Swing Trading Strategies & Stock Picks Since 2003

Dow Jones Industrial Average – Weekly Roundup

28^th June – 5^th July 09

Key Statistics

Open: 8440.13

High: 8580.47

Low: 8294.49

Close: 8303.18

Weekly Change: -130.14 (-1.5%)

Market Strategy

Markets are still range-bound with 8300 being the support and 8800 levels the resistance on the upside. Traders who took short positions at higher levels can once book profits at 8300 levels. It is highly possible that for market to find some support at 8250 levels. Expect weakness in the market, if the support levels are broken. However, a small pullback rally this week is on the cards this week.

The week that was

The stock market was rattled last week as much worse than expected June jobs report broke investor’s faith in recovery.

Investor optimism has been tested by an increasing number of economic reports that show the recession is still taking a toll on businesses and consumers. Two of the biggest disappointments came last week, when the Conference Board said consumer confidence sagged last month, and the Labor Department reported that employers cut more jobs than expected.

Dow aluminum maker Alcoa (AA) kicks off what is expected to be another tough quarter for corporate earnings. Hundreds of other corporations will issue their reports during the next four weeks.

Profits for S&P 500 companies are expected to have fallen 21% versus the same quarter a year ago, according to the latest estimates from earnings tracker Thomson Reuters.

Unlike in the first quarter, when investors were just glad to see companies meet forecasts, corporations are now going to have to beat expectations and give positive forecasts for investors to respond positively.

The week ahead

Monday, 6^th July 09 - The Institute for Supply Management releases its index on the services sector of the economy, shortly after the start of trading. The index is expected to have risen to 46 in June from 44 in May.

Tuesday, 7^th July 09 - No market-moving economic news or events

Wednesday, 8^th July 09 - May consumer credit is expected to have fallen $7.5 billion in the month after falling $15.7 billion in the previous month. The Federal Reserve report is due in the afternoon.

The weekly crude oil inventories report from the Energy Information Administration is due in the morning.

After the close, Dow component Alcoa unofficially begins the second-quarter reporting period. The aluminum maker is expected to report a loss of 34 cents per share versus a profit of 66 cents a year ago.

Thursday, 9^th July 09 – May wholesale inventories are expected to have fallen 1% after falling 1.4% in the previous month. The Commerce Department report is expected to show that inventories plunged for a ninth straight month.

The nation's chain stores will release sales figures for June throughout the morning.

The weekly jobless claims report from the Labor Department is also due in the morning.

In Washington, the House Financial Services committee holds a morning hearing on reinvesting bank bailout money.

Friday, 10^th July 09 - The May trade balance is expected to have widened to $30 billion from $29.2 billion on weaker exports amid the global economic slowdown. The Commerce Department report is due before the start of trading.

Also due: June import and export prices from the Labor Department.

The University of Michigan releases its initial reading on consumer sentiment shortly after the start of trade. The index is expected to have risen to 71.0 from 70.8 in June.