Stock Market Highlights - Week 28
- Janet Yellen reaffirmed America's central bank intends to raise interest rates this year.
- WTI closed 7/11 at $52.74 and Crude Oil $58.73. Oil prices continues to decline.
- P&G dismantling its beauty business with sales of brands
- New GoPro $400 video camera size of an ice cube.
- Shell hauling two huge rigs in Arctic Ocean to start drilling in days.
The Dow Jones Industrial Average (DJIA) closed at 17760.41 on Friday, July 10 2015, which was about a 30 point decline versus a week ago of 17730.11 on Friday, June 26th 2015. The DJIA dipped below the trading range for the first time in four months. In fact it is now trading just above the 200 DMA. We'll want to see it break back into the trading range at the 17800 level otherwise, expect further downward prices.
After retesting 17600, the short-term stochastic (STO) indicators bounced off STO 20 and it is now hovering over 40s. We still see that the longer term fourteen day STO is still a bit oversold. The bounce at the 200 DMA has been less then spectacular. I'd expect more downward prices unless we break the 17800 level.
The S&P 500 closed at 2076.62 on Friday, July 10th 2015 versus a week ago of 2076.78 on Thursday, July 2nd, 2015. The change was flat. The S&P experienced a huge drop toward the 200 DMA and like the DJIA struggled to make a convincing V-shaped bounce. It appears as if it is forming a bearish flag, which would suggest further decline in prices.
The STO levels suggest that the bounce was less than strong. Even when they are showing it is not overbought, they are declining. We can see that the STO levels (five day) peaked at 50 and then declined to 30s versus a peak above 20 in the fourteen week STO indicator and a decline at 17 by the end of the week. This suggests weakness in the markets.
The Nasdaq (COMPQ) closed at 4997.70 on Friday, July 10th versus 5009.21 on Thursday, July 2nd 2015. The strongest of the three indices is still the COMPQ. As with the action we saw last week, the trend has been broken and now we are failing to make higher highs. This is also a clear indication that the markets are beginning to turn. Unless we can see a solid bounce back into the trading range, expect lower prices.
Fitbit, Inc. (FIT) is a makers of fitness bands. It has also been a focused long-stock in weeks prior namely due to its strong price action despite the downturn in the markets. Last week was week of consolidation. FIT tried to work off overbought conditions and did so wonderfully. It hovered around 40-44 last week, which sets it up perfectly for a breakout above the $44 level. We doubt that this will reach STO oversold before it sees higher prices. Right now we are targeting $47.61.
Disclosure: I have a long position in FIT.
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Labels: Weekly Market Reviews