Sometimes the market gets it right, inventories today were 4.1m vs estimates of 0.1m . Bad data is just weekly and profits will be taken no doubt hence movement is possible either wayOn the 28th of July when this last occurred also it was a low for that period.The main difference might be the direction of the dollar index, it was heading down then and now it is threatening to continue up though hesitates below 83.6 currently.Also we had moving average support last time from 50 DMA
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ITS ONLY TUESDAY as JPY makes the transition from rising to soaring amid inaction from Japanese officials. Readers of this website have been warned of 81-80 in USDJPY since January before it was fashionable to do so. Cracks inside the FOMC about renewing QE, forecasts of a possible UK recession by the newest member of the Bank of Englands MPC and warnings from Moodys about further downrgrades in Europeincluding fears of a Eurozone double dip in the event of slowing Asiahave fabricated the perfect storm for deepening equity losses and risk aversion. US July existing home sales seen -14% to 4.630 mln & August Richmond Fed seen at 12 from 16. EURCHF on the retreat again as risk aversion highlights CHF strength but watch out from any SNB action at 1.3070s. AUDJPY deepens losses, calling up 73 and 72.50 as the next key support. Ashraf's CNBC interview on the yen http://bit.ly/cqUi7bRead more…
By Nicholas Santiago on August 24th, 2010 10:28am Eastern Time
Regardless of what the government says the market action has been weak. The powers that be such as the U.S. Treasury and the Federal Reserve Bank (U.S. Central bank) must be shaking their heads wondering what they have to do next in order to inflate these markets again. Since late April 2010 the major stock market indexes have continued to decline. Sure, there have been small rallies along the way, however, the declines seem to continue. This action in the market regardless of what the positive talking heads in the media are saying is very bearish. Please remember the stock market leads the economy. It is not the other way around. The economy does not lead the stock market.
The market indexes are now getting short term oversold after today's morning decline. Therefore, bounces are very possible and should not be a surprise if they do occur. Rarely does the market ever trade up or down in a straight line. Recently the merger and acquisition activity has heated up and this is usually short term bullish for the overall markets. However, the market indexes did react very positive to all the takeover news. This tells us that something bigger is going on when the market cannot bounce or rally on positive news.
Today the markets are having a broad based decline. However, if the U.S. Dollar Index declines this could help to inflate the major stock indexes off the lows. This morning the U.S. Dollar Index was trading higher by 0.20 cents and now it is trading flat on the session around $83.12. Please realize that when the dollar declines most commodity stocks will bounce higher and help lift the stock market indexes. The U.S. Dollar chart in my humble opinion is one of the most important charts in the entire stock market.
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By Gareth Soloway on August 24th, 2010 11:37am Eastern Time
The markets gapped sharply lower on the back of continued global concerns over growth and specifically the U.S. recovery. More and more data points to another double dip recession in the United States. After the initial gap down at the open, the markets traded at a major daily technical support level on the SPDR S&P 500 ETF (NYSE:SPY) at $105.80. This happens to be the pivot low going back to the July 20th, 2010 shown on the chart below. The markets traded in this range into the 10am ET economic data release of the Existing Home Sales. Existing Home Sales fell by a stunning 27.2%. This rocked the market causing a collapse down to the even number of $105.00. The markets quickly bounced back over the next 30 minutes to the $105.80 level and are currently trading slightly above that master level. This level continues to be one to watch. If the markets were to close below, look for further downside to $101.00 - $102.00. As long as the SPY stays above that $105.80, the markets could trade flat to higher.
What caused the bounce back higher? The horrible economic news caused a collapse in the dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) dropped from $24.22 to $24.05, allowing the markets to bounce back up. The inverse relationship between the dollar and the markets lives! As the dollar helped get the markets back above the master $105.80 level, light volume has now taken over and they are floating neutral to higher. Truly a wild ride today in the markets. To gain more insight, guidance, analysis and receive swing trades, join the Research Center.
Gareth Soloway
Chief Market Strategist
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By Gareth Soloway on August 23rd, 2010 1:52pm Eastern Time
The markets are trading in normal late August fashion with most stocks flat to lower on extremely light volume. There are a few standouts today that are higher and can be given the credit for keeping the markets flat instead of substantially negative. Just for reference sake, please be aware there is an in spirit of bear flag on the intra day S&P 500 chart. While normally this pattern has a high probability of playing out to the downside, the light volume snooze fest today makes it more of a 50/50.
The three standouts today are clearly Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM) and Wal-Mart Stores, Inc. (NYSE:WMT). These are three of the thirty components of the Dow Jones Industrial Average and likely the reason why the index is actually flat on the day instead of lower. Walmart is the leader, up 2.3% on the day. Often times Walmart can be looked at as a bearish signal for the economy as it is a lower end retailer. Should Walmart start to do better, it would show a shift in thinking of the consumer to saving money. Consumer spending fuels the U.S. economy. Chevron and Exxon are both up nicely as well even though oil is weaker.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
