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Oil Bounces. Watch These Resistance Levels.
This morning the United States Oil Fund(NYSE:USO) has rallied higher from the opening bell. The USO has been under selling pressure over the past few trading sessions. This morning the USO is trading higher by 0.35 cents to $43.10 a share. Short term day traders can watch for intra-day resistance on the USO around the $43.25 area and more around the $43.50 level. Small pullbacks could occur around both levels.
InTheMoneyStocks.com
JPMorgan Chase Gaps Then Craps
JPMorgan Chase & Co. (NYSE:JPM) opened nicely higher this morning after reporting earnings that beat expectations. While the earnings were solid, the stock could not hold the gains and has fallen sharply, now trading at $46.06, -0.58 (-1.24%). The key to this level is the even number and double bottom shown on the chart below. This could be a solid level for support on JPMorgan for a bounce.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
Money Rotation From Commodities To Tech
As the markets bounce today, the technology sector seems to be the strongest. Stocks like Apple Inc. (NASDAQ:AAPL), International Business Machines Corp. (NYSE:IBM) and Google Inc. (NASDAQ:GOOG) are all higher, while oil stocks like Exxon Mobil Corporation (NYSE:XOM) continue to fall.
It appears, over the last three days a rotation has started to take place from commodity stocks back into technology. This is clearly seen by the action in Apple Inc. of late. Over the last three weeks Apple has barely been able to keep its head above water, falling almost every day, even when the market was rallying higher. This was partly due to re-balancing but also due to money being pulled out of technology and pushed into oil plays like Exxon. Then oil began to collapse, as oil fell from $113.00 to $106.00, oil and all commodity stocks saw a mass exodus. As the mass exodus occurred in the energy sector, Apple Inc. started moving higher. Today, the commodities have continued to sell, Apple and other technology stocks are moving higher.
This movement in these sectors can clearly be pinned on money flow as Wall Street rotates billions in investment capital from one sector to the other.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
How: Calling The Oil Bounce Today
Oil bounced today after dropping sharply the last two days. After topping out around $113.00 per barrel last Friday, oil collapsed into the $105.00 range. This drop over the last two days scared many speculators into selling oil. News hit the market that Goldman Sachs Group, Inc. (NYSE:GS) had told their clients to sell. In addition, there seems to be more signs that the sharp incline in oil prices have sent consumers into hiding.
Oil is bouncing today, with the United States Oil Fund LP (NYSE:USO) trading at $42.72, +0.42 (+0.99%). Oil was going to bounce today, there was no doubt about it. I made the bullish call yesterday and I will explain why?
Prior to the latest move in oil that sent it to $113.00 and the USO to $45.20, oil had been hammering on the 2010 high. This 2010 high happened to be at $42.15 - $42.20 on the USO. Note the chart below clearly showing this pivot high from 2010. Finally, oil broke through this major resistance point, spiking dramatically higher.
After the USO hit $45.20 on Friday, it started the drastic sell off over the last two days. As it fell, guess what level it fell into? The USO slammed into the $42.15 - $42.20 level which was the former breakout resistance level from 2010. This now becomes massive support and an ideal level for a bounce. Sure enough, today speaks for itself with oil bouncing sharply. It is a beautiful thing to learn the charts.
Not only did I alert a bounce on the USO and on oil but I also covered my Chevron Corporation (NYSE:CVX) short. In addition, it made sense to also go slightly bullish on the markets due to the fact that if oil bounced, most likely the markets would get a small bounce as well. Sure enough, the markets opened higher today, getting that bounce on oil.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Casino Stocks Hit Blackjack
All of the leading casino stocks are soaring higher this morning. Traders should now be alerted to the action in these leading casino stocks whenever the Asian stock markets trade higher. The business in Las Vegas, Nevada is not the reason for the strong reaction in the casino stocks. It is the Macao market that is thriving and driving the casino names higher at this time. Last night, both the Shanghai Index (China) and Hang Seng (Hong Kong) indexes were up sharply higher.
Wynn Resorts Ltd.(NASDAQ:WYNN) is trading higher this morning by $4.53 to $134.69 a share. This stock remains the strongest of all the leading casino stocks. The stock will have some short term intra-day resistance around the $135.00 and $136.00 levels. The daily chart remains very strong as the chart is very close to testing its 52 week high made just five trading days ago at $137.10 a share.
Las Vegas Sands Corp.(NYSE:LVS) is trading higher by $1.19 to $44.65 a share. The stock should consider changing its name to Macao Sands since that is where it is driving its revenue from. Short term traders can watch for intra-day resistance around the $44.65 and 45.00 levels. The stock could also have some daily chart resistance around the $46.50 area.
MGM Resorts International(NYSE:MGM) is also surging higher this morning by 0.81 cents to $13.41 a share. MGM has a large presence in Macao and looks to be benefiting from their stake in Asia. MGM stock will have intra-day resistance around the $13.60 area. The stock will have a fair amount of daily chart resistance around the $14.00 area.
When the Asian markets rally it is now beneficial to the leading casino stocks that have a presence in Macao, China. This market is the growth engine for the leading casino stocks at this time.
Nicholas Santiago
InTheMoneyStocks.com
Markets: The Truth Revealed
The markets opened sharply higher. The key to the markets higher open was a crushing of the Dollar that took place overnight. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.53, -0.14 (-0.65%), making a new 52 week low. A weaker Dollar is positive for the markets as stocks are treated like commodities in regards to Dollar fluctuations. A drop in the Dollar means individual companies must be valued higher in terms of Dollars just like a drop in the Dollar means gold must be valued higher in terms of the greenback. Black box trading programs are programmed this way. Until those programs are changed, expect the same going forward.
