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Five Things You Need to Know: ISM, NYSE Bullish Percent, El Hanging Chad?, Hollywood, Firecracker

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What you need to know (and what it means)!

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Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. ISM

Today the most important piece of economic data due out is the Institute for Supply Management's Manufacturing Index for June, scheduled for release at 10 a.m.

  • Consensus, according to Bloomberg, is that manufacturing expanded in June.
  • The median forecast of economist's surveyed is that the factory index rose to 55 in June from 54.4 in May.
  • Anything above 50 is considered "economic growth."
  • The survey is based on responses from more than 400 companies in 20 industries.
  • Rather than focusing on the index headline number, however, the key areas of focus will be the gauge of prices (expected to fall sightly) and commodities reported up/down in price and in short supply.
  • In last month's report, nearly all commodities were reported up in price while only particle board, stainless steel and steel were reportedly in short supply.
  • Another report showing very few commodities in short supply would raise more questions about the nature of commodities price increases.

2. NYSE Bullish Percent

Friday's market action reversed the NYSE Bullish Percent Index to Xs. Is this a positive context shift, or last call?

  • First, what is the NYSE Bullish Percent? Point & Figure Bullish Percent charts are simply charts that measure the percent of "something" doing "something."
  • The NYSE Bullish Percent measures the percent of stocks on the NYSE that are on point and figure buy signals. (For Minyanville's NYSE Bullish Percent Primer click here and here.)
  • If the chart is in Xs, it is typically considered positive; if the chart is in Os it is typically considered negative. Now that the chart is in Xs is the coast officially clear according to this indicator?
  • Not necessarily. We wrote recently about the "Bearish Catapult" pattern in the NYSE Bullish Percent.
  • That "Bearish Catapult" pattern remains intact and the reversal up to Xs for this chart is occurring within the context of lower highs and lower lows dating back to January 2004.
  • Moreover, as the chart below shows, the trendline from the October 2002 lows has now been violated despite the reversal back to Xs.
  • In my opinion this suggests the negative structural changes that began in 2000 are now back in force, and that any reprieve from those negative structural conditions are destined to be short-lived and temporary.
  • Last call.

NYSE Bullish Percent Chart
(Courtesy StockCharts.com)

3. Deja Vu in Mexico: ¿Ha visto cualquiera senorita Katherine Harris?

In an election that is too close to call, Mexicans learned late last night that they will not know who their next president is until at least Wednesday

  • Ignoring pleas from the Mexican Federal Elections Institute for caution and reserve, the two Mexican candidates immediately declared victory.
  • López Obrador of the Democratic Revolutionary Party, said the official count put him ahead by 500,000 votes.
  • Felipe Calderón of the National Action Party, said exit polls put him ahead with 38 percent of the vote to his main opponent's 36 percent.
  • López Obrador promised to bring a combination of social welfare programs and projects to build the country's infrastructure.
  • Calderón promised to continue the free-market, pro-globalization policies of Fox.
  • Reports were that turnout in the country's election exceeded 60 percent of the more than 71 million eligible voters.
  • Following procedures outlined by Mexico's election law, the federation will initiate a final count of all votes on Wednesday.
  • The winner of Mexico's presidential election will most likely be the candidate that successfully carries Miami's Dade County and Columbus, Ohio.

4. (Hollywood) California Love

California...knows how to party
California...knows how to party
In the citaaay of... Hollywood

Whoa, Tupac, rewind that piece and back it up, did you say Hollywood? Apparently so. "Even Hollywood tryin to get a piece baby," Says Tupac.

  • Through the first 25 weeks of the year, domestic box-office revenue - helped by a boost in ticket prices - was up nearly 5 percent, to $4.6 billion, according to the tracking company Exhibitor Relations the New York Times reported.
  • Movie attendance was up about 1.65 percent to 699 million for the first 25 weeks, after a sharp decline in 2005.
  • For the seventh consecutive weekend total ticket sales in the United States outpaced last year's performance, the Times said.
  • In recent years the film industry has struggled with sagging box office due to competition from cable, the Internet, video games and dvd rentals.
  • But Nielsen Entertainment released a study in June that suggested that those who go to the movies most often, 10 times per year or more, are also those who most frequently buy DVD's, usually considered a chief rival for box-office dollars, the Times said.
  • The Wall Street Journal reported last year on efforts by movie theater chains to make movie-going a pleasant experience, including offering money-back-guarantee refunds.
  • Just proves one of the oldest rules of business: The less you appear to hate your customers, the more likely they are to continue doing business with you.

5. Five Things You Need to Know About Fireworks

Tomorrow, on July 4, U.S. citizens will celebrate Independence Day by purchasing and detonating millions of Chinese-manufactured explosives.

  • The world's first "fireworks" were manufactured during China's Han Dynasty by roasting bamboo to produce a loud "pop."
  • The original purpose of the sound was to frighten away evil spirits.
  • China is the world's largest manufacturer of fireworks.
  • Estimates are that China exported over 6 million cases of fireworks to the U.S. in 2005.
  • As if it weren't already ironic enough that we celebrate "Independence Day" by purchasing and detonating millions of fireworks manufactured in China, modern fireworks contain significant heavy metals and pollutants including sulfur-coal compounds and barium which can contaminate water supplies and possibly produce acid rain.
  • But you know what? If you don't like it, how about I give you a little ride on what I call my "boot stool" before you up and move to China?

God Bless America... and no one else!

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No positions in stocks mentioned.

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