Jul 02, 2009 (SmarTrend via COMTEX) ----Renewed hopes for a robust economic recovery spurred on stock buyers yesterday. The DJIA climbed quickly intraday, but only ended up half as much. The SmarTrend(R) indicators climbed higher, ready to pause for a few hours before the shallow rally resumes after the holiday.

Reports on housing and manufacturing gave heart to stock buyers that the recession is slowing, and the DJIA quickly climbed 130 points, then backslid from profit-taking to close up only 57 points. Even so, the daily SmarTrend(R) uptrends were positive again at 45:16, more than sufficient to boost the IBDI and Trend Ratio, both of which continue to signal that the intermediate-term uptrend, which had been sleeping, is now headed north again, and can be expected to boost the long-term uptrend, which showed more uptrend resolve yesterday.

Much of the current rally has been driven by the near-term uptrend. One week ago the near-term trend indicators emerged from oversold territories and have been climbing steadily since then with only a couple of minor pauses. This process is likely to repeat again with a shallow pause today followed by a continuing near-term uptrend rotation after the holiday weekend. With the near, intermediate and long-term trends all synching up in moves northward, the likelihood is high that the current shallow uptrend will gather momentum during the first week in July.

Like all multi-day uptrends, whether shallow or steep, they tend to move up in stepwise fashions, pausing every two or three days to consolidate gains. This is due to profit-taking, sandwiched between heavy buying days; and when the retreats are shallow, the end result is usually an uptrend characterized by progressively higher daily highs and higher lows. The same pattern can be used to describe a trade-term uptrend with intraday movements, although many trade-term trend pauses are due to reactions to news. Today, the hot topic is the government's employment report, just out this morning. It will be scrutinized by savvy analysts for indications that unemployment will start leveling off soon, thereby confirming an end of the recession is in sight. The trade-term trend may be impacted by other important news discussed below, but it is likely to take today's employment news in stride, regaining its footing to join the rally process starting again Monday or later today. For a look at the complete list of stocks changing trends over the last week, please click on http://www.mysmartrend.com.

The week's key data points, the monthly count of US jobs lost and an expected uptick in the jobless rate, may find an absence of interested traders, as desks are abandoned to the long holiday weekend. The news is unlikely to cheer. Fed's Yellen noted she expects that unemployment will "remain painfully high for several more years." Consumers' willingness to reopen their wallets, and fuel the economic recovery may be shaped by their sense of job security, a shaken optimism not expected to be resurrected in today's numbers.

Yesterday's markets proved markedly slow, well off last year's daily average of 2.28 billion, at 948 million shares traded, with advancing shares ahead of decliners by a three to one margin. The Vix volatility measure eased 0.5% to 26.22. Major indices moved higher during the session, but with gains of less than 1%, with the DJIA up 0.7% to 8504; the NADAQ up 0.6% to 1845; and the S&P500 up 0.4% to 923.

Financial and healthcare stocks moved lower, off 0.2% and 0.1%, respectively, while the remaining eight industry sectors traded moderately higher during the session. Consumer goods shares led with modest gains of 1.9%; utilities followed with a 1.4% advance. On the DJIA, Kraft (NYSE:KFT) shares led higher with a 5% increase, following news from rival General Mills (NYSE:GIS) of better-than-expected fiscal fourth quarter results on strong sales of its cereal and dough products and improved current year guidance. Intel (NASDAQ:INTC) shares jumped 3% on a ratings upgrade to "market perform" from "market underperform." On the downside, financial components Bank of America (NYSE:BAC), American Express (NYSE:AXP) and JP Morgan (NYSE:JPM) moved lower, down 1.1%, 1.0% and 1.0%, respectively.

Yesterday's full plate of economic activity covered the gamut of private sector job losses, vehicle sales, construction spending, the ISM index, pending home sales and crude inventory levels. The ADP jobs number revealed 473,000 jobs were shed in June. June vehicle sales indicated a drop of 28%, its smallest rate of decline since last September. Construction spending fell a sharper than expected 0.9% in May, now off in four of the past five months, fueled by a 33.3% decline in residential spending, but somewhat offset by a 55.2% advance in factory construction.

On a more positve note, the ISM manufacturing index provided signs of a stabilization in the contraction of US manufacturing activity, which has been ongoing for the past nine months, and the sharpest since WWII. While still below the watershed 50 mark and still signalling a contraction, the survey increased to 44.8 from 42.8 in May, for its sixth consectutive improvement as production levels grew for the first time in nine months. Seven of eighteen industries noted growth, led by petroleum and coal products, printing, wood products, and non-metals. And pending home sales, viewed as a leading indicator of housing market activity, rose for the fourth straight month in May, up 6.7% from year ago levels, on improved affordability and government incentives.

Besides the elephant of the jobs report in today's room, weekly jobless claims and factory orders will also post. ECB President Trichet's comments will be scoured for any change in plans to increase asset purchases, although interest rate levels as expected remained unchanged.