The SPDR S&P 500 ETF (NYSE:SPY) pushed to a high of $133.99 in the first ten minutes of the trading day before collapsing lower. This level happened to be a perfect triple top from the last two trading days and a major sticking point of resistance. The sharp fall in the markets can be blamed on the technical resistance points as well as a continue push in oil. Spot crude is nearing $112.00 per barrel and showing no signs of slowing. The United States Oil Fund LP (NYSE:USO) is trading at $44.53, +0.54 (+1.23%). Silver and gold are both spiking higher again, making new 52 week highs. As volume lightens up this afternoon, look for the markets to start to float sideways, possibly even slightly higher.
With commodity prices soaring, there is just one group to blame, the Federal Reserve. Their weak Dollar, print money policy is the culprit. By flooding the world with tons of new Dollars, the Dollars value declines. As the value of the Dollar declines, commodity prices must rise. This effect was obvious from the very start but did little to deter Ben Bernanke and his minions. As commodity prices have soared, the middle class is fading. Articles have been written that to survive as the middle class, many have to work two jobs. As energy and food continue higher, the middle class is finding themselves to be no more. The poor in this country, those that could barely afford to buy food to feed their family are relying on food stamps. As prices rise, this is not even enough to help them get by.
The Federal Reserve has said food and energy do not count when looking at inflation. That is probably the biggest joke ever spoken. What is the largest percentage of income spent on by the average American family? After housing, food and energy. In this simple Chief Market Strategists view, food and energy should be the main keys to monitoring inflation.
The bottom line is this, two years ago I spoke of the repercussions of a print money policy. I discussed how energy and food would rip higher and the average American, with few jobs and slow wage growth would get crushed. This is happening and will continue to happen as long as the Federal Reserve continues to print money and the Dollar goes down. I believe the Federal Reserve to be decently intelligent, therefore I must conclude they knew this would happen. That leaves me with one final thought, they wanted this to be the outcome. Was this all planned? Are they attempting to create two classes, rich and poor? Time will tell but without wage growth and jobs, the hardships are just starting as oil heads north of $112.00 per barrel.
Related: Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), Randgold Resources Ltd. (NASDAQ:GOLD)
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
Keys: Markets Recover After Massive Sell
After a late morning massive sell off, the markets have recovered, inching back to the flat line. Earlier, another massive earthquake struck Japan measuring 7.2. The markets freaked out on fears of more economic hardships, a possible tsunami and of course more nuclear meltdowns. However, it looks as if the impact may be on the minor side and the markets are responding by moving back to the flat line.
Oil is trading higher again today and looks to be headed towards $110.00 per barrel. The United States Oil Fund LP (NYSE:USO) is trading at $43.67, +0.30 (+0.69%). Not only has an economic recovery taken place, but fear over nuclear energy has put more emphasis on oil as the main source of energy. The uncertainty in the Middle East continues and is also adding fuel to the fire.
Solar shares are weak again today which is somewhat unusual on the back of higher oil prices. Usually, the higher oil goes, the more people will look to alternate energy. That is not happening today nor has it happened over the last week. This is structural weakness that must be watched closely. Often times when weakness like this is seen in a sector that should be strong, news will break about a miss in earnings or margin pressure. Keep a close eye on this sector over the next couple weeks. First Solar, Inc. (NASDAQ:FSLR) is trading at $147.39, -3.21 (-2.13%).
The fertilizer stocks are slightly weaker again today. Yesterday, Monsanto Company (NYSE:MON) fell sharply on earnings taking the sector with it. Today, it appears some weakness remains.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
Action Markets: Another Earthquake Strikes Japan
The markets opened quietly today on the back of an expected interest rate hike by the ECB and Jobless Claims that came in at 382,000. These were no shock to the markets which opened slightly lower on a stronger Dollar. No sooner had the markets opened, a flurry of buying came in as the Dollar fell down in its normal daily spiral. The markets advanced towards the high from yesterday with the SPDR S&P 500 ETF (NYSE:SPY) hitting $133.98. All of a sudden, the markets turned down, collapsing with ferocity and massive volume. News had hit that Japan was struck with a massive earthquake, measuring 7.2. Worries about more damage, another Tsunami and of course those nuclear plants surged. The SPY went from a high of $133.98 to $132.66 before having a gigantic bounce. It is currently trading in the middle range at $132.84, -0.72 (-0.54%).
Chevron Corporation (NYSE:CVX) is seeing its second down day in a row, somewhat of a rarity. The stock is trading at $107.81, -0.85 (-0.78%). A second down day may actually signal a short term top in the stock as long as it closes below $108.44 today. This would be known as confirmation of a reversal. Chevron would have first major support at $106.00 while resistance would be the 52 week high at $110.00.
As the markets continue to sell, Goldman Sachs Group, Inc. (NYSE:GS) is bucking the trend. The stock is trading at $163.30, +1.41 (+0.87%). Goldman has surged in the last three trading days and continues to show abnormal strength, relative to the markets. The daily chart shows massive resistance at $165.60 while support is at $159.00. Yesterday, banks and financial firms saw massive buying interest.
Looking forward, the markets will be analyzing the new earthquake in Japan. Is there additional damage, what is the economic impact? In addition, all eyes are now on the U.S. government and a possible shutdown tomorrow at midnight. As of now, the markets have felt it will not occur. However, should it occur there may be an economic impact as checks are not sent out and various programs shut down. Follow this closely in the next couple days.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
FXE Drops. Watch This Support Level.
