Where Will The Markets Close This Week?

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Wednesday, the 27th of July.

It really upsets me when we export US jobs overseas. Case in point: General Electric just shipped a ton of jobs out of Wisconsin to China. I can understand some things, but the person who is in charge of creating jobs for the President of the United States is Jeffrey Immelt, who just so happens to be the president of General Electric. So here we have someone who is “The Official Job Creating Czar" shipping good American jobs overseas to China. Does that make any sense to anyone? Oh, and I might also point out that General Electric paid zero taxes in the U.S. last year.

How much did you pay in taxes?

How are the markets reacting with just 2 days left before the end of the month? The equity markets are remarkably flat so far for July. It's a different story for Gold and Silver which had the biggest gains last month with a 9% move up in Silver, and a positive gain over 7% for Gold. Crude Oil was up 2.47% in July, which closely mirrored the Reuters/Jefferies CRB Commodity Index which managed to move up 2.67%

Let's go right to the markets!

S&P 500
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55

We want to see how this market closes for this week and this month. The S&P 500 is pretty much flat for the month of July. If we see this index close below the 1300 level it would indicate further downside pressure and a test of the 1250 area. As readers of this report know, this is the line in the sand for many technical traders. Let's see how we close out the day.
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

Silver pushed to new highs for the recent move and continues to bounce along the top of the Donchian trade channel. This market has put in a remarkably good performance for the month of July and is up a positive 9.56% as of this writing. Technically we can see a move to the 42.50 to 43.00 level on the upside. This would represent a 61.8% Fibonacci retracement. So far this market has been remarkably calm, and has not exhibited any kind of blow-off phase. All of our Trade Triangles are on the positive side and we're looking for this market to go higher.
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

Gold is positive for the month, the 2nd best performance we've seen with a solid 7.65% gain. The move to new highs reinforces the nervousness and uncertainty that are surrounding the equity and financial markets. All of our Trade Triangles continue to remain in positive mode and we are looking for a move to the $1640 to $1650 level. We are also looking for this market to make its highs in Q3 and possibly early Q4 on a cyclical basis. Support is now at $1580.
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60

Despite all the shenanigans in Washington D.C., the crude oil market is higher for the month. What most politicians do not seem to understand is the fact that this is a global commodity and is used around the world. The US is not the only beneficiaries of this still cheap form of energy. As we have said in earlier reports, we are looking for this market to close over the $100 a barrel level before we get excited on the long side. At the present time, our Trade Triangle Technology is mixed with a + 60 Chart Analysis Score, indicating that this market is in a broad trading range and could be traded using the Donchian trading channels and the Williams%R Indicator as we have shown in previous videos.
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 60

The low that was witnessed on June 7 of this year at 73.50 was enough to turn this market back to the upside. For the month, the dollar index is pretty much flat, which will come as a surprise for most traders. Remember we are talking about the dollar index as opposed to any one particular currency. At the present time, this index is heavily oversold and we would not rule out some sort of rally out of this area on the upside. We see major support coming in at 73.50 and again right around the 73.00 level. Our Trade Triangles are indicating a trading range.
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60

The Reuters/Jefferies CRB commodity index crept up last month and put in a solid gain of 2.67%. We've been watching this indicator of inflation very carefully. At the moment our Trade Triangles are indicating that this index remains in a broad trading range. We are favoring the long side should we break out over the 353 level. We feel that interest rates only have one direction to go and that will be on the upside and lead to a more inflationary economy. However, that is pure conjecture at this point. Only a positive move in the Trade Triangles will allow us to get bullish on this market. Support comes in around 341 level.


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As always, we rely on our market proven Trade Triangle technology for catching the big moves.

Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub.com

7 thoughts on “Where Will The Markets Close This Week?

  1. I'm not sure the average American understands how bleak the outlook is. America is shipping jobs to China because we live in a global economy and the true value of manufacturing jobs is being reflected in Asia, not the high-priced wages of Americans. Economics is ultimately politically neutral, and any attempt to save "buggy whip" jobs for political gain will ultimately end in failure. In fact, it was the government's policies towards saving outdated jobs that helped lead to the US losing its competitive edge to begin with.

    For example, the government refused to let North American steel mills close for 30 years to save jobs. The result? A bloated inefficient industry that is desperately trying to keep up with Chinese and Indian mills who have superior technology, better steel, and lower costs. Government interference promoted by U.S. steel industry special interests over the years killed the domestic industry and allowed foreign mills to take over 80% of the global market. A mill that used to employ 1200 people can now be run by a crew of 30.

