Archive | July, 2009

Wk29: Market Recap

27 Jul

The market internals started and ended the week strong, however midweek showed some divergence as the broader market paused only slightly. We have seen quite the move higher off the lows set back in March 09. The S&P500 is +47% from the March 09 lows, Dow +41%, NASDAQ +55%, and Russell +60%. These moves are incredible and to have the VIX retract nearly 70 points is astonishing. Looking back only a mere 6 months and option premiums were through the roof.

We saw the S&P500 finally break out of the 956 level and once it did prices have not stopped. Nonetheless this 10-day run is due for a pullback. When one does occur, look for the old 956 resistance level to act as new support.

Wk30: Stocks to Watch

27 Jul

Look to stocks that act relatively strong or don’t pull back as much in relation to the market. Here’s a list of some of the strongest stocks in the market, any pullback in the broader market will provide a good entry for the following stocks that hold up relatively strong.
Watch Price and Volume!
Stocks we are looking to short.

Wk30: Market Forecast

27 Jul

In the week ahead look for these news announcements to act as potential market movers
· Mon: New Home Sales 10:00 AM ET
· Tues: S&P Case-Shiller HPI 9:AM ET
· Tues: Consumer Confidence 10:00 AM ET
· Weds: Durable Goods Orders 8:30 AM ET
· Weds: EIA Petroleum Status 10:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: EIA Natural Gas Report 10:30 AM ET
· Fri: GDP 8:30 AM ET

A good amount of news ahead in the week to come, all eyes and ears will be on Friday’s GDP number. We will be looking for a slowing in deceleration of the economy.
We see the S&P 1,000 level as the next target, but foresee a pullback to 956 before this happens. Getting short with a stop over the S&P 980 level would be one potential play here; however with many traders’ thinking in this way, a move above 980 could send the market catapulting higher as stop orders are triggered.

Wk28: Market Recap

19 Jul

With a market breadth of 28:1 and 10:2 confirming the intraday moves higher, it was apparent that they would hold throughout the week. The breadth is an indicator of volume flowing into up stocks compared to volume flowing into down stocks. Essentially 10 and 28 times more volume was flowing into up stocks than down stocks. Any reading over 10 is extremely bullish. 1:1 is parody.
When a pattern as strong and clear as a head and shoulders fails, the amount of people covering their shorts involuntarily pushes the markets higher. This is what we saw happen in week 28.

Wk29: Market Forecast

19 Jul

In the week ahead look for these news announcements to act as potential market movers
· Weds: EIA Petroleum Status Report 10:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: Existing Home Sales 10:00 AM ET
· Thurs: EIA Natural Gas Report 10:30 AM ET
· Fri: Consumer Sentiment 9:55 AM ET

No major economic accouchements this week, but Ben Bernanke speaks this week delivering his semi-annual monetary policy testimony to the House Financial Services Committee in Washington, Tuesday and Wednesday at 10:00 AM ET.

Looking for the S&P500 to consolidate here at the 940 level, a break of its recent high of $956.23 and we should see a large move higher perhaps to the 1,000 level.

Wk29: Stocks to Watch

19 Jul

After a failed head and shoulders pattern, the broader markets broke out and sent our bull picks soaring while deflating our potential shorts. The tech sector remains the strongest and we will continue to watch tech names like the infamous AAPL which has broken out above its prior highs. Keep in mind we are still in the midst of earnings season.

Wk27: Market Recap

13 Jul

A spinning top candlestick formation on the weekly bar of the S&P500 shows the sideways action we faced last week. As stated in the prior week’s forecast, volume is quite lackluster and we are seeing a strictly news driven market.
The weekly chart is quite messy and the price patterns forming are weak as well, with the exception of the head and shoulder formations on the S&P, Dow and Russell. The NASDAQ could be in a H&S formation if you look closely, but is clearly the strongest of all four top-line figures.

We saw a continued drop in crude oil and gold prices this week and will expect this trend to continue as recession troubles are not nearly over. The 10-Year Treasury Notes ($TNX) have fallen quite a bit as well from their prior highs and are now coming into a support area. We will continue to watch these correlations as the change.

Wk28: Market Forecast

13 Jul

In the week ahead look for these news announcements to act as potential market movers
· Tues: Producer Price Index 8:30 AM ET
· Tues: Retail Sales 8:30 AM ET
· Weds: Consumer Price Index 8:30 AM ET
· Weds: Empire State Manufacturing Survey 8:30 AM ET
· Weds: Industrial Production 9:15 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Fri: Housing Starts 8:30 AM ET
OPTIONS EXPIRY WEEK!

News, News, News, and lots of it will be the talk of the media this week. Earnings season is underway with Goldman Sachs (GS) Tuesday morning and Google (GOOG) Thursday evening and the FOMC minutes will be released Wednesday at 2:00 PM ET. The top line figures remain trading at levels of support and should continue to do so until a catalyst-either positive or negative, moves them higher or lower.

The EUR/USD has also been trading in a tightening range which could be forming a triangle. A break of its 1.38 or 1.42 level should act as another form of confirmation.

At this point volume is quite low and makes it harder to gauge the strength in market moves. We will be watching for a break of 869 or 900 on the S&P500 to be a convincing breakout.

The same goes for the Dow, NASDAQ, and Russell, a break of last week’s candle tails to the downside or a break of the large body candle’s high to the upside.