Day Trading – The Bullz And Bearz

S&P Technically Has Great Support Here

March 9th, 2010

S&P 500 index futures are lower this morning as commodities weakened ahead of a report expected to show another increase in crude oil inventories, a bearish sign for demand in the world’s largest energy consumer. Technology shares will also be in focus one day after Texas Instruments Inc (TXN.N) raised its quarterly earnings and revenue forecast. Oil prices slipped as expected on a stronger dollar and expectations that crude inventories will continue to rise. For now, here are the levels we are working with on the S&P. Actually there are some pretty good support levels below us so it’s going to take some serious selling to break these.

We Still LOST Jobs Last Week!

March 8th, 2010

Listen people, we still lost jobs last week. As much as the market’s will try to sugarcoat things now, the reality is here to stay. The report Friday said 36,000 U.S. jobs were lost in February, compared with forecasts 50,000, resulting in a rally that pushed the Dow and S&P to close at six-week highs.

So we LOST fewer jobs than expected but we still LOST jobs! Unbelievable.

For today please check out the SPX chart below. Watch for a sell-off this week down to the first support level at the least.

GS Goldman Sachs Stock Breakout

March 5th, 2010

Goldman Sachs (GS) stock had a huge breakout yesterday. Not only did it break out above a key area of price resistance yesterday but GS volume rose above average. The breakout above major resistance is shown on the daily chart below. Typically these breakouts will run to the next higher resistance level which we have shown here for you.

Bulls Fail To Hold Yesterday’s Highs

March 4th, 2010

The jobs numbers are coming out soon and of course will play a major role in today’s market direction. Yesterday is what I want to focus on though – with the market failing to hold the highs intra-day. See the chart below but the main thing to grab onto here is that they market rallied early morning and mid-day but then sold off just as fast into the close. What this means is that the market (at least for yesterday) had no confidence in higher prices. Again today will be important…

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Tuesday Morning SPX Support/Resistance Levels

March 2nd, 2010

Yesterday was a great day for the markets and anyone who dared go bullish. The day ended on a high note and ironically right at target resistance level. All the indicators for momentum and trend show clear bearish divergence even at these high prices. So for now the support/resistance levels on the intra-day chart remain the same and are updated below for you all.

I would watch for a slightly higher open and then a close lower on some good volume selling. As I talked with another coaching member last night – the VIX now below 20 for the second time has got me at least a little worried that the bullish move will be over soon and with a swift move lower.

The Big Picture

March 1st, 2010

USD, Oil, Greece – All Predicting Lower Move

February 25th, 2010

Here’s the scoop on this morning Briefing – U.S. stock index down after rating agencies said they may downgrade Greece’s sovereign debt, reigniting concerns over possible defaults in the euro zone that have dogged markets in the recent week or so. Moody’s said a downgrade of 1 or 2 notches is possible in the next month. As a result Oil has dropped on the dollar rise. For today – the SPX is hitting right up against resistance. The likely move is going to be much lower and heading back down to near the lows from the recent bottom.

Today there’s the report on employment and Federal Reserve Chairman Ben Bernanke’s second day of testimony.

Updated S&P Intra-Day Levels

February 24th, 2010

Futures look to be edging higher this morning as Ben Bernanke goes to Capitol Hill to address Congress yet again. For now the intra-day chart looks like this. Support and resistance are fairly similar in distance away so it will be all on Uncle Ben to devlier for the Bulls today.

Bernanke will deliver his twice-a-year economic report to Congress, will be under more pressure than usual. It’s an election year for lawmakers, whose constituents face near-double-digit unemployment, record-high home foreclosures and tough-to-get credit, especially for small businesses. The unemployment rate, now at 9.7 percent, is expected to drop only slowly. Many economists think it will take until the middle of this decade for the jobless rate to decline to a more normal 5.5 percent to 6 percent.

Consecutive Closes Odds Favor Sell-Off

February 23rd, 2010

The the Russell has been on a 9-day winning streak – the most consecutive closes higher in over 3 years! Odds clearly favor a lower close in the near futures and each day higher only means the odds will increase.

EEM Emerging Market ETF

February 22nd, 2010

The EEM iShares emerging market ETF has recently rallied on speculation Federal Reserve Chairman Bernanke may keep interest rates near record lows. It’s actually been on a good rally along with the markets since early February. A target somewhere around $41 may not be out of the question.

USD Rally Coming To An End?

February 18th, 2010

The USD Index has been strong over the last couple months but recently showed a bearish MACD cross on the daily chart. From here a move down to support is highly probable.

One of the key developments to note is in Gold, which drew strong support recently and could be ahead of the turn in the USD. Nevertheless, gold will need to break resistance soon.

Will Markets Continue Higher Today or Fall?

February 17th, 2010

Yesterday was very good for the over-sold markets. I mean we basically have told everyone since the HAMMER PATTERN that we would see a rebound in the markets. But now that we are here – will the market carry through onto higher prices or start to falter? On an intra-day chart I don’t see us getting much higher than the recent highs of early Feb.

