After trading slightly higher overnight, the Dow and SPX opened slightly lower, and as of this writing, the Dow is now up 15 while the SPX is down 0.98. The other major indexes are mixed, with the Transports leading the way, up 0.10%. Troubles in Europe continue, with reports that inflation printed at 2.6%, driving expectations that the ECB will increase interest rates. Which in turn has the Euro trading higher at 1.4188 after trading over 1.42. The Dollar is off, trading 75.89 and Yen is stronger, trading at 82.76.
News out of Japan is that the impact of the recent natural disasters have begun to be reflected in the economic reports. Japanese PMI plunged to 46.4 from 52.9, the largest decline ever. The disruption in supply chains and manufacturing output is showing up, while input costs increase with the price escalation in energy and raw materials. Stagflation stalks the land. Of course, there is growing concern that there may not be a solution to the Nuclear disaster short of pouring thousand of tons of concrete over the whole mess.
Initial new unemployment claims have missed expectations, printing 388,000 vs expected 380,000. They have also revised last weeks surprising beat of expectation, which now turns out to have been a miss, revised upward to 394,000 for 382,000. The record now for upward revisions is about 98%. Continuing claim are also higher.
The Chicago PMI is reported at 70.6, a decline from the prior month 71.2 but higher than the 69 estimate. Prices paid continue to be a problem printing at 70 and just 3 points lower than the all time high in 1980. The question remain how businesses will be able to pass along price increases that must be implemented in order to maintain margins.
Our Momentum Change indicators are still bullish. There is likely to be resistance around 134 and then at 1341. The action today should give us another opportunity to again tighten stop loss prices.
Best To Your Trading!
Bill
Thursday, March 31, 2011
Wednesday, March 30, 2011
Labor reports headline today's news
After being higher overnight, markets gaped higher on the open, with the Dow currently up 59 and the SPX up 6.5. All of the other major indexes are also higher, after trading in Asian and European markets ended higher. Fundamentally, it would seem the concerns about Irish, Portuguese and Greek sovereign debt would be enough to generate selling in the Euro, but the selling has been modest. In addition, the governing coalition in Germany is suffering big losses in regional voting, potentially making it much harder for the German government to continue to backstop the Euro. After hitting its recent highs above 1.42, the Euro has been steadily declining, currently trading at 1.407. This weakness in the Euro is finally translating into modest strength in the Dollar, which is today trading at 76.25
Oil is slightly lower this morning at 104.38 and Brent is slightly higher at 115.35. Gold is higher at 1427.4 and Silver is higher at 37.65. Copper is off a little, at 4.328. Mr Copper does not seem to want to lead the markets in this rally. The balance of the commodity is mostly higher, most less than 0.25%.
The 10 Year Note is higher at 3.48% while the long Bond is slightly lower, trading at 4.55%
The big news domestically is the ADP payroll report, which has printed 200,300 new Jobs. Commentators seem pleased that most of the new jobs were created in the service sector.... not sure why they would be pleased to see fast food servers and retail clerks dominating the new job creation, but seems to be the take-a-way. This ADP report is expected to foretell a good BLS new jobs report on Friday. Hopefully, there will be no surprises like last month when the BLS report was a big miss of expectations.
Another report that is likely to have a greater impact on the markets is the continuing buzz that 1st quarter GDP, currently projected by consensus estimates to print at 4% may in fact come in much lower. The Fed Macroeconomic advisers has lowed its 1st quarter projection from 4% growth to 2.3%. I saw a story yesterday, purporting to be a Goldman leak, that they are about to revise their 1st quarter estimates downward to 1.75% to 2%. With the slowing of growth expectations for the economy and the continuing reality of higher input costs in manufacturing and the resultant margin squeeze, it would not be unusual that investors begin to change their minds about earnings per share and PE ratios,
I did not even point out that the free money injections of QE2 POMO is due to end in June and it would not be unreasonable to expect that stock prices will come under pressure. As my wife likes to say.. .Ya Think?
For the time being, we are Bullish on the short term, with the Buy signal generated by the Proprietary Momentum Change indicators 2-23 still in effect. Please note that there have been some changes to the stop loss prices added to the trades at the right.
Best to Your Trading!
Bill
Oil is slightly lower this morning at 104.38 and Brent is slightly higher at 115.35. Gold is higher at 1427.4 and Silver is higher at 37.65. Copper is off a little, at 4.328. Mr Copper does not seem to want to lead the markets in this rally. The balance of the commodity is mostly higher, most less than 0.25%.
The 10 Year Note is higher at 3.48% while the long Bond is slightly lower, trading at 4.55%
The big news domestically is the ADP payroll report, which has printed 200,300 new Jobs. Commentators seem pleased that most of the new jobs were created in the service sector.... not sure why they would be pleased to see fast food servers and retail clerks dominating the new job creation, but seems to be the take-a-way. This ADP report is expected to foretell a good BLS new jobs report on Friday. Hopefully, there will be no surprises like last month when the BLS report was a big miss of expectations.
Another report that is likely to have a greater impact on the markets is the continuing buzz that 1st quarter GDP, currently projected by consensus estimates to print at 4% may in fact come in much lower. The Fed Macroeconomic advisers has lowed its 1st quarter projection from 4% growth to 2.3%. I saw a story yesterday, purporting to be a Goldman leak, that they are about to revise their 1st quarter estimates downward to 1.75% to 2%. With the slowing of growth expectations for the economy and the continuing reality of higher input costs in manufacturing and the resultant margin squeeze, it would not be unusual that investors begin to change their minds about earnings per share and PE ratios,
I did not even point out that the free money injections of QE2 POMO is due to end in June and it would not be unreasonable to expect that stock prices will come under pressure. As my wife likes to say.. .Ya Think?
For the time being, we are Bullish on the short term, with the Buy signal generated by the Proprietary Momentum Change indicators 2-23 still in effect. Please note that there have been some changes to the stop loss prices added to the trades at the right.
Best to Your Trading!
Bill
Tuesday, March 29, 2011
All is Well Tuesday Afternoon
Nothing much to report..
Not much to worry about as things are going our way. Note the stop loss price changes at the right.
Best To Your Trading!
Bill
Not much to worry about as things are going our way. Note the stop loss price changes at the right.
Best To Your Trading!
Bill
Residential RE back in the News.
This morning the S&P/Case Shiller Home Price Index was released, printing at 140.86 vs 142.46 previously. After the New Home sales and Existing Home sales numbers were reported last week, this report is hardly a surprise. Here is the the meat of the report;
Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20- City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now. “These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing"
After a flat opening, the Dow is now down 20 and the SPX is down 0.38 All of the major indexes are also off this morning. Mr Market is taking the breather that we expected yesterday and several trades are nearing the stop loss prices. If the stop loss orders are triggered, we will be able to re-enter the market at the next Buy confirmation.
Oil is trading lower, down a couple of ticks at 103.83, Gold is off, trading 1417.4 and Silver is off, trading 36.87. Copper is also off a few ticks, and the commodity complex is mixed. The weakness in the Euro continues today, trading at 1.408 while the Dollar continues its bounce, trading higher at 76.24. The Yen is also weaker at 82.32. The bond are lower, with the 10 year Note trading 3.44% and the long bond at 4.5%.
The is not much reporting due today.. mostly Fed directors speaking around the country.... it seems the theme is focused on how to end QE2 and what it will mean for the economy. As if they have any idea of what to do except more of the same. News out of the MENA region continues, with a new development in Syria, where Assad reports accepting the resignation of the government. Not sure what that means. It seems as if the news rooms are holding their breath, awaiting the next Black Swan event to create new and exciting headlines.
The radioactivity around the damaged Nuclear power plant seems to be real, the story has devolved into a guessing game about which spokesperson is to be believed.. as there are so many conflicting reports. It feels like the final answer will be to pour a lot of concrete on top of the whole mess and move on to the rebuilding phase. Because each day brings more evidence that the officials in charge have no clue about what to do. If there is in fact anything they can do.
Momentum still with the Bulls. In the time it has taken me to write this update, the Dow has gone from down 20 to plus 35. Cant't find any news that could have moved the markets like that......must be the refrain we have heard so much this past year. (and I can't believe I am going to write this) BTFD!
Best To Your Trading!
Bill
Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20- City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now. “These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing"
After a flat opening, the Dow is now down 20 and the SPX is down 0.38 All of the major indexes are also off this morning. Mr Market is taking the breather that we expected yesterday and several trades are nearing the stop loss prices. If the stop loss orders are triggered, we will be able to re-enter the market at the next Buy confirmation.
Oil is trading lower, down a couple of ticks at 103.83, Gold is off, trading 1417.4 and Silver is off, trading 36.87. Copper is also off a few ticks, and the commodity complex is mixed. The weakness in the Euro continues today, trading at 1.408 while the Dollar continues its bounce, trading higher at 76.24. The Yen is also weaker at 82.32. The bond are lower, with the 10 year Note trading 3.44% and the long bond at 4.5%.
The is not much reporting due today.. mostly Fed directors speaking around the country.... it seems the theme is focused on how to end QE2 and what it will mean for the economy. As if they have any idea of what to do except more of the same. News out of the MENA region continues, with a new development in Syria, where Assad reports accepting the resignation of the government. Not sure what that means. It seems as if the news rooms are holding their breath, awaiting the next Black Swan event to create new and exciting headlines.
The radioactivity around the damaged Nuclear power plant seems to be real, the story has devolved into a guessing game about which spokesperson is to be believed.. as there are so many conflicting reports. It feels like the final answer will be to pour a lot of concrete on top of the whole mess and move on to the rebuilding phase. Because each day brings more evidence that the officials in charge have no clue about what to do. If there is in fact anything they can do.
Momentum still with the Bulls. In the time it has taken me to write this update, the Dow has gone from down 20 to plus 35. Cant't find any news that could have moved the markets like that......must be the refrain we have heard so much this past year. (and I can't believe I am going to write this) BTFD!
Best To Your Trading!
Bill
Monday, March 28, 2011
Monday Morning
Ofter trading higher overnight, the Dow opened up 12 points, and is now trading up 27 at 12246, and the SPX is also trading higher, up 1.92 at 1315. All the other major indexes are also trading higher. After printing some very negative numbers for new home sales and existing home sale last week, this week it is reported that Pending New Home sales are up unexpectedly, printing plus 2.1% vs expectations of minus 1% The Commerce Department says spending rose 0.7% after a 0.3% gains in January. Personal income declined from a 1.2% gain in January to 0.3, less than expected. U.S. consumers had to dip into savings to spend that money. Which is why saving shows a declined to 5.8 of Personal Income, from 6.1% in January.
Goldman Sachs again warns that first quarter GDP is likely to decline from the expected 3.5% gain to something more like 1.75% to 2%, which would be a significant miss of consensus estimates. The Dallas Fed has reported their diffusion index, printing at 11.5 and missing expectations of 18%, another significant miss. Of course, Mr Market ignored the news. When Mr Market wants to go higher, nothing gets in the way. Deeper into the report, we learn that margins are under pressure, and that expectations for future wages and benefits to be lower, and input costs to be higher. Of course, CapEx is also expected to be nil as Corporations continue to sit on their cash pile.
Oil is lower this morning, trading 104.5 while Brent is higher at 115.52. Gold and Silver are lower, Gold at 1416.7 and Silver at 36.82. Copper is also lower, as we are stopped out of our JJC this morning on the open. The entire commodity complex is lower with the exception of Beans, which are up 0.17%. In Europe, with the Portuguese government in chaos, the Irish now demanding that Banks take a haircut on the ready-to-default Irish debt, and 250,000 Englishmen demonstrating in the streets against austerity, and the German Government taking another hit in regional voting, it is no wonder that the Euro is trading higher at 1.410 and the Dollar lower at 76.08. Ya, sure!
