... 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.

.... July 12, 2007, 9:52am ...Clear breakout above 1527.45 in S&P 500 index confirms upside to test 52-week high of 1540.56 in near term sooner than moving below 1504.66. ... 7:30am ... Closing at 1518.76 within a trading range 1519.34 - 1506.76, while the advanced/decline was about even, the S&P 500 index bounced back from a sell-off in the previous session, as hopes for a strong second-quarter earnings season helped offset concerns that the meltdown in the subprime mortgage market will spill over to other areas. Android investors have been trained to buy on every dip and yesterday's action was no exception. Whether the gains hold is another story. For now, track the Dartline perimeters within the S&P range of 1504.66 - 1527.45 to justify near-term equity participation with limited risk ... Indeed, with no fresh bad news at hand, investors shopped for stocks and turned a cold shoulder toward Treasuries, which fell yesterday as investors took a breather from subprime mortgage market vibrations. Worries about the contagion from the subprime market remained in the forefront of investors' minds , but were offset by corporate profit optimism. Yet, the possibility that another shoe could drop on the subprime front limits how high bond yields can go and how far prices can drop. ... Fed Governor Warsh and Treasury undersecretary Steel stated the turmoil in subprime is not causing systemic risks. Philadelphia Fed President Plosser said most banks remain in "good shape'' to handle subprime losses. Typical spins to keep the bulls biting at the bit .The SEC's market regulation chief, meanwhile, said that Bear Stearns' (BSC 138.10 +0.14) troubled hedge funds should be able to "unwind in an orderly fashion." Could be true, if the big broker wants to "bury" the loss with a footnote. ... Although government officials downplaying any spillover of the subprime fallout helped improve overall sentiment, the remarks more notably sparked a much needed rebound in the S&P 500's most heavily weighted sector -- Financials. The rate-sensitive sector did not get any help whatsoever from bond yields, which closed at session highs. However, the pullback in Treasuries was due in part to an unwinding of the subprime risk premium that has recently been priced into bonds. The yield on the 10-year note (-15/32), which fell below the psychologically significant 5.00% level (to 4.98%) overnight, climbed to 5.08%. Look for yield to move above 5.25% in the mid-term.

... . 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.