StockTwits Market Preview 7/7/09

• kileyay
• July 7th, 2009

Overseas

Futures are edging down this morning following mixed results overseas.

Asian equity markets mostly moved lower. Japan’s Nikkei 225 suffered its fifth straight losing session. The Shanghai Composite fell 1.1% — snapping a four-session winning streak — though China’s growth continues to defy sense. Indian shares were trading higher, regaining some of Monday’s big losses.

Shares in Europe are up for the first time in four sessions. Economic fundamentals remain mixed. Manufacturing output and industrial production data from the U.K. showed unexpected declines for May, while German manufacturing orders picked up by much more than expected.

Commodities

Weaker oil prices continue to drag on crude- and shipping-related stocks. But many think the crude correction won’t last for long.

Merrill Lynch increased its estimate of oil prices for this year and next. Merrill said oil could reach $82 by next year, citing limited growth in non-OPEC supply, a shrinkage of OPEC spare capacity, and emerging-market demand.

The Commodity Futures Trading Commission is readying restrictions on speculation. The CFTC said they may clamp down on speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds.

WTI crude is going for below $64 per barrel again this morning.

Corporate

Ruby Tuesday ($RT) is expected to report fourth-quarter earnings of 19 cents a share. The stock saw big activity after-hours yesterday but looks flat this morning.

Discover Financial Services ($DFS) said it’s planning a $500 million secondary stock offering. Shares will gap down.

Technicals

The S&P 500 looks like it’s in the right shoulder of a head-and-shoulders pattern. Price could move lower on lower volume. Volume has been declining since early May.  MACD and RSI are also showing negative divergences.

The left shoulder of the H&S was formed in early May.  The head was formed in early June as the index broke through the 200 day moving average.  The right shoulder was formed last week, when the S&P failed to break through the left shoulder levels:

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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