The Yen is also lower, at 81.69. I read a story over the weekend that most clearly explains why the currency of a government that has experienced a devastating earthquake and Tsunami and the worst nuclear accident in 25 years would see their currency advance against world currencies. The government forces domestic insurers and re-insurers to be responsible for a major share of any disaster, therefore Japanese insurance companies have huge reserves invested the world over in stocks and bonds. To begin to have the kinds of liquidity that will be necessary to fund the damage claims and rebuilding, the insurers will have to sell some of those assets. When they sell those assets, dominated in lets say Euros, they will then have to convert those Euros into Yen in order to bring that cash back into Japan. In other words, the insurers will be huge buyers of Yen as they re-repatriate there investments.
The Proprietary Momentum Change indicators are still on the Buy signal generated last Wed. We got stopped out on the JJC (the Copper ETF) this morning at 57.85 for 1.05 loss. The rest of the positions are still active, and you will note that I tightened the stop loss prices on Friday. I suspect we may get a breather shortly, and there is of course always the possibility that some of the stops will get triggered. But if that does happen, we will be looking for a re-entry point. The market timing indicators that I have used for a long time, and which have been a little less that perfect for the past several months, are looking for an end to this rally in the late May, early June period. The market should experience relative strength into the top period, although it is likely we will get some trading experiences as we move through the next few weeks.
Best To Your Trading!
Bill
Goldman Sachs again warns that first quarter GDP is likely to decline from the expected 3.5% gain to something more like 1.75% to 2%, which would be a significant miss of consensus estimates. The Dallas Fed has reported their diffusion index, printing at 11.5 and missing expectations of 18%, another significant miss. Of course, Mr Market ignored the news. When Mr Market wants to go higher, nothing gets in the way. Deeper into the report, we learn that margins are under pressure, and that expectations for future wages and benefits to be lower, and input costs to be higher. Of course, CapEx is also expected to be nil as Corporations continue to sit on their cash pile.
Oil is lower this morning, trading 104.5 while Brent is higher at 115.52. Gold and Silver are lower, Gold at 1416.7 and Silver at 36.82. Copper is also lower, as we are stopped out of our JJC this morning on the open. The entire commodity complex is lower with the exception of Beans, which are up 0.17%. In Europe, with the Portuguese government in chaos, the Irish now demanding that Banks take a haircut on the ready-to-default Irish debt, and 250,000 Englishmen demonstrating in the streets against austerity, and the German Government taking another hit in regional voting, it is no wonder that the Euro is trading higher at 1.410 and the Dollar lower at 76.08. Ya, sure!
The Yen is also lower, at 81.69. I read a story over the weekend that most clearly explains why the currency of a government that has experienced a devastating earthquake and Tsunami and the worst nuclear accident in 25 years would see their currency advance against world currencies. The government forces domestic insurers and re-insurers to be responsible for a major share of any disaster, therefore Japanese insurance companies have huge reserves invested the world over in stocks and bonds. To begin to have the kinds of liquidity that will be necessary to fund the damage claims and rebuilding, the insurers will have to sell some of those assets. When they sell those assets, dominated in lets say Euros, they will then have to convert those Euros into Yen in order to bring that cash back into Japan. In other words, the insurers will be huge buyers of Yen as they re-repatriate there investments.
The Proprietary Momentum Change indicators are still on the Buy signal generated last Wed. We got stopped out on the JJC (the Copper ETF) this morning at 57.85 for 1.05 loss. The rest of the positions are still active, and you will note that I tightened the stop loss prices on Friday. I suspect we may get a breather shortly, and there is of course always the possibility that some of the stops will get triggered. But if that does happen, we will be looking for a re-entry point. The market timing indicators that I have used for a long time, and which have been a little less that perfect for the past several months, are looking for an end to this rally in the late May, early June period. The market should experience relative strength into the top period, although it is likely we will get some trading experiences as we move through the next few weeks.
Best To Your Trading!
Bill
Friday, March 25, 2011
Weekend is 30 minutes away.
The Dow is up 58 as I write this, and the SPX is up 5.20. There are a lot of traders who don't like to go into a weekend with positions, but after the response of the market to all of the Black Swans which swarmed in the past 2 weeks, what could possibly happen this weekend that would cause a big Gap Down on Monday? You know, the day that has presented a nearly perfect record of advances since QE2 and even earlier with the rumors of QE2.
What could possibly go wrong?.......ya, right!
But we can't make the big money being totally cautious. So let's go with the positions we have (as long as those positions are long). Take a look at the new stop loss prices for our open trades. If by chance Monday does turn sour, we can protect our profits.
Have a great week end, and Best To Your Trading!
Bill
What could possibly go wrong?.......ya, right!
But we can't make the big money being totally cautious. So let's go with the positions we have (as long as those positions are long). Take a look at the new stop loss prices for our open trades. If by chance Monday does turn sour, we can protect our profits.
Have a great week end, and Best To Your Trading!
Bill
Man, What a Week!
Euro is mixed, Asia was higher in every exchange and the SPX traded higher in the overnight futures market. After a Gap open of nearly 50 points in the Dow, the index is up 83 as this is written. The SPX is up 6.44, trading 1316.23 and well above the downtrend resistance line. It looks like this weeks rally has again turned the markets higher.
Oil is off a little, trading 105 and the Brent is off at 115.64. Gold is higher at 1436 /and Silver is up, trading at 37.52 The entire commodity complex is up, with out a single red arrow to be seen. The Euro is off, trading 1.413, while the Dollar is higher t 75.87. The Yen is also lower, trading 81.14 vs the Dollar. The 10 year Note is up at 3.401% and the long Bond is higher at 4.467%
News out of Japan seems to deteriorate every day, with the Government and TEPCO now extending the exclusion area beyond the previous 18 mile boundary after learning that Zirconium is being showing up in the waste around the plant. This is only possible when the cladding around the fuel rod has melted, which means positive proof that a melt down has occurred. Bottled water has disappeared from shelves in Tokyo while the government consuls the citizens not to hoard. Some cracks are appearing in that well ordered and disciplined culture.
In Europe, concern mounts that the Sovereign debt issues in Portugal will mean for the first time that maybe Bond holders will be forced to book some of the losses associated with some bad loans. The IMF and the ECB's are creating another emergency fund to prepare for the next series of BailOuts and voters in Germany are expected to continue expressing their disapproval of their county's backstopping of the Bailouts.
In Libya the violence continues as the U.S. promises to hand over command of the "No Fly" enforcement to a NATO commander shortly. (I had thought the French Air Force was the main player in that effort, but it turns out that American Jets flew 80% of the sorties.) Egypt is looking more and more like they are getting more of what they had, while tens of thousand demonstrate in Yeman. If that was not enough trouble in the Middle East, we learn that the shooting war continues to heat up, with Hamas launching rockets even deeper into Isreal, which of course is threatening to respond with more force.
I guess this is all good, because the markets have had their best week since last June. The Proprietary Momentum Change Indicators generated a Buy signal on Wed., 3/23 and the trade recommendations are to the right. I have timing tools that are looking for this rally to carry into late May or early June, and potential targets on the SPX of 1400. The timing tools have been less reliable than usual in this market, especially since August of last year. But it is nice to have a goal to work with.
I guess the best advice is to sit back, relax, maybe go fishing for all those hungry Bass, and watch those Buy Stops get triggered all the way to 1400.
Best To Your Trading!
Bill
Oil is off a little, trading 105 and the Brent is off at 115.64. Gold is higher at 1436 /and Silver is up, trading at 37.52 The entire commodity complex is up, with out a single red arrow to be seen. The Euro is off, trading 1.413, while the Dollar is higher t 75.87. The Yen is also lower, trading 81.14 vs the Dollar. The 10 year Note is up at 3.401% and the long Bond is higher at 4.467%
News out of Japan seems to deteriorate every day, with the Government and TEPCO now extending the exclusion area beyond the previous 18 mile boundary after learning that Zirconium is being showing up in the waste around the plant. This is only possible when the cladding around the fuel rod has melted, which means positive proof that a melt down has occurred. Bottled water has disappeared from shelves in Tokyo while the government consuls the citizens not to hoard. Some cracks are appearing in that well ordered and disciplined culture.
In Europe, concern mounts that the Sovereign debt issues in Portugal will mean for the first time that maybe Bond holders will be forced to book some of the losses associated with some bad loans. The IMF and the ECB's are creating another emergency fund to prepare for the next series of BailOuts and voters in Germany are expected to continue expressing their disapproval of their county's backstopping of the Bailouts.
In Libya the violence continues as the U.S. promises to hand over command of the "No Fly" enforcement to a NATO commander shortly. (I had thought the French Air Force was the main player in that effort, but it turns out that American Jets flew 80% of the sorties.) Egypt is looking more and more like they are getting more of what they had, while tens of thousand demonstrate in Yeman. If that was not enough trouble in the Middle East, we learn that the shooting war continues to heat up, with Hamas launching rockets even deeper into Isreal, which of course is threatening to respond with more force.
I guess this is all good, because the markets have had their best week since last June. The Proprietary Momentum Change Indicators generated a Buy signal on Wed., 3/23 and the trade recommendations are to the right. I have timing tools that are looking for this rally to carry into late May or early June, and potential targets on the SPX of 1400. The timing tools have been less reliable than usual in this market, especially since August of last year. But it is nice to have a goal to work with.
I guess the best advice is to sit back, relax, maybe go fishing for all those hungry Bass, and watch those Buy Stops get triggered all the way to 1400.
Best To Your Trading!
Bill
Thursday, March 24, 2011
Thursday Afternoon
Let's see...where was I? Oh, Yah! New Buy signals generated by the Proprietary Momentum Change indicators. After getting very close to new Buy signal on Monday, the market was able to hold the momentum into the close yesterday. I have Posted new trading ideas, listed at the right, and I will be tightening the stops this afternoon, and should be completed by the time this is posted.
Oil traded over 106 near the open, and is now trading at 105.96. Brent is 115.84. Gold and Silver have made new highs, Gold trading at 1447.9 and Silver trading at 38.07. The soft commodities are mostly higher, with Wheat again leading, up 3.25%.
The Euro is up, trading at 1.419, surprisingly, considering the collapse of the Portuguese government and Increasing doubt about the Irish resolve to accept the terms of the Bailout agreement negotiated by the previous government. The Dollar is off a little, trading at 75.57. The Yen has resumed it climb, trading 80.08 vs the Dollar.
Bond are down slightly, with the 10 year trading 3.388% and the long Bond trading at 4.477.
Domestically, the new unemployment claims printed about expectations, at 383,000, while Durable Goods surprised on the downside, printing at -0.9 for February after a revised January 3.6. Later this morning, the Bloomberg Consumer Comfort Index plunged to a 7 month low and the measure of the current economy slipped to a 15 month low. Higher food and energy prices are seen a driving consumer concerns.
In Japan, there are new reports of deteriorating conditions at the TEPCO plant, with previously unharmed units #5 and #6 now leaking radioactive waste, while the radioactive levels in seawater near the plant grow to levels deemed to be dangerous. There were reports last night that the dangerously high levels of radioactive debris will persist for some time, which at some point may raise those same levels in this country in water and farm land on the West Coast. What I had thought were misplaced concerns about fallout here may may have to be re-thought.
The SPY is struggling with resistance at 131, but momentum looks to be sufficient to carry through today or tomorrow.
