UK GDP FIGURES: Due at 8:30 am GMT (9:30 BST) The preliminary figure of UK Q2 GDP expected +0.5% q/q from +0.3% in Q1, which is the 3rd straight quarterly positive GDP growth. On a y/y basis, Q2 GDP exp +1.1% from 0.2%, the 1st positive y/y figure in 8 quarters. Positive figures could further boost GBPJPY to 133.70-80s especially in the event that risk appetite remains in positive mode. GBPUSD eyes $1.5320-30 but no break of $1.5340. Any negative disappointment could see a retreat towards $1.5180. The other part of the puzzle will be the outcome of the Stress Tests, which are due after the London close. EURUSD ooking for fresh attempt towards $1.2970.
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By Nicholas Santiago on July 22nd, 2010 10:00am Eastern Time
The month of July has been a roller coaster of a month. Since options expiration ended on July 16th the up and down action has been outright violent. One hundred point moves on the Dow Jones Industrial Average have become common over the past week. This morning the major stock market indexes are surging higher to start the day on the back of positive European data. It has been a long time since the markets have reacted positive to anything out of Europe.
This morning it is important to note that the U.S. Dollar Index is trading down sharply. In my opinion this is the real catalyst for the move higher today in the stock indexes. Remember when the dollar declines the major stock indexes will inflate. Today the market rally is broad based as most sectors are trading higher.
Technology stocks seem to be the leading group as Qualcomm Inc (NASDAQ:QCOM) is trading higher by 2.64 to $38.80. F5 Networks Inc (NASDAQ:FFIV) is also soaring higher by 8.75 to $81.87 after a positive earnings report. F5 Networks Inc should have daily chart resistance around the $82.50 - $83.00 area. Baidu Inc (NASDAQ:BIDU) is also trading higher by 1.88 to $75.15 after a positive reaction to earnings.
July has been one of the most volatile months in quite a while. This type of choppy action is likely to continue as the battle between the bulls and bears is just heating up. Every time the sky looks clear the storm clouds come rolling in. The opposite case can be made as almost every sell off or decline seems to reverse higher the next day. Today is a perfect example as the markets are trading sharply higher after yesterday's sharp downside reversal. Take this month in stride as July has been a month to remember.
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By Gareth Soloway on July 22nd, 2010 11:59am Eastern Time
Federal Reserve Chairman Ben Bernanke testified yesterday, scaring the markets with his words. His comments were all bearish in regards to the economy and the recovery. He eluded to keeping rates low for a long time to come as the recovery was going to take far longer than anyone had thought. After saying this, the markets fell off a cliff, selling sharply and closing near their lows. Today, the markets are having a huge rally. It is as if nothing happened yesterday. What is the difference between yesterday and today? Frankly, nothing has changed but the markets continue to react in the opposite direction of the retail, amateur trader. As soon as the market psychology gets bearish, the markets reverse. As soon as market psychology gets bullish, the markets reverse again. Black box trading programs, hedge funds and big financial trading desks have taken the market whips to new heights. Just look at the moves in the last three days. The SPDR S&P 500 ETF (NYSE:SPY) on Tuesday gapped down to $105.87 and closed the day at $108.48. Wednesday, the markets gapped higher to $109.04, then reversed to close at $107.07 after hitting a low of the day at $106.63. After closing yesterday at $107.07, the SPY hit a high today of $109.85. Talk about whips! If you did not have your seatbelt on you would be in major trouble. This price action is likely to continue in the near future. The whips are being helped by uncertainty and mixed economic news. We alerted our subscribers that this type of crazy action was going to take place. This keeps us with very short term swing trades so we can maximize the profits. To get more analysis, guidance, education and trades, join the Research Center.
Gareth Soloway
Chief Market Strategist
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By Gareth Soloway on July 22nd, 2010 12:41pm Eastern Time
The SPDR S&P 500 ETF (NYSE:SPY) ran up under the master $110.00 resistance level and pulled back. This $110.00 level was the key level we ran into a week ago and could not break through. Watch this level closely.
Market leader Goldman Sachs Group, Inc. (NYSE:GS) was sharply higher this morning, trading at $149.88. It has now fallen and turned slightly negative on the day, trading at $146.85. This level happens to be the 200 moving average and major support intra day.
