Market Commentary-July 17

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Market Commentary-July 17
Jul 17, 2009

Larry Swing

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Dow Jones Industrial Average

16^th July 09

Key Statistics

Open: 8612.66

High: 8739.55

Low: 8584.40

Close: 8711.82

Change: +95.61 (+1.11%)

Prev Close: 8616.21

RSI: 59.08

MACD: -4.69

Snapshot

Dow ended +95.61(+1.11%) points higher, S&P 500 up 0.86% and Nasdaq up 1.19%
JP Morgan posts better than expected profits
Google, IBM reported higher quarterly earnings
Earnings watch - Bank of America, Citigroup and General Electric report quarterly results today

Current Market view– Cautious

Market Strategy

Taking the broader view on the market, one can see that the market has broken out of earlier head and should pattern. It is likely to face next resistance at 8800-9000 levels and support at 7800-8000 levels on the Dow Jones. S&P has a steam to move up to 960 points in times ahead.

Currently the Dow Jones is nearing its 200 DMA, and one could expect some volatility in the markets in coming few days.

Any sharp correction should be used to build long positions. Although the markets have risen in last few days, but they have not been supported by higher volumes.

Continuing strong quarterly results reports can definitely add strength to the markets.

Market Commentary

It would have been a lackluster day of trade had the Dow Jones not rallied 100 odd points in the final hours of trade.

Stocks rallied for the fourth consecutive day on better than expected results by the leading corporates. Positive remarks about the economy from a prominent bear on the Wall Street also gave strength to the markets.

JP Morgan posted better than expected results on Thursday. The company posted strong quarterly profit of $2.7 billion but warned of deteriorating consumer credit.

Google also reported strong quarterly results after the closing bell. Google said that the slowing ad sales contributed to week revenue growth this quarter. The stock was down 2.4% at $432.19 in extended trade.

Adding strength to the Tech Sector, IBM reported higher quarterly earnings that topped analyst estimates. The company also gave strong guidance for the future.

Nokia shares slumped 14% after it posted a 66% drop in second-quarter net profit. Nokia changed its mobile device operating margin forecast for the second half, saying it no longer expects to gain market share in that period.

Economic News

The Labor Department said initial filings for jobless benefits dropped by 47,000 to 522,000 in the week ended July 11. The tally of continuing claims fell by a record 642,000 during the week ended July 4 to 6,273,000.

The Philadelphia Fed index, a regional reading on manufacturing, dipped to negative 7.5 in July

The Day Ahead

June housing starts data is due today.

Bank of America, Citigroup and General Electric report quarterly results today.