Best to Your Trading!
Bill
Oil traded over 106 near the open, and is now trading at 105.96. Brent is 115.84. Gold and Silver have made new highs, Gold trading at 1447.9 and Silver trading at 38.07. The soft commodities are mostly higher, with Wheat again leading, up 3.25%.
The Euro is up, trading at 1.419, surprisingly, considering the collapse of the Portuguese government and Increasing doubt about the Irish resolve to accept the terms of the Bailout agreement negotiated by the previous government. The Dollar is off a little, trading at 75.57. The Yen has resumed it climb, trading 80.08 vs the Dollar.
Bond are down slightly, with the 10 year trading 3.388% and the long Bond trading at 4.477.
Domestically, the new unemployment claims printed about expectations, at 383,000, while Durable Goods surprised on the downside, printing at -0.9 for February after a revised January 3.6. Later this morning, the Bloomberg Consumer Comfort Index plunged to a 7 month low and the measure of the current economy slipped to a 15 month low. Higher food and energy prices are seen a driving consumer concerns.
In Japan, there are new reports of deteriorating conditions at the TEPCO plant, with previously unharmed units #5 and #6 now leaking radioactive waste, while the radioactive levels in seawater near the plant grow to levels deemed to be dangerous. There were reports last night that the dangerously high levels of radioactive debris will persist for some time, which at some point may raise those same levels in this country in water and farm land on the West Coast. What I had thought were misplaced concerns about fallout here may may have to be re-thought.
The SPY is struggling with resistance at 131, but momentum looks to be sufficient to carry through today or tomorrow.
Best to Your Trading!
Bill
3/24/2011 Thursday Morning
I will be out this morning and will miss the open. The overnight trading was mostly higher for the DOW and the SPX, with the first call looking for the Dow to open 75 points higher and the SPX to open 9 point higher.
I posted new trade ideas yesterday at 3:30, after getting Momentum Change Buy signals intra-day that did not look to be weakening going into the close. The Proprietary Momentum Change signals had moved to a Buy signal on Monday but had weakened in the last hour. Yesterday, indexes or ETF's representing an index, generated new Buy signal in the SPY, IWM (RUT), QQQ (COMP)and JCC (Copper). I added leveraged longs QLD and UWM and the TNA
I should be back by 12:00PM will up date around 3:30. I will tighten the stops this afternoon, after a look at today's trading.
Best To Your Trading!
Bill
I posted new trade ideas yesterday at 3:30, after getting Momentum Change Buy signals intra-day that did not look to be weakening going into the close. The Proprietary Momentum Change signals had moved to a Buy signal on Monday but had weakened in the last hour. Yesterday, indexes or ETF's representing an index, generated new Buy signal in the SPY, IWM (RUT), QQQ (COMP)and JCC (Copper). I added leveraged longs QLD and UWM and the TNA
I should be back by 12:00PM will up date around 3:30. I will tighten the stops this afternoon, after a look at today's trading.
Best To Your Trading!
Bill
Wednesday, March 23, 2011
Trading Alert Wednesday Afternoon
The Momentum Change indicators have now confirmed a new Buy signal in the SPY, the IWM, the QQQ's and in Copper. Please find the recommended trades at the right.
Best to Your Trading.
Bill
Best to Your Trading.
Bill
3/23/2011 Wed Morning
After being higher in overnight trading, the first call had the market higher, then about 7:30, the early trading turned soft and the Dow gaped down 15 on the open. at 10:30am, the Dow is off 22, the SPX is off 6.32 and the rest of the major indexes are also down around 0.5%. The Euro is weak this morning, and the U.S. Dollar is having its best performance in a number of days, trading up 0.40% at 75.73 TheYen has stabilized vs the Dollar and the Euro after Central Bank intervention, which has put an end to the unwinding of the Yen carry trade.
Not sure what happened overnight to the Oil market, but this morning, WTI is trading up at 105.79. I would swear that Oil closed yesterday at 102 and change, but the price report only shows it up .69. Gold is also higher at 1433.80 and Silver is making a run on the post-Hunt Bros high, trading at 36.55. Copper is trading higher, and looks like it has put in a IHS bottom, and is trading higher at 4.415, Copper has led the market for most of the past year so this new strength may be telling us the market is ready to also move higher. The soft commodities are mixed, with Rice being a leader, up 2.0%. The 10 year Note is higher, trading at 3.285 and the long Bond is also higher, at 4.400
After a couple of days where the news out of Japan seemed to indicate that TEPCO had gotten the Nuclear disaster under control, it now appears that the melt down in #2 continues and is burning again. Workers have been withdrawn and it is reported that although the "Power cord" was finally installed, is not connected to a power source. Uups! But not to worry, that news is not longer high priority now that DWTS has started the new season. It looks like the fat lady can't sing, but maybe she can dance.
The bombing in Libya continues and Gaddifi continues to assure this supports that the Crusader Attack will soon be repelled and the enemy destroyed. It is expected that Portugal's government, led by a Minority party is about to fail..... unable to resolve financial problems. At the same time, Irish 10 year bond yields have pushed through 10% for the first time, as concern grows that a bankruptcy may be in the offing.
To top it all off, the nastiness in the Gaze Strip continues to heat up, with a bomb blast in Jerusalem that has injured at least 25 people, but no casualties currently reported. My guess is that this may be the cause of the spike in Oil prices we saw overnight.
Momentum Change indicators are still on Sell, but it is possible that a new Buy signal can be generated at any time. There are currently no open trades.
Best To Your Trading!
Bill
Not sure what happened overnight to the Oil market, but this morning, WTI is trading up at 105.79. I would swear that Oil closed yesterday at 102 and change, but the price report only shows it up .69. Gold is also higher at 1433.80 and Silver is making a run on the post-Hunt Bros high, trading at 36.55. Copper is trading higher, and looks like it has put in a IHS bottom, and is trading higher at 4.415, Copper has led the market for most of the past year so this new strength may be telling us the market is ready to also move higher. The soft commodities are mixed, with Rice being a leader, up 2.0%. The 10 year Note is higher, trading at 3.285 and the long Bond is also higher, at 4.400
After a couple of days where the news out of Japan seemed to indicate that TEPCO had gotten the Nuclear disaster under control, it now appears that the melt down in #2 continues and is burning again. Workers have been withdrawn and it is reported that although the "Power cord" was finally installed, is not connected to a power source. Uups! But not to worry, that news is not longer high priority now that DWTS has started the new season. It looks like the fat lady can't sing, but maybe she can dance.
The bombing in Libya continues and Gaddifi continues to assure this supports that the Crusader Attack will soon be repelled and the enemy destroyed. It is expected that Portugal's government, led by a Minority party is about to fail..... unable to resolve financial problems. At the same time, Irish 10 year bond yields have pushed through 10% for the first time, as concern grows that a bankruptcy may be in the offing.
To top it all off, the nastiness in the Gaze Strip continues to heat up, with a bomb blast in Jerusalem that has injured at least 25 people, but no casualties currently reported. My guess is that this may be the cause of the spike in Oil prices we saw overnight.
Momentum Change indicators are still on Sell, but it is possible that a new Buy signal can be generated at any time. There are currently no open trades.
Best To Your Trading!
Bill
Tuesday, March 22, 2011
3:30 post
Here are 2 SPY charts.. the 2 day 5 minute and the 1 month 15 minute. What we have here is a failure to advance. A series of lower lows and lower highs.
The Momentum Change indicators are still holding the Sell signal last confirmed 2/22. I don't feel there is any special insight that I have about how this is going to resolve its self. I felt yesterday that there was a good chance that the market could sell of from that attempt and failure at the 130 level. Now, I don't have any idea what tomorrow will bring. I guess that we will see a very small change in the McClellan today, which will signal a large move in the next day or two.
Sorry, but I don't have any idea. Better to sit on the sideline and await the next fat pitch.
Best To Your Trading!
Bill
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The Momentum Change indicators are still holding the Sell signal last confirmed 2/22. I don't feel there is any special insight that I have about how this is going to resolve its self. I felt yesterday that there was a good chance that the market could sell of from that attempt and failure at the 130 level. Now, I don't have any idea what tomorrow will bring. I guess that we will see a very small change in the McClellan today, which will signal a large move in the next day or two.
Sorry, but I don't have any idea. Better to sit on the sideline and await the next fat pitch.
Best To Your Trading!
Bill
3/22/2011 Tuesday Morning
The short positions entered late yesterday afternoon, with very tight stops were stopped out near the close. I knew that was a possibility but there was also a good possibility that there was a good profit potential. Here is a chart of the 15 minute SPY.... showing how the market is having difficulty throwing over the downtrend line.
The Momentum Change indicator Sell signal is still in effect, but is in a neutral position and yesterday, intra day, the SPY and the RUT moved temporarily into the Buy position, but faded on the close. So action today and tomorrow is very critical. There is a very good possibility that the SPY can overthrow the downtrend line, while it is also possible that it can re-test the lows of last week. As this is written, the SPY is falling away from the encounter with the downtrend line and the potential new Buy signal is fading away. For Now!
Now that the earthquake related troubles in Japan are considered "old" news, it is possible for the markets to consider the problems in Europe, where we learn that Ireland has missed a coupon payment, that Portugal debt is again reaching new highs on political unrest regarding the austerity measures. In the U.S, we learn that residential RE has resurfaced as a problem, with unit sales falling to new lows, 10% under last month at 466,000 annualized units, missing estimates of 510,000. And all over the world, inflation is causing distress, with inflation measured in the UK at 4.4% and the misery index has hit a 20 year high. In Libya, the U.S. Air Force lost a fighter due to mechanical failure, and the the Rebels seem to have re-gained momentum, And the real hot spot may turn out to be in the Gaza Strip, where the Palestinians and the Israelis are throwing explosives at each other, with 3 being killed last night.
After being higher overnight, with a 4% gain in the Nikkei, U.S equities market opened mixed and as of this writting, the Dow is down 27, the SPX is down 4.22 and the rest of the major indexes are also down. Oil is trading higher on the new problems in MENA, trading at 103.12 and Brent is trading higher at 115.4, Gold is higher at 1427.4 and Silver is close to new highs at 36.39. The Euro is soft, after reaching highs above 1.42, while the Dollar has caught a bid and is trading up at 75.54 Bonds are mixed, with the 10 Year trading off at 3.337 and the long Bond trading higher at 4.442%.
There are no trading ideas today....if the SPY runs back up to the down trend line with out flipping to a Buy signal, I will post a couple of new shorts, again with very tight stops.
Best to Your Trading!
Bill
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Now that the earthquake related troubles in Japan are considered "old" news, it is possible for the markets to consider the problems in Europe, where we learn that Ireland has missed a coupon payment, that Portugal debt is again reaching new highs on political unrest regarding the austerity measures. In the U.S, we learn that residential RE has resurfaced as a problem, with unit sales falling to new lows, 10% under last month at 466,000 annualized units, missing estimates of 510,000. And all over the world, inflation is causing distress, with inflation measured in the UK at 4.4% and the misery index has hit a 20 year high. In Libya, the U.S. Air Force lost a fighter due to mechanical failure, and the the Rebels seem to have re-gained momentum, And the real hot spot may turn out to be in the Gaza Strip, where the Palestinians and the Israelis are throwing explosives at each other, with 3 being killed last night.