The dollar fell as investors felt less of a need to stash their money in safer investments. Oil, gold and other commodities joined stocks as the beneficiaries of the market’s renewed confidence. And the stocks of energy and materials producers were among the day’s big winners.

European markets also rose following new plans by European Union leaders to push Greece to get its budget under control. European officials gave Greece one month to prove it can cut its deficits. Debt problems in European countries including Greece, Portugal and Spain have been a major factor behind weakness in global stock markets in recent weeks.

In the U.S., Kraft Foods Inc. and apparel retailer Abercrombie & Fitch reported earnings that beat expectations, while drugmaker Merck & Co. said profits jumped after the company bought its longtime partner Schering-Plough Corp.

Will The Indexes Break Resistance Today?

February 16th, 2010

The big question this week is: Will the indexes break resistance? This morning stock futures are higher after a long holiday weekend. Earnings and economic reports throughout the option expiration week are likely to be scrutinized to see if the U.S. economy is continuing to improve despite concerns about overseas growth.

European markets rose following new plans by European Union leaders to push Greece to contain its growing debt problems. European leaders on Monday said Greece will have another month to come up with a plan to reduce its deficit, but again pledged to support the debt-burdened country.

Oil prices also joined a broad-based rally in commodities, as the dollar edged lower against rival currencies while Gold futures gained $24 to $1,114 an ounce.

The junk bond ETF HYB is continuing to sell off this week as investors are selling out of “junk” bonds at the fastest rate since September 2005, in the latest indication that concerns over sovereign debt are spreading to other credit markets. Nearly $1 billion was withdrawn from US funds that hold high-yield corporate bonds (junk bonds) in the past month.

The HYG which is the most widely tracked ETF shows us how much investor’s are selling this off right now. Good support isn’t until much lower.

Greece Gets Bailout From EU – Not Good!

February 10th, 2010

Round 2 begins. Today the Greece bailout by the EU is sending the stock market futures higher. Basically the second straight day of gains, as hopes grew that the European Union will provide a rescue package for Greece.

SO LET ME GET THIS STRAIGHT! We used to only bailout companies and now we are bailing out ENTIRE COUNTRIES! Mark my words everyone – and listen clearly here – California will be next for a bailout. After that you CANNOT keep putting bad money on bad money. Eventually the house of cards WILL fall.

Has The Trend Change Already Happened?

February 8th, 2010

Now that another “lower low” has been formed in each of the major indices, we firmly believe that stocks are positioned to make another leg down within the 2-3 months. While short term indicator’s point to a minor rally here, the trend change is nearly complete. Looking at the daily charts of the DOW JONES, the next logical support level isn’t until 9,300.

Job Losses Post WWII Are Bigger Than Ever

February 5th, 2010

Job losses during the Great Recession have been huge and they’re about to get bigger. The labor department is also expected to release figures showing that the jobs shed during the recession are over 8 million. Check out this chart we pulled down showing Post WWII Recessions.

The new data will help illustrate the scope of the jobs crisis. Analysts think the economy might generate 1 million to 2 million jobs this year. And they say it will take at least three to four years for the job market to return to anything like normal. That takes us all the way out to 2014 before we see significant job growth.

Double Money in 11 Years?

February 4th, 2010

Historically speaking – YES! If you look at the long run average of the S&P 500 the after-inflation return of the including dividends is about 6.6% a year. Historically, that number has been about 7%, but thanks to recent economy and 2008 losses it’s come down significantly.

So effectively an investor could doubled their money in real terms every 11 years. Of course, that’s an average and the intra-year returns could be wildly different.

And The Blood Letting Starts

February 4th, 2010

Crude Oil Rally Stopped Dead?

February 3rd, 2010

Crude oil’s rally was stopped dead today on the recent stockpile news. The rallied which sent crude to a 2-week high at 77.41 after the US reported strong rise in pending home sales – has now lost some steam. Energy prices are now pulling back as they naturally would onon profit-taking. Moreover, API’s report showing higher-than-expected stock-builds damped sentiment.

API reported crude oil inventory rose +4.7 mmb in the week ended January 29 after dropping -1.8 mmb in the previous week. Gasoline and distillate stockpiles drew as refiners reduced production.

/ES and /NQ Short Term Forecast – Bullish

February 1st, 2010

The /ES and /NQ stock futures are on the rise early this morning after ending January last week with a month’s loss. There is a lot of economic news and earnings to get through today – namely the ISM, personal spending and income and Exxon earnings to name a few. All in all we still think a move back near 1,030 over the next two weeks is highly probable.

The Dollar Index, which tracks the U.S. currency against those of six major trading partners, ended a four-day advance, dropping 0.1 percent this morning as treasuries fell for the first time in three days. A weak dollar could help drive and inflate equity prices short term here.