Daily Market Update – July 8, 2016 (9:00 AM)
This morning’s futures trading is telling us to expect that the all time closing and intra-day highs on the S&P 500 are about to give way to new ones.
Before that happens, though, the previous highs, representing resistance levels have to be tested. At least, that’s usually the case.
Often, the market has to make more than one run at those levels before actually breaching them and establishing a new level of support.
Following Friday’s Employment Situation Report there was enough good news in terms of job creation to give logical reason for the market to celebrate.
At some point all the logical people in the world should have eventually come to the conclusion that more people getting jobs is a good thing even as it might lead to some inflation and wage inflation.
That’s especially the case as we see so much of the rest of the world getting mired in such a low rate and even negative rate environment and unable to sustain any kind of growth, at all.
There’s nothing wrong with growth, especially if its in moderation and for the moment, our economy and our stock markets are the best in the world.
This week doesn’t have too much going on, although there are 13 different speeches being given by members of the Federal reserve and some of those are likely to get a response from traders.
Those come in advance of the July 2016 FOMC meeting and on the heels of last Friday’s Employment Situation Report, you do have to wonder whether that may be the trigger to finally go ahead with the increase that we’ve all been expecting for the past few months.
I do have some cash this week and am willing to spend it as the July 2016 option cycle comes to its end.
Although I do have a number of positions set to expire this week and with some assignment or rollover prospects, I wouldn’t mind adding some more income, especially since there are no ex-dividend positions this week.
What i don’t expect to do is to jump in if the market shows too much strength to open the week, although individual stock weakness could be a draw.
Otherwise, earnings begin anew this week and it will be interesting to keep an eye on the financials as they could set the tone in a bad way as the lower interest rate environment hasn’t been good for them and many will start guiding lower as thoughts of the impact of the “Brexit” vote crystallize.