The internals do not paint a clear picture of last weeks price swings (Click on the image to read more about the A/D Line and Breadth). With a fake out to the upside mid-week, the bears finished the week on top. Economic news was grim as news of the federal government taking over Citigroup along with a weaker than expected fourth quarter GDP of -6.2% on Friday sent stocks lower.As we continue making these new lows, the VIX (Volatility Index)…
In the week ahead make note of these important economic announcements.· Mon: Personal Income and Outlays 8:30 ET· Mon: ISM Manufacturing Index 8:30 ET· Fri: Employment Situation 8:30 ET Also pay attention to Tuesday’s Pending Home Sales Index at 10:00 ET and Thursdays Jobless Claims 8:30 ET. A move lower seems likely, but we are still setting up with some long positions because we feel the risk/reward is such that a sharp rally to the upside will occur at the…
Last weeks trading session didn’t produce much. As mentioned in a previous write up called “First 15-min. Rule” we do nothing the first 15 minutes the market is open. This gives us an initial gauge of market direction. Typically if a stock gaps up or down off the open it fills, therefore if a stock we are thinking about going long gaps up above our entry price, it will either begin to fail in the first 15 minutes, or move…
While the media focuses on the Dow, a more accurate gauge of market action is the S/P due to the fact that it is a barometer which contains 500 stocks versus the 30 in the Dow. We have to remember that the market prices in the emotions of traders and investors because it is in essence a balance of greed and fear. Gold continued its bull run touching $1000 an ounce on the London board. Any pullback into the 90…
Get out your long playbook. When everyone thinks sell, it’s time to buy!The market prices in the FUTURE speculation of the economy so we believe that any sign of a positive 2010 or 2011 will produce a huge rally over the months to come. In the week ahead make note of these important economic announcements.· Thurs: Durable Goods 8:30 ET· Fri: GDP 8:30 ET We also have Consumer Confidence on Tuesday, Existing Home Sales Wednesday, New Home Sales Thursday, and…
All of them. Especially the strong ones. Here are a few that stand out… Long: ALXN, AMZN, CHE, GILD, HANS, IPI, MOS, NITE, POT, SLGN Short: FE, KR, MMS, PLCE If we get a rally, you can expect the weakest sectors, financials, materials, and transports to get the biggest lift. Whereas the current leaders, healthcare, telecom, and utilities may not see as large of a rally at these levels.
Taking a look at the S/P and Dow, we are at, and coming into a major support level. The Dow, closing at the lowest level since 1997, has the potential to break down into “open space” meaning the next support level is not clear. The S/P is not far behind, just off it’s November 08 lows which coincide with the lows of 2002/03. If we see a break of the S/P 740 or the Dow 7450 we could be in…
With recent US and global economic new heavily influencing the market, we have seen morning gaps off the open. One indication on which way these gaps will play out is to look at the EUR/USD, as it trades 24-hrs a day.We recently saw a triangle breakdown in the EUR/USD. Measuring the high/low points of the EUR/USD triangle we get a target of 1.22. The Dow is sitting right at its support level of 7500 and any break lower may induce…