Market Lab Report - We Are Your Watchmen 7/18/16

Published:

18 Jul 2016 13:10 ET

Major averages closed Friday near breakeven on mixed volume in a tight trading range which registers as another constructive day as the market digests recent, sharp gains.

The coup attempt in Turkey took futures down after the close by more than half a percent. Futures have since more than recovered and are up slightly at the time of this writing.

The military's attempt to take over Turkey failed. This would have put the country into a state of martial law. Venezuela, after all its economic woes, is now ruled by this draconian martial law.

Alan Greenspan, the former central bank chair, suggested in roundabout fashion in a recent interview that other countries could follow suit at some point, including the US. He made it clear this would not happen overnight, but said at the current rate of change, signs point to the possibility in the not-too-distant future.

But trying to predict the future is futile and runs counter to making money in the markets. Our pledge to our members has always been to stay focused on the markets in real-time, running our screens, and watching for subtle changes in stocks so potential long and short positions reveal themselves at the right time. This enables us to make money NOW. The present is all that matters.

Currently the indexes are well extended from their late June post-Brexit lows as well as from their recent range breakouts. A pullback here to the top of the range, perhaps down to the 2120-2130 level on the S&P 500 could be considered normal within this context.

Earnings "roulette" season moves into full gear over the next two days as Netflix (NFLX) announces today after the close while Apple (AAPL) is expected to report tomorrow after the close. There is potential for earnings season to have some impact on the future direction of the market. Also, during earnings roulette season there is always the potential for stocks that post positive results to gap-up in the process. In some cases these can produce actionable buyable gap-ups, something that we will be watching closely for. Should an actionable idea present itself, we will issue a BGU report as appropriate.

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