Based upon the price action in the foreign exchange market, very few investors, if any want to own dollars. The greenback has performed terribly since the beginning of the year and over the past 24 hours it has fallen to fresh lows against many of major currencies.
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Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret. http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
It is rather amazing that the major stocks indexes are not down sharply lower today as spot oil is trading at $110.00 a barrel. The Middle East seems to be getting worst by the minute as Israel and Palestine have begun to fight again. Problems in Libya, Syria, and other nations in the region do not seem to be getting any better. Japan had another 7.1 magnitude earthquake earlier and we do not know how bad the already damaged nuclear reactors are. Portugal needs a bailout and Spain could be next on horizon. What else could go on in this world? It seems that everything except the kitchen sink has been thrown at this market and it still holds up and bounces back almost immediately.
As of 3:09 pm EST the Dow Jones Industrial Average is trading lower by just 39.00 points to 12,387.66. Traders must watch for resistance around the 12,400.00 level which looks to be the next important intra-day resistance area. Please use caution when trading in this environment intra-day as we can never predict the next major news event to cause a spike in either direction. The United States oil fund is trading at a new high for the year just above $44.00 a share. This would normally be a negative for the major stock indexes, however, it has not really seemed to matter over the past week. This is truly a market that does not want to decline.
Good article on corn this morning by Smart Money Europe (Zero Hedge link).
The bottom line is that corn is sitting at a two year high. Reading SME you have to conclude there is more on the upside. I’m lifting this chart from the piece to make a point:
http://www.zerohedge.com/article/corn-and-crude-convergence
Chevron Corporation (NYSE:CVX) is seeing its second down day in a row, somewhat of a rarity. The stock is trading at $107.81, -0.85 (-0.78%). A second down day may actually signal a short term top in the stock as long as it closes below $108.44 today. This would be known as confirmation of a reversal. Chevron would have first major support at $106.00 while resistance would be the 52 week high at $110.00.
As the markets continue to sell, Goldman Sachs Group, Inc. (NYSE:GS) is bucking the trend. The stock is trading at $163.30, +1.41 (+0.87%). Goldman has surged in the last three trading days and continues to show abnormal strength, relative to the markets. The daily chart shows massive resistance at $165.60 while support is at $159.00. Yesterday, banks and financial firms saw massive buying interest. Join the pros by taking the one week free trial to the Research Center. Click here.
Looking forward, the markets will be analyzing the new earthquake in Japan. Is there additional damage, what is the economic impact? In addition, all eyes are now on the U.S. government and a possible shutdown tomorrow at midnight. As of now, the markets have felt it will not occur. However, should it occur there may be an economic impact as checks are not sent out and various programs shut down. Follow this closely in the next couple days. To gain more hardcore analysis, guidance, swing trades and education, take the free trial of the Research Center now.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Oil is trading higher again today and looks to be headed towards $110.00 per barrel. The United States Oil Fund LP (NYSE:USO) is trading at $43.67, +0.30 (+0.69%). Not only has an economic recovery taken place, but fear over nuclear energy has put more emphasis on oil as the main source of energy. The uncertainty in the Middle East continues and is also adding fuel to the fire.
Solar shares are weak again today which is somewhat unusual on the back of higher oil prices. Usually, the higher oil goes, the more people will look to alternate energy. That is not happening today nor has it happened over the last week. This is structural weakness that must be watched closely. Often times when weakness like this is seen in a sector that should be strong, news will break about a miss in earnings or margin pressure. Keep a close eye on this sector over the next couple weeks. First Solar, Inc. (NASDAQ:FSLR) is trading at $147.39, -3.21 (-2.13%). To get hardcore analysis and swing trades, take a one week free trial of the Research Center. Click here.
The fertilizer stocks are slightly weaker again today. Yesterday, Monsanto Company (NYSE:MON) fell sharply on earnings taking the sector with it. Today, it appears some weakness remains.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Asian markets were mostly lower Thursday after Portugal became the latest European country to plead for a bailout
There is only one thing that euro traders care about right now and it is the prospect of an interest rate hike from the European Central Bank tomorrow. Nothing else seems to matter, including Portugal’s official request for a bailout