After being higher overnight, with a 4% gain in the Nikkei, U.S equities market opened mixed and as of this writting, the Dow is down 27, the SPX is down 4.22 and the rest of the major indexes are also down. Oil is trading higher on the new problems in MENA, trading at 103.12 and Brent is trading higher at 115.4, Gold is higher at 1427.4 and Silver is close to new highs at 36.39. The Euro is soft, after reaching highs above 1.42, while the Dollar has caught a bid and is trading up at 75.54 Bonds are mixed, with the 10 Year trading off at 3.337 and the long Bond trading higher at 4.442%.
There are no trading ideas today....if the SPY runs back up to the down trend line with out flipping to a Buy signal, I will post a couple of new shorts, again with very tight stops.
Best to Your Trading!
Bill
Monday, March 21, 2011
Trading Alert
New Trades have been posted at the right.
I will have very tight stops tomorrow morning...maybe even this afternoon prior to the close.
The 5 minute candle is now breaking down and I think this is a relatively safe place for one shorts.
The Momentum Change indicators have begun to unwind the potential Buy signal I mentioned this morning, which is why intra day signals can be dangerous.
Best To YOur Trading
Bill
I will have very tight stops tomorrow morning...maybe even this afternoon prior to the close.
The 5 minute candle is now breaking down and I think this is a relatively safe place for one shorts.
The Momentum Change indicators have begun to unwind the potential Buy signal I mentioned this morning, which is why intra day signals can be dangerous.
Best To YOur Trading
Bill
3/21/2011 Monday Morning Trading Alert
There is not much news this morning that is not already on every cable news station... crises in Japan is looking to stabilize, Libya is feeling the impact of the No-Fly zone imposed by the NATO nations and with the consent of the Arab League. I looks like the "Risk Trade" is back on.
This morning, the Proprietary Momentum Changes indicators for the SPY and the Russell 2000 have flipped to BUY, while the NDX and the COMP and the Transports are still Sell, but are in the neutral zone. The SPY is having trouble breaking resistance at 130.00 and has now back away 3 times on the 5 minute. I will have some new recommendations this afternoon after we see the market this afternoon, going into the last 1/2 hour. In addition to the Momentum Change Buy signal, the VIX generated a new Buy signal on the close Friday, but nearly every Technician has already seen that.
The Oil market is higher at102.18, Gold is higher at 1429.9 and Silver is higher at 35.94 while the rest of the commodity complex is mixed. However, Copper is off again this morning and is not yet confirming the strong equities and PM markets. The Euro is higher, trading 1.419 while the Dollar continues lower, trading 75.54 and convincingly below support at 77 and only 150 basis points higher than next support around 74. The Bond market is soft, consistent with the "Risk Off" trade, with the 10 year trading lower at 3.342% and the long BOnd is lower, trading 4.459%.
Although currently with intra-day trading generating new Buy signals in the RUT and the SPY, I have seen previous new signals generated intra day deteriorate and disappear by days end. So I will wait until I see how the close is shaping up. In fact, my inclination is to short this rally around this level, and I was looking earlier at short opportunities at the 129 level. So lets wait and let the market show us what it wants to do.....that is the whole purpose of the Momentum Change indicators.
Best To Your Trading!
Bill
This morning, the Proprietary Momentum Changes indicators for the SPY and the Russell 2000 have flipped to BUY, while the NDX and the COMP and the Transports are still Sell, but are in the neutral zone. The SPY is having trouble breaking resistance at 130.00 and has now back away 3 times on the 5 minute. I will have some new recommendations this afternoon after we see the market this afternoon, going into the last 1/2 hour. In addition to the Momentum Change Buy signal, the VIX generated a new Buy signal on the close Friday, but nearly every Technician has already seen that.
The Oil market is higher at102.18, Gold is higher at 1429.9 and Silver is higher at 35.94 while the rest of the commodity complex is mixed. However, Copper is off again this morning and is not yet confirming the strong equities and PM markets. The Euro is higher, trading 1.419 while the Dollar continues lower, trading 75.54 and convincingly below support at 77 and only 150 basis points higher than next support around 74. The Bond market is soft, consistent with the "Risk Off" trade, with the 10 year trading lower at 3.342% and the long BOnd is lower, trading 4.459%.
Although currently with intra-day trading generating new Buy signals in the RUT and the SPY, I have seen previous new signals generated intra day deteriorate and disappear by days end. So I will wait until I see how the close is shaping up. In fact, my inclination is to short this rally around this level, and I was looking earlier at short opportunities at the 129 level. So lets wait and let the market show us what it wants to do.....that is the whole purpose of the Momentum Change indicators.
Best To Your Trading!
Bill
Friday, March 18, 2011
3/18/2011 TGIF
After the UN voted to impose a "No Fly" zone in Libya, Oil shot back up from around 96 to over 103. Then Libya announced that they welcomed the "No Fly" zone and that they would be happy to comply and start talking with the opposition groups. Of course Oil then retreated back to 100 and the European markets all rallied.. even the Asian markets rallied. Kinda gets you all teary-eyed doesn't it?.
After trading higher overnight, the Dow opened higher and traded up as much as 150 points. as this is written at 10:30, the Dow is up 143, the SPX is up 13 and all the other major indexes are also higher. Oil is off, trading at 100.99, Gold is higher at 1421.9 and Silver is higher at 35.15. The entire commodity comlex is also sharply higher this morning, with Corn leading the way with a 5% advance. The Euro has blown through resistance at 1.405 and is trading at 1.413. IN the meantime, the Dollar has continued its fall toward irrelevance, trading at 75.81. After major central back support for the Dollar vs the Yen, the Dollar is back down to 81.06.
Here is a chart of the U.S. Dollar, the U.S. long Bond, the Euro and the SPX. As you can see, when the Long bond is strong and the Euro is strong, and the Dollar is weak, that is not a good prescription for the SPX. IN other words, Euro Up, Bond Up, Dollar Down equals SPX down.
The Proprietary Momentum Change indicators are still working on the Sell signal last confirmed on 2/22. We have no open trades, but I am looking for an opportunity to reenter the short side if the SPX can get back up to around 1295-1300. Then we will see how the Momentum indicator is behaving. Currently, the Momentum Change is Bearish, the longer term indicator are also Bearish. But some of our timing signals are pointing to a direction change due shortly. For the present, I have no suggestions except wait for the fat pitch to re-enter the market.
Best To Your Trading!
Bill
After trading higher overnight, the Dow opened higher and traded up as much as 150 points. as this is written at 10:30, the Dow is up 143, the SPX is up 13 and all the other major indexes are also higher. Oil is off, trading at 100.99, Gold is higher at 1421.9 and Silver is higher at 35.15. The entire commodity comlex is also sharply higher this morning, with Corn leading the way with a 5% advance. The Euro has blown through resistance at 1.405 and is trading at 1.413. IN the meantime, the Dollar has continued its fall toward irrelevance, trading at 75.81. After major central back support for the Dollar vs the Yen, the Dollar is back down to 81.06.
Here is a chart of the U.S. Dollar, the U.S. long Bond, the Euro and the SPX. As you can see, when the Long bond is strong and the Euro is strong, and the Dollar is weak, that is not a good prescription for the SPX. IN other words, Euro Up, Bond Up, Dollar Down equals SPX down.
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The Proprietary Momentum Change indicators are still working on the Sell signal last confirmed on 2/22. We have no open trades, but I am looking for an opportunity to reenter the short side if the SPX can get back up to around 1295-1300. Then we will see how the Momentum indicator is behaving. Currently, the Momentum Change is Bearish, the longer term indicator are also Bearish. But some of our timing signals are pointing to a direction change due shortly. For the present, I have no suggestions except wait for the fat pitch to re-enter the market.
Best To Your Trading!
Bill
Thursday, March 17, 2011
3/17/2011 Thursday Morning
First Call has the Dow up 125, following on a broad gain in Europe and another day of losses in the Asian markets. The whole commodity complex and PM's are higher this morning, as is the Euro. The Dollar is off, trading under 76 at 75.91. The U.S. long Bond is off sharply, down 1.5 points, at 4.417%.
After all is resolved with the troubles in Japan, I suspect the problem remaining for this country is going to be the collapse of the U.S. Dollar, the accelerating inflation levels, and an economy that can't get off the Fed POMO teat.
I will be out until around 1:00pm today. I am looking for a re-entry point for another series of short trades, somewhere around the 1300 level, depending of course on Momentum Change indicators.. I doubt the indicators can change quickly enough to flip back to Buy with out a retest of the lows
Bill
After all is resolved with the troubles in Japan, I suspect the problem remaining for this country is going to be the collapse of the U.S. Dollar, the accelerating inflation levels, and an economy that can't get off the Fed POMO teat.
I will be out until around 1:00pm today. I am looking for a re-entry point for another series of short trades, somewhere around the 1300 level, depending of course on Momentum Change indicators.. I doubt the indicators can change quickly enough to flip back to Buy with out a retest of the lows
Bill
Wednesday, March 16, 2011
Humpday...3/16/2001
I have been waiting for the rally to get up to resistance around 130 before re-entering the market, and had thought we might get that today. Now, in the past 15 minutes, there have been warnings of potential catastrophic meltdown possible in the next few hours and the market fell out of bed.. a mini crash. the market has rallied off its lows, and is currently trading off 120 Dow Points.
I am not a day trader, although that is a lot of fun. But for purposes of this blog, I have longer term objectives. This is not set up to be able to act a quickly as a day trader must. Having said that, we are in a market where it is best have a plan and be ready to act on that plan. As long as momentum remains Bearish, I will be looking for a new SPY trade on a rally somewhere around 130. Meantime, keep the powder dry and ready to act.
Best To Your Trading!
Bill
I am not a day trader, although that is a lot of fun. But for purposes of this blog, I have longer term objectives. This is not set up to be able to act a quickly as a day trader must. Having said that, we are in a market where it is best have a plan and be ready to act on that plan. As long as momentum remains Bearish, I will be looking for a new SPY trade on a rally somewhere around 130. Meantime, keep the powder dry and ready to act.
Best To Your Trading!
Bill
Tuesday, March 15, 2011
Tuesday Morning as the dust settles
As of this time, all trades have been stopped out and closed. Momentum Change indicators are still Bearish, and I will be looking for a re-entry point this afternoon or tomorrow. The market should have a decent bounce off this huge gap open and should present us with another opportunity to get short for the next leg down.
The news out of Japan is on every media outlet, so I assume you current. Many observers are concerned that financially, Japan is in no position to deal with the disaster with out severe consequences to their economy. At this point, there is no understanding of what they will be able to do that will not reverberate through the world markets with a deleterious impact on every asset class. This morning, there is not an up tick in any of the commodity complex, with Oil trading down hard at 98.07 after trading as low as 96.71. Gold is also down, trading at 1398 and Silver at 34.43. All soft commodities are down hard, over 3% in every market, with Wheat leading the way, off 6.5% The surprise for me is how little impact this even is having on the Euro, down a little at 1.3946, while the Dollar is a little higher at 76.56. I don't think the little bounce in the Dollar bodes well for the continued recognition of the Dollar as the "Safe Haven" currency.
The bond market are strong, with the 10 year Note up a half point, at 3.286 and the Bond up a point at 4.468% The U.S. debt markets are showing strength, coming off long term support, that if continued, will have a negative impact on the equity markets.
I will have some charts and some ideas this afternoon as the news out of Japan is consolidated into the markets. IN the meantime, what is clear is that major support has been broken by all the major equity indexes, and serious damage has been done. The Momentum Change indicators are still working with the last Sell confirmation signal, and I am looking for a point to re-enter the short side. But know that the next signal will be a Buy signal and we want to be able to catch the market near its turn. So I will be on high alert for a bounce off support around 1260 on the SPX, and wary of a new Buy signal that could be just around the corner.
