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Markets Sell Again, What You Must Know (NYSE:SPY) (NYSE:MOS) (NYSE:XOM) (NYSE:CVX)

Posted by Aadil on January 20, 2011 at 5:30pm
The markets sold for the second straight day, dropping sharply as commodities took the brunt of the sell off. The SPDR S&P 500 ETF (NYSE:SPY) opened slightly lower on the day and then collapsed, much like yesterday. The SPY is trading at $127.40, -0.85 (-0.66%). The key to the drop today was continued fear from China. The Shanghai Index has dropped approximately 7% this week amid fears that China will continue to raise interest rates. Just last night, China reported stronger than expected GDP. This continues to fuel the fears that they will continue to cool off their economy. Oil, Gold and all other commodities are getting smacked today. The Dollar is higher as well. Commodity stocks are taking the brunt of the sell off. The Mosaic Company (NYSE:MOS) is down another 5% on the day after dropping over 10% yesterday. On Tuesday, the stock traded to a high of $85.45. Today, the low is $72.19. While it has been hit hard, there is a possible swing trade bounce play at the 50 moving average on the daily at just under $72.00. Other stocks are dropping sharply as well. The strongest stocks for the last couple months have been Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX). These two stocks have propped up the indexes by themselves. Today, they are dropping sharply. XOM is trading at $77.12, -1.12 (-1.43%) while CVX is trading at $91.88, -1.09 (-1.17%). The biggest question is, has this market topped? Right now, the markets are set to confirm a pivot turn to the downside in the short term. However, extreme caution must be used because this is options expiration week. During options expiration week, institutions will push the markets in the opposite direction from where they have been going to get options to expire worthless. The amateur, uneducated investors are usually the ones that buy the options from the institutions. Therefore, it is common to see the bigger, more powerful institutions manipulate the market to get those options to expire worthless, thus the institutions retains the full premium which is pure profit. Assuming this market ends near the lows of the day, one must believe a short term top is in. However, my personal short positions are smaller in this down turn than usual because of the options expiration influence. This is called smart and disciplined trading. It is the key for any swing trader or investor. To get more market analysis, guidance, swing trades and education, join the Research Center. Gareth Soloway Chief Market Strategist www.InTheMoneyStocks.com
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China Plummets Again (NYSE:SCCO) (NYSE:CLF) (NYSE:FXI)

Posted by Aadil on January 20, 2011 at 4:57pm
Last night the Shanghai Index declined by nearly 3.00 percent again. Since November 8th, 2010 the important Shanghai Index has declined lower by nearly 15.0 percent. The decline comes as the Chinese economy reported a stronger than expected gross domestic product(GDP) of 9.8 percent. The Chinese consumer prices Index(CPI) was reported at 4.6 percent. The CPI number was actually in line with expectations, however, inflation continues to surge in the country. Many investors are now blaming the Federal Reserve Bank's quantitative easing program for the spike in Asian inflation. You see all commodities are traded in U.S. Dollars, which makes the dollar the worlds reserve currency. When the Federal Reserve Bank creates massive cash reserves by purchasing U.S. Treasuries this causes most commodities to inflate. Copper, gold, oil, corn. wheat, soybeans, and most other commodities are now beginning to pullback after recently making new highs for the year. The reason for the commodity decline is because most Asian countries are now forced to raise interest rates in order to fight the high inflation that these countries are experiencing. Recently, there have been food riots breaking out in various countries around the world due to the high inflation. Even in the United States the American people are complaining about higher gasoline and food prices. Inflation is simply everywhere now. Leading commodity stocks are under pressure today due to the expected increase in Asian interest rates. Southern Copper Corp.(NYSE:SCCO) is trading lower by $1.31 to $45.38 a share. Freeport McMoRan Copper & Gold Inc.(NYSE:FCX) is trading lower by $5.16 to $110.07 a share. Investors can see how copper is declining just by following these two leading copper stocks. Cliffs Natural Resources Inc.(NYSE:CLF) is a leading iron ore pellet producer that is trading lower by $2.55 a share to $84.91. This tells us that many industrial commodities around the world are declining today. Gold and silver are also declining sharply this morning. The iShares FTSE/Xinhua China 25 ETF(NYSE:FXI) is declining today by 1.74 percent this morning. This highly popular ETF follows the Chinese market and could come under further pressure in the near term.
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News Flash: Greenspan Says ‘Stocks Are Cheap’

Posted by L Levin on January 20, 2011 at 12:27pm
Greenspan’s circular logic was unenlightening: “Stocks are cheap if earnings are to continue higher.” Taken as a whole, this does not mean much, akin to prophesizing: “The Red Sox will win if they score more runs than the Tigers.” Greenspan’s successful impoverishment of the American people often hinged on the suppression of his dependent clauses: “Stocks are cheap,” was all we needed to know.

Read more: News Flash: Greenspan Says 'Stocks Are Cheap' http://dailyreckoning.com/news-flash-greenspan-says-stocks-are-cheap/#ixzz1BZtDxbfI
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