By Gareth Soloway on September 21st, 2010 12:47pm Eastern Time
As the rally in September has been impressive and gigantic, one thing is concerning. Oil has not rallied much, especially considering the drop in the dollar. The United States Oil Fund LP (ETF) (NYSE:USO) is only up 3-5% from the recent lows while the S&P 500 is higher by around 10%. In addition, the dollar has dropped substantially which should strengthen oil as well. This has not happened. Oil is one of the major economic leading indicators as any uptick in the global growth story, creates a rise in oil as future demand increases.
While this massive rally has turned even the strongest bears into bulls, the media giddy and the retail investing is once again putting their hard earned money into the markets, I remain skeptical. Oil should be soaring much more than it is if this rally is truly based one an economic shift to recovery and momentum. To gain more insight, analysis, swing trades and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
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You’ll be surprised at what these clues say.They come from a look back at history. One analyst found that when the beauty contest between stocks and bonds sets up as it does today, bonds get destroyed. “For the third time since the 1850s,” he writes, “30-year rolling real bond returns are near equity returns, and on both previous occasions, multidecade bond bear markets followed.”And for stocks? Well, this same fellow deduces from the same history that stocks could rise 30% or more as inflationary expectations rise.http://www.howestreet.com/articles/index.php?article_id=14612Read more…
By Gareth Soloway on September 20th, 2010 11:39am Eastern Time
On light volume, the markets jumped higher this morning ahead of the Town Hall Meeting with President Obama. In addition, the market continues to look forward to the Federal Reserve comments tomorrow after their policy meeting at 2:15pm ET. The SPDR S&P 500 ETF (NYSE:SPY) is higher by $1.27 to $113.76 (+1.13%). This move comes after continued weakness in the dollar. The dollar opened flat as the markets opened flat to slightly higher. Then as the dollar collapsed lower, the markets shot higher. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is lower by $0.07 to $23.53 (-0.30%). Always remember, the markets go inverse to the dollar. Therefore, the dollar dropping only helps the markets move higher into this Obama Town Hall Meeting.
The markets are hoping to hear bullish comments from Obama. Namely, talk on job creation and tax cuts. Even if the markets do not get exactly what they want, it is likely no major selling will occur as the Federal Reserve meeting tomorrow will keep things on hold.
Gold is hitting new all time highs again today while oil is moving higher as well. Gold moving up is concerning to the markets as this is generally a fear indicator or major inflation hedge. Either way, be on the look out for one of those factors to show their ugly faces soon. To get more analysis, guidance, swing trades and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
By Nicholas Santiago on September 17th, 2010 3:37pm Eastern Time
Everyone on Wall Street is now buzzing about the 'inverse head and shoulders' pattern that the S&P 500 Index has now carved out on the daily charts. This is a bullish pattern that often predicts the price target once the stock breaks out above the neckline or sideways trend line. In this particular case the pattern has a target of $125.00 on the SPDR S&P 500 ETF(NYSE:SPY) should the pattern trigger. Usually, these patterns will have a tendency to play out once they trigger, however, sometimes they will fail. Since the March 2009 low most of the 'inverse head and shoulders'(bullish) patterns have played out to the upside while the 'head and shoulder' top patterns which is bearish have failed. You can check the failed head and shoulder top patterns that failed by looking at any chart in July 2009 and July 2010. We shall see very soon if this pattern triggers and if it reaches it's upside potential target.
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Posted by Geofract on September 19, 2010 at 11:59am
EU retesting the underside of the previous daily TL, and printing a pin bar/shooting star. price stalling at 76.4 fib, and failing to break and hold above 1.31. I may consider an entry on retrece of the pin, depending on the PA at the time.
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Posted by Geofract on September 19, 2010 at 11:45am
DXY daily bouncing from a daily TL. Printed a pin bar. I expect DXY to strengthen in the next few days, but then to continue falling further. I fully agree with Larry what's his face that the fed will seek to continue devaluing the dollar, which will in turn re-inflate the markets. Lets see anyway!
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