Last week we saw the market finish up a point or a little more depending upon how you define the market.  Volume was heavy enough on Friday, a down day, to tag on another distribution day to the S&P 500 and another distribution day to the NYSE.  So that brings the count to 4 on the S&P500, 2 on the NASDAQ, and 2 on the NYSE.  If we get one more on the 500, we will see O'Neil change the current outlook to market uptrend under pressure.

That would be a good time to check your stops and curtail any new positions unless you have a strong conviction.  Having said that, there seems to be a lot of positive sentiment on the coming weeks.  This maybe triggered by the good bond floats going on in Europe.  Banks and people are buying up the debt of France and Italy driving the yields down to reasonable levels.  Keep an eye on the rating down grade by S&P of the European bailout fund.  That could make for an interesting day in the market tomorrow.  At the moment, early Monday evening, the market futures look bright. 

The week ahead, be it shortened, has a few things to keep an eye on.

Tuesday

Look for an increase in the Eurozone consumer prices.  This will be slight and should be already baked into the market prices.  Japan will have a couple of reports our including machine orders and corporate good pricing.  None of these should be market movers, but everybody is looking somewhere to stimulate fear and greed.  The Bank of Canada will announce no change in interest rates.  At home we will have the Empire State report, a manufacturing indicator.  Remember anything above 0 is expansion and anything below 0 is contraction.  The expectation is about 10.5.  We are thinking better.  Closer to 13 would be our guess.  Anything over 11 should help move the market up.

Wednesday

The UK's labour market report will be watched to see of employment is improving (NOT).  Look for Italy's merchandise trade to be down.  Mortgage applications number are out and look for a slight slight improvement.  Nothing to write home to mom about, but headed in the right direction.  With recent prices we can expect a little drop in producers price indexes.  This is already accounted for in the market so it would take a big move down or a big move up to matter.  I wouldn't count on it.  A couple of retail reports are released and look for healthy numbers.  Industrial production number will continue to please.  The housing market index is expected to be flat with last month.  That's sets up either a nice surprise or a big disappointment.  We are going with the later.   

Thursday

Australia will let loose its employment figures and they should be flat.  The Aussie's are talking a lot about the impact of a Chinese cool down so I am sure hiring might be on the low side.  Here is the states it could be wild ride as we have the CPI, Housing Starts, Initial Jobless Claims, and the Philly Fed report.  We won't bore you with our individual guesses.  Let's just say we are not expecting brilliantly good news on the day. 

Friday

We will see Canada's consumer price numbers and we would expect a slight increase, but nothing to loose sleep over.  In the US after what should be a nervous day on Thursday with all the data points coming out we should see a quiet day as the only mover being released is Existing Home Sales.  Look for a slight improvement allowing traders to take a breather. 

So our guess is a market that ends up 1.5% next week.  That would be the S&P 500.

Salve Lucrum