Stock Market Indices Review for Week 32 in 2015

Aug 7, 2015 -

Stock Market Highlights - Week 32

- Fitbit Quarterly revenue jumped up to $400.8 million, which beat a $319 million forecast.
- WTI was at $44.66 and crude oil $49.52. Oil prices continue to decline.
- Disney revenue in its third quarter totaled $13.1B, a 5% increase last year same period.
- U.S. unemployment rate held at a seven-year low of 5.3%.
- Service Industries in the US expanded at the fastest pace in a decade.

The Dow Jones Industrial Average (DJIA) closed at 17373.38, which was about a 316 point decrease versus a week ago of 17689.86 on Friday, July 31st 2015. We've now broken the trading range and it is confirmed that we are trending downward. This is looking good for the bears in the mid-term (weeks to months). 

However, from a a short-term perspective (days - a week), we see a potential reversal looming. With the hammer pattern on Friday, we should be looking out for a follow through confirmation bullish candle on Monday. This is somewhat likely considering how oversold the DJIA is. A potential trade would be to go long the DIJA and put your stop just below the hammer pattern. 

The S&P 500 closed at 2077.57 on Friday, August 7th 2015 versus a week ago of 
2103.84 on Friday, July 31st 2015. This was a 26 point swing downward. Essentially of all last week's gains have been wiped out. 

Similar to the DJIA chart, we see hammer candlestick. However, without any confirmation of this bullish candle, we can only guess if this is a true indicator of positive prices to come. If you look closely, you can see that the 50 DMA crossed the 20 DMA and this is otherwise known as the "deathcross". This is definitely a bearish signal. Though I would wait until I see a run up back to overbought territory before trying to short this market.

The Nasdaq (COMPQ) closed at 5043.54 on August 7th, 2015 versus 5128.28 on July 31st, 2015. The strongest of the three indices continue to be the COMPQ. However, the head and shoulders bearish chart pattern has revealed itself. Of the three indices we've reviewed, this one seems to be the hardest to short. Though a break of the neckline at around 5000 and follow through will suggest that we will see lower prices. 

Starbucks (SBUX) was a stock that we reviewed last week. When we spoke of the chart, we liked the up trending prices, but did not like the price at the time. Well we waited for a retest of the 20DMA and lone behold, it arrived just today. 

Therefore, we dumped our Facebook (FB) position in favor of SBUX. While FB looks like it is forming a bullish flag, the SBUX chart looked stronger. 

Disclosure: We have a position in SBUX.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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