This morning the Currencyshares Euro Trust(NYSE:FXE) is declining after the European Central Bank(ECB) raised their key bank lending rate by 25 basis points to 1.25 percent. This move by the ECB was already telegraphed by the market over the past month and today the FXE is declining lower by 0.70 cents to $142.00 share. The FXE will have intra-day support around the $141.70 area. This is a level where short term scalp traders can look for a bounce in the FXE.
When the FXE declines it can only mean that the U.S. Dollar Index is rising in price. This morning the U.S. Dollar Index is trading higher by 0.15 cents to $75.65 per contract. Traders must be aware that often the U.S. Dollar Index will start the morning higher and usually fade once the market opens in the U.S. for trading. That is actually occurring as I write this. If the U.S. Dollar Index declines the FXE could bounce before tagging the $141.70 support area.
Nicholas Santiago
InTheMoneyStocks.com
Same Game Different Day
This morning was another day when the U.S. Dollar Index declined sharply lower after the opening bell rang at the New York Stock Exchange. When the dollar dips the major stock indexes flip (higher). This phenomenon occurs almost on a daily basis. The same exact thing happened yesterday. Therefore, all short term scalp traders should really watch and follow the U.S. Dollar Index chart every trading session.
www.InTheMoneyStocks.com
Distribution Alert: Third Day In A Row, Markets Fade
A common theme is developing in the markets this week. Each day, the markets have been up nicely and by the close, faded to the flat line. This seems to be happening again today. The SPDR S&P 500 ETF (NYSE:SPY) is at $133.37, +0.13 (+0.10%) after being as high as $134.00. The high of the day was only a small distance from the 52 week high on the SPY at $134.69.
The fall in the markets each day most likely represents distribution. Distribution occurs when the institutions sell their shares to the individual investors, taking profits. This generally represents the high in the market or near the high. Why would individual, retail investors be putting money into the market? First, between the Middle East, Japan and Europe, the markets have been unbelievably strong. This gives the small investor a false sense of security. They basically think, if all that cannot derail the markets up move, then nothing will and the markets must be headed far higher. In addition, this is the first week of the second quarter for 2011. New money into 401k's and other retirement plans are now available and are flooding into mutual funds. This is a perfect time for institutions to sell into the buying.
The Dollar is down again today, a common theme of late. The one interesting factor is to note that the Dollar has been dropping as the markets have been falling back. This is unusual and should be noted. The most likely reason is commodity prices. As the Dollar continues to fall, commodities like oil just go higher. The $110.00 per barrel level is quickly approaching and the markets are getting nervous. Higher oil means higher prices at the pump. In an economy trying to recover, higher costs to consumers means less spending and a weaker economy. This must be watched. The United States Oil Fund LP (NYSE:USO) is trading at $43.42, +0.32 (+0.74%.
Gold and silver are both flat to higher today. The SPDR Gold Trust (NYSE:GLD) is trading at $142.08, +0.03 (+0.02%) while the iShares Silver Trust (NYSE:SLV) is trading at $38.56, +0.22 (+0.57%).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Markets Defy Gravity And Here Is The Reason
This afternoon the major stock market indexes are holding on to some small minor gains. Nothing seems to stop this market from moving higher. WTI oil is trading over $108.00 a barrel. The United States Gasoline Fund(NYSE:UGA) is trading higher again by 0.43 to $51.75 a share which is a new 52 week high. When will the high energy prices effect the major stock indexes? Leading stocks such as Google Inc.(NASDAQ:GOOG), Apple Inc.(NASDAQ:AAPL), and BIDU Inc.(NASDAQ:BIDU) are all trading lower this afternoon and the Nasdaq Composite is basically flat to slightly higher this afternoon. What could ever bring these markets down again?
Ah, we can only look to one other factor that is keeping the markets from even having a simple pullback and that is the weak U.S. Dollar Index. The U.S. Dollar Index has declined lower by 15.0 percent since its June 2010 pivot high when it traded at $88.70. Today the U.S. Dollar Index is trading lower by 0.02 cents to $75.88. Here is the reason for the rally in a nut shell; when the U.S. Dollar declines the asset prices in the market will inflate higher. Traders and investors can simply watch gold and silver as the real barometer of inflation. Gold and silver are a central banks worst nightmare. They tell the investing public exactly how much the currency is being devalued and deflated.
This afternoon the iShares Silver Trust(NYSE:SLV) is trading higher by 0.64 cents which is new 52 week high. The SPDR Gold Shares are rallying higher by $1.94 to 141.79 which is a new all time high. As long as central banks continue to print money at alarming rates to prop up asset prices precious metals can trade higher.
Since December 2008, the Federal Reserve has had the key bank lending rate (fed funds) at zero percent. This means that banks such as J.P. Morgan Chase & Co.(NYSEJPM), Wells Fargo & Co.(NYSE:WFC), Citigroup Inc.(NYSE:C), and Bank of America Corp.(NYSE:BAC), are able to borrow money at zero percent. Therefore, these banks that are too big to fail can borrow money for free and invest as they see fit to make capital. These banks pump money into stocks, operate a lucrative credit card business which they charge and average of 17.00 percent, and pay you nothing for keeping your money in their bank. What a racket.
So there you have it. That is the reason for the stock market rally. When this bubble pops it could be the mother of all bubbles. In the meantime, just follow the charts and ride the wave while it lasts because it wont last forever.
Nicholas Santiago
www.InTheMoneyStocks.com
ConocoPhillips Dips From Intra-day High.
