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Risk FX rallied in Asian session trade boosted by positive comments from PBOC governor Zhou and slightly better than expected data from both Germany and France.
http://www.fx360.com/commentary/boris/7050/euro-rallies-on-chinas-support.aspx?num=1329296528376
45 minutes interview: http://www.elliottwave.com/club/analyst-videos/ewi/prechter-mind-of-money.aspx?title=Robert%20Prechter%20on%20the%20Mind%20of%20Money
The markets are hovering slightly lower on the day with the SPDR S&P 500 ETF (NYSEARCA:SPY) trading at $135.06, -0.30 (-0.22%) and the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) trading at $62.99, -0.06 (-0.10%). As the markets remain near their recent highs, signals of a top are all around. Here are the reasons.
1. The media is euphoric, coaxing the retail investor into the market. Throughout history, when the retail investor jumps in, the top is at hand.
1. The media is euphoric, coaxing the retail investor into the market. Throughout history, when the retail investor jumps in, the top is at hand.
2. The markets have been moving higher on lighter and lighter volume. This tells us that institutions are no longer buying and it is only retail money pushing the markets up. If institutions are not buying, be very careful.
3. Insider selling heavily outweighs insider buying. Insider sells to buys are over 5-1. If the CEO's are selling, there are definite problems ahead. Insiders in theory should know the most about their companies. Selling is never good.
4. Apple Inc. (NASDAQ:AAPL) crossed the psychological $500 level. This was a target which has now been achieved. As the little investor rushes to invest, the large players sell. Classic top name reaching a psychological milestone is a warning to all.
5. The Facebook IPO has hyped the markets and got the little investor to once again invest. In 2007, The Blackstone Group L.P. (NYSE:BX) was the Facebook of its time and its hyped IPO nailed the top now. As every little investor wants to own Facebook, history is repeating itself.
6. Wall Street is now programmed to believe everything will be fine around the world. Do you notice how credit downgrades have almost no impact anymore on the markets? Do you notice how bad news barely drops the market for an hour? The markets have been conditioned to think the world has been saved. This puts Wall Street on the edge of a cliff. Any shocking news that cannot be brushed off will cause an epic sell off. Reality is that Europe is still an ugly mess and not even close to better. Once realized, the markets will correct.
7. Barrons cover sported DOW 15,000. The last time a cover showcased something like this was in 1999-2000, just before the Dot.com bubble burst. In addition, other magazines sported people hugging their houses in 2007, nailing the top on real estate. Be warned.
Take the seven day free trial to the Research Center and Intra Day Stock Chat. Join the elite as they profit on every swing up and down in the market. Join the pros and make money all year long, no matter the direction of the market.
Related: SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) and PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
The major stock indexes are finally declining lower. Since December 19, 2011 the markets have rallied higher. Lately, every intra-day pullback was being bought by investors and traders. Many people are now calling this a market top, however, one day does not make a trend. These market were severely overbought and extended, therefore, a pullback or decline was certainly overdue.
This coming Friday is also options expiration. There were many small retail investors that were buying call options near the recent highs in the market. Rarely if ever, will the institutional money ever allow the small retail options traders to collect a gain in the near term call options.
This coming Friday is also options expiration. There were many small retail investors that were buying call options near the recent highs in the market. Rarely if ever, will the institutional money ever allow the small retail options traders to collect a gain in the near term call options.
Traders and investors must not make too much out of today's pullback. After all, the trading volume that has lacked conviction on the upside is also lacking the conviction on the downside today. The trading volume on the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) is just 4.05 million shares as of 3:30 pm EST.
Many leading stocks will often experience erratic action during the trading week leading up to Friday's option expiration. Just look at the action in popular stocks such as Amazon.com Inc (NASDAQ:AMZN), Google Inc (NASDAQ:GOOG), Netflix Inc (NASDAQ:NFLX), and CF Industries Holdings Inc (NYSE:CF). Traders and investors should expect the crazy action to last into the end of the week.
Many leading stocks will often experience erratic action during the trading week leading up to Friday's option expiration. Just look at the action in popular stocks such as Amazon.com Inc (NASDAQ:AMZN), Google Inc (NASDAQ:GOOG), Netflix Inc (NASDAQ:NFLX), and CF Industries Holdings Inc (NYSE:CF). Traders and investors should expect the crazy action to last into the end of the week.
The markets are slightly higher today after Greece approved tough austerity measures over the weekend. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $135.03, +0.60 (0.45%). As riots in Greece continue, the markets rejoice. For now, the European Union has been saved.
Many argue that Greece should drop out of the Euro or that Greece is too small to matter. This is a nonsensical argument and those making it have no sense whatsoever. It has nothing to do with Greece being large or small. It is more about the precedence that dropping out would send to other troubled Euro countries like Italy, Spain and Portugal. If one domino falls, they all may fall. In any case, the markets are slightly higher as the austerity measures passed and the markets breath a sigh of relief.
Many argue that Greece should drop out of the Euro or that Greece is too small to matter. This is a nonsensical argument and those making it have no sense whatsoever. It has nothing to do with Greece being large or small. It is more about the precedence that dropping out would send to other troubled Euro countries like Italy, Spain and Portugal. If one domino falls, they all may fall. In any case, the markets are slightly higher as the austerity measures passed and the markets breath a sigh of relief.
There are some key stocks moving today. First, Apple Inc. (NASDAQ:AAPL) hit a high of $503.83. This marks the first time Apple has gone through this psychological even number. The chart is extremely extended and a pull back is likely in the near term now that the $500 level has been achieved.
Technology is mostly higher but for semiconductors. The Merrill Lynch Semiconductors HOLDRS ETF (NYSEARCA:SMH) is trading at $34.04, -0.13 (-0.38%). This is in contrast to the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) which is trading at $62.94, +0.47 (+0.75%). When the semi's lag, it is often a sign that a top is near. Watch this divergence closely.
Volume is once again insanely light in the market. The same pattern that has played out over the last six weeks is playing out again. Early sell when volume is decent then once volume dries up, the markets float higher. Today is no difference in that respect.
Take the seven day free trial to the Research Center and Intra Day Stock Chat. Join the elite swing traders as they profit on every swing in the markets, up and down. Make this year the year you profit like a pro.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
