The Demo Site

Last week SP500 fell by 1.9%, MSCI Europe Index (EFA) by around 2.6% and gold fell by 1.83%. The Chart technicians would contend that the "Neckline" of Head and shoulder formed in SP500 & in Gold charts are broken. That means Bearish forces are stronger than the Bullish ones.

That picture might be clearer if you were to look at Macro fundamentals of the economies around the world. With Unemployment rising and more stimulus packages being released, it is hard to gain confidence in the markets. Naturally the Michigan sentiment Index came in less at 64.6 than expected 70.

While Commodities, Gold and equities continued their declining trend from the reversal point in early June, Bonds have been better off. Long term treasuries (TLT) rose 2.2% last week, and ten year treasury yield dropped from 3.49% to 3.3%. This should be helping people looking Mortgage Refinances, and the weekly mortgage applications survey registered an increase last week.

The second quarter Earnings season began with Alcoa doing better than expected, but the expectation itself was so low. What good is to beat the expectation if that cannot deliver higher employment and get us out of this crisis. Will this be a trend for 2Q earnings season?

Though Inflation is expected to be low, lets watch for the CPI reports this week.

Last week's market Internals:

NYSE, (New Highs - New lows), 5 DMA = -0.6

10 year Treasury yield = 3.32%
Short term bond rate = 1.81%

Volatility Index, VIX = 29.02
Put/Call Ratio, total of equity/Index = 1.05
Bull/Bear Ratio, Investors Intelligence survey = 1.41

US Dollar, 5 DMA = 80.39
Gold, 5 DMA = 89.7

Next Week's economic calendar:
- PPI, Core PPI, Retail Sales - 7/14
- CPI, COre CPI, MInutes of FOMC meeting - 7/15
- Housing Starts - 7/16

.