Best to Your Trading!
Bill
The news out of Japan is on every media outlet, so I assume you current. Many observers are concerned that financially, Japan is in no position to deal with the disaster with out severe consequences to their economy. At this point, there is no understanding of what they will be able to do that will not reverberate through the world markets with a deleterious impact on every asset class. This morning, there is not an up tick in any of the commodity complex, with Oil trading down hard at 98.07 after trading as low as 96.71. Gold is also down, trading at 1398 and Silver at 34.43. All soft commodities are down hard, over 3% in every market, with Wheat leading the way, off 6.5% The surprise for me is how little impact this even is having on the Euro, down a little at 1.3946, while the Dollar is a little higher at 76.56. I don't think the little bounce in the Dollar bodes well for the continued recognition of the Dollar as the "Safe Haven" currency.
The bond market are strong, with the 10 year Note up a half point, at 3.286 and the Bond up a point at 4.468% The U.S. debt markets are showing strength, coming off long term support, that if continued, will have a negative impact on the equity markets.
I will have some charts and some ideas this afternoon as the news out of Japan is consolidated into the markets. IN the meantime, what is clear is that major support has been broken by all the major equity indexes, and serious damage has been done. The Momentum Change indicators are still working with the last Sell confirmation signal, and I am looking for a point to re-enter the short side. But know that the next signal will be a Buy signal and we want to be able to catch the market near its turn. So I will be on high alert for a bounce off support around 1260 on the SPX, and wary of a new Buy signal that could be just around the corner.
Best to Your Trading!
Bill
Its Tuesday and It's Leaking
News out of Japan is not good this morning... the out-of-service unit has caught fire and the fire has been extinguished, but it is thought that a melt down has occurred in unit #2, releasing substantial amounts of radioactivity. Currently, winds are blowing towards Tokyo with radioactive levels 40 times normal. There are reports of panic in the largest city in Japan as residents leave the city.
This is intended as an alert only, I have no new trades. I will post an update about 10:30 after the market has a chance to stabilize after the open. Pre-Open the Dow looks like it will open down about 250 points and the SPX down 32 at 1258. The market will likely rally after the open, and will give us a better look at price direction.
This is intended as an alert only, I have no new trades. I will post an update about 10:30 after the market has a chance to stabilize after the open. Pre-Open the Dow looks like it will open down about 250 points and the SPX down 32 at 1258. The market will likely rally after the open, and will give us a better look at price direction.
Monday, March 14, 2011
Monday Mid-Day
The Dow and all major indexes are falling again this morning, with the Dow at 12:30pm off 135, the SPX off 16.20 and the rest of the indexes all off over 1%, with the transports leading on the way down, off 2.20%. I have updated the stop loss prices for the second time this date and the new stop loss prices are posted at the right. It is clear that the markets are experiencing a "Risk Off" moment.. I just wish that Risk Off trade would demonstrate its regard for the U.S. Dollar, which is trading down at 76.51, down 0.35% in the day.
I won't bore you with additional comments on the disaster in Japan, only to express my concern for all the people directly effected by the events of the past nearly 4 days. The latest news I have seen is commenting on the apparently misleading information being presented by the Japanese government... and the recent reports that all of the 5 out of 8 generators in service at the time of the earthquake are now in some stage of core failure and the complete lack of options for the operators. It appears we are not even at the end of the beginning of this disaster.
The news out of the MENA region continues to deteriorate, with news of the Sauds sending troops into Bahrain. Do we need to be reminded that the Gwahar 5,000,000 bpd oil field is only 60 miles from Bahrain? The markets are apparently remembering inter-connectedness of the world economy. Charles Hughes Smith has an interesting post at OfTwoMinds.com that details some of that inter-connectedness.
Oil started the day trading just above $98, and has rallied to 100.45, while Gold is higher at 1429 and Silver is back above 36. The Euro is off a little, trading at 1.395 and the Dollar is very weak, off 0.35% at 76.51. The balance of the commodity complex is off with the exception of Rough Rice, which is up 3% at 13.7 The 10 Year Note is up, trading at 3.343% and the Bond is up, trading at 4.532%
The Momentum Changes indicator is still Bearish, although I am not recommending new positions. I have updated that stop loss prices for open trades again and they are posted at the right. Some of the cycle work that I follow is looking for a cycle low late this week or early next week, so I want to make the point that this February top is not likely The Top. That same cycle work and and several timing tools are not looking for The Top until late May.
Best To Your Trading!
Bill
I won't bore you with additional comments on the disaster in Japan, only to express my concern for all the people directly effected by the events of the past nearly 4 days. The latest news I have seen is commenting on the apparently misleading information being presented by the Japanese government... and the recent reports that all of the 5 out of 8 generators in service at the time of the earthquake are now in some stage of core failure and the complete lack of options for the operators. It appears we are not even at the end of the beginning of this disaster.
The news out of the MENA region continues to deteriorate, with news of the Sauds sending troops into Bahrain. Do we need to be reminded that the Gwahar 5,000,000 bpd oil field is only 60 miles from Bahrain? The markets are apparently remembering inter-connectedness of the world economy. Charles Hughes Smith has an interesting post at OfTwoMinds.com that details some of that inter-connectedness.
Oil started the day trading just above $98, and has rallied to 100.45, while Gold is higher at 1429 and Silver is back above 36. The Euro is off a little, trading at 1.395 and the Dollar is very weak, off 0.35% at 76.51. The balance of the commodity complex is off with the exception of Rough Rice, which is up 3% at 13.7 The 10 Year Note is up, trading at 3.343% and the Bond is up, trading at 4.532%
The Momentum Changes indicator is still Bearish, although I am not recommending new positions. I have updated that stop loss prices for open trades again and they are posted at the right. Some of the cycle work that I follow is looking for a cycle low late this week or early next week, so I want to make the point that this February top is not likely The Top. That same cycle work and and several timing tools are not looking for The Top until late May.
Best To Your Trading!
Bill
Monday Morning... Trading Alert
Please note the stop loss prices have been tightened again.
Morning post to follow shortly.
Bill
Morning post to follow shortly.
Bill
Friday, March 11, 2011
Friday Morning
Mr Market continued its new declining ways overnight and opened soft this morning. After a "dead cat bounce" that took the Dow to plus 20, the market reversed and is currently down 33 Dow points. All of the rest of the major indexes are also off this morning. As the Copper prices has seemed to lead the market since March, 09, I think it should be fitting to review the chart for Copper and I have used the Copper ETF....JJC. Notice that it has broken down in a significant way.... breaking long term support and long term trend support lines that had come together and at the same time, forming a large Head and Shoulders formation and then breaking the neck line with authority.
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The SPY looks similar without the H&S.
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Oil is lower at 100.16 as the Japanese earthquake has taken Japanese refinery capacity off line, reducing demand. Gold is off at 1411.3 and Silver also trading lower at 34.57. The Risk Off trade takes a little hit today, as the Euro is up, trading at 1.383 and the Dollar down at 77.01. The 10 year Note is off 1/2 after the big run up yesterday, trading at 3.39% and the Bond off 5/8 at 4.54%
The big news this morning is of course the huge earthquake that hit Japan just off shore on the East Coast, sending a 30 foot Tsunami around the the Pacific. The impact on the market is expected to include the Japanese need to liquidate liquid assets which will include the big positions taken recently in Euro Sovereign debt, and the expected insurance losses. In addition, the loss of Japanese refinery capacity will impact demand for Oil, which has already shown in the oil market.
There is an interesting report this morning at Zerohedge on the sharp and persistent decline in the Shadow Banking and Conventional banking system. The article is written as a reason that QE3 will likely be necessary.. as the Fed becomes the only source of liquidity... even though it is clear that QE2 has failed. Of course, many comments insist that this means inflation. But there is another way to see this decline in the Shadow Bank system. I have a friend who is very well established in the commercial RE industry who 3 years ago had a net worth of about 12 million dollars, and a healthy cash position in addition to his numerous commercial building. After being forced to bring large cash deposits to the table in order to refinance 2 of his buildings, and finding himself suddenly without his cash, and realizing that he would be unable to bring cash to the refinance of his remaining buildings, and at this same time understanding that he could not sell any properties to raise cash, he made a statement that blew my mind. He referred to the fear the general public has about the Fed liquidity programs, and the possibility of inflation and he said..."I don't care how much money they print.. we are going to run out of money."
When we learn that the Shadow Banking system had seen a drop of $440 Billion after 19 months of decline, we get an idea of just how much credit is being destroyed and the deflationary impact on the economy. Inflation may well be in our future, but it seems to me that deflation is the more timely concern.
Oh, and the Momentum Change indicators are still Bearish. No additional change to the stop loss prices, but I may have some new trades this afternoon.
Best To Your Trading!
Bill
Thursday, March 10, 2011
It's "Finanlly Going Our Way " Thursday
OK.. everyone knows the Dow is off 220 points, and every market in the world posted declines overnight. The open on my screen was Dow down 150, and it has been trending lower since. All major indexes are also down over 1.5%. The only 2 new pieces of information that I can find are news about Trade Deficits in China and the U.S. China posted a 7.3 Billion Trade Deficit vs expectations of 4.9 Billion Surplus, and the U.S. posted a Trade Deficit of 46.3 Billion vs expectations of 41.5 Billion Deficit. Makes me wonder who posted a Trade Surplus.
Initial Unemployment claims printed this week at 397,000 vs expectations of 376,000 and the upwardly revised 371,000 from last week. Of course the good news is that 200,000 dropped off the extended benefit list and are therefore no longer counted as "unemployed", thus the numerator for the Unemployment Ratio makes the monthly report much easier to spin up as a positive.
Military intervention in Libya seems now to be a foregone conclusion, beginning with a "no-fly" order for the Libyan military jets. And reports now have all 7 of the front line U.S. Aircraft Carriers now at sea, mission unknown. Anyone want to take bets on where the last 3 are headed?
Oil is trading lower at 101.37, as is Gold at 1412.20 and Silver at 34.98. A peek at the commodity screens and I don't see a single Green arrow in the bunch. The Euro is off, trading at 1.380 and the Dollar is higher at 77.25. The 10 year Note is higher at 3.445% and the Bond is also higher at 4.586%. I feel I can report with impunity that, at least for today, the "RISK" Trade is OFF!.
Momentum Changes indicators are of course still Bearish... please note the tightened Stop Loss prices at the right. I will continue to tighten these stops as trading progresses.
Best To Your Trading.!
Bill
Initial Unemployment claims printed this week at 397,000 vs expectations of 376,000 and the upwardly revised 371,000 from last week. Of course the good news is that 200,000 dropped off the extended benefit list and are therefore no longer counted as "unemployed", thus the numerator for the Unemployment Ratio makes the monthly report much easier to spin up as a positive.
Military intervention in Libya seems now to be a foregone conclusion, beginning with a "no-fly" order for the Libyan military jets. And reports now have all 7 of the front line U.S. Aircraft Carriers now at sea, mission unknown. Anyone want to take bets on where the last 3 are headed?
Oil is trading lower at 101.37, as is Gold at 1412.20 and Silver at 34.98. A peek at the commodity screens and I don't see a single Green arrow in the bunch. The Euro is off, trading at 1.380 and the Dollar is higher at 77.25. The 10 year Note is higher at 3.445% and the Bond is also higher at 4.586%. I feel I can report with impunity that, at least for today, the "RISK" Trade is OFF!.
Momentum Changes indicators are of course still Bearish... please note the tightened Stop Loss prices at the right. I will continue to tighten these stops as trading progresses.
