By Nicholas Santiago on April 12th, 2010 12:58pm Eastern Time
Today's volume may rival the lightest volume trading day of the year. Unfortunately, this is a very dull market and as we all know by now a dull market usually favors the upside; hence the market adage, “never short a dull market.” However, beginning this afternoon the dull market and light volume could change, so be ready.
Earnings season will soon be underway as Alcoa Inc. (NYSE:AA) is scheduled to report earnings today. The stock is still well below its January highs of 17.60. Currently the stock could have some upside, however, the 15.50 level looks to be good resistance on the daily chart. Should the stock have a negative reaction after its earnings release it will have support around the 13.00 level. While Alcoa Inc. has rarely been a huge mover it will often bring some much needed volatility and volume to this snooze of a market.
Tomorrow afternoon another important stock will report earnings. This time it will be the technology leader Intel Corp. (NASDAQ:INTC). Intel Corp. has a bullish daily chart pattern in place. Therefore, the stock could see an initial move higher after their earnings report. However, playing earnings is always a risky game. The upside for Intel Corp. looks to be the 24.00 level while the downside for Intel Corp looks to be 21.00. In either case this stock should help to increase the volume and volatility in this market.
J.P. Morgan Chase & Co. (NYSE:JPM) is the next major stock to report earnings after Intel Corp. They are scheduled to report earnings before the open on Wednesday, April 14th, 2010. J.P. Morgan Chase and Co. and the other large banks have really been the market leaders since March 2009. It is possible that the stock has much of its earnings release already factored in. However, the financial stocks have lead the markets higher and remain technically very strong. Please remember that the Fed fund's rate (overnight lending rate to the large banks) is at zero percent. Therefore, the large banks do not have to make loans to make money; they can simply buy U.S. Treasuries and stocks in order to see a positive return.
Regardless of how the market interprets the current earnings releases it should bring back some volume and volatility. The major stock indexes have had extremely light volume since the February 5th, 2010 pivot low. Hopefully, this earnings season will bring back some good trading action and opportunities, but for now we have to trade what the market gives us.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
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By ITMS News on April 10th, 2010 1:44pm Eastern Time
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The U.S. Dollar Index [also tracked via the PowerShares DB US Dollar Index Bullish (NYSE:UUP) ] pulled back this past week after breaking out of a bullish flag pattern on the weekly chart. This pullback on the weekly chart appears to be just a normal pullback bar after a sharp move higher. However, when the dollar declines most commodity and inflationary stocks will rally. This can be seen even on intra-day charts as the dollar is usually very strong before the U.S. markets open. Once the opening bell rings at the NYSE the dollar will usually decline giving the markets a bid higher. When this type if intraday action takes place day after day it allows the dollar and the major stock indexes to gain ground and trade higher on the daily charts together. As mentioned last week the U.S. Dollar Index will have resistance every point higher as well as support every point lower.
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By Gareth Soloway on March 26th, 2010 2:25pm Eastern Time
The markets, for the second day in a row have reversed earlier gains, dropping back to the flat line. The reversal yesterday, came at my master $118.15 level on the SPDR S&P 500 ETF (NYSE:SPY). So far, this level looks to have signaled a short term downtrend in the markets. Whether or not it turns out to be anything bigger, I will discuss in tonights nightly technical analysis video, which is part of the Research Center.
Today, the volume trends continue to be the same. Any bounce in the market are not because of major buying but because of lack of selling. Any drops in the market are because there is volume behind them.
The markets seem to be tempting a key pivot point. What do I mean by this? After yesterdays monster reversal, the market looks to give signals on whether or not it will be just a one or two day affair or something larger that could last a week or maybe more. I am currently crunching all the data on this. I did find it very interesting that yesterday, on good news, the markets were not able to hold their gains. Today, even more interesting, the dollar is lower and the markets still dumped out. For the first time in quite some time, the positives on the market are unable to hold it up.
Goldman Sachs Group, Inc. (NYSE:GS) is among the weaker stocks today, while JPMorgan Chase & Co. (NYSE:JPM) continues to try and hold on to recent gains. These two stocks over the last few days have been very much the opposite of one and other. It seems that there is fear of financial regulation with Goldman Sachs in regards to its risky trading. JPMorgan Chase, on the other hand is looked at as much more of a pure bank. While both stocks are up over the last few weeks, JPMorgan has continued to soar while Goldman Sachs has stalled. Technically speaking, both stocks are overbought and in need of a small correction. It looks like it is underway with Goldman Sachs but still hard to come by for JPMorgan Chase.
Other stocks hitting my watch list for a possible pullback after crazy gains are United States Steel Corporation (NYSE:X) and Baidu, Inc.(ADR) (NASDAQ:BIDU). Bloated is the only way to describe them.
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Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By ITMS News on March 24th, 2010 5:00pm Eastern Time
Note the following example where a channel had been forming on the SPY 10 minute chart. It was a nice downward channel that continued to bounce off the lower channel trendline and then hit the upper. These patterns break to the upside about 90% of the time and can be used as a great trading method for making money. The key is to understand that once the break is made, the technicals signal a move, and traders pile on the trade. This sent the SPY spiking higher like the below example. Gaining a solid understanding of channels and how to trade them like the Pros will advance your trading, and increase your profitability!
Learn the channel patterns and make money!
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