Why Today Could Provide An Important Signal

  • June 9, 2003
  • Peter Navarro

Market Trend:
Short Term Up

Market Outlook: Increasing Chance of a
Pullback

Macroplay of the Week: PECS

The Broad Market
Outlook: Up, Up and Away?

After almost a year, it has finally happened. Prices
have broken out of their trading ranges to the upside on all three major
indices. This is a bullish sign for the short- to intermediate-term if these
breakouts hold up. We will be watching closely to see if Friday’s sell-off
carries through to next week, and how deep that sell-off ends up being. 

In this regard, we still believe that we are way overdue for what will amount to
at least a pullback. If this pullback does not cause failure in the recent
breakouts of the major averages, and the underlying technicals remain solid,
we will then view this as a buy signal. However, if prices decline back into
their trading range, and the underlying technicals deteriorate, we will stand
back or lean towards the short-side.  

The Week’s Macro Data Market
Movers:

The
Macroeconomic Calendar


DAY


EVENT
Monday

  • Wholesale Trade
Tuesday

  • Chain Store Sales
Wednesday

  • Beige Book

  • Mortgage Applications

  • Oil and Gas Inventories

  • German industrial production
Thursday

  • Business Inventories

  • Jobless Claims

  • Retail Sales
Friday


  •      Trade
    Report

  • PPI

  • Consumer Sentiment

* Potential major market
movers in red

The biggest market mover this week is likely to
be retail sales — projected to be flat — on Thursday. A report that shows
increased sales would be a very nice positive surprise and spur the markets up
while a bad report would move the markets significantly down.

On Monday, the wholesale trade numbers could provide an important signal that
the economy is strengthening and save the market from any pullback doldrums.

Why bother to check our German industrial production on Wednesday? Because if
Germany seeks (deeper) into recession, that bodes ill for US exports..

 Peter’s
Pick: Pick a PECS

I flagged this fundamentally sound
security stock before. At the time, it had a very nice run and anyone using
reasonable stop losses would have been most pleased. Now, after
(
PECS |
Quote |
Chart |
News |
PowerRating) has
come back to earth, it is resuming an upward move. Bon Chance. 

If you have a favorite macroplay or stock you would like us to consider in this
column, send an e-mail to

peter@peternavarro.com or go directly to

https://www.peternavarro.com.  We’d love to hear from you.  Â