Best To Your Trading.!
Bill
Wednesday, March 9, 2011
Wednesday Morning
The market opened soft this morning, trading off 20 Dow points in the first 15 minutes. Europe and Asia were mixed over night. Greek and Portuguese debt were again in the news as the ECB ministers get ready to meet again to sort out the debt issues of the "periphery" nations. Oil continues to consolidate its gains, trading in narrow range and trading currently higher at 105.49. Gold is higher, trading at 1432.30 while Silver is higher at 36.02. The commodity complex is mostly higher
The Euro is higher after being lower over night, trading at 1.3921 and the Dollar is again lower, trading at 76.67. U.S. debt is firming after 3 days of weakness, with the 10 year Note trading at 3.529 and the Bond trading at 4.64
Not much "new" news this morning, with the same-old-same old MENA troubles, however Zerohedge is reporting a "leaked" pre-publication statement from Bill Gross at PIMCO that the worlds largest Bond Fund has completely eliminated all U.S. Treasuries from its portfolio, and currently has $54.5 Billion in cash, the largest cash position it has ever held. That's a lot of cash!. But what I find the most interesting is that among his remaining debt positions (there are 5 sectors), the longest duration portfolio is 3.98 years. Let me help you understand what this means. The guy who is most likely the most connected insider of all connected insiders does not like U.S. debt, and he does not want the principle risk associated with longer term debt portfolios. My take away is that he expects higher rates and does not like the Dollar. Duh!
Here is a link to the PIMCO report.
Looking at his portfolio duration, he is thinking very short term. I can't imagine that the market he apparently sees developing is one that will be favorable for long term stock and bond holders.
The Momentum Change indicators are still Bearish, with little movement yesterday with the 124 point rally. Mr Market is stuck in a very narrow trading range, with a series of higher lows and lower highs... it should resolve its self in the next few days, as there is little room to continue the developed patterns.
Best To Your Trading!
The Euro is higher after being lower over night, trading at 1.3921 and the Dollar is again lower, trading at 76.67. U.S. debt is firming after 3 days of weakness, with the 10 year Note trading at 3.529 and the Bond trading at 4.64
Not much "new" news this morning, with the same-old-same old MENA troubles, however Zerohedge is reporting a "leaked" pre-publication statement from Bill Gross at PIMCO that the worlds largest Bond Fund has completely eliminated all U.S. Treasuries from its portfolio, and currently has $54.5 Billion in cash, the largest cash position it has ever held. That's a lot of cash!. But what I find the most interesting is that among his remaining debt positions (there are 5 sectors), the longest duration portfolio is 3.98 years. Let me help you understand what this means. The guy who is most likely the most connected insider of all connected insiders does not like U.S. debt, and he does not want the principle risk associated with longer term debt portfolios. My take away is that he expects higher rates and does not like the Dollar. Duh!
Here is a link to the PIMCO report.
Looking at his portfolio duration, he is thinking very short term. I can't imagine that the market he apparently sees developing is one that will be favorable for long term stock and bond holders.
The Momentum Change indicators are still Bearish, with little movement yesterday with the 124 point rally. Mr Market is stuck in a very narrow trading range, with a series of higher lows and lower highs... it should resolve its self in the next few days, as there is little room to continue the developed patterns.
Best To Your Trading!
Tuesday, March 8, 2011
Tuesday Morning
After being mostly lower overnight, the market opened high this morning, with the Dow trading puls 40 at 10:00am. The rest of the major indexes were mixed. Oil traded lower overnight, and is trading at 104.60, Gold and Silver are mixed, with Gold trading lower at 1430.10 and Silver higher at 35.95. Copper is trading lower at 4.291 and looks to have broken a major up trend support line. Without its most recognized leader, Mr Market may find advancing more difficult.
The Euro got just above 1.40 before falling back, trading currently at 1.388, while the dollar finds a little strength, trading at 76.88. The Bond market has been all over the place overnight, finally losing bidders after the open. News out of Europe has the Greek 10 year note trading at 12.76% (can you believe that!), and the Portuguese 10 year has surged to 7.66%. While not at high as the Greek note, it is a new high for the Portuguese note. As the world has focused attention on the MENA region and the violence and oil production disruptions, the debt troubles of Europe continue to boil.
Light news day for the financial press...... must mean nothing is happening. As I started writing this post, the Dow has traded up, reaching plus 72, and the SPX reaching plus 7.05. All of the rest of the major indexes are now higher, with the Transports leading the way, up 1.68%. The SPY has gotten back with in its triangle pattern after breaking support yesterday. But it still has a way to go before breaking out to the upside.
The Momentum Change indicators are still Bearish, but we are watching carefully for any reversal.
Best to your trading!
Bill
The Euro got just above 1.40 before falling back, trading currently at 1.388, while the dollar finds a little strength, trading at 76.88. The Bond market has been all over the place overnight, finally losing bidders after the open. News out of Europe has the Greek 10 year note trading at 12.76% (can you believe that!), and the Portuguese 10 year has surged to 7.66%. While not at high as the Greek note, it is a new high for the Portuguese note. As the world has focused attention on the MENA region and the violence and oil production disruptions, the debt troubles of Europe continue to boil.
Light news day for the financial press...... must mean nothing is happening. As I started writing this post, the Dow has traded up, reaching plus 72, and the SPX reaching plus 7.05. All of the rest of the major indexes are now higher, with the Transports leading the way, up 1.68%. The SPY has gotten back with in its triangle pattern after breaking support yesterday. But it still has a way to go before breaking out to the upside.
The Momentum Change indicators are still Bearish, but we are watching carefully for any reversal.
Best to your trading!
Bill
Monday, March 7, 2011
Monday Morning
Oil, Gold, Silver saw big gains in pre-market trading over the weekend, with Oil trading as high as 106.95 before rumors of Gadaffi making a peace gesture to the rebels.. Oil is currently trading up on the day at 105. Gold is higher at 1438.90 and Silver is up at 36.42. Anyone want to guess where the Dollar is trading? If you guessed lower, you would be right. Dollar is off, trading at 76.30, while the Euro is strong, trading at 1.4008. Every trading site I looked at over the week end is commenting on the Trend support line that the Dollar has violated, and talk is about the collapse of the Dollar, not the pending collapse, or the imminent collapse of the Dollar, rather the Collapse of the Dollar. Even Greenspan is talking about the flight of investment capital into PM's
The Commodity complex is again strong, with Cotton leading the way. The domestic debt market is weak, with the 10 year Note trading off 1/2 at 3.54% and the Bond off 5/8 at 4.64.
The Dow opened strong, gaping up nearly 50 points and trading up 70 at 10:00am before pulling back, currently up 20. The SPX also opened higher, trading up 3.40 points, currently trading up 1.41. The rest of the major indexes are all trading lower, led by the Transports which are trading 0.35% lower. I can't find the news that triggered the recent sell off, but but the time I get this posted, I am sure the reason will be clear.
There is news this morning that Fed FOMC members are now openly debating whether or not QE11 should be halted, with all the good news on the economy last week. The rumors of a QE3 are also being challenged.
I read an interesting comment at Slope of Hope this morning, describing the kinds of markets identified with advancing or declining Dollar.
#1) When the dollar and stocks are both up, we are in a true bull market with a healthy, strong economy (** note that this has not happened for years now).
#2) When the dollar is down and stocks are up, we are in a "fake" bull market (see years 2003-2007 and the current market). In this scenario, equities are rising only because the dollar is falling and exports become cheaper, but it is not really healthy and/or sustainable.
#3) When the dollar is rising and equities are falling, we are experiencing deflation (note that May 2010 was a highly volatile, deflationary move). Deflationary moves are very trade-able for short term bears and are usually reflected by declining bond yields.
#4) When the US Dollar falls and equities fall together, the "game is basically over". The market period from year 2001 to 2003 is a technical example of this scenario.
A tip of the hat to facesincabs.....good stuff!
It looks like Mr Market is setting us up for another whipsaw...... I would love to get a Buy signal so I could BTFD, as it seems that is the only trade generating profits. I know a few other bloggers are getting tired of these whipsaws! But I will stay with the latest trades until they get stopped out or they generate a profit. The momentum again this morning is still Bearish, despite the late Friday afternoon rally and this morning's quick 70 point gain. As this post is completed, the Dow is up 30 points, , while the rest of the indexes are mixed.
Best to Your Trading!
Bill
The Commodity complex is again strong, with Cotton leading the way. The domestic debt market is weak, with the 10 year Note trading off 1/2 at 3.54% and the Bond off 5/8 at 4.64.
The Dow opened strong, gaping up nearly 50 points and trading up 70 at 10:00am before pulling back, currently up 20. The SPX also opened higher, trading up 3.40 points, currently trading up 1.41. The rest of the major indexes are all trading lower, led by the Transports which are trading 0.35% lower. I can't find the news that triggered the recent sell off, but but the time I get this posted, I am sure the reason will be clear.
There is news this morning that Fed FOMC members are now openly debating whether or not QE11 should be halted, with all the good news on the economy last week. The rumors of a QE3 are also being challenged.
I read an interesting comment at Slope of Hope this morning, describing the kinds of markets identified with advancing or declining Dollar.
#1) When the dollar and stocks are both up, we are in a true bull market with a healthy, strong economy (** note that this has not happened for years now).
#2) When the dollar is down and stocks are up, we are in a "fake" bull market (see years 2003-2007 and the current market). In this scenario, equities are rising only because the dollar is falling and exports become cheaper, but it is not really healthy and/or sustainable.
#3) When the dollar is rising and equities are falling, we are experiencing deflation (note that May 2010 was a highly volatile, deflationary move). Deflationary moves are very trade-able for short term bears and are usually reflected by declining bond yields.
#4) When the US Dollar falls and equities fall together, the "game is basically over". The market period from year 2001 to 2003 is a technical example of this scenario.
A tip of the hat to facesincabs.....good stuff!
It looks like Mr Market is setting us up for another whipsaw...... I would love to get a Buy signal so I could BTFD, as it seems that is the only trade generating profits. I know a few other bloggers are getting tired of these whipsaws! But I will stay with the latest trades until they get stopped out or they generate a profit. The momentum again this morning is still Bearish, despite the late Friday afternoon rally and this morning's quick 70 point gain. As this post is completed, the Dow is up 30 points, , while the rest of the indexes are mixed.
Best to Your Trading!
Bill
Friday, March 4, 2011
Friday Update,. Trading Alert
The Dow is down 160 points, the SPX is down 1583 and all the major indexes are off over 1%. Oil is exploding, up over 2 at 104.14 and Brent is trading at 116.14. Violence is increasing in Libya, disappointment here in the NFP jobs report and the 27 year low in the labor force.
The Momentum Change signals have been producing whipsaws for the past couple of months, even though they continue to be Bearish with out producing any Buy signals. It is clear that distribution is going on in the markets, volume expands on the down side, but I have been unwilling to leave new positions exposed without protective stop loss points. It is part of the discipline I encourage to prevent large losses and getting trapped on the wrong side of a move.
I have learned that each trade must stand on its own, although it is emotionally and psychologically abusive to keep entering a trade and quickly getting stopped out, then re-entering a trade at nearly the same price as the last entry.. But money management requires it. I feel that the the overwhelming Bearish momentum requires that trades be entered again to participate in what could be a decline to the 1225-1250 level.. The SPX is again below the trend support line established since 8/25/2010 and is trading on the trend support line established since 3/9/2009.
It may be that the market can rally again off these support lines, but the risk reward ratios favor again taking a position to profit from a sharp decline that has been building cause for 2 months. I am re-entering the same short levered ETF's that have been recommend previously.
