Market Insights

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S&P 500 overview: Hits resistance at January downgap

• Failed breakout → Risk of bearish phase.
• SPX bearish harami on Thursday, July 26.
• Remember we’ve been up 4 straight weeks.
• 2700 may be key level on SPX: Trendline, pivot, 100DMA

Earnings in focus:

• This morning: Caterpillar (CAT)
• As we speak: KLA-Tencor (KLAC)
• 7/31: Pfizer (PFE)
• 7/31: Archer Daniels Midland (ADM)
• 7/31: Huntsman (HUN)
• Click here for last week’s earnings recap.

Glass half empty?

• Fed meeting, jobs data may kill Goldilocks. Powell ahead of the curve?
• Factset: On pace for best earnings season in terms of beating estimates since at least 2008. EPS growth rates revised up for all nine sectors.
• Stronger GDP not necessarily bullish for S&P 500.
• Tech troubles (FB, NFLX, TSLA, INTC) focus for now. No new high in chips since Jan, high-multiple software weakening.
• Mid-term elections could soon become worry.
• China checkup: Boosting fiscal stimulus as electricity consumption slows. Click here for our special report.

Options activity:

• 7/30: Procter & Gamble (PG) August 77-75 bearish put spread.
• 7/30: Tracking Apple (AAPL) diagonal spread into earnings.
• 7/26: Market Vectors Semiconductor ETF (SMH) September 100-90 bearish put spread.
• 7/24: BHP Billiton (BHP) August 55 calls → January 60 calls.

Charts to watch

• ORCL, RHT downside risk in tech.
• MNST potentially rolling over after drop.
• BABA, BIDU at risk of bigger breakdowns, but not confirmed yet.
• Refiners, energy may have most upside. Watch WLL for earnings tomorrow night, Iran news August 6.