Will the week ahead be quiet or noisy?
Stocks generally are quiet the week after the monthly jobs report. But all the talk about the Fed and interest rates may still push stocks around.
On Thursday, things looked worse for stocks until shortly after noon E.T. The Standard & Poor's 500 Index ($INX) dropped to its 50-day moving average and then just below 1,600. The index held. A second bounce came at 12:50 p.m., along with a second bounce. Then, stocks rallied seriously for the rest of the day and, thanks to a better-than-expected jobs report, all of Friday.
It was a startling reversal: Between 12:50 p.m. ET Thursday and Friday's close, the Dow jumped more than 400 points. A lousy week ended up producing decent gains.
The force of the rally probably surprised short sellers, who had bet the market was heading lower and were forced to cover their positions. They may get another chance to short the market, maybe even next week.
Stocks don't move much the week after the monthly jobs report comes out. In the 16 months ended in May, the average change for the Dow in the week after a jobs report was 0.68%. It may have a lot to do with there being few economic reports of consequence and, often, not many earnings reports to digest.
But a quiet week without specific things to react against leaves the market vulnerable to a lot of noise, like the constant debate about quantitative easing and when the Federal Reserve will start the process of slowing its bond-buying program and letting interest rates rise.
That could be a big factor for the next week and even beyond. The Fed's rate-making body, the Federal Open Market Committee, meets June 18-19.
So, there's a good chance of some volatility in the week ahead. Which should make short sellers happier.
What's not clear is whether the stock market itself is vulnerable. Here's what I mean; the major averages hit intraday highs on May 22 and have fallen back since: 1.9% for the Dow, 2.6% for the S&P 500 and 1.8% for the Nasdaq.
If the averages peak -- but not at new highs -- and fall back, that will concern technicians. They will see a head-and-shoulder pattern forming, very often a signal of a weakening market.
They also are watching to see if the Hindenburg Omen -- a combination of more than 2.2% of New York Stock Exchange Stocks hitting new highs and 2.2% hitting new lows on the same day -- will force the market down. This happened four times between May 29 and June, reports Tom McClellan, editor of the McClellan Market Report.
That the averages have gained so much this year -- 16.4% for the Dow, 15.2% for the S&P 500 and 14.9% for the Nasdaq -- remains a concern. It just gets harder to move higher. And that's why all those analysts who have seen a correction ahead still believe it's coming.
It just needs a trigger to set it off.
The week ahead, however, doesn't really have the potential for a big trigger.
The biggest may be Monday, when Apple's (AAPL) annual developer conference starts. If Apple doesn't make some major product announcements, the stock could be pressured.
Right now, the biggest announcements are expected to be new operating systems for its Macintosh and mobile product lines.
The shares are up 14.7% since bottoming on April 19 at $385.10, but they are still off 37% from its peak in September.
The most important economic reports of the week are jobless claims and retail sales on Thursday, and the producer price index and consumer confidence from the University of Michigan on Friday.
There are a few earnings reports of note: Lululemon (LULU) and Annie's (BNNY) on Monday afternoon and Smithfield Foods (SFD) on Thursday.
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What if we all could just print up our own money and "issue and buy our own bonds? " (IOUs to ourselves) It won't work. There's no free ride. Bernanke should be arrested for counterfeiting and negligence. Take him to Singapore for a good long public cane spanking.
Fatty Cakes....Is the "only one" to get "thumbs up" when nobody else is thumbing...
You missed a spot, swabby..!!
The push will be from Ben printing money to fuel a fack market. Bankruptcy is coming for the USA.
Well if we make some numbers first couple of days, a sell or two goes through...
Then add that to a few thou, laying in wait; And we can pick up some better ideas or add to some good ones we own now....Thinking we might will have a 1-2% drop later in the week..??
It's all a game of smoke and mirrors alright...You just have to increase your bets on 2 pr. or Trips.
I knew there was something strange about that Pic...Miss Lilly saw it right away..
What's the problem Senor Fatty, You have nothing profound for a Sunday morning...?
The Padre throw you out of Mass, for trying to pilfer the collection plate..?
Or did you get in Communion line too many times?
Can't get that good of wine, back under the bridge can you ?
I thought you cleaned your Hotwheels collection, with TP and Q-tips on Sundays?
Then raced them in the afternoon, for the prize of roasted Rat or Wendy's coupons.
Heard you got a new Frigidaire box from FEMA after that last flood...Good job, Brownie.
Sometimes they glide in safely....
Any one that you can walk away from, is a good one.....Ol' pilot...
We'll see,we'll see....I'll predict 200-300 gains on the DOW for next week..
Providing 1-2 heavy hitters on the DOW, don't blow up..And the FED doesn't say too much, pro/con.
Wonder with the newer printers, that they make today; If one could be purchased and run fast enough printing money, to keep up with inflation....??
Now where's that high percentage cotton rag, paper we've been saving...?
Clean that deck, swabbies....!!
MIRAGE GUY;You would be thrilled if we had a depression.You would be gloating.Your
first post would be "I told you so, it`s all Obama`s fault".It`s about time you realized
that Obama has turned the economy around.If Obama was 100% white and a Republican
who would be the markets` biggest cheerleader.Admit it.7,000 point increase in the Dow
is not smoke and mirrors.You can`t keep lying to yourself.
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After enjoying a smooth rise in stock prices since May, investors are about to be hit with another bout of volatility.
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