Coverage for the week of July 17th – July 21st: In this week’s coverage, we analyze the rally in the E-Mini Dow Jones futures, and the pullbacks in Japanese Yen, Gasoline and Copper futures. We also examine the economic reports and earnings releases expected in the coming days.
September E-Mini Dow Jones Future Daily Chart
The September E-Mini Dow Jones Index future showed five consecutive days of higher closes, after testing support of the 50-day moving average. The MACD indicator showed a bullish cross above its signal line. The RSI increased with price, and while at 57 it still has room to go to be considered overbought, the divergence shown from the last peak high in price could indicate market weakness for Dow futures. Should the current uptrend continue, previous peak highs of 34888 and 35092 could indicate areas of resistance. A downturn could encounter support at the 50-day moving average (~34000).
August RBOB Gasoline Future Daily Chart
August RBOB Gasoline futures began the week with continuation buying, before forming a 3-bar reversal pattern to finish the week. The rally brought Gasoline into a long-term resistance area as denoted by the tan channel, which was tested three times previously, starting with November of last year. Friday’s reversal candle caused RSI to pause at ~65, just short of the overbought level of 70. While the MACD and its histogram are both positive and bullish, the histogram is turning down, indicating a possible slowing of the uptrend. Should the pullback continue, support may be found at the 50-day moving average (~2.47). A reversal to the upside could find resistance at the previous peak high from November of last year (~2.74).
September Japanese Yen Future Daily Chart
September Japanese Yen futures continued the rally, crossing above the declining 50-day moving average before pulling back on Friday’s trading. Friday’s high tested the Ichimoku cloud, before falling to the 23% Fibonacci retracement level. Both RSI and MACD show signs of strong bullish momentum, with the MACD line finishing the week in positive territory as an extra bullish bonus. Should the yen resume the upward trend, expect resistance at the bottom of the cloud (~0.0073500) and the 38% Fib retracement level (~0.0074150). If Friday’s pullback continues, look for support at the 50-day moving average (~0.0072450).
September Copper Future Daily Chart
September Copper futures had a big week, crossing above both the 50-day and 200-day moving averages, as well as the top of the Ichimoku cloud. Friday’s stall couldn’t quite get back to the cloud, though. RSI is at 62+, trending in line with price, and still has room to go before reaching overbought status. The MACD showed bullishness last week with a crossing of both the zero line and its average line. Should the overall bullish trend persist, resistance might be found at the 50% Fibonacci retracement level (~3.9750). A continuation of Friday’s pullback might find support at the 200-day moving average and the 38% Fibonacci retracement level (which is about 3.8800).
Companies Reporting Earnings July 17th – July 21st
|Tuesday, July 18th||Bank of America Corp. (BAC): $0.84 EPS Estimate, $25.17B Revenue Estimate (BMO)
Bank of New York Mellon Corporation (BK): $1.22 EPS Estimate, $4.38B Revenue Estimate (BMO)
Charles Schwab Corp. (SCHW): $0.74 EPS Estimate, $4.66B Revenue Estimate (BMO)
Lockheed Martin Corp. (LMT): $6.43 EPS Estimate, $15.86B Revenue Estimate (BMO)
Morgan Stanley (MS): $1.19 EPS Estimate, $13.51B Revenue Estimate (BMO)
Novartis International AG (NVS): $1.67 EPS Estimate, $12.94B Revenue Estimate (BMO)
PNC Financial Services (PNC): $3.31 EPS Estimate, $5.46B Revenue Estimate (BMO)
J.B. Hunt Transport Services, Inc. (JBHT): $1.98 EPS Estimate, $3.36B Revenue Estimate, (AMC)
|Wednesday, July 19th||Goldman Sachs Group (GS): $3.54 EPS Estimate, $11.60B Revenue Estimate (BMO)*
M&T Bank Corp. (MTB): $4.11 EPS Estimate, $2.40B Revenue Estimate (BMO)
U.S. Bancorp (USB): $1.13 EPS Estimate, $7.16B Revenue Estimate (BMO)
Alcoa, Inc. (AA): ($0.50) EPS Estimate, $2.71B Revenue Estimate (AMC)
Discover Financial Services (DFS): $3.69 EPS Estimate, $3.88B Revenue Estimate (AMC)
IBM (IBM): $2.00 EPS Estimate, $15.56B Revenue Estimate (AMC)*
Netflix, Inc. (NFLX): $2.81 EPS Estimate, $8.27B Revenue Estimate (AMC)
Tesla, Inc. (TSLA): $0.82 EPS Estimate, $24.53B Revenue Estimate (AMC)
United Airlines (UAL): 4.07 EPS Estimate, $13.93B Revenue Estimate (AMC)
|Thursday, July 20th||Abbott (ABT): $1.04 EPS Estimate, $9.68B Revenue Estimate (BMO)
American Airlines Group (AAL): $1.58 EPS Estimate, $13.71B Revenue Estimate (BMO)
Johnson & Johnson (JNJ): $2.61 EPS Estimate, $24.67B Revenue Estimate (BMO)*
Nokia Corp. (NOK): $0.09 EPS Estimate, $6.21B Revenue Estimate (BMO)
Travelers Companies, Inc. (TRV): $2.27 EPS Estimate, $10.00B Revenue Estimate (BMO)*
CSX Corp. (CSX): $0.49 EPS Estimate, $3.74B Revenue Estimate (AMC)
|Friday, July 21st||American Express Co. (AXP): $2.79 EPS Estimate, $15.47B Revenue Estimate (BMO)*|
|* indicates that this company is in the Dow Jones Index|
Commentary: After earnings beats by two Dow Jones companies (UnitedHealth and JPMorgan Chase) lifted E-Mini Dow Jones futures Friday morning, five Dow Jones companies report earnings this week, with Goldman Sachs and Johnson & Johnson reporting Tuesday before market open—Goldman Sachs before markets and IBM after markets on Wednesday, Johnson & Johnson and Travelers before markets Thursday and American Express on Friday morning.
Banks and Financial services are the focus this week, with Bank of New York, Bank of America, Schwab, Morgan Stanley and PNC reporting Tuesday morning; and M&T Bancorp, U.S. Bancorp and Discover on Wednesday.
Pay attention to the guidance for the banking sector, as they could give guidance into economic outlook for 2023. Keep an eye on NASDAQ futures (MNQ) after market close on Wednesday as Netflix and Tesla report on those days.
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