Watch This Area:
ConocoPhillips(NYSE:COP) is declining lower by 0.40 cents to $79.28 a share. This leading integrated energy stock has come under some mild selling pressure over the past three trading sessions. Short term scalp traders can watch the $78.85 area for intra-day support. This is a likely short term intra-day bounce area for the stock.
Nicholas Santiago
www.InTheMoneyStocks.com
Gold Miners Strike Early
This morning the major gold mining stocks are holding up very well. Gold and silver are both catching bids higher today. The Market Vectors Gold Miners ETF(NYSE:GDX) is trading higher by 0.61 cents to $60.39 a share. The GDX will have intra-day resistance around the $60.65 area. This could be a small pullback area for the GDX.
Newmont Mining Corp.(NYSE:NEM) is trading higher this morning by 0.91 cents to $55.35 a share. There looks to be some minor intra-day resistance for Newmont stock around the $55.40 area and more resistance around the $56.00 level. Traders can watch for small pullbacks off of both levels.
Randgold Resources Ltd.(NASDAQ:GOLD) is another leading gold mining stock. This stock rallied sharply higher last week and looks to be pulling back today after last week's surge. Randgold stock is trading lower this morning by $1.38 to $82.23 a share. The stock will have minor intra-day support around the $82.00 area. Should the stock decline further intra-day traders should watch for support around the $81.00 area.
Nicholas Santiago
InTheMoneyStocks.com
Chevron Fades From Open. Watch This Level.
Chevron Corp.(NYSE:CVX) started the morning around the $109.60 area at the open of the day. The stock has faded a bit from the opening high print and is trading around the $108.80 area now. Short term scalp traders must watch the $108.00 level as important intra-day support. Should the stock decline down to that area this would be a likely bounce level.
Gold and Silver Shining Early
This morning the precious metals are rallying higher. Recently, gold and silver have been trading in tandem with oil. This morning WTI oil has surged higher by $2.18 to 106.45 a barrel as the Middle East and North Africa remain in turmoil. Anyone that has followed the problems in that region knows that they do not disappear quickly.
The SPDR Gold Shares (NYSE:GLD) are trading higher by $1.41 to $140.07 a share. The all time high for the GLD was $141.28 made on March 24, 2011. This morning the problems in Ireland, Portugal, and most other Euro-zone nations have emerged and this is definitely giving the precious metals a boost. Often the European Central Bank will purchase bonds in order to keep bond yields lower when they spike on debt fears. Anytime money is created by these central banks it will benefit gold and silver. The Federal Reserve buys bonds in the United States everyday via its permanent open market operation (POMO) and we see the U.S. Dollar Index decline almost on a daily basis. Traders must watch the $141.28 level for intra-day resistance on the GLD this morning should it trade up there.
The iShares Silver Trust(NYSE:SLV) is trading higher by 0.36 cents to $36.89 a share. The SLV made a new high on March 24, 2011 at $37.26 a share. Therefore, this level will minor intra-day resistance for the SLV. Should the SLV make a new high today the $38.00 level will be the next intra-day resistance level.
As long as central banks around the world continue to create more money and devalue the currency gold and silver could continue to climb higher. Traders and investors will continue to buy gold and silver until the Federal Reserve begins to strengthen the U.S. Dollar. This morning the U.S. Dollar has once again declined and is trading lower by 0.22 cents to $75.90.
Nicholas Santiago
InTheMoneyStocks.com
ADP Private Jobs Report Keeps Markets Higher
The markets continued their march higher today, closing in on the 52 week highs. The SPDR S&P 500 ETF (NYSE:SPY) are hammering on the highs of the day at $132.76, +0.90 (+0.68%). This is just slightly off the 52 week highs on the SPY at $134.69. The markets are higher today on the back of continued optimism after ADP Private Sector Employment was reported. The private sector gained 201,000 jobs which is very bullish for Friday's jobs report. On Friday, at 8:30am ET, the Non Farm Payroll Report will be released. Wall Street is now hoping for a number above 200,000.
Gold and silver started the day with solid gains but quickly fell back to the flat line as money flow started to head for riskier assets. The SPDR Gold Trust (NYSE:GLD) is trading at $138.27, +0.06 (+0.04%) while iShares Silver Trust (NYSE:SLV) trades at $36.35, +0.18 (+0.50%). These are both well off their early morning highs.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
Transports Test Major Level
The iShares Dow Jones Transport ETF(NYSE:IYT) has rallied sharply higher from its March 15, 2011 pivot low at $88.90 a share. This morning the IYT is trading higher by 0.59 cents to $95.72 a share. The IYT has rallied higher by nearly $7.00 in just 12 trading sessions. At this time the IYT is trading around its recent double top area from February 18, 2010 which was $96.30. Therefore, this area should be of some resistance in the near term. The IYT is also getting a bit extended on the daily chart at this time. Recently, the transports have climbed higher with the major stock indexes and this is a sign of economic strength in the near term. However, until the IYT clears the double top area at $96.30 traders must not assume that the transports will break out just yet.
Other leading transport stocks that are trading higher this morning are FedEx Corp.(NYSE:FDX) and United Parcel Service Inc.(NYSE:UPS). Should the IYT begin to pullback it would be prudent to expect these transport leaders to pullback as well.
Nicholas Santiago
InTheMoneyStocks.com
Broadcom Retreats Intra-day. Watch This Spot.
Broadcom Corp.(NASDAQ:BRCM) has staged a strong move higher from a sharp gap lower open. The leading chip stock has now pulled back intra-day despite the major stock indexes rallying near the highs of the session. Short term scalp traders can watch the $40.40 area for intra-day support. This is a likely intra-day bounce area for aggressive scalp traders.