Best To Your Trading!
Bill
The Momentum Change signals have been producing whipsaws for the past couple of months, even though they continue to be Bearish with out producing any Buy signals. It is clear that distribution is going on in the markets, volume expands on the down side, but I have been unwilling to leave new positions exposed without protective stop loss points. It is part of the discipline I encourage to prevent large losses and getting trapped on the wrong side of a move.
I have learned that each trade must stand on its own, although it is emotionally and psychologically abusive to keep entering a trade and quickly getting stopped out, then re-entering a trade at nearly the same price as the last entry.. But money management requires it. I feel that the the overwhelming Bearish momentum requires that trades be entered again to participate in what could be a decline to the 1225-1250 level.. The SPX is again below the trend support line established since 8/25/2010 and is trading on the trend support line established since 3/9/2009.
It may be that the market can rally again off these support lines, but the risk reward ratios favor again taking a position to profit from a sharp decline that has been building cause for 2 months. I am re-entering the same short levered ETF's that have been recommend previously.
Best To Your Trading!
Bill
TGIF
After being higher overnight, the market has opened flat, and at 10:00am the Dow is down 15, the SPX down 2.75 and all the major indexes are also off less than 0.50%. It is likely we will see a consolidation day today after the trend day yesterday. The media is focused on the positive news on the labor front as being the spark behind yesterdays advance, with short covering providing the fuel. Expectations this morning were for a NFP (Non-Farm Payrolls) print at 296,000, with rumors running as high as 250,000, but came in lower at 292.000. Unemployment was also nominally lower, printing 8.9%. However, the picture is a little less bright when it is considered that the Labor Force Participation rate is at 25 year lows, printing for the second month at 64.2% If the LFP were at historic trend, 200 basis points higher, the unemployment rate would 11.6%. Included in the NFP report are 118,000 "birth/death" new jobs.....another one of those "let's guess" estimates about unmeasured small business additions to new jobs.
In the mean time, violence in Libya seems again to be increasing, with reports of oil wells near Benghazi being on fire, the Kingdom of Saud is experiencing increased unrest, and Iranian protester take to the streets again. Oil has traded higher over night, and WT crude is above 103, and Brent above 116. Gold is again on the move, trading higher at 1427 and Silver is higher, trading at 34.65. The rest of the commodity complex is mostly higher. Bonds are also higher, with the 10 year Note trading at 3.512% and the Bond trading at 4.608%. The Euro is about to hit 140, trading 3.995 and the Dollar is continuing its retreat, trading 76.38.
Since I started writing, the stock market has retreated, with the Dow now now 74 and the SPX down 8.65. The pattern for the equities market since Feb 21 continues to be lower highs and higher lows. Mr Market will find himself in a corner, where he will have to make up his mind.
The Momentum Change indicators continue to be Bearish, and little change yesterday to the numbers. Depending on action today, we may have new trade recommendations this afternoon.
Best To Your Trading!
Bill
In the mean time, violence in Libya seems again to be increasing, with reports of oil wells near Benghazi being on fire, the Kingdom of Saud is experiencing increased unrest, and Iranian protester take to the streets again. Oil has traded higher over night, and WT crude is above 103, and Brent above 116. Gold is again on the move, trading higher at 1427 and Silver is higher, trading at 34.65. The rest of the commodity complex is mostly higher. Bonds are also higher, with the 10 year Note trading at 3.512% and the Bond trading at 4.608%. The Euro is about to hit 140, trading 3.995 and the Dollar is continuing its retreat, trading 76.38.
Since I started writing, the stock market has retreated, with the Dow now now 74 and the SPX down 8.65. The pattern for the equities market since Feb 21 continues to be lower highs and higher lows. Mr Market will find himself in a corner, where he will have to make up his mind.
The Momentum Change indicators continue to be Bearish, and little change yesterday to the numbers. Depending on action today, we may have new trade recommendations this afternoon.
Best To Your Trading!
Bill
Thursday, March 3, 2011
Thursday Mid-day
The market exploded higher this morning, opening up 150 Dow points, and at noon is trading higher, up 180 points. All the major indexes are higher with the Transports the best performer, up 2.44%. There are any number of explanations for the move, from the reports out of Europe that interest rates could be increased as early as April due to inflation concerns and the surge in the Euro above 1.385, to the drop in new unemployment claims to 368,000, to the better than expected Services ISM print, to the early reports of a decline in oil prices, to the Retail Sales reports for Feb that print higher than expected. Take your pick... probably all of the above.
As of 12:00pm, the Momentum Change indicators are still firmly on the Bearish side, as they have been since Jan, 20, and they not likely move to neutral this afternoon. Since he February 18 top and the February 22 bottom, the market has been forming a series of lower highs and higher lows, effectively painting itself into a corner, and pattern is consistent over all time frames. The 5 minute chart indicates a downtrending resistance about 133.25, and if a candle can close above that level, there is a probability of even higher prices today. If the SPY can't trade higher than 133.25 on a 5 minute candle close, it is likely the market will give up some of its gains.
As a brief round-up of price action, WT crude is off 0.93, trading at 101.30, Brent is off 2 at 114.38, Gold is off 13.70 at 1424 and silver is off .36 at 34.47. The rest of the commodity complex is catching the hot money, with the whole food complex up big. The Euro has been flying, with the Euro trading 1.3941, up 0.59%.. a huge move, while the Dollar falls to 76.58. Bonds are also weak, with the 10 year Note trading off 3/4 at 3.5591 and the Bond off 1 at 4.6277 on top of a large decline yesterday.
I have been expressing concern about the performance of the Dollar, and it looks now like it has violated significant long term support. Here is the current chart, courtesy of StockCharts, showing the violation of a 3 year trend support line and is nearing a major support line.
This a development that has major long term implications and is perhaps the least well understood by the investing public. We are like fish swimming in water, unaware of the water, as we buy and sell in our domestic currency, unaware of its changing value.
I am unhappy that the trades got stopped out, but there is another trading coming along shortly, either on the short side or the long side. I remain committed to a trading discipline that will identify market momentum, while protecting capital against painful losses. No loss is fun, even small ones, but capital remains intact, allowing a trader to move on to the next trade.
Best To Your Trading!
Bill
As of 12:00pm, the Momentum Change indicators are still firmly on the Bearish side, as they have been since Jan, 20, and they not likely move to neutral this afternoon. Since he February 18 top and the February 22 bottom, the market has been forming a series of lower highs and higher lows, effectively painting itself into a corner, and pattern is consistent over all time frames. The 5 minute chart indicates a downtrending resistance about 133.25, and if a candle can close above that level, there is a probability of even higher prices today. If the SPY can't trade higher than 133.25 on a 5 minute candle close, it is likely the market will give up some of its gains.
As a brief round-up of price action, WT crude is off 0.93, trading at 101.30, Brent is off 2 at 114.38, Gold is off 13.70 at 1424 and silver is off .36 at 34.47. The rest of the commodity complex is catching the hot money, with the whole food complex up big. The Euro has been flying, with the Euro trading 1.3941, up 0.59%.. a huge move, while the Dollar falls to 76.58. Bonds are also weak, with the 10 year Note trading off 3/4 at 3.5591 and the Bond off 1 at 4.6277 on top of a large decline yesterday.
I have been expressing concern about the performance of the Dollar, and it looks now like it has violated significant long term support. Here is the current chart, courtesy of StockCharts, showing the violation of a 3 year trend support line and is nearing a major support line.
This a development that has major long term implications and is perhaps the least well understood by the investing public. We are like fish swimming in water, unaware of the water, as we buy and sell in our domestic currency, unaware of its changing value.
I am unhappy that the trades got stopped out, but there is another trading coming along shortly, either on the short side or the long side. I remain committed to a trading discipline that will identify market momentum, while protecting capital against painful losses. No loss is fun, even small ones, but capital remains intact, allowing a trader to move on to the next trade.
Best To Your Trading!
Bill
Welcome to Wall Street!
As my old friend and manager, Capt. Gatorbait, used to say, "Some Days You Get the Bear, and Some Days the Bear Gets you!" Or in this case, the Bull. All of the trades entered Tuesday, except FAZ, were stopped out this morning, most on gap-open down trades. The prices we are stopped out at are listed to the right. I will be back before noon with some ideas about where momentum is now.
Best To Your Trading!
Bill
Best To Your Trading!
Bill
Wednesday, March 2, 2011
Wednesday at the Close
Can you say "Dead Cat Bounce?" I hate that expression as I love cats, and Mr. Loveydovey is sitting in my lap as I write this. But it is the most illustrative metaphor for today's action.
Not an impressive bounce from the hard down day on Tuesday. The EW guys are confused about whether or not we are in a small wave 2 or have started a larger wave 3 down move, but in any event, they all seem to believe that this should be resolved by Friday, and the direction should be down.
We will see shortly. In the meantime, the Momentum Change indicators are pointing to a decline and our positions are 100% bearish. I am hoping someone can point me to a site or commenter who has a idea how to describe action in the equity market, given the political unrest in the Middle East, Northern Africa, the parabolic move in Oil and Gold and Silver.. and then show me how the persistent weakness in the Dollar can represent the Risk On/Risk Off trade. I am certain it is "Risk Off, but I can't for the life of me explain Dollar weakness with out scaring myself to death.
Best To Your Trading!
Bill
Not an impressive bounce from the hard down day on Tuesday. The EW guys are confused about whether or not we are in a small wave 2 or have started a larger wave 3 down move, but in any event, they all seem to believe that this should be resolved by Friday, and the direction should be down.
We will see shortly. In the meantime, the Momentum Change indicators are pointing to a decline and our positions are 100% bearish. I am hoping someone can point me to a site or commenter who has a idea how to describe action in the equity market, given the political unrest in the Middle East, Northern Africa, the parabolic move in Oil and Gold and Silver.. and then show me how the persistent weakness in the Dollar can represent the Risk On/Risk Off trade. I am certain it is "Risk Off, but I can't for the life of me explain Dollar weakness with out scaring myself to death.
Best To Your Trading!
Bill
Wednesday Morning
I have placed protective stops on the trades entered Tuesday afternoon. I will tighten these stops after we see a day or two of market action. Because there are no nearby swing trades, I am using the 3 day SMA on the 5 minute chart.
After trading lower overnight, and Europe and Asia trading lower, the market open modestly lower and is at 10:00am trading up 25 on the Dow and up 2.90 on the SPX. The rest of the major indexes are modestly higher. The big news over night was the new highs in Gold and Silver, with Gold trading 1436.20 and Silver trading 34.90. Oil also was higher over night, trading at 100.72 and Brent at 115.62. Concern grows that Oil production can be delayed for some period of time and reports that Oil could hit 130 near term. Copper, the much watched leader of the last 1 year market rally continues to consolidate its recent decline, and is trading lower at 4.4695.
The Euro continues its run to 140, trading higher at 1.3873 and the Dollar continues to knock about on support at 76.60. Bonds are soft after being higher overnight, apparently in response to the ADP payroll report of 217,000 new jobs. They also reported sharp increases in expected layoffs for both private and government employers. The 10 Year Note is off slightly at 3.4243% and the Bond is flat to slightly lower, trading at 4.5071%
Zerohedge has a "must read" story here on Bill Gross of PIMCO. His question is "Who will buy the Treasuries when the Fed won't?". I knew that the Fed appeared to be the major buyer of Treasuries at the almost daily POMO auctions, but I had not idea that they were the buyer of 70% of the annualized issuance since the start of QE 11 in November. Gross further estimates that current rates are about 1.5% too low if in fact the GDP accomplishes the expected 5% annual growth. He says that current prices and yields are sitting on an artificial foundation of Fed credit, which may or not be successful in handing off to the private sector, and creating a stable foundation for prices and rates. Sound like "risk off" to me!
