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Monday, May 21st, 2012
9:00am (EST)
(To view the charts, please log into the Members Area this morning. Also, for subscribers who upgraded to a 1-year membership over the weekend, please make sure you watch the video we sent this morning for our option course which covers a few more charts we draw out for you on the fly and how we come up with new trades.)
“The major indexes ended mixed on Monday with the S&P and Nasdaq showing the slightest of gains while the Dow fell 30 points. Friday was pretty much the same with the S&P switching sides. We have been talking about negative Friday and Monday closes which are bearish and although there wasn’t a crystal clear picture on this indicator, we would have to say the action favored the bears.
We are unsure on how shares will open and trade when FaceBook becomes public but it should be interesting.
If the offering is well-received by Wall Street, the market could get a bounce, if support isn’t broken by then. If the demand isn’t overwhelming, and shares struggle, look for the bears to step on the gas.”
(from 5/13/2012 Weekly Wrap/ Monday Morning Outlook)…
As you can see from last week’s chart, the market played out like a fiddle as the bears controlled the action all week despite the FaceBook (FB, $38.23, up $0.23) frenzy on Friday. We rode the bears back to one of our most successful weeks of the year as we were able to lock-in profits on 7 more triple-digit winning put option trades.
There was no bounce on Friday as FaceBook got baked into the cake as you can see from our comments in the aforementioned chart’s red box. The bulls are looking for a rebound but the bears did some serious technical damage last week. The charts and other warnings signals we have been giving you have been spot on all year long and so far we have had a HUGE May.
This week’s charts are showing a possible bounce but the overall trend is still lower. (continued…)
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Tags: COF, fslr, GMCR, Nasdaq
Posted in Market Analysis | Comments Off
Friday, March 30th, 2012
9:00am (EST)
The bulls made a nice comeback on Thursday after the bears pushed a 1% decline but it wasn’t enough as the most of the major indexes finished lower. Much of the action can be blamed on weaker-than-expected economic news which had been coming in above expectations over the past few weeks.
Initial Claims fell 5,000 to 359,000 versus expectations for a drop to 350,000. The previous week’s numbers were “revised” which accounted for the slight miss but still came in a 4-year lows. Elsewhere, fourth-quarter GDP increased 3.0%, which matched forecasts while Personal Consumption increased 2.1%, also in-line. The data was actually pretty good but Wall Street panicked when it heard the talking heads say we missed numbers. Futures worsened which lead to the opening losses.
The indexes reached their lows an hour into the session but gradually started to climb after lunch with buying really picking up in the last hour of trading.
The Dow gained 20 points, or 0.2%, to settle at 13,145. The blue-chips fell to a low of 13,032 before rebounding triple-digits, but more importantly, they were able to hold the 13,000 level. If the bulls can clear 13,200 today, the rally is still on.
The S&P 500 slipped 2 points, or 0.2%, to close at 1,403. The index touched a low of 1,391 but was able to reclaim the 1,400 level by the closing bell. The break below 1,397 was bearish though as it also represented last week’s low before yesterday. We are expecting to see a 25-point swing, either way, soon which means 1,425 or 1,375 sometime next week.
The Nasdaq dropped 10 points, or 0.3%, to finish at 3,095. Tech traded own to 3,069 but was able to hold 3,050. Last Friday, the index kissed 3,044 before bouncing. These levels will be important to watch if they start to fall today and will favor the bears going into next week while a close above 3,100-3,125 could extend the current rally into April.
Futures are showing a nice open as we head to press and look like this: Dow (+57), S&P 500 (+7), Nasdaq 100 (+11). Subscribers, check the Members Area for the updates.
Tags: Dow index support, Jobless Claims, Nasdaq, S&P resistance
Posted in Economic News, Market Analysis | Comments Off
Tuesday, March 6th, 2012
1:15pm (EST)
We said March Madness would come early and that volatility would pick up in the market. Today’s weakness is all about the Greek debt situation, which is back in the front burner. There is a Thursday night deadline for Greece and its bondholders to come to an agreement over the debt bond swap in which the creditors would lose nearly 75% of their value on the bonds. It’s been nice not having to write about this situation for a few weeks but Greece is the word today.
We have spent a lot of time talking about the 5-week trading range we have been in and that there was a good chance this week that the market would move out of this range. We cited Wednesday’s Apple announcement of the iPad3 and Friday’s jobs figures as the two key events that would make or break the bulls push higher.
Often times when resistance is being tested, the indexes tend to overshoot these levels which we have been calling our “fluff” targets”. We said the Dow would move 1,000 points back in late November when the index was at 11,800 and we said the blue-chips would run into resistance at 12,800. We hit this mark in January. We also said if the Dow closed above this level there would be a chance at 13,000. If this level was cleared we said to watch for 13,250. To the downside, we said short-term support was at 12,900 and then 12,800 which is exactly where the Dow has been hovering. The index is currently down 193 points to 12,770.
We also said to look for a close above 1,375 for the S&P 500, which we haven’t gotten, and that if there were further weakness the bulls would need to hold 1,350. The index is down 20 points to 1,344 after opening at 1,363.63 which now bring 1,325-1,300 into the picture.
The Nasdaq is lower by 40 points to 2,910. Tech opened at 2,917and we said a dip below 2,925 would bring 2,900-2,850 into play. Here we are. Apple (AAPL, $529.07, down $4.09) is also lower and another clue we said to watch for.
The S&P Volatility Index (VIX, 21.55, up 1.98) is up 14% and above 20 for the first time since mid-February. This was another clue we said to watch for in Sunday’s Weekly Wrap.