Rare Earth Stocks Hottest
Over the last week, rare earth stocks have caught fire again. Molycorp, Inc. (NYSE:MCP) is soaring today, trading at $58.85, +3.34 (+6.02%). It has gone almost straight up over the last eight trading days. On March 18th, 2011, MCP was trading at $42.10. Truly an amazing move in a short amount of time. Other small China rare earth plays are also soaring. China GengSheng Minerals, Inc. (AMEX:CHGS) is up 12% today and has gone from $1.97 on March 22nd, 2011 to a high today of $3.68.
These stocks are getting a major momentum squeeze on the back of fear. As the world prints more money, demand from emerging markets jumps, hoarding seems to be on the mind of Wall Street. This mentality is leading towards a dramatic increase in stock price for companies that deal in rare earth. Just like gold and silver, the more money printed, the more diluted the currencies become while rare earths and gold and silver are the only place to store true wealth.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Why Oil Trades With Markets Unlike Weeks Ago
It was just three weeks ago when oil spiked higher, causing the market to sell sharply. As oil traded over $100 per barrel, the markets got jittery over fears it would crush a slowly recovering economy. Today, the markets are loving oil as they trade together, tick for tick. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $131.51, +0.53 (+0.40%). This is the high of the day. The United States Oil Fund LP (NYSE:USO) is trading at $41.83, +0.41 (+0.99%). This is also the high of the day. So what happened? Why is higher oil all of a sudden good for the markets?
The reasons are simple and easy to understand. The spike in oil from $90.00 to $107.00 was quick and painful. The markets are never good with sudden change. The markets like calm, slow and steady. Surprises and shocks keep investors on the sidelines or cause them to panic and sell. This was the initial run up in oil. In addition, this move higher was coupled with a dramatic, sudden destabilizing force in the Middle East. This again strikes at fear. Oil shooting higher caused traders to fear the oil shock would cause the economy to slow and a possible double dip could occur.
Emotion rules the markets in the short term. On one side there is greed, on the other fear. Oil stalled out after reaching $107 per barrel and fell back to $100.00. This allowed cooler heads to prevail. Fear over the Middle East began to subside and oil has now stabilized between $100.00 and $105.00. The panic and fear is now gone and Wall Street thinks oil at this level will not cause any major disruption in growth.
In addition, not only is the fear gone but profits may actually benefit from higher oil at some companies. Assuming oil demand does not falter much, companies like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) make more money from higher energy prices. While this may not seem like a big deal, these two stocks, along with many others are key components of the Dow Jones Industrial Average and S&P 500. If they have a major weighting in those indexes and their profits are soaring, those indexes will also get a solid boost.
While the market enjoys the calm in the eye of the storm, Wall Street and all traders must remain cautious. Ultimately, higher oil is coming whether because of a weak Dollar or global demand on shrinking supplies. Yes, the markets seem OK with oil between $100.00 and $105.00 per barrel but it is unlikely to remain there long. Any sharp spike higher may send another shock through the markets causing a quick decline.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
This Could Be The Lightest Volume Day Of The Year
Where is the trading volume today? Yes, Monday's are usually a lighter volume trading session, however, the volume today is simply ridiculous. Does anyone realize that there is a crisis in Japan, the Middle East, and in Europe? This market is being driven by computer algorithms today. The human hand has not been seen at all today. When the major stock indexes looked as if they had a chance of breaking down this afternoon the price of oil dropped and helped the major stock indexes rebound a little. The trading volume on The SPDR Trust (NYSE:SPY) as of 2:55 pm EST is just 65 million shares. The three month average volume is 168 million shares a day. That means that today's volume is nearly 100 million shares below the three month average.
Nicholas Santiago
InTheMoneyStocks.com
Gap Fill Rots Apple Intra Day
Apple Inc. (NASDAQ:AAPL) has been a powerhouse over the last week. The stock hit a beautiful double bottom support level at $326.50 on March 16th, 2011. Since that low, Apple shot higher, ripping up into a master gap fill shown below in the chart. Since this hit, Apple has lost all of its momentum. While still positive, it is off the highs and may be reaching a short term top. Apple is trading at $352.72, +1.18 (+0.34%).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
The Keys: Today's Market
The markets opened the day slightly higher, then had a strong push into the double top highs from Friday. After attempting to push through this level many times, the markets pulled back to the flat line. The SPDR S&P 500 ETF (NYSE:SPY) is holding just slightly positive at $131.39, +0.09 (+0.07%).
The markets are coming off major gains in the last week. Volume today is extremely light as it appears the they are searching for direction. The infamous Non Farm Payrolls number is due out this coming Friday. That will keep the markets neutral until then. Silver and gold are slightly lower today, along with oil. The iShares Silver Trust (NYSE:SLV) is trading at $36.20, -0.19 (-0.52%), the SPDR Gold Trust (NYSE:GLD) is trading at $138.47, -0.79 (-0.57%) and the United States Oil Fund LP (NYSE:USO) is trading at $41.83, -0.35 (-0.83%).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Charts provided by: RealTick LLC
U.S. Dollar Index Reverts Back To Its Losing Ways
This morning the U.S. Dollar Index(DXY) is declining lower by 0.34 cents to $76.05. Last week, the U.S. Dollar Index staged a small bounce on the daily chart, however, today the U.S. Dollar Index failed to trade above its daily chart 20 moving average. Please note that the DXY remains below all of the major moving averages and this puts the U.S. Dollar Index in a down trend. The U.S. Dollar Index has declined lower by 15.0 percent since June 7, 2010.
