The markets

The Nasdaq was dead flat on Friday and I have to confess that I am not surprised by that. It had moved up for 10 consecutive days, so it’s hardly surprising that the Nasdaq had a flat day on Friday. Also there are a number of technology stocks due to report earnings in the near future. Facebook is reporting earnings on July 26th – this Wednesday. Facebook will also announce forecast earnings for the next three months. Large tech companies like Facebook, Apple, Amazon and Google all have earnings coming out soon. Netflix has already announced great earnings. You’d expect these impending earnings announcements to have an impact on the Nasdaq.

Last week the Nasdaq broke to new all-time highs and is still looking strong. Just because it’s had 10-days to the upside, doesn’t mean it can’t continue to move up. You shouldn’t expect it to suddenly change direction after 10 days of climbing higher. We need to be aware that earnings are pending and in the elite program we are in many earnings trades.

The S&P 500 was also dead flat on Friday, in fact most of the major indexes were flat. The Russell was down fractionally, 0.45%. The energy sector was down 0.99%, and was the worst performing sector. It’s hardly surprising then that the Russell was down. The Russell 2000 is very much energy dependant. When energy goes down, the Russell usually goes down and that is exactly what we saw on Friday.

Going forward …

I will be watching the biotech sector – IBB. It has now broken above that 323 resistance level, which I have referred to in the past. If you take a longer-term perspective you’ll notice that there is no resistance on the IBB on the daily chart until it gets to around 344. It could have a bit of a run. It was up 0.61% on Friday. Let’s see if IBB wants to have a run to the upside. We are already in a couple of positions within IBB and I have one or two extra ones to show my elite students tonight.

A sector that is looking dicey is retail. It was down 0.57% on Friday. It has come right down to the 21 level, but hasn’t yet broken below it. Will retail bounce off the 21 EMA and move higher or will it break below it and become bearish again?

We are right in the middle of earnings seasons and have multiple trades going on that are looking good.