The Momentum Change indicators generated the 3rd Sell confirmation since 1/20 and I have offered new short side trades. Please place protective stops at the suggested level. As I wrote yesterday, I expect this Bearish momentum to be significant (there has been not Buy signal since 12/1/2010), but first of all, protecting capital is most important and Mr Market has been very confused for the past month and a half, even though the indexes have traded higher.
For those interested in charts, take a look at yesterdays Bearish Engulfing Candle which took out the previous 3 days of gains.
It is possible that we get some kind of bounce today before the decline resumes.
Best To Your Trading!
Bill
After trading lower overnight, and Europe and Asia trading lower, the market open modestly lower and is at 10:00am trading up 25 on the Dow and up 2.90 on the SPX. The rest of the major indexes are modestly higher. The big news over night was the new highs in Gold and Silver, with Gold trading 1436.20 and Silver trading 34.90. Oil also was higher over night, trading at 100.72 and Brent at 115.62. Concern grows that Oil production can be delayed for some period of time and reports that Oil could hit 130 near term. Copper, the much watched leader of the last 1 year market rally continues to consolidate its recent decline, and is trading lower at 4.4695.
The Euro continues its run to 140, trading higher at 1.3873 and the Dollar continues to knock about on support at 76.60. Bonds are soft after being higher overnight, apparently in response to the ADP payroll report of 217,000 new jobs. They also reported sharp increases in expected layoffs for both private and government employers. The 10 Year Note is off slightly at 3.4243% and the Bond is flat to slightly lower, trading at 4.5071%
Zerohedge has a "must read" story here on Bill Gross of PIMCO. His question is "Who will buy the Treasuries when the Fed won't?". I knew that the Fed appeared to be the major buyer of Treasuries at the almost daily POMO auctions, but I had not idea that they were the buyer of 70% of the annualized issuance since the start of QE 11 in November. Gross further estimates that current rates are about 1.5% too low if in fact the GDP accomplishes the expected 5% annual growth. He says that current prices and yields are sitting on an artificial foundation of Fed credit, which may or not be successful in handing off to the private sector, and creating a stable foundation for prices and rates. Sound like "risk off" to me!
The Momentum Change indicators generated the 3rd Sell confirmation since 1/20 and I have offered new short side trades. Please place protective stops at the suggested level. As I wrote yesterday, I expect this Bearish momentum to be significant (there has been not Buy signal since 12/1/2010), but first of all, protecting capital is most important and Mr Market has been very confused for the past month and a half, even though the indexes have traded higher.
For those interested in charts, take a look at yesterdays Bearish Engulfing Candle which took out the previous 3 days of gains.
It is possible that we get some kind of bounce today before the decline resumes.
Best To Your Trading!
Bill
Tuesday, March 1, 2011
Trading Alert
The Momentum Change Indicators have again reached a confirmation point land I have re-entered the same trading positions. They are posted at the right, as of 2:45pm
It is likely that we can get a rally into the close, which can offer us better prices than currently available, but I would recommend that new positions be entered prior to 3:30pm. Or maybe not. The man who wants to get a trade, after he has made up his mind, enters a market order.
Best To Your Trading!
Bill
It is likely that we can get a rally into the close, which can offer us better prices than currently available, but I would recommend that new positions be entered prior to 3:30pm. Or maybe not. The man who wants to get a trade, after he has made up his mind, enters a market order.
Best To Your Trading!
Bill
Tuesday Mid-day
I am trying to make sense of what the Momentum Change indicators are trying to tell me. The series of indicators that I have been using since late 2010 have had a very successful record of identifying change in the direction of the market with great accuracy, and with in a day or two of the actual top/bottom. The nine signals generated through late October were all profitable. The indicators in late October were a little premature, as it turns out, as the actual top did not occur until November 13. The previous Buy indicator occurred Sept,1 and the trading positions that were sold in late October were of course profitable. But the Short positions entered at the Sell signal were quickly stopped out, and I did not re-enter the short side until the Sell confirmation in November. The short positions entered were sold with the next Buy signal Dec, 1.
The Long positions entered were all profitable with the next Sell signal Jan, 19, 2011. The short positions entered were again quickly stopped out with small losses. I had a Sell confirmation Jan 28, but did not enter any short positions. With a Sell signal confirmation again on 2/22, I entered 7 short positions, 5 of which were nominally profitable and 2 were nominal losses.
The interesting thing for me is that the indicators have not generated a new Buy signal at any point since the last Buy signal on Dec. 1. In the mean time, indexes have crept higher since Jan 20, but the internal measures of market strength have continued to deteriorate, and several additional indicators (not momentum related) have flashed new warnings. It is always difficult to ignore Greed or Fear, or let it overcome a disciplined trading strategy, but a review of the results of the past 14 months are overwhelmingly profitable. The losses have been small, the profits have been great, but as always, frustration with the market can be draining.
Today is another key day for the indicators, as they are near again to a Sell confirmation. Let me be clear, I am not trying to predict market turning points, only to observe the changes that occur with sufficient alacrity to be able enter the market with a potentially profitable trade from the results from the correct observation of that new direction. Sometimes that new direction does not last long....and absent a new Buy signal, I rely on stop loss orders to protect against an error.
I am watching carefully today for another entry point, and will post around 3:30pm.
Best To Your Trading!
Bill
The Long positions entered were all profitable with the next Sell signal Jan, 19, 2011. The short positions entered were again quickly stopped out with small losses. I had a Sell confirmation Jan 28, but did not enter any short positions. With a Sell signal confirmation again on 2/22, I entered 7 short positions, 5 of which were nominally profitable and 2 were nominal losses.
The interesting thing for me is that the indicators have not generated a new Buy signal at any point since the last Buy signal on Dec. 1. In the mean time, indexes have crept higher since Jan 20, but the internal measures of market strength have continued to deteriorate, and several additional indicators (not momentum related) have flashed new warnings. It is always difficult to ignore Greed or Fear, or let it overcome a disciplined trading strategy, but a review of the results of the past 14 months are overwhelmingly profitable. The losses have been small, the profits have been great, but as always, frustration with the market can be draining.
Today is another key day for the indicators, as they are near again to a Sell confirmation. Let me be clear, I am not trying to predict market turning points, only to observe the changes that occur with sufficient alacrity to be able enter the market with a potentially profitable trade from the results from the correct observation of that new direction. Sometimes that new direction does not last long....and absent a new Buy signal, I rely on stop loss orders to protect against an error.
I am watching carefully today for another entry point, and will post around 3:30pm.
Best To Your Trading!
Bill
Tuesday Morning
After trading higher over night, the market opened modestly higher. at 10:00am, the Dow is trading up 30, or 0.24%. The SPX is trading up 2.33 or 0.18% The rest of the market is trading lower, with the Transports, the RUT, the COMP and the XLF trading lower. The Oil market has opened higher, trading at 97.61, Gold higher at 1422 and Silver at a new post-Hunt Bros high at 34.35. The commodity complex is up with the exceptation of Wheat. The Euro continues higher, trading at 1.383 and the Dollar its lackluster performance, trading off at 76.79. The 10 year Note is lower, at 3.471 as is the Bond, trading at 4.526%
News from North Africa and Middle East continues to indicate the political instability of the region is deteriorating. Libya continues to slide into civil war, while the Sauds are reported to be sending Tanks into Bahrain. There is an interesting report at The Oil Drum regarding the political impact on oil supplies and the exporting countries own pressing needs to grow their own domestic economies and the lack of adequate political resources to replace those being overthrown.
I don't think that I am the only observer who is feeling really queasy about the recent performance of the U. S. Dollar. I don't think I visit a single business site that does not have a comment to make regarding the apparent weakness of the Dollar and the strength of the Euro. It always goes something like...."the Euro is showing surprising strength as the ECB deal with the Sovereign debt problems of Ireland, Spain, Portugal and the increasing reluctance of the German tax payers to hold the Euro together" and "Fed policy will destroy the value of the Dollar". Ya... I get it.
Here is a 10 year chart of the weekly USD history.....and it shows clearly that the Dollar is breaking its trend support line.
It has flirted with this trend line in the past, but this time it is beginning to look more serious. I am old enough to remember when the reflexive response of investors the world over, when faced with obvious threatening political or economic events, would rush to abandon "Risk" investments and move to "Safe" investments. For most of my life, those investors would move to U.S. Treasuries, and Gold. When the Dow would get hit, the expected trade would be Bonds up, Gold up and the Dollar up.
But it is now apparent that something has changed. The threats presented by the violence and political instability in Northern Africa and the Middle East and the threats to dependable production of Oil certainly present the most serious challenge world stability in a long time. Yet, investors the world over seem to be focused on a "flight to safety" that includes Gold & Silver, U.S. Treasuries, soft Commodities and the Euro and the Swiss Franc. The Dollar can barely generate an uptick, let alone a rally. It is beginning to feel like something is really different and I don't think we are going to like it.
Momentum Change indicators are still firmly Bearish, with the rally yesterday having only a minimal impact on this numbers. We are back to the reality of the market internals being divergent from index direction.
As I have been typing, the market has turned decidedly weak, now trading lower with the Dow off 38 and SPX off 5.75. I may have some trade ideas this afternoon.
Best To Your Trading!
Bill
News from North Africa and Middle East continues to indicate the political instability of the region is deteriorating. Libya continues to slide into civil war, while the Sauds are reported to be sending Tanks into Bahrain. There is an interesting report at The Oil Drum regarding the political impact on oil supplies and the exporting countries own pressing needs to grow their own domestic economies and the lack of adequate political resources to replace those being overthrown.
I don't think that I am the only observer who is feeling really queasy about the recent performance of the U. S. Dollar. I don't think I visit a single business site that does not have a comment to make regarding the apparent weakness of the Dollar and the strength of the Euro. It always goes something like...."the Euro is showing surprising strength as the ECB deal with the Sovereign debt problems of Ireland, Spain, Portugal and the increasing reluctance of the German tax payers to hold the Euro together" and "Fed policy will destroy the value of the Dollar". Ya... I get it.
Here is a 10 year chart of the weekly USD history.....and it shows clearly that the Dollar is breaking its trend support line.
It has flirted with this trend line in the past, but this time it is beginning to look more serious. I am old enough to remember when the reflexive response of investors the world over, when faced with obvious threatening political or economic events, would rush to abandon "Risk" investments and move to "Safe" investments. For most of my life, those investors would move to U.S. Treasuries, and Gold. When the Dow would get hit, the expected trade would be Bonds up, Gold up and the Dollar up.
But it is now apparent that something has changed. The threats presented by the violence and political instability in Northern Africa and the Middle East and the threats to dependable production of Oil certainly present the most serious challenge world stability in a long time. Yet, investors the world over seem to be focused on a "flight to safety" that includes Gold & Silver, U.S. Treasuries, soft Commodities and the Euro and the Swiss Franc. The Dollar can barely generate an uptick, let alone a rally. It is beginning to feel like something is really different and I don't think we are going to like it.
Momentum Change indicators are still firmly Bearish, with the rally yesterday having only a minimal impact on this numbers. We are back to the reality of the market internals being divergent from index direction.
As I have been typing, the market has turned decidedly weak, now trading lower with the Dow off 38 and SPX off 5.75. I may have some trade ideas this afternoon.
Best To Your Trading!
Bill
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