When the U.S. Dollar Index declines it will usually help to inflate asset prices. Many people that are retired and live a fixed income really feel the effects of a declining dollar the most. Costs of all the goods that individuals need to survive will increase higher. Food and energy are two products that will increase the most when the U.S. Dollar Index declines. The recent food riots around the world have been blamed on the declining U.S. Dollar Index. Should the U.S. Dollar Index trade below its recent low of $75.24 the next important daily chart support would be around the $74.22 level which is the low made on November 24, 2009. The all time low for the U.S. Dollar Index was $70.69 made on March 17, 2008.
Hot Stocks To Watch
This past week the major stock market indexes all rebounded sharply higher as if there were nothing in its way to stop it. Geopolitical events in the Middle East and North Africa, the Japanese nuclear crisis, high oil prices, and the European debt problems seem to be here for the long run. However, the stock market market indexes seem to rally further the worst the news gets since the March 16 pivot low. This week we shall focus on three different stocks that can be effected by the worlds problems.
The iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE:OIL) will generally trade higher or lower with the price in the WTI crude futures. Since mid-February the OIL has spiked sharply higher on the back of the Middle East and Northern Africa protests. On February 16, 2011 the OIL was trading as low as $23.10 a share. Since that time it rallied to $28.36 on March 7, 2011. The current price is at $27.90 and the pattern on the charts could be forming a bullish consolidation pattern. At this time the OIL still remains under its recent March 7, 2011 pivot high. Therefore, until the OIL breaks above this high the $28.36 level is still minor daily chart resistance. Should the OIL break out to new highs the $30.00 level would be the next major resistance level on the daily charts.
Sony Corp. (NYSE:SNE) is one of the leading manufactures of electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. The company is based in Tokyo, Japan and has come under pressure after the Japanese Earthquake. The stock has formed a pivot low at $29.00 on March 15, 2011. The stock is currently trading at $32.21 a share which is a minor daily chart resistance level. The next important resistance levels that traders must watch for will be around the $34.00 area and more resistance at $35.25. All of these resistance levels could see pullback for the stock and present excellent trading opportunities.
Last week the rating agency Moody's (NYSE:MCO) downgraded thirty Spanish banks as the European debt crisis continues to grow almost on a daily basis. Banco Santander (NYSE:STD) is one of Spain's largest financial Institutions. This stock was not effected by the major bank downgrade and made a near term pivot low on March 16, 2011 at $10.92 a share. Since that time the Banco Santander stock has rallied higher and is now trading around the $11.94 level. The stock should still have important daily chart resistance around the $12.75 area. If the stock were to rally past this resistance point the next major resistance level for STD stock would be $13.50. Should Banco Santander stock decline or pullback from here the $11.00 level would still be near term daily chart support. Keep a close eye on the levels noted in this report as they will present the opportunity to enter and exit trades at the most optimal price.
Stocks To Watch If Nevada Legalizes Online Gaming
Today, Nevada will decide whether or not to allow online poker to become legal. This would be the first state to pass such a measure and could start a domino effect in other states. Currently, millions of people gamble online every day but through outside sources since it is illegal in the United States. Therefore the States and Federal Government are left flat when it comes to taxing these profits. It is said they are missing out on billions in revenue by lack of taxes. When almost all states are facing possible bankruptcy due to huge deficits, it is an obvious course of action to legalize it.
Small cap stocks that could benefit from this course of action will be CryptoLogic Limited (NASDAQ:CRYP) as well as PokerTek, Inc. (NASDAQ:PTEKD) and even possibly GigaMedia Limited (NASDAQ:GIGM).
Origionally, the large casinos like Las Vegas Sands Corp. (NYSE:LVS) and Wynn Resorts, Limited (NASDAQ:WYNN) were against online gaming because they feared it would take massive business away from them. However, since it appears millions do it anyways, they are now realizing that they could get involved and profit from it as well. The key is to regulate it appropriately. If done correctly, not only could States get a boost of revenue from taxes, but also more profits to the casinos. Watch for the vote later today in Nevada. To gain more hardcore analysis, swing trades and education, join the Research Center. Take a one week free trial today.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Key Stocks Gap Into Solid Resistance, What It Means
Not only did the markets gap into the 20 and the 50 moving average today, but many leading stocks did as well. This tells smart traders that Wall Street may struggle a little in the next few days while it consolidates below this level. So far the markets pulled off this resistance level all the way to the flat line before bouncing back a little.
Some of the major stocks that opened higher but into resistance were Google Inc. (NASDAQ:GOOG), which opened into the daily 20 moving average and International Business Machines Corp. (NYSE:IBM) which into the 20 and 50 moving average. Again, the key here is to recognize that leading stocks are hitting resistance ranges just as the markets are doing the same. This basically means that traders are now moving from a bullish bias over the last week to a more neutral or neutral to small negative bias.
Reading the charts is the number one thing any successful trader does. The charts tell the whole story while the media and fundamentals only tell half. Learn the charts and profit.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Alert: Master Levels On Apple For The Day
Apple Inc. (NASDAQ:AAPL) has been on a wild ride over the last month. On February 16th, 2011, Apple made an all time high at $364.90. Since then, things have started to fall apart. The stock has plummeted to a recent low of $326.26 as the market has had a small correction and the brain, Steve Jobs took a leave of absence.
