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Thursday, July 2, 2015

Daily update 7/2 Factory orders

Bulls failed to capitalize.

The futures traded above yesterday's high a few times early this morning.  If the bulls had been able to apply some upward pressure from there they very likely would have generated a significant short squeeze rally.  The shorts sensing that kept putting downward pressure on the market and were able to contain the bulls.  At the end of the day breadth was dead even.  There were 52 new highs and 113 new lows.  I can understand the bulls hesitating in front of all the Greece noise.

We had one green price bar which brought out the sellers.  The last nine bars are nothing but a consolidation inside the big blue down bar.  That consolidation could be a bottom or could be a continuation pattern.  Which it is may depend on what happens with Greece.  Unless of course people get tired of waiting on Greece and decide to buy or sell anyway. 

There is clear downward pressure in the charts.  It is likely to take some good news to get the market going up for a test of the highs.  There is a referendum in Greece on Sunday that may move the markets come Monday.  You just can't predict this stuff.  There is still room to bounce without reversing the current down trend, but there is no obligation to do so.  We have worked off enough of the oversold condition it could head down again.  This is a tough environment at the moment.  Throw in some earnings news soon and things could get really crazy.

Factory orders came out today and were not particularly good.  Here is a look at a couple bits of data.

Manufacturing on a YOY basis appears to still be struggling if not in outright trouble.

Despite the big drop in energy prices over the last year consumer goods are not doing well either.  I really have no explanation for this weakness.  I wish we had more data on this one.  Are we going to get a bounce back or are we in real trouble?

In recent months we have seen weakness in the industrial production, retail sales, and factory orders that has not been present previously in this recovery.  I can't help but feel the economy is still vulnerable to a shock that could send us into a recession.

I was thinking about a blog for investing in non taxable accounts (401k and IRAs).  Please check it out and let me know what you think in the poll question on this blog.  http://traderbob58-401k-ira.blogspot.com/

The market and sector status pages have been updated.  Have a great weekend.


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