMP
What is on tap for the rest of the week?=
Tues: CSX, GS, JNJ, JPM, INTC, YHOO
Wed: SNDK, ABT, BLK, EBAY, KMI, USB, YUM
Thur: AMD, GOOG, MS, SLB, GWW, UNH
Fri: HON, GE, VFC
Tues: Retail Sales, Retail ex-auto, Empire, Export, Import, Business Inventory
Wed: MBA, PPI, Core PPI, Industrial Production, Capacity Utilization, Net TIC Flows, NAHB Housing Index, Fed Beige Book
Thur: Initial Claims, Continuing Claims, Housing Starts, Building Permits, Phil Fed
Fri: Michigan Sentiment, Leading Indicators – OPTIONS EXPIRATION
Wed – GB: Labour Market Report
Thurs – EMU: HICP, JP: BOJ MPB Minutes
How I am looking to trade?
I have let stocks run and now I am in the process of protecting stocks for this earnings season.
I am only looking out two weeks to start to collar or protect those stocks before their earnings.
That means you need to build you earnings list
AAPL 7/22 AMC
BIDU 7/24 AMC
BBY 8/26 BMO
CLDX 8/6 est
D 8/6 est
DIS 8/5 AMC
F 7/24 BMO
FB 7/23 AMC
LNCO 8/7 BMO
MEI 8/28 est
MS 7/17 BMO
NVDA 8/7 est
SBUX 7/24 AMC
SNDK 7/16 AMC
SLB 7/17 AMC
TSLA 8/6 est
V 7/24 AMC
VZ 7/22 BMO
ZION 7/21 AMC
AAPL – I’m ready on AAPL but I can add some shares. Not sure if I want to do that before or after earnings.
BIDU – Already 100% plus return
DIS – Just sitting in shares and with the movie Frozen revenue, summer park revenue, I plan on protecting with OTM Long puts at maybe $85
F – Protecting profits and I’m not sure if they will have good earnings based on monthly channel check and auto reports
NVDA – Have previous earning puts still on that ecpire on Friday and Have Sept long puts in place for earnings
V – Have OTM Aug 215 long puts to run thru earnings
Blogsite down until Monday. GoDaddy stopped using blogspot so I am transferring everything to word press
www.myhurleyinvestment.com = Blogsite
Article Links can be followed by being a twitter follower
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