As the markets have rebounded over the last week, Apple has also had a decent bounce back. Today it is trading at $340.13 +0.94 (+0.28%). Below, are are all the master levels for Apple during the trading day. Each resistance level should be a solid short while each support should be a great quick long scalp. Note the chart below. To gain more hardcore analysis, guidance, swing trades and education, join the Research Center and Intra Day Stock Chat. Take the one week free trial today.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Markets Gap Into Resistance
The SPDR S&P 500 ETF (NYSE:SPY) opened sharply higher today on the back of continued optimism on the global economy. Things remain somewhat quiet in the Middle East, Japan and even Europe. The markets have adapted to the craziness of the last month and at this point, unless something new happens, the markets seem to be in rally mode again.
The SPY opened higher at $130.40, just below a major neck tie resistance point on the daily chart. This level is made up of the 20 moving average and the 50 moving average. In the short term this may keep the markets from breaking higher.
One of the other positives for today in the market is Best Buy Co., Inc. (NYSE:BBY). Best Buy reported better than expected earnings this morning and is sharply higher. Durable goods orders and jobless claims were also reported approximately in line with estimates.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Pre-Market News and Views
This morning the S&P 500 e-mini futures are trading higher by 7.00 points to 1299.00 per contract. The futures began to rally around 3:30 am EST when they were trading as low as 1298.25 per contract. The S&P 500 e-mini futures have now rallied higher by 59.00 points since its March 17, 2011 low pivot. The major stock indexes have continued to climb the wall of worry despite all of the geopolitical events taking place in the Middle East, Japan, and Europe.
This morning durable goods orders declined by 0.09 percent which was the largest decline in four months. This news is having very little effect on the S&P 500 e-mini futures this morning. Initial jobless were reported this morning and were better than expected declining by 5000 to 382,000 claims.
The Asian markets were basically flat last night. The highly watched Nikkei Index(Japan) was lower by just 14.0 points despite the ongoing problems with damaged nuclear reactors. The Sensex Index(India) was the big winner last night trading higher by 145.00 points or 0.80 percent. Therefore, the India Fund(NYSE:IFN), and Tata Motors Ltd.(NYSE:TTM) could see an early morning bounce.
Moody's downgraded 30 Spanish banks this morning, however, the Currencyshares Euro Trust(NYSE:FXE) does not seem to be effected at all by the news. Portugal debt yields are spiking on the 2 year bonds and that does not seem to be having any negative effects on the major stock indexes in the United States.
WTI oil is trading just under the $106.00 level. Gold and silver are also rallying higher before the opening bell. We shall see if these commodity leaders can keep climbing higher as they are getting a little overbought.
Nicholas Santiago
InTheMoneyStocks.com
The Apple May Fall Far From The Tree
As Steve Jobs continues to become less and less of an impact player at Apple Inc. (NASDAQ:AAPL), whisperings on Wall Street have started. Institutional players and big hedge funds seem to be questioning the ability for Apple to continue to grow at such a quick pace. This growth rate has given it the price to earnings multiple it currently holds. The quiet talk has been something that has built up since Steve Jobs took his second leave of absence from the company in recent months but is only partially a result of his departure.
Throughout history, companies have gone into mega growth momentum phases. Look back at stocks like Microsoft Corporation (NASDAQ:MSFT) and Cisco Systems, Inc. (NASDAQ:CSCO). These stocks had their golden years where they were the talk of the town. Everyone owned them and thought the good times would never end. However, inevitably, the good times always end. This is two fold. First, the larger you become, the harder it is to grow at the same rate as previous years. Doubling your size when you are a $100 million company is a lot easier than when you are a $100 billion company. Secondly, every other company in the sector targets you as a leader, copies you and tries to one up you. As the competition pushes faster and harder, it is almost impossible for the leader to not stumble. One miss step by management and you are the old maid.
As the iPhone is amazing, the Droid is right there. As the iPad is a work of art, many companies already have competing products on the market which are nearly as good, if not just as good. Price wars begin, margins drop and ultimately stock price falls. This is the cycle of life as a mega growth company.
This talk has been increasing since the departure of Steve Jobs. Part of it obviously has to do with him being the brain of Apple now absent. However, the other half is definitely the mega company syndrome. It looks like many large institutions and hedge funds have started to unload their Apple positions. While they still hold Apple, a distribution of sorts has been increasing as they sell into the retail investor. This can clearly be seen in the stock price as it has stalled out and created an M top. This type of top is usually bearish and smells of distribution by the big boys.
While Apple will remain a leader for years to come, investors must start to wonder if their fate may be sealed like that of Microsoft and Cisco. Microsoft ran to $60 per share in 2000 only to fall back to the $20 - $30 range for the last ten years. Could this be the fate of Apple?
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Fertilizer Stocks Sprout
While the markets are slightly lower on the day, the fertilizer stocks have started to make a move higher. Earlier today, stocks like Potash Corp.Saskatchewan (NYSE:POT), The Mosaic Company (NYSE:MOS) and Monsanto Company (NYSE:MON) were all lower. However, in the last hour they have turned around and moved to the positive side.
The key to understanding this move is two fold. First, the global population, especially in emerging markets continues to climb. As emerging market economies gain wealth, their people demand more food and higher quality. This increases the need for an acre of land to yield more produce. That has been the case for the strength in Potash, Mosaic and Monsanto over the last few years. However, just in the last few weeks a new front has emerged. The Japanese earthquake, tsunami and disastrous nuclear meltdown created a toxic mess. Not only is food full of radiation but their water supply has been contaminated as well. Japan, the third largest economy in the world is now in a position of having to import massive amounts of food. In the short term this could be a bullish case for these fertilizer plays.
These stocks may continue to remain strong unless one scenario occurs. Should the global economy slip back into recession, these stocks would suffer. In all other cases, these stocks should continue to remain strong, especially in the wake of the Japanese nuclear crisis.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
WalMart Declines Again. Watch These Levels.
