Dartline™ First Look – morning directional planner

July 28, 2010, 7:00 am EDT .. The Standard and Poor’s 500 index futures down 0.40 to 1110.50, as the governor of the Bank of England said Wednesday that the need to stimulate the economy still takes precedence over concerns about high inflation at a time when the outlook for the global economy remains uncertain. Governor Mervyn King told Parliament’s Treasury Committee, “We continue to face the challenge of rebalancing our economy away from consumption towards net exports, and raising our national savings rate. During the rebalancing, there is a risk that the level of money spending in the U. K. will remain weak, with the economy operating below capacity. That would push down on inflation potentially to a rate that is significantly below the 2 percent target. … The key underlying causes of the crisis in terms of the imbalances in global demand have still not been tackled. Those imbalances are likely to be larger this year than last, and will probably still be around three-quarters of their level at the peak immediately prior to the crisis.” … Meanwhile, The yen was down against the dollar, and the euro was up. Oil prices were above $77 a barrel after a report showed U.S. oil supplies unexpectedly rose last week, suggesting demand remains subdued. Britain’s FTSE index of 100 leading shares was up 0.3 percent to 5,365.67, Germany’s DAX was slightly higher at 6,209.26 and the CAC-40 in Paris added 0.4 percent to 3,680.01. … China’s central bank also said it believes the mainland’s economy is unlikely to suffer a “double dip,” or relapse into a slowdown, helping Chinese shares to rebound to a 12-week high, led by banks and real estate. The benchmark Shanghai Composite Index jumped 58.3 points, or 2.3 percent, to close at 2,633.66, the highest since May 14. Japan’s benchmark Nikkei 225 stock average outpaced China, with a 2.7 percent jump to 9,753.27 after laser printer and digital camera marker Canon reported a surge in quarterly earnings. Sharp increases in Japanese automakers’ global production for the first half of the year, underlined a recovery in demand for new cars. Exporters were also helped by a softer yen, which boosts the value of their repatriated profits and makes their goods more competitively priced abroad. The Japanese currency approached 88 yen to the dollar — up from earlier this month, when the dollar sank to the mid-86 yen range. The improvement in sentiment caused broad-based buying. … In currencies, the dollar rose slightly to 88.04 yen from 87.76 yen late Tuesday in New York. The euro rose to $1.2996 from $1.2988. Benchmark crude for September delivery was down 9 cents at $77.41 a barrel in electronic trading on the New York Mercantile Exchange. … The current spin  across the board: Two weeks ago, people were wondering whether the U.S. was slipping back into a double dip. In fact, corporate results are very good. The market is starting to get the message that the economy is not so bad. Okay — buy the noise at your peril, but play the equities market like its true. Follow yesterday’s script — Major test today for S&P 500 index at interim resistance of 1,117.51, last held on June 18, 2010. With low volume and exaggerated swings, stocks are being driven by earnings plays. Trade the tape and remain flexible. Take profits and don’t allow the enthusiasm to buy paper cloud your mid-term view.