Daily Market Update – July 30, 2015 (Close)
With no news coming from the FOMC yesterday, the market correctly anticipated that to be the case and tacked on another nice gain to the one seen on Tuesday.
Suddenly, the move to re-test the support level at the 2045 level of the S&P 500 was halted and the market is now within about 1.5% of its all time highs and in a position to re-test resistance.
Technicians like to think that as the lows get higher and the highs get lower, that kind of convergence of lines indicates that there will be some sort of break out, but they can’t say in which direction that breakout will be.
The catalyst to the upside could be earnings, but we’re now about at the mid-way point and many of the significant companies have now already reported. However, what may hold some potential for more moves could be retail earnings, which have yet to be released.
Other than that, the relative quiet on the world front, especially some calm now coming from the Chinese stock markets, after a rough start to the week, could remove a barrier from moving higher.
This morning was another GDP release, including revisions to previous data. In 2015 some of those revisions have been fairly significant and have caused an entire shift in sentiment about where we were and where we were going.
Today’s GDP data, even though showing growth of 2.3% was disappointing, but the market was basically a yawner all day, other than for the first 30 minutes when the DJIA was down triple digits.
A stronger than expected GDP and any upward revisions would have gotten tongues wagging again about a September rate hike, but that has been expected for so long at this point, that you would have to believe it has already been discounted and wouldn’t be considered as bad news. We might actually be at a point that good economic news would be seen as good economic news for a change.
Instead, the GDP was on the low side and was seen as bad news, the way you would expect normal people to react.
But eventually came the thought that if the FOMC is still swearing that it is going to be data driven and if growth isn’t heating up enough, then where’s the reason to raise rates, even in September?
This morning the futures were flat and after the past two days you couldn’t blame the market for taking a little break. But as we’ve been seeing lately, there’s very little predictive value in the futures. We’ve even seen some reversals on those days when the futures were making large moves, so it was really anyone’s guess how today would go.
At this point, having already rolled over half of the positions set to expire this week, there’s not too much more to do other than to hope that the march higher continues.
With no expirations scheduled for next week and with cash at very low levels, I’d like to see some assignments, but that appears unlikely, although there’s still some glimmer of hope for Best Buy with two days of trading left in the week.
It, along with so many others, though, has had a rough time putting consecutive winning sessions together, just as the market has had a tough time doing so.
While it would have been nice if today could have added another day onto that modest market winning streak, there’s always the chance to start anew tomorrow and maybe see gains trickle down to members of the indexes in a more broad way than the market’s advance has been to date.
While most investors aren’t socialists at heart, they might agree that this one be an acceptable instance of sharing the wealth.