    But it gets worse...Everyone thinks the answer to America's problem is innovation; you know, the kind of stuff that gave us a man on the moon and Apple computers. All we have to do is educate our population to a higher level of technical skill and we'll be right back in the driver's seat putting those foreigners in their place. Sorry...it ain't going to work this time.

    While America's been making cuts to its education system for decades and applauding under-performance, mediocrity, and pop culture, the developing world has been plowing funds into advanced education. There are now more students in private advanced technical education in China than there are students in the entire United States (please read that last sentence again to get the full impact). Meanwhile, patent applications from the U.S. have decreased over the last five years, whereas patent applications from Asia have skyrocketed.

    So, the U.S. can't compete in manufacturing. And it's no longer the world leader in innovation, its traditional area of salvation. What's left? How many fast food workers does one nation need?

    And as if that isn't enough, America -- the food basket for the world -- is now a net importer of food because of a government policy that sees the country burn potential food for fuel. When inflation REALLy gets going and all those unemployed people can't afford to eat, it will make riots in Egypt look like a picnic.

    Just watch what Adam calls "the Bernanke nightmare," also known as the CRB index, and you'll see the crisis forming on a chart right before your eyes.

    I honestly can't see a way out of this mess for the U.S. In the 1980's Volcker ramped up interest rates to keep inflation under control. But the economy had more savings in those days and could withstand the hit. Now, a dramatic increase in interest rates would be a final bullet into the nearly dead, which is what America is with its current debt levels and unfunded liabilities.

    Unfunded liabilities, one example: You see, most countries, like Canada, for example, set aside actual money for things like retirement. Every employed worker pays into a fund for his/her eventual retirement and the money is invested for their use when they retire. But not the U.S. It prints a giant IOU for the money, because in an act of supreme arrogance (or stupidity) it was assumed the money would be there for all the retirees. Well, last year the first of the baby boomers came looking for their checks...and guess what? The U.S is about $14 trillion short...and counting.

    America is about to find out what it's like to be poor. And it won't be pretty. Oh, and taxing the rich?...forget it, they're the first to leave for greener pastures if only because they can. Corporations are already pulling up stakes because of a 35% corporate tax rate (Canada's is 19%)and the wealthy have already started the egress to join their assets in other countries. Welcome to Canada!...and Switzerland, and Singapore, and Hong Kong, etc.

    Unfortunately for the Average American, once that can gets picked up way down the road, he, his children, and his children's children are going to be paying the tab...for a long, long time.

  2. How about a Direct Tax on carbon generation, made especially "transparent" in order to persuade more users (all of us) to think about and incentivise toward non-carbon generating sources. Windmills have drawbacks including bird and bat slaughtering, humming, low availability. Solar has low availability, especially at sundown, also requires a substantial levelized cost partly balanced by no carbon tax on their energy product.

    Hydro-electric (damned dams) disliked by naturalists,spawning fish and probably others.

    I would like to see much greater use of geo-thermal sources, with 95% availability, the output can be used for baseload electricity. Great "hot spots" recently discovered in West (by god) Virginia but its coal mining industry would probably prevent or at least slow down geothermal development.

    Earth movements, called earthquakes in Japan, are a design restraint but "The Geysers" near San Francisco has been operating for a century and still going strong.
    Smaller generating modules on displaceable platforms might reduce quake caused interuptions.

  3. The President spoke of a fair and balanced approach. Is it fair and balanced that GE paid zero taxes while some Mom working at a donut shop pays more than zero?

  4. Hi Adam,
    again thank you for the daily no-hype market update, this is very helpful to me
    in this volatile market.

    Re: your comment about GE not paying taxes --
    I think we all favor a free-enterprise, open-marketplace
    with only minimal & effective government regulation to protect people and the environment
    from a ''profits at any cost'' mentality.
    So with a huge part of our deficit going for Wall Street Bail-Outs
    for the ''too Big to Fail'' Banksters whose unregulated derivatives caused our recession,
    and many of global corporations paying little or no taxes,
    it always seems that the small to medium business owner gets the worst of it,
    while the TBTFs hire lots of lobbyists with plenty of dough to get what they
    want from Congress.

    So if all those lobbyists with all their campaign contributions would tell Congress
    to grow up and get intelligent,
    I think we would have better government --
    but it seems like neither of the big-two political parties
    or the lobbyists who pay their re-election bills want to solve problems
    so that average folks can pay our bills, raise our families and have a future to look forward to.

    Oh well, thanks for letting me vent.

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