Market Update-July 28

Nothing much has changed in my view of the market since the videos this weekend, except obviously after 3 days, the Q's have finally given up the relative leader status they enjoyed last week, but that already went on longer than I anticipated. However, I'm still looking for that burst of momentum that pushes the Q's through $46.

Before we get there, obviously we've got to deal with the existing downtrend that is in effect. I have some thoughts that are a bit more specific regarding that and a few other things that I sent out in a Contributor's letter today. I wanted to do something along the lines of a newsletter-sorta and I also wanted to do something extra to say thanks to those who have generously contributed through the PayPal link on the right side of the site. So today the first Contributor's Letter went out, actually I sent out 4 today, 3 updates. I'm not going to send them out everyday, just when events warrant and today there were 4 so it just depends on what opportunities are presenting themselves. If you have contributed and you didn't get the letter today, please email me and let me know. I've had a little bit of confusion with some of the nicknames and secondary emails people use, but I'll send today's letters to you immediately so you can act on the information.

I don't believe the market is re-entering the Bear trend down at this point, I think it's just pulling back from a rather spectacular rally last week and beyond. There's a lot of accumulation in a lot of stocks I'm looking at. I think there's more upside to this bounce and my video analysis pretty much stands for the most part.

It should be a volatile week though, we are in the heart of earnings season and on that subject 118 of the S&P 500 will report this week. Here's a look at how today's have gone.

Kraft Foods (KFT 30.87, +1.49) beat Wall Street's estimate with a solid increase of 16% for the second quarter. Investors didn't feel the same about Verizon's numbers though. (VZ 33.57, -0.88) Amgen (AMGN 60.48, +6.56) was the big winner on Monday hitting one out of the park with favorable results coming from their osteoporosis drug. HIG came in with solid earnings that beat consensus, upside guidance, a strong $1.5 billion capital position and an accelerated stock buyback program in the pipeline.

Tomorrow we can look for releases from BP (BP), Colgate-Palmolive (CL), Coach (COH), Northrop Grumman (NOC), Sony (SNE), US Steel (X), and Waste Management (WMI). General Motors (GM) has yet to confirm whether t will join in Tuesday announcements according to Briefing.com.

Economic releases include he S&P CaseShiller Home Price Index at 9:00 am and The Consumer Confidence Index for July at 10:00 am. Later in the week, we have the Q2 GDP Report on Thursday and the July employment report on Friday. Friday may disappoint, but Briefing.com believes there may just be an upside surprise in the GDP report on Thursday. So there's a lot of potential catalysts out there this week to spark a move either way, I'm leaning toward the resumption of a bounce, but it's important to remember, the results don't matter. Watch how the market reacts to those results, the perception is what matters and that can change on the drop of a dime.

Take this morning for example, Financials were actually up 1.2% until MER tumbled for no apparent reason other than some concern over some unusual options activity. Remember, it's end of month and window dressing could be at play. More importantly, especially regarding the unusual MER options activity and considering where we are in the month, take a look at this video, it may be illuminating.

That's it for tonight. Don't forget, if you want to try out the Trade Guild Indicators, my X-Over Template, the Trend Channel, The MACD Heat Map, or 3C, you'll need TeleChart. TeleChart has been voted best software under $500 by the readers of Stocks and Commodities magazine for every year since 1993! Remember, I'm an affiliate for Worden/TeleChart/Blocks so if you use a link from my site to go to their site, I'll get credit for you signing up and it won't cost you anything. Or tell them that you heard about them from their affiliate Trade-Guild. After that, email me and let me know you are up and running and I'll send you instructions for the rest. Have a great week.