We said there may be an opportunity to add a NEW TRADE or two today and that is what we are doing. Subscribers, check the Members Area for the updates and be sure to use limit orders to get the best fill prices.
Tags: Apple, iPad3, Nasdaq, Russell 2000, VIX
Posted in Market Analysis, Market Commentary, VIX | Comments Off
Thursday, February 16th, 2012
12:30pm (EST)
The bulls are back on track following yesterday’s pullback on better-than-expected economic news which has pushed the major indexes back towards near-term resistance. Jobless claims continue to tick lower as Initial Claims came in at 348,000 versus expectations for a print of 365,000. Continuing Claims were 3.42 million versus estimates for 3.49 million.
The Producer Price Index (PPI) for January didn’t live up to the hype after posting a 0.1% pop versus forecasts for an increase of 0.4%. However, the core PPI reading, which backs out food and energy, was up 0.4% versus calls for an increase of 0.2%.
Housing numbers were also impressive as Housing Starts were well above forecasts for 675,000 as they came in at 699,000. Building Permits were below par and came in at 676,000 versus expectations for an increase to 680,000. And finally, the Philly Fed index rose to 10.5 from 7.3 in January.
As a result the bulls have held their opening gains as they look to extend the rally in the second half of trading and into the close.
The Dow is currently higher by 107 points to 12,888 while the S&P is up 11 points to 1,354. The Nasdaq is showing a 26 point pop and is at 2,941. Subscribers, check the Members Area for the updates.
Tags: Dow, initial jobless claims, Nasdaq, PPI
Posted in Economic News | Comments Off
Friday, February 10th, 2012
9:00am (EST)
The market finally got some resolution towards Greece settling its tab, or should we say, making its next loan payment, but nothing is etched in stone and we still have a weekend of uncertainty ahead of us. We aren’t sure what kind of last minute back slapping/ stabbing, hand-shook deals it took to get something accomplished but, in the end, the political suit-and-ties got an agreement that bought them some more time.
The bulls were able to make another push higher but the lack of conviction and tight trading ranges this week, not to mention low volume, are signs the bears are still around. We really didn’t expect a “blow-off” the roof type rally on the Greece news, we did if a deal would have come at the start of the week, but the fact that it took until yesterday was not surprising and it isn’t really a deal. It was another “agreement” on a deal and to be a long story, short, if a check isn’t stroked by next Wednesday, Greece will default in March.
The Dow added 6 points, or 0.1%, to finish at 12,890. The blue-chips traded to a high of 12,924 and took out Wednesday’s 52-week high of 12,893. The Dow is at its highest level since May 2008 which was also the last time the index was above 13,000.
The S&P gained 2 points, or 0.2%, to end at 1,352. The index kissed a high of 1,354 and is at its July 2011 top. The 52-week high is 1,370 which was hit on the first trading day of May 2011.
The Nasdaq advanced 11 points, or 0.4%, to settle at 2,927. Tech reached a peak of 2,930 and is at its highest level since December 2000.
We know all of this stuff because we have an elephant brain and we are chart-a-holics. We are also history buffs and sentiment watchers so we try not to follow the noise.
We have a lot to talk about inside our Members Area this morning so we have to cut it short as we have a few trades to tweak. As
Tags: Dow, Nasdaq, S&P 500
Posted in Market Analysis, Market Commentary | Comments Off
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Bears Growl as S&P Falls Below 1,350
Tuesday, March 6th, 2012
1:15pm (EST)
We said March Madness would come early and that volatility would pick up in the market. Today’s weakness is all about the Greek debt situation, which is back in the front burner. There is a Thursday night deadline for Greece and its bondholders to come to an agreement over the debt bond swap in which the creditors would lose nearly 75% of their value on the bonds. It’s been nice not having to write about this situation for a few weeks but Greece is the word today.
We have spent a lot of time talking about the 5-week trading range we have been in and that there was a good chance this week that the market would move out of this range. We cited Wednesday’s Apple announcement of the iPad3 and Friday’s jobs figures as the two key events that would make or break the bulls push higher.
Often times when resistance is being tested, the indexes tend to overshoot these levels which we have been calling our “fluff” targets”. We said the Dow would move 1,000 points back in late November when the index was at 11,800 and we said the blue-chips would run into resistance at 12,800. We hit this mark in January. We also said if the Dow closed above this level there would be a chance at 13,000. If this level was cleared we said to watch for 13,250. To the downside, we said short-term support was at 12,900 and then 12,800 which is exactly where the Dow has been hovering. The index is currently down 193 points to 12,770.
We also said to look for a close above 1,375 for the S&P 500, which we haven’t gotten, and that if there were further weakness the bulls would need to hold 1,350. The index is down 20 points to 1,344 after opening at 1,363.63 which now bring 1,325-1,300 into the picture.
The Nasdaq is lower by 40 points to 2,910. Tech opened at 2,917and we said a dip below 2,925 would bring 2,900-2,850 into play. Here we are. Apple (AAPL, $529.07, down $4.09) is also lower and another clue we said to watch for.
The S&P Volatility Index (VIX, 21.55, up 1.98) is up 14% and above 20 for the first time since mid-February. This was another clue we said to watch for in Sunday’s Weekly Wrap.
We said there may be an opportunity to add a NEW TRADE or two today and that is what we are doing. Subscribers, check the Members Area for the updates and be sure to use limit orders to get the best fill prices.
Tags: Apple, iPad3, Nasdaq, Russell 2000, VIX
Posted in Market Analysis, Market Commentary, VIX | Comments Off