1. JULY MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
4. QUOTES
5. ON THE WEB
6. LETTERS 

1. WILL CORPORATE EARNINGS TRIGGER ANOTHER RALLY OR BUY THE RUMOR SELL THE NEWS?
Many analysts weighed the possible combination of good Second-quarter earnings and stocks oversold as good reason to buy for a short term rally. They were right last week.  So what next- a retest of Dow 10000 and lower, or Dow 10428 and higher?  For the next two weeks, we have no strong views. Markets can easily be whipsawed on an almost daily basis given option expiration and earnings season. 

More important than earnings will be forward guidance and it is our strong belief that Q3 earnings will not surprise on the upside! Hence, by or before the last week of July, we are unlikely to recommend trading buys or covering shorts when markets retest support.
Bottom line: For most investors, that means enjoy your summer vacation and ignore markets until they are well below Dow 10,000. 

Gloomy Bond Investors Clash With Upbeat Stock Managers

HW: US Bonds are a bubble from an intermediate and long term perspective.  I don't agree with Ben that inflation is almost non-existent.  While it is true that there are strong pockets of deflation, e.g. US labor, we also see inflation here and now, as well as building for the future e.g. Chinese labor.

Bottom line: Short and intermediate term flights to safety in H2 2010 should be considered EXIT opportunities.

 
KEY DATES:     JULY 12, 16
DJIA:                10200 PIVOT 9600 SUPPORT R1 10300 R2 10450 R3 10600
SPX:                 1080 PIVOT  S1 1060 S2 1040 S4 1015  R1 1100 R2 1115 R3 1135
NASDAQ:          2200 PIVOT 2050 SUPPORT R1 2250 R2 2300 R3 2350
AUG GOLD       1200 PIVOT 1180 SUPPORT?  R1 1220 R2 1240 R3 1265
SEP SILVER:    1850 PIVOT S1 18 S2 1750 S3 17 SUPPORT 19.60 RESISTANCE
AUG OIL:          75 PIVOT 72 SUPPORT?  82 RESISTANCE
EURO:              124 PIVOT/SUPPORT? 128 RESISTANCE?
US$                  84 PIVOT   

Market Marker Sentiment is to Sell prenews optimism; even modest reality will move markets down! 
2009 CLOSE:           DJIA  10428 SPX  1115 & NASDAQ 2269
2008 CLOSE:           DJIA   8776, SPX   903 & NASDAQ 1577
2007 CLOSE:           DJIA 13264, SPX 1468 & NASDAQ 2655
2006 CLOSE:           DJIA 12463, SPX 1418 & NASDAQ 2415
2005 CLOSE:           DJIA 10717, SPX 1248 & NASDAQ 2205
DJIA:                       6 ~ FV 2 1V; 7 offer 4%+ Dividends 2 offer 5%+ Dividends.
US BANK FAILURES TO DATE: 90   

THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. We expect markets lower later in the summer.  Hence investors are advised to remain on a buyer strike until at least one more, and preferably two more tests of Dow 9800 & 9600. 

3. Most gold investors believe there is strong support for the yellow metal $1150 to $1200. However for gold markets to rally above its previous highs to $1300 and higher will require continued fresh capital inflows from investors, as the supply/demand fundamentals are roughly in balance. GFMS reports that “economic conditions still seem to favour such growth in investment over the balance of this year and, indeed, they probably will continue to do so well into 2011.”  I don’t disagree, but feel it is too early as well as too expensive to rush to buy gold, “just yet”. 

4. “When you add up the fundamentals, they’re there. The historical truth in the stock market is you want to buy stocks when there’s skepticism and fear all over the place and sell when everyone’s feeling complacent. The problem is this emotional aspect.”
Fritz Meyer, senior market strategist, Invesco
HW:  True, but given into H1 2011 things will remain difficult, isn’t a bit too early to be a contrarian? 

"Stocks have more room to go. While there are questions about a slowdown and corporate outlooks, we believe we're not in a double dip."
William Stone, chief investment strategist, PNC Wealth
HW: I agree except for different reasons. I don’t believe the US economy ever left being in a recession! 

"The market is near a critical point where if it loses just a few more percentage points, it's really going to collapse."
Stephen Carl, head equity trader, Williams Capital Group
HW: Not necessarily. It depends on how much more money Ben is given to support the market. 

5. Gaga over recession worry 

ETFs: Which Strategy Makes Sense in a Volatile Market?

10 Reasons Why We Are Headed Into a Recession 

6. READER: Is their any time period this year --where you see a high likelihood of war between (e.g.) Israel and Iran -- like the potential bombing of Iran's Nuclear Facilities? If so -- it could be a good time to be in OIL.
HW: Both Israel and Iran have potential geographic July 11^th Solar eclipse triggers. A first level analysis would place such a potential event within one year of the eclipse. But this needs conformation from both Israel’s and Iran’s horoscope as well as a second level analysis for timing.  I prefer not to publicly talk about this potential event for several reasons: 

First, it is unpleasant to have to live with this potential even should it be confirmed by further analysis and date calculation.  I remember well when I first calculated the date of the first gulf war I had to live with it for many months as well as worry if I would be right. Then when I ultimately was right (I was off 4 hours, even though it was forecast 2 years in advance) I lost money because the markets rallied as that war was an easy take out. Ironically, those who went long because they forecast wrong made money.  These days, I am more concerned with making a profit instead of being a prophet (Been there, done that, have the T shirt.)

Second, this would tend to give me an unnatural emotional wish for it to happen in order to make money, when I have so many OTHER better choices to create wealth.  

As for Oil, we are no longer bearish, but bullish in H2 2010.  After any serious market or Oil corrections, it is somewhat a no-brainer to buy any number of energy companies that would be profitable even with Oil much lower.  That will be true regardless this Middle East scenario. 

READER: Now that we have had a nice rally, what does this next solar eclipse do???
During '08 crash I was told that markets crashed after the lunar eclipse until the solar eclipse. Then after the solar eclipse they rose dramatically for several weeks. They crashed at the lunar eclipse this time, but began a sharp rise before the solar eclipse.  Will the rise continue or do things reverse on bad news after the solar eclipse???
That is the $64,000 question! This market seems to want to rise.  Bullishness is only at 21%. A contrarian would say get ready for a heck of a rally.
An astrologer would say?
HW: Depends which astrologer you ask. :)
Personally I see one July and one August time period ahead that is hardly market friendly. Q2 Earnings should be acceptable, but forward guidance, if realistic, will be somber. Hence continued mixed market sentiment with lower highs and lower lows ahead.