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Mon 9th

JUNE

Reports / Data

Sanctuary Group (I) PBT 6.1m exp. Renold (F), Warner Estate Holdings (F)

09.30 May PPI Input & Output figures 09.30 April Industrial Production m/m +0.2% exp.

16.30 May BRC Retail Sales Monitor y/y

Gordon Brown announces Euro Decision to Parliament (pm)

Tue 10th

Dairy Crest (F) PBT 76.8m exp. London Scottish Bank (I) PBT 19.6m exp. Severn Trent (F) PBT 238m exp. Blick Plc (I), Charles Stanley (F), First Choice Holidays (I), Intechnology (F), London Merchant Securities(F),

RPC Group (F), TBI (F), VP (F)

Cadbury Schweppes Trading Statement

09.30 Non-EU Trade Balance -2.5bn exp. BAA Traffic Figures

FTSE Review Committee Meets Tomorrow changes based on tonights closing prices.

Wed 11th

Oasis Healthcare (F) PBT 0.5k exp. Compco Holdings (F), Henlys Group (I), Radstone Technology (F), Speedy Hire (F), Yates Group (F)

Premier Farnell (AGM), Cobham (AGM)

09.30 May Unemployment 0.8k exp. 09.30 April Average Earnings 3m ma y/y +3.5% exp.

Thu 12th

Wincanton (F) 28.2m exp. Alba (F), Babcock International (F), Jarvis (F)

Antofagasta (AGM)

Traders Meeting in Sunderland.

09.30 New Construction Orders US:

Adobe Systems (Q2), Heinz (Q4)

13.30 May Import Price Index m/m flat exp. 13.30 May Advance Retail Sales flat exp. 13.30 April Business Inventories +0.2% exp. 13.30 Initial Claims (w/e 7/6) 423k exp.

Fri 13th

Trading Thoughts Sunday 8th June

Company Thoughts For Next Week

Monday:

The Government's decision on joining the euro will take centre stage in the City.

At 9.30 look out for the important April Industrial Production where a rise of 0.2% is expected.Sanctuary Group is expected to deliver good interim figures on Monday. Its list of recording artists include Dolly Parton and Alison Moyet is less prone to the weakness in album and singles sales due to Internet piracy. Tuesday:

Severn Trent water the only FTSE 100 company with results next week should say thet its overall performance had been in line with expectations. But cost pressures unforeseen when the current regulatory price controls were set in 1999 are likely to have hurt its overall operational performance. Its Biffa Waste Management have been hit by the economic climate with its profits to fall 7% to 10% while its Severn Trent Services unit poised to report no growth in profit. Forecast profits before tax and any one-off charges of around 242m, from 233.3m in 2002. Dairy Crest, supply cheese brands such as Cathedral City and Davidstow, Oversupply is likely to have reined in profits expected to be 76.5m from 73.7m.TBI, who run Luton, Cardiff and Belfast airports are expected to show growth due to the boom in low-cost air travel. They are less exposed to the fall off on long-haul traffic experienced by BAA. Despite the withdrawal of British Airways from its Belfast route analysts expect pre-tax profits of 23.3m for the year ended March, from 16.6m last time. First Choice Holidays now the UK's biggest quoted holiday company by market value reports interims on Tuesday. It's expected to report a loss for its first half. That deficit should be similar to last year's loss of 46m. Of greater interest will be First Choice's outlook on holiday booking patterns.

Cadbury Schweppes update will be monitored for comments on trading after the confectionery and soft drinks group said last month the trading environment remained difficult. This is a share which could possibly be set for a big fall. WednesdaySpeedy Hire tool hire are believed to have gained market share in the past year with a contribution from Jewson's bought last year.. They release full-year figures with sales expectedto be up 7% & profits at 18.2m, from 15.4m last year.Yates Group, run the Yates's and Ha! Ha! bar chains, has issued two profits warnings in the past year. The CEO said in April that rumours of its demise had been 'greatly exaggerated'. Sales were down but a modernisation programme was beginning to help. Full year profits are predicated of 9.7m for the year to March from 12.1m. Thursday: Babcock International defence services support group has been exiting loss-making operations, repositioning itself in support services and acquired SGI services. Recent new contracts at Faslane naval base and the Royal School of Military Engineering should have compensated for declining work at Rosyth naval base. Analysts are looking for 17.5m before tax and charges, compared with losses of 13.9m in 2002.

Friday:  

Tesco Britain's biggest supermarket chain updates investors on Friday and holds its annual general meeting.

Market Thoughts  As Limpsfied Chartist from Global Markets Training says "The Trend is your friend except for the kink at the end" .

For several weeks we have simply used the trend to predict the FTSE would continue its rise towards the important 4200 level. This has given us a run of some 3 months or so of correct calls but next week is far more tricky!

An indicator that the party may be over can be seen on the chart where this year  rise on the FTSE rise (in blue) is set to meet the 3 year downtrend (in red). This is very clear but the ghosted out background Dow Jones chart need some artistic licence in drawing it's long-term downtrend trend line. 

So will the recent uptrend have enough momentum to beat the longer term downtrend ?  The chart can give us some guidance, in 3 years the FTSE longer term resistance has proved to be to strong for any major gains. Whereas on the short term the DOW has shown more volatility and has managed to rise up to 10% above it's longer term resistance  level.

We also have some other possible indicators that the market may slow down or halt its rise from this point.

The fall back on the DOW on Friday after hitting new intraday highs for the year could be a further indicator that sellers moved in as the market reached the 3 year resistance line (In grey on the chart)

The bond market is also rallying which normally happens when when the economy is stagnant or weak although this could also be due to the fears of deflation. But also several financial services giant and assurer's are now moving funds from equities to bonds. This may be the reason that during the last few days I have noticed some large institutional sell orders being placed in the evening auctions which has knocked the FTSE back at the close of the day.

Historically the markets tend to fall back during the quieter summer months

Analysts on Bloomberg, CNBC etc seem far less bullish which may indicate a subtle change in sentiment

So the BIG question, where are we likely to go next week? Logically we should go with the uptrend but the charts tell us that further upside gains may be limited. My guess is that further progress may well be difficult to achieve and we could end next week with a fall on the markets.  Over the last 3 months I have had a 60% mix on my longer term positions in favour of long's. This has now been adjusted to a 50/50 mix with Lloyds being changed from a buy to a sell. However if this is the end of the Bull run I do not believe we will have an initial big fall on the FTSE. As can be seen on the chart when an uptrend runs out of steam it tends to trade around the resistance point for quite a while before beginning to drop..

That's it for another week and now I look forward to reading your market thoughts.

Wishing you all good trading!

David

David@FTSEDOW.COM  www.FTSEDOW.com    All the above comments are purely a personal opinion and no investment advice is intended.  Please do your own research.