Walmart Stores Inc.(NYSE:WMT) is the worlds largest and leading retail stock. This morning the stock is declining lower by 0.50 cents to $51.50 a share. The stock will have intra-day support around the $51.45 area. This is a level where the stock could see a short term intra-day bounce. Should this level fail to hold up the next intra-day support area for WMT stock will be around the $51.00 level.
Nicholas Santiago
InTheMoneyStocks.com
Pre-market News And Views
Oil will be the lead story today as WTI crude is trading above the $105.00 level. It is still amazing that many talking heads in the financial media are discounting the effects of high energy prices. Please remember that U.S. consumer spending accounts for 70.0 percent of the gross domestic product(GDP) in the United States. GDP really has no choice but to be negatively effected going forward.
The problems in the Middle East, and North Africa, continue to escalate and show no signs of easing up anytime soon. Libya, Yemen, Egypt, and Bahrain, remain in turmoil. Many investors and traders are watching Saudi Arabia very closely. Should a disruption occur in Saudi Arabia, which is the largest producer of oil in the Middle East, a super spike in oil is possible. This morning the United States Oil Fund(NYSE:USO) is trading higher by 0.20 cents to $42.10 a share.
Euro-zone nations such as Ireland, Portugal, and Greece have bond yields surging this morning. Obviously, the European Central Bank will have to step in a buy more debt from these countries in order to bring the yields back down. This is exactly what the Federal Reserve does in the United States on a daily basis via its permanent open market operation(POMO). This morning the Currencyshares Euro Trust(NYSE:FXE) is declining sharply 0.70 cents to $140.80 a share. When the Euro declines it usually means that the U.S. Dollar Index is higher and that is the case this morning.
Asian markets were mixed overnight. The Nikkei Index(Japan) declined by 1.65 percent. The Shanghai Index(China) and the Sensex Index(India) were both higher by more than 1.00 percent. When the Shanghai Index trades higher traders should watch for leading commodity stocks to be in play at the open. Stock such as Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), and Cliffs Natural Resources Inc.(NYSE:CLF) will trade trade higher before the opening bell at the New York Stock Exchange.
The major stock indexes have bounced sharply over the past week. Many leading stocks are now trading into important resistance levels, therefore, expect this market to be more volatile today.
Nicholas Santiago
InTheMoneyStocks.com
Small Cap Biotech Wakes Up
For small cap biotechnology to wake up, all it takes is a monster runner like Prana Biotechnology Limited (NASDAQ:PRAN). This little bio-tech company which deals in therapeutic drugs for neurological diseases ripped higher after results were published on their lead drug candidate PBT2. Their data showed that PBT2 repaired the damage in an Alzheimer's affected brain thereby facilitating the restoration of cognition in Alzheimer's Disease. The stock ripped higher, going from $1.47 to a high today of $4.50.
Anytime a small cap biotechnology stock makes that kind of move, other small cap biotechnology stocks follow to the upside in a more limited fashion in sympathy. Just today, small cap bio-tech stocks like Poniard Pharmaceuticals, Inc. (NASDAQ:PARD) and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) started to move higher.
The key to understanding small cap biotechnology is the insane risk involved but also the amazing rewards. Small cap bio-tech companies are valued at such levels that one major drug can turn the company from a micro cap to a large cap. However, they burn cash at an insane rate. Finding the true winners is somewhat luck and somewhat of an art. To gain more hardcore analysis, guidance, swing trades and education, join the Research Center. Take a free trial today.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Technical Levels: Money Flow Into Tech
Technology shares are spiking higher today, leading the markets. The Nasdaq is higher by 50.34 (+1.90%), trading at 2,694.01, while the S&P 500 and Dow Jones Industrial Average are lagging, up a respectable 1.5%. It appears money flow which had been shunning the technology sector is now rushing back in. Financial stocks are also weaker today after being stronger last week. It appears money is flowing from the bank stocks into the beaten down technology stocks.
It is truly fascinating to watch the charts. For instance, more tech stocks hit master levels of support last week prior to this rally than any other group in the market. This signaled a high probability of money inflow as trading programs and hedge fund players were spotting these levels. Take a look at the chart of Microsoft Corporation (NASDAQ:MSFT). Just last week the stock sold into a key gap fill from October 12th, 2010 and also hit a double bottom from November 29th, 2010. These two coinciding levels and an oversold Microsoft chart, signaled a high probability of a solid bounce. Today, Microsoft is trading at $25.37, +0.57 (+2.30%).
Charts provided by: RealTick LLC
Another stock that has surged in the last few days since the markets made a short term bottom is Hewlett-Packard Company (NYSE:HPQ). Hewlett-Packard was very a oversold chart and last week finally hit two major support levels. This level came into play at a gap fill from September 23rd, 2010 at just above $40.00. In addition, direct your attention to the pivot low made in early October. This also coincided with the $40.00 level. The combination of these two levels made Hewlett-Packard a sweet spot for smart traders. Since that $40.00 level area, HPQ has bounced back, hitting a high today of $42.10.
Charts provided by: RealTick LLC
These are just two examples of major technical levels hit on technology stocks. Take a look at Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) last week as well. Both hit major levels. Apple Computer hit the master $326.50 level which was the pivot low from January 21st, 2011 and Google kissed the 200 moving average on the daily chart. There was literrally no way the markets were going to break lower in the short term without a bounce via technology. Learn the charts and profit. To gain more hardcore analysis, swing trades and education, join the Research Center. Take the free trial today.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com