August 2nd Morning Outlook

morningoutlook

Draghi and the ECB issued their annoucement minutes ago, but no details were revealed of their plan to save the Eurozone. Markets are expecting moey printing and bond buying, if they get anything less than that look out below. Futures are starting to spike higher as is the EUR/USD which is over 70 pips higher this morning.

stocks futures up .3%.
the US Dollar is -.24%
Silver Futures -.5%
Gold Futures -.15%
Crude Oil Futures -.2%

Another day, another ramp higher in stock futures. Again yesterday the market fell apart right near the close. That is three sessions in a row where we get strong selling into the close. Stocks were rather calm in spite of the FOMC decision to do nothing, but many feel they will start QE3 in September unless we get a rapid rebound in economic data.

Still awaiting Draghi and the ECB this morning, which will likely move the market. Stock futures hit their lows around 4AM and have moved higher ever since. This is turning into a pattern lately and we've seen this type of action during QE1 and QE2 when futures would fall and then recover their losses and rally overnight.

With stock futures higher, the EUR higher, you would expect gold and silver to be higher as well, as Draghi is expected to announce, much to the chagrin of the Germans, a money printing scheme to buy Spanish and Italian bonds. Should Draghi announce money printing and gold/silver make anything less than a modest move, I think both will offer a great profit opportunity. Gold has lost some of its shine lately, but more printing should give it a renewed sparkle.

GMCR initally dropped last night on earnings, it the powered ahead and is trading well over $20 early on today.
FSLR has rallied to over $18 on earnings last night.
RIG is up almost 4% this morning after reporting earnings last night.
MNST is down -2% early after missing earnings

This is a day that will move based on the ECB. That announcement will come at 7:45am. For short term option traders we must wait to see what the outcome is and plan accordingly.

Tonight we have earnings from LNKD and MCP.

U.S. stock market futures edged higher Thursday, but caution remained the watchword as investors waited to see if the European Central Bank will make good on recent pledges to do its part to help support the beleaguered euro.

Futures for the Dow Jones Industrial Average rose 52 points to 12,980, while those for Standard & Poor's 500 index gained 5.9 points to 1,376.30. Those for the Nasdaq-100 index added 11 points to 2,636.

U.S. stocks fell Wednesday, losing ground in afternoon trading following the Federal Reserve's decision to hold steady on monetary policy, a move that had been widely expected. The Dow Jones Industrial Average (DJI) fell 32.55 points, or 0.3%, to 12,976.13.

But observers said the real show comes when the European Central Bank makes its policy announcement at 7:45 a.m. Eastern time, with a press conference by Mario Draghi, the euro zone's top central banker, to follow at 8:30 a.m. Eastern.

German daily Sueddeutsche Zeitung reported Thursday that the central bank was planning coordinated action with the European Stability Mechanism to buy Spanish and Italian bonds, citing unnamed sources. The report helped boost European stocks, with the Stoxx Europe 600 index up 0.6%.

The euro edged up against the dollar, climbing to $1.2263 from $1.2232 late in New York on Wednesday.

The bar has been set so high by markets that many analysts say Draghi can hardly reach it, but they are looking for him to follow up his recent statement: that the central bank will do "whatever it takes" to preserve the euro.

"This is Draghi's key moment, when he has a chance to reinforce his powerful rhetoric with some equally powerful actions," said Chris Beauchamp, market analyst at IG Index. "However, there is always the possibility he will do nothing, or that the announced plans fail to live up to investors' high expectations.

"If that occurs, the damage to fragile investor confidence could be severe," said Beauchamp, in emailed comments.

Earlier, the Bank of England left key rates unchanged after the close of its meeting.

Data from the U.S. include weekly jobless claims, due at 8:30 a.m. Eastern, followed by factory orders for June, to be released by the Commerce Department at 10 a.m. Eastern.

Away from economics, Time Warner Cable Inc. (TWC), General Motors Co. (GM.XX) and Kellogg Co. (K) are among the companies whose quarterly results will draw scrutiny before the market opens.

Among stocks in focus, shares of Green Mountain Coffee Roasters Inc. (GMCR) rose 14% in pre-market trading. Late the prior day, the group cut its fiscal 2012 financial targets for the second time since last May. It also announced a plan to buy back $500 million of stock.

Shares of Abercrombie & Fitch Co. (ANF) tumbled 17% in pre-market trading after the fashion retailer The New Albany, Ohio, retailer of clothing for teenagers reported late Wednesday that second-quarter comparable-store sales fell 10%. The company also estimated the quarter's earnings at 15 cents to 18 cents a share, well short of estimates.

In other markets, Asia stocks finished mostly lower amid skepticism that the ECB will announce any new or bold measures. Chinese stocks sank on a sharp fall in property developers, with the Shanghai Composite Index closing down 0.6%.

In commodities, crude oil for September delivery rose 22 cents to $89.13 a barrel, while gold for August delivery fell $2.30 to $1,601 an ounce.

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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