Expectations 'in the market'
Thursday, July 29, 2010 at 07:19AM Early in the week, noted if a close over 1118 didn’t materialize, a dip would be in order. Well, we’re getting just that as the market meanders with nothing up it’s sleeve (catalyst) .
Earnings, the predominant theme over the past week for the broad market is simply out of fuel at this stage as the bulk of SP companies have painted a (better than expected) picture. Yesterday and today, we see profit taking on the ’better’ reports, which means the market is saying.."we know this already, you really have to surprise us now!!”. Expectations are simply high now.
Focus turns to macro/ eco’ data next week (including China PMI‘s weekend), most investors are fine with waiting it out now as upside to much hyped about ~1130 early in the week is looking improbable to close off July. There is no problem with letting the market ‘work it off’, even if it means being off nearly ~20SP from week’s high. There is enough congestion 1098/1100 to provide a floor for the market and possibly get some dip buying in. Today, transports were the backbone of the market (DJIA down only 40 vs. NASD -24) with CHRW/ODFL continuing the ‘positive’ tone set by EXPD first. Watch group for any signs of market deterioration following the already 'Steel' no-show this week.