By InTheMoneyStocks.com on February 22nd, 2010 11:49am Eastern Time
The markets gapped higher on the back of what the media reported as great Lowe's Companies, Inc. (NYSE:LOW) earnings. In addition, Schlumberger Limited (NYSE:SLB) buyout offer to Smith International, Inc. (NYSE:SII), according to the media gave the markets an extra push. While these news tidbits were solid and slightly bullish, an technician knows, in this market, it has no correlation. Why?
Let's examine the markets! All of a sudden we see the markets lower across the board. Why are they down when the media reports all this positive news? Simply, as I said it has nothing to do with it. The SPDR S&P 500 (NYSE:SPY) is down $0.20 on the day just off the lows. PowerShares QQQ Trust, Series 1 (NASDAQ:QQQQ) are also down $0.20.
The real catalyst to this markets movement is simply the dollar. The dollar ETF I follow is the PowerShares DB US Dollar Index Bullish (NYSE:UUP). It started out with a gap down. What did the markets do? They gapped higher. Then the dollar rallied back pushing the markets lower. Is it as simple as that? Actually, yes! The media just needs to report more, so they harp on news and make the common investor make mistakes by listening. I go out of my way to tell it like it is and avoid the hype!
The markets are trading lower today just above the $111.00 on the SPY. Should that level be closed below and the following candle on the 10 minute close below that low, the markets have a good chance of selling sharply for the remainder of the day. At this point, with light volume, it is unlikely. Keep on an eye on the UUP. Any major move in the UUP will result in the opposite happening to the markets.
The projections for today are neutral to lower. The week is expected to be choppy. Be safe and learn the technicals and avoid the hype!
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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