Market News for the Prepared Mind: 05.23.2011

"Chance favors the prepared mind." -- Louis Pasteur

The market closed down for the third straight week with the indexes trading in a narrow range.  The S&P 500 (SPX) closed at 1,333.27 or down 0.34%,  the Dow Jones Industrials closed at 12.512.04 or down 0.66%, the NASDAQ 100 (NDX) closed at 2,351.43 or down 0.1.17%, and the Russell 2000 closed at 829.06  or down 0.79%.  Implied volatility for the indexes – SPX (VIX). RUT (RVX) and NDX (VXN) – was up.

The beginning of this week appears to be a case of the market saying, “Oops, I forgot about that.”  The apprehension exhibited by the markets appears to have a name.  The bogeyman are European sovereign debt, strength of the dollar, U.S. budget  concerns, with a dash of Spanish elections and  “easing demand.’    The talking heads have ignored Greek debt the past three weeks.  Ignoring problems comes with a cost.  Today’s projected opening prices are currently are 1.25 – 1.5 % below Friday’s close. The Prepared Mind has anticipated the impact of this move and other moves in the market post-opening.  The preparation for the new reality includes adjustments, closing trades, and new trades.

This week’s economic focus is on the New Home Sales on Tuesday, GDP on Thursday, and Personal Income on Friday.  The earnings cycle is winding down with only a handful of reports scheduled for the week.  Watch the Volatility Indexes – SPX (VIX). RUT (RVX) and NDX (VXN).  Another  strong indicator of direction will be the /Euro dollar/US dollar spot price.  Be wary.  Trade carefully and with a plan.

Remember:

“Chance favors the Prepared Mind.” – Louis Pasteur

This week’s economic news:

Monday May 23:

Economic:  Chicago Fed National Activity – 8:30

Earnings: BMO: Campbell Soup (CPB). Genesco (GCO)

Tuesday May 24:

Economic:  ICSC- Goldman Sachs Store Sales – 8:45, Redbook – 8:55, April New Home Sales – 10:00

Earnings:  BMO;  Medtronic (MDT);  AMC – Applied Materials (AMAT)

Wednesday May 25:

Economic:  Durable Goods Orders – 8:30, FHFA House Price Index  – 10:00, EIA Petroleum Status Report – 10:30.

Earnings:  BMO: Costco (COST), Polo Ralph Lauren (RL); AMC:  Computer Sciences (CSC), Semtech (SMTC).

Thursday May 26:

Economic:  GDP – 8:30, Jobless Claims – 8:30

Earnings: BMO:  Big Lots (BIG), Heinz (HNZ)

Friday  May 27:

Economic:  Personal Income and Outlays – 8:30, Consumer Sentiment – 9:55, Pending Home Sales – 10:00.

Earnings: BMO:  Mentor Graphics(MENT)