... The S&P 500 closed at 1,549.52 2.98 - 0.19% as the index consolidated last week's gains. While the current market conditions should be profitable for investors who can handle the volatility, managing emotions and remaining focused to the near-term objective cannot be executed unless you have a well defined plan. With our market perimeters set within the channel of 1590 to 1520, you can trade both sides of the market knowing in advance what to expect. Indeed, the bias favors the upside to commit more long assets, but you have a reasonable idea of how far to extend your stock positions. ... Even though Dartline features the broad S&P 500 index, a look at the stocks that pulled back in the second half of trading Monday, and the relationship of blue chips that helped the Dow mark a record high and its fourth straight up session, would be prudent. While U.S. stocks finished mixed Monday, the Dow Jones Industrial Average closing in record territory helped by take-over speculation over Verizon Corp., as the broad market fell ahead of key earnings later in the week. The rally continued from last week towards the key 14,000 level, as investors put money in multi-nationals that benefit from global growth and a weak dollar. Pushing a new milestone when a near term psychological barrier is about to be breached usually takes a few day to adjust to the event. Investor enthusiasm will pulls the general market higher. ... While investors park more money into equities, two jokers remain in the deck: (1) crude oil prices, and (2) sub-prime loans. ... (1) Crude-oil futures' benchmark contract closed above $74 a barrel Monday for the first time in 10 months, but finished below the day's peak as reformulated gasoline futures fell to their lowest level in a month. The oil market expects data due later this week to reflect a rise in U.S. refinery activity and an increase in motor gasoline supplies, prompting a decline of more than 4% in gasoline futures. However, continuing concern about oil production in the North Sea and recent predictions for growth in oil demand will keep crude prices high. The $75 level for oil is a near-term resistance level that will be jumped on its way to $80 within the next two months. Indeed, oil is undoubtedly bullish, especially when the recent run-up in price cannot really be tied to any one significant event, but a combination of forces that have moved the market. This has particularly frustrated bears who are throwing up their hands trying to figure out how they got things so wrong. Yet, the facts are clear: The bears underestimated demand and demand going forward will accelerate - a no brainier! ... (2) The sub-prime scenario has caused Financial shares to work lower ahead of key earnings from JP Morgan Chase (JPM ), which could reveal an impact from the meltdown in the subprime mortgage market. Expected earnings in two weeks to give us a better incite into the housing and sub-prime mess. While they will be poor, the revenues generated from the takeover activity should cushion the blow. In the same boat are Goldman Sachs (GS) , Lehman Brothers (LEH), Bear Stearns (BSC ) , which saw two of its hedge funds brought to near-collapse due to their exposure to subprime markets. If JPM, GS, LEH and BSC do reasonably well in this quarter, the general market will move up accordingly to thrust above 1590 in the S&P 500 index.

... July 16, 2007, 7:30am ... Starting the week at 1552.50, the S&P 500 index is strategically position to test 1590 in the near term. Retain support at 1520.47, while seeking long mid-term investments candidates. Further gains in equities are likely as corporate earnings will meet expectations. The major catalyst to Dartline's projections is the weaker dollar, which helps U.S. exports by making them cheaper in overseas markets, while enhancing the overseas profits of multinationals when repatriated into dollars. Cheap dollars attracted foreign investors to American stocks. Thus, a major shift in asset preferences - buy stock, sell bonds - has occurred. Bonds are not a risk averse alternative because interest rates are going higher, even though the Fed will hold rates at 5.25% . ... Last week the dollar weakened 1.2% against the euro and 1.1% against the yen. Look for a near-term test on the $1.40 level for the euro. Indeed, the US dollar is the single biggest exception to the robust domestic and international equity and commodities markets, which the global investment bankers have demonstrated by accumulating U.S. equities and rising values for primary commodities. This trend has been effectively pursued since March 19, 2007 when the S&P stood at 1386.95. The desire to convert U.S. dollars (paper) to U.S. equity is very compelling, and usually not the case for the country issuing the paper. But the U.S. is in a very unique position as the only superpower with its international footprint of the multinational companies based in the U.S. ... Earnings growth consensus is expected to rise 4.2% in the second quarter (Dartline 6.7%), marking the second straight period in which earnings growth falls below 10%. Up until this year, earnings grew more than 10% for 14 consecutive quarters. The economy slowed to 1.7% in the first quarter, but investors remain optimistic that global growth will help multinational companies, which are heavily represented on the S&P 500 index, to continue fueling earnings growth. For now, don't worry about the softening economy and continue to participate in U.S. equities providing that 1520.47 holds. ... Even with earnings taking center stage, remained focused on economic data that may offer important clues to the direction of the economy and the U.S. dollar. Two measures of inflation -- the Producer Prices Index are due on Tuesday and the Consumer Prices Index on Thursday; including statistics on housing starts. Reviewed in part or whole, represent a potential market-mover. ... On the carry trade front: The lower U.S. dollar, following the Bank of Japan's decision to leave rates alone, reinforced the liquidity of the carry trade and helped boost those large-cap, multinational companies that benefit the S&P 500 index. The yen carry trade refers to borrowing the Japanese currency at lower interest rates to invest in higher yielding assets, such as U.S. stocks and bonds.

... July 13, 2007 ... ...The S&P 500 rose 28.94, or 1.91 percent, to 1,547.70, above its record close of 1,539.18, set June 4, and a mere six points from its all time top. Dartline suggests you change near term support to 1520.47 and up top-side resistance to 1590. Consider both sides of the market, take profits, eliminating laggards and be watchful for earnings contraction candidates. ... The rally, which included the Dow's biggest one-day gain in more than four years, was perhaps surprising given that the fact that no extraordinary announcement or other catalyst usually seen with such a huge gain, and that it came before most companies have announced their second-quarter earnings. The rise also marked a sharp contrast to the start of the week, when stocks fell sharply amid concerns that some hedge funds could succumb from ill-placed bets on the housing sector. So what's the deal? ... Short covering on the S&P 500 index was evident during the day and accelerated before the close with at least $35 billion appeared to have been retired. Could it be that a few mainstream retailers, including Wal-Mart Stores Inc. (the world's largest retailer, which posted a better-than-expected 2.4 percent jump in sales at stores open at least a year), Target Corp. and J.C.Penney Co. Inc., offered upbeat sales outlooks for July? Consensus sighted optimism for back-to-school sales even in the face a softer economy. Yet, in general, retail sales appeared to be crimped by higher gasoline prices and a tepid housing market, as the outlook for the coming months would be difficult to ascertain. Then you have the Alcoa (AA) factor, which got outbid for Alcan by Anglo-Australia mining group Rio Tinto Ltd/Plc. Then, yesterday afternoon late Standard & Poor's corrected the volume of residential mortgage-backed securities it has placed under review for potential credit ratings downgrades on Tuesday to $7 billion from $12 billion, which gave a big pop to the oversold Financials. Take you pick or find a better idea. Don't go crazy for an answer, just go with the flow and focus on the technicals - S&P 500 index near term support at 1520.47 and up top-side resistance at 1590. Consider both sides of the market, take profits, eliminating laggards and be watchful for earnings contraction candidates as value traps. ... Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 5.13 percent from 5.09 percent late Wednesday. The dollar was generally lower against other major currencies, dropping to a new record low versus the euro and a 26-year low against the British pound. Gold prices rose.

... . Purpose of the arrows: - projecting that DJIA, Nasdaq and S&P barometers will close higher at the end of the day. - projected consolidating barometers with limited directional action. - projecting all three barometers declining for the days.