Top Line: With the short trading day on Thursday and with the Fourth of July holiday on tap, there could be some fireworks on Wall Street. We still think we are very close to a low right now even though there is a possibility of a good sized drop at the opening on Thursday. We expect the Dow to be higher in two weeks than it is tonight. We'll check back in two weeks to see where we're at. We finally got that headline we have been waiting for, you know the one about how Now we have entered a bear market. Again, where were they in October??? These statements are not meant to "scare" people but that's what happens and This contrarian thinks it marks a trading low.
[Editor's note: With the holiday, the next post will be Sunday evening.]
The way the market closed on Monday, we thought maybe a rally would emerge today. Right. Well, at least it was interesting. With two hours left in the day, the Dow was about even on the day. At the end of the day it was down 166.
Then after hours, NVDA warned that their earnings were not going to be up to expectations. Their announcement came with the news that there were some technical problems with some of their chips for notebook computers. You can imagine that the market did not like that news very much and punched NVDA to the tune of 20% after that news.
So, what can happen in the morning? Well, the market could try to ignore the news because it doesn't apply to any other company except NVDA...yes, it's weak we know.
There are some other issues to deal with in the morning such as the decision by the Bank of England on their interest rates. The world worries about the dollar and oil so when the fantasy of the Bank of England raising rates is discussed the results are that the dollar will go down, oil will go up and the stock market will go down. This argument requires some reality. [Thursday morning update: It's the ECB (European Central Bank) not the Bank of England and they did raise rates by 25 bps so now we'll see what happens. The market pretty much expected this rate increase so the futures are not doing much after the announcement a few minutes ago. Of course NVDA is down 27% to 13.70 in pre-market trading.]
Yes, the other big news that actually could have some value is our own jobs' report. The numbers are expected to be job losses of about 60K but an improvement in the unemployment rate from 5.5% to 5.4%.
Have a great holiday weekend...see you next week.
FSI: 85.73 (a new low for the move)