Wall Street is expecting another volatile week. In addition to our regular complement of oil price spikes, Dollar worries, inflation fears and economic reports on home building and wholesales prices … this week, the biggest news might be the quarterly earnings reports from Morgan Stanley (MS), Goldman Sachs (GS), and Lehman Brothers (LEH).
Currently, just 33% of stocks in the S&P 500 are above their 50-day moving averages. Much of this weakness has come from the Financial sector. Only 17% of Financials are above their 50-day moving averages. To see how ugly that sector has been, take a look at the charts of the Financial Sector SPDR (XLF) and the Banking Index ($BKX). Both are back at, or near, their lows.
But, next week also has Phi Day. What? Your friendly Fibonacci traders may note that June 18 is 6-18 (and everyone knows how important .618 is in trading). If not, then you haven't spent time at Prechter's site. Even if you don't believe it, enough traders watch the 61.8% retracement level, it is worth monitoring. For example, check out the current chart on the Dow.
Here are some of the things that caught my eye this week:
- What's $3BB among friends? Loss catalyst for shakeup at Lehman.
- Lehman's share price might be a better proxy for fear in the market than the VIX.
- Signs of a Market Bottom from a Humble Student of the Markets.
- Kudlow thinks Fed will raise rates in July.
- An updated "Misery Index" shows consumers are in as much pain as the early 80s or 90s.
- NYTimes notes a negative 12-month change in private sector jobs is a "Perfect Recession Indicator".
- Infectious Greed notes Exchanges now make more money selling their trade data than on the trades.
- Apple announced their new iPhone and EndGadget has details.