In the corporate corner, Exelon (NYSE:EXC) increased its all-stock offer for NRG Energy (NYSE:NRG) 12.4% to $7.73 billion.

Deutsche Bank (NYSE:DB) began coverage of Cisco Systems (NASDAQ:CSCO) at a "buy" with a price target of $26, noting, "We anticipate accelerating growth to be driven by customer upgrades as network traffic strains installed products. We also anticipate good uptake for the new initiatives around unified computing and video networking."

Sepracor (NASDAQ:SEPR) announced that results of patient studies of its SEP-225289 failed to meet primary efficacy endpoint of reduced depression symptoms after eight weeks of treatment.

Morgan Stanley (NYSE:MS) is expected to post a second quarter loss of between $400 million and $1 billion, a worse showing than many of its rivals, on lower trading profits and higher charges, according to analysts.

Google's (NASDAQ:GOOG) CEO Schmidt in a interview noted the impact of government stimulus funds starting to work, 2009 economic conditions expected to remain "difficult," with a recovery in 2010, and Google results to be impacted by changing tax policies.

By Chip Brian, Editor-in-Chief, Comtex news Network

www.Comtex.com -- editor@mysmartrend.com

The following equities mentioned above include:

   Comtex SmarTrend Alert
   ----------------------------------------------
   Ticker    Last Close    Trend Direction    Trend Price      Trend Date
   ----------------------------------------------------------------------
   AXP        23.00         Downtrend           22.98          6/23/2009
   BAC        13.05         Uptrend             5.42           3/12/2009
   DB         60.39         Downtrend           59.70          6/17/2009
   CSCO       18.80         Downtrend           18.48          6/23/2009
   EXC        51.56         Uptrend             49.13          6/2/2009
   GIS        58.18         Uptrend             53.67          5/14/2009
   GOOG       418.99        Downtrend           409.69         6/22/2009
   INTC       17.04         Uptrend             14.57          3/17/2009
   KFT        26.61         Uptrend             23.41          4/30/2009
   JPM        33.77         Downtrend           32.85          6/17/2009
   MS         28.36         Uptrend             14.38          12/4/2008
   NRG        26.05         Uptrend             19.31          4/6/2009
   SEPR       17.89         Uptrend             15.98          6/2/2009
   

INX -- S&P 500: 923
   Lo: 921 Hi: 932
   Change: +4.01
   

http://www.mysmartrend.com/images/INX20090702.jpg

INDU -- DOW JONES: 8,504
   Lo: 8,448 Hi: 8,580
   Change: +57.06
   

http://www.mysmartrend.com/images/INDU20090702.jpg

QQQQ -- NASDAQ: 1,846
   Lo: 1,844 Hi: 1,862
   Change: +10.68
   

http://www.mysmartrend.com/images/QQQQ20090702.jpg

This report is divided into three sections. The first deals with our 5 proprietary market indicators, the second section examines important economic and business happenings which are expected to affect U.S. Stock market movements and the third section describes specific company announcement and earnings releases. Experience demonstrates that when these 5 indicators reach extremes they can shortly be expected to change direction and move in the opposite direction. When such happens in all or most of the 5 indicators, on or about the same time, followed by a move from below an extreme (oversold) to above that extreme (or vice versa for overbought), a change in market direction is very probable. The near term market moves are measured to identify the best possible returns for traders/investors. Daily price/volume examinations provide the best data upon which to base such forecasts. In this report though, intraday indicators are examined to improve the point of entry timing for the expected move.

Comtex News Network, Inc. is not a registered investment advisor and does not provide investment advice. Investors bear complete responsibility for their own investment research and decisions and should seek the advice of a qualified investment professional prior to making investment decisions. SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright, Comtex News Network, Inc. 2008

Comtex News Network, Inc. ("Comtex") obtains information from sources deemed to be reliable; however, Comtex does not guarantee the accuracy of any of the information or commentary provided. Comtex makes no warranties, expressed or implied, as to the fitness of the information for any purpose, or to results obtained by individuals using the information. In no event shall Comtex be liable for direct, indirect, or incidental damages resulting from the use of the information. Comtex shall be indemnified and held harmless from any actions, claims, proceedings, or liabilities with respect to the information and its use. Comtex does not make specific trading recommendations or provide individualized market advice. The information contained in the Morning Call product is provided as an information service only.

To subscribe to this newsletter, please visit http://www.mysmartrend.com/newsletter . To learn more about SmarTrend, go to http://www.mysmartrend.com or call Comtex sales at (212) 688-6240.

Copyright, Comtex News Network, Inc. 2008
   
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   11-28-2008 for AXP @ $22.58.
   
   As of Sunday, 06-28-2009 23:59, the latest Comtex SmarTrend Alert, 
   an automated pattern recognition system, indicated an UPTREND on 
   11-28-2008 for BAC @ $15.90.
   
   As of Sunday, 06-28-2009 23:59, the latest Comtex SmarTrend Alert, 
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   12-10-2008 for CSCO @ $17.42.
   
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