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Distribution Alert: Third Day In A Row, Markets Fade (NYSE:SPY) (NYSE:USO) (NYSE:GLD) (NYSE:SLV)

Posted by Aadil on April 6, 2011 at 4:33pm
A common theme is developing in the markets this week. Each day, the markets have been up nicely and by the close, faded to the flat line. This seems to be happening again today. The SPDR S&P 500 ETF (NYSE:SPY) is at $133.37, +0.13 (+0.10%) after being as high as $134.00. The high of the day was only a small distance from the 52 week high on the SPY at $134.69.

The fall in the markets each day most likely represents distribution. Distribution occurs when the institutions sell their shares to the individual investors, taking profits. This generally represents the high in the market or near the high. Why would individual, retail investors be putting money into the market? First, between the Middle East, Japan and Europe, the markets have been unbelievably strong. This gives the small investor a false sense of security. They basically think, if all that cannot derail the markets up move, then nothing will and the markets must be headed far higher. In addition, this is the first week of the second quarter for 2011. New money into 401k's and other retirement plans are now available and are flooding into mutual funds. This is a perfect time for institutions to sell into the buying. Take the one week free trial of the Research Center to gain master swing trades and market guidance. Click here.

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The Dollar is down again today, a common theme of late. The one interesting factor is to note that the Dollar has been dropping as the markets have been falling back. This is unusual and should be noted. The most likely reason is commodity prices. As the Dollar continues to fall, commodities like oil just go higher. The $110.00 per barrel level is quickly approaching and the markets are getting nervous. Higher oil means higher prices at the pump. In an economy trying to recover, higher costs to consumers means less spending and a weaker economy. This must be watched. The United States Oil Fund LP (NYSE:USO) is trading at $43.42, +0.32 (+0.74%). Click here to take a one week free trial of the Research Center.

Gold and silver are both flat to higher today. The SPDR Gold Trust (NYSE:GLD) is trading at $142.08, +0.03 (+0.02%) while the iShares Silver Trust (NYSE:SLV) is trading at $38.56, +0.22 (+0.57%).

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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8 Gap Higher Opens In 16 Trading Sessions (NYSE:DDM) (NYSE:DXD) (NYSE:QID) (NYSE:QLD)

Posted by Aadil on April 6, 2011 at 3:22pm
8118286252?profile=originalThe major stock indexes have certainly staged a sharp rally since the March 16, 2011 pivot low. The Dow Jones Industrial Average(DJIA) has gain 886.00 points in just 16 trading sessions. This is a major move for the markets in such a short time. The amazing fact about this three week rally is that the major stock indexes have had eight gap higher opens in the past sixteen trading days. Therefore, fifty percent of the time the market has gapped sharply higher to start the day. This is very unusual action for the major market indexes. 

Continued gap higher opens will usually end in a sharp reversal day, however, that has not occurred and the markets remain strong at this time. When you think of all the negative news that has been thrown at these markets it is really amazing to see the rally from the March 16, 2011 cycle low. However, traders must be aware that gap higher opens usually do not last and are not a sign of a healthy rally.
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Commentary by Kathy Lien: USD: Fed Minutes, Implications Of Gvt Shutdown

Posted by Aadil on April 6, 2011 at 12:04am

 investors who shrugged off all of the bad news to focus only on stronger earnings and M&A deals. This included a softer non-manufacturing ISM report, a rate hike by China and another sovereign debt downgrade in Europe. Part of the strength can be attributed to the Fed’s optimism and their plans to keep monetary policy easy compared to other central banks around the world.  According to the minutes from the March FOMC meeting, the Federal Reserve has grown more comfortable and optimistic about the outlook for the U.S. economy. 

 

http://www.fx360.com/


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Oil, Gold, Silver: All Impacting On FX Market

Posted by Aadil on April 5, 2011 at 10:23pm

There’s a bit of a ‘chicken-and-egg’ situation when it comes to the relationship between precious metals and the USD; is it the weakening USD which is driving demand in PMs or is it the other way around? Whatever, as long as the strong uptrend continues in Gold and Silver, the FX market will not be comfortable buying USD

 

http://www.forexlive.com/178371/all/oil-gold-silver-all-impacting-on-fx-market

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Morgan Stanley On Why Stock Investors Should Be Terrified About The End Of QE2

Posted by L Levin on April 5, 2011 at 5:26pm

The end of QE2 will be bad news for stocks if recent experiences in the U.S. and Japan are anything to go by, according to Morgan Stanley's Ronan Carr.

Carr warns that there isn't much history to go on, in terms of the market's relationship with QE, but the past three instances of its use indicate that its end is not good news for stocks.          http://www.businessinsider.com/morgan-stanley-end-of-qe2-stocks-2011-4

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UBS Investigated For LIBOR Manipulation, 15th March 2011

Posted by L Levin on April 5, 2011 at 1:38pm
About a year ago, when Zero Hedge was nothing but a monocultured, bearish, conspiracy theory-based blog, we wrote a post titled: "Is The Swiss National Bank Using UBS To Launder Its Euro Purchases?" The reason for this allegation stemmed from some dramatic observations in the reporting of LIBOR to the BBA by member banks.   http://www.zerohedge.com/article/ubs-investigated-libor-manipulation
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