Wall Street Stock market Forecast For Week Of July 18 2011

Wall Street Stock market Forecast For Week Of July 18 2011 : There's only one thing you should be doing as a trader: attempting to establish the trend in the present. Remember when Peter Schiff said back in 2009 that gold would be at 5,000 by the end of 2010? Whenever I hear somebody say that at some future point in time, some market is going to be at some level, I know that guy is an idiot. That dude doesn't know what he's doing. He knows that most people are not going to take a pen or pencil and write down the prediction he just made and then check back a year or so later to see if he was right.

They just don't say anything when their wrong because they know that no one is going to remember what they said; however, if their right then they scream at the top of their lungs how they were right. Don't get caught up in that publicity game. There's only one thing that you should be doing right now: establish the trend in the present then trading that trend. Live in the present, not the past, and not the future. Don't buy gold because someone said it was going to be 1,850 by year end. If it turns out to hit that price great. Buy gold because you established that it's in a strong uptrend in the present and you're going to ride that trend for as long as you can.

The Dow is within an uptrend. The S&P 500 is within an uptrend. The Nasdaq has a sidelines rating. The Russell 2000 is within an uptrend. So looking at just the major indices, the bulls have an advantage over the bears going into trading next week, Monday, July 18th 2011.

Let's look at some market internal indicators and see if they support the thesis derived from the trends of the major indices that the bulls have an advantage over the bears going into trading next week.

Sixty-two percent of stocks on the New York Stock Exchange are trading above their 200 day moving average. That's a bullish bias.

The TICK shows a bullish bias because the last swing move down resulted in a -134 but the last swing move up result in a +1025.

The VIX is still within a downtrend which is bullish for the market as it suggests not a lot of fear is out there right now as evidenced by PUT buying.

The market internals do indeed support the thesis that the bulls have an advantage over the bears going into trading next week.

Gold is in a strong uptrend.

Silver is in a strong uptrend. This is the first time in several months that silver has a strong uptrend rating.

The U.S. dollar is within an uptrend. The dollar and gold have decoupled from each other and are both in uptrends.

Looking at our inflation indicators, DBO (Oil) is in an uptrend. DBO went from a strong uptrend to a downtrend in May and not back into an uptrend which suggests inflation is on the rise once again. This is supporting the upward move in precious metals.

DBA (Agriculture) has gone into a very weak uptrend. With the drought in Texas and the crop shortages forecast by the FDA last month, higher food prices are on the way. Food is the second biggest inflation indicator behind Oil. The very weak uptrend in DBA supports the upward move in gold and silver.

The CRB has been upgraded to a sidelines rating.

Unleaded gas prices at the pump are uptrending. The Unleaded Gasoline spot price shows that prices at the pump will be $4.17 in my area, Fresno California, within 2 to 3 weeks. That's a big problem and if not brought down, will continue to hurt consumer demand across the economy.

Looking at the Stock Trader's Almanac, the second half of July should be weaker than the first half of the month.

Fundamental reports that moved markets last week were Tuesday's International Trade, Thursday's PPI and Retail Sales, and Friday's CPI and Industrial Production reports.

The trade deficit unexpectedly worsened in May and sharply. Higher oil prices that month played a key role in the increased red ink. The May trade gap ballooned to $50.2 billion from a revised $43.6 billion in April (originally $46.7 billion). The May deficit was much larger than analysts' estimate for $42.7 billion.

In June, lower energy costs gave the economy a break. Producer price inflation in June turned negative with prices dropping 0.4 percent, following a relatively soft rise of 0.2 percent in May.

Retail sales edged up in June despite a price related drop in gasoline sales. Overall retail sales in June edged up 0.1 percent, following a 0.1 percent dip in May (originally down 0.2 percent). The increase in June was marginally better than the median forecast for no change. A rebound in auto sales helped lift overall sales.

Consumer price inflation turned negative for the first time in twelve months on another decline in energy costs. The consumer price index in June dipped 0.2 percent, following a 0.2 percent increase the month before. The June number matched the median estimate for a 0.2 percent decrease.

Industrial production in June rose moderately, but mainly due to a rebound in the utilities component. Manufacturing, however, was soft. Overall industrial production in June advanced a modest 0.2 percent, following a 0.1 percent dip in May (originally up 0.1 percent). The market consensus called for a 0.4 percent boost.

Fundamental reports that have the greatest probability of moving markets next week are: Tuesday, July 19, 2011 = Housing Starts