Commodities and commodity stocks continue to have great days. Chevron Corporation (NYSE:CVX) is sharply higher as is United States Oil Fund LP (ETF) (NYSE:USO). Chevron is trading higher by almost 2% while oil is trading higher by 3%. The commodity rally continues to help the markets stay higher even though Goldman Sachs has fallen back. Other financial stocks are mostly holding their gains.
Gareth Soloway
Chief Market Strategist
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By Nicholas Santiago on July 22nd, 2010 3:22pm Eastern Time
As the stock market nears the end of the trading session many traders and investors are still unsure if the stock market is going to hold it's massive gains into the close. Today the Dow Jones Industrial Average is trading higher by more than 200.00 points in another large reversal day this week. In the past five trading days this market has staged four reversals for more than 100 points each.
Yesterday the major stock indexes all opened sharply higher only to reverse lower and close down over 100.00 points on the Dow Jones Industrial Average yesterday. While we are in the middle of earnings season this is still very erratic action. Today this market is holding up very well as many major stocks from all sectors are trading sharply higher and holding the gains.
Simon Property Group Inc (NYSE:SPG) is surging higher by more than 4.21 to $86.85. This stock is the leading commercial real estate stock in it's industry group. Simon Property Group will have daily chart resistance around the $88.00 - $88.50 area. Therefore, should the volatile stock market hold up this stock has the potential to trade into that daily resistance.
United Postal Service Inc (NYSE:UPS) is a leading ground and air cargo shipping company that is surging higher today by 3.38 to $63.42. This stock actually reached it's daily short term resistance area this morning around $64.00 level. In any case it is still a solid move higher for this stock and many of the major transport stocks as well.
Today the very volatile and sometimes unpredictable stock market indexes are all holding up well. As for tomorrow's action it would not surprise anyone to see the market pullback as that has been the theme this week. Since the July 16th options expiration this market has been very volatile staging four major reversal days. Will we see another reversal tomorrow?
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Charles Biderman explains why he believes the level of risk in the U.S. stock market is higher now than at any other point in his 40-year career. Traditional investors were not responsible for the rally that has lifted the market cap of all U.S. stocks by about $6 trillion from the March 2009 lows. Neither companies nor retail investors nor hedge funds nor pension funds have been driving the stock market's gains.watch 4min video here: https://www.youtube.com/watch?v=_wpHFBAJbXgRead more…
By Nicholas Santiago on July 21st, 2010 10:51am Eastern Time
Today the leading commodity stocks are surging again. The move higher in these stocks began yesterday after the Chinese Government made a statement that they would begin to loosen credit for the Chinese housing market. Prior to this move the Chinese government had stated that they would try and tighten lending to prevent a housing bubble.
Cliffs Natural Resources Inc (NYSE:CLF) surged higher yesterday and is continuing it's rally today by climbing by more than 1.61 to $51.99. This stock has just pierced it's 50 moving average which is some short term resistance. This stock does have some possible further upside in the cards if it can clear this current area. The next important resistance level will be around the $56.50 area.
United States Steel Corp (NYSE:X) is another leading commodity stock that is surging again today. Today the stock is trading higher by 1.66 to $45.90. U.S. Steel Corp will have strong daily resistance around the $45.00 - $45.50 area.
Freeport McMoRan Copper & Gold Inc (NYSE:FCX) is trading higher today by 2.10 to 66.41. This stock had very strong resistance around the $68.00 area and has already reversed after reaching that resistance point today. This stock will still have some short term daily chart support around the $65.00 area should it pullback a bit further.
The leading commodity names must be followed closely by most traders and investors. When the commodity stocks trade higher it is a sign of global economic growth. These stocks have had a very sharp move higher since yesterday and may need to pullback already as many of these stocks are at or near important resistance.
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By Gareth Soloway on July 21st, 2010 2:16pm Eastern Time
A quiet day of sideways action turned into a little bit of a sell off as Ben Bernanke made comments on the economy. Overall, his comments were bearish. Immediately following his comments, the markest began to sell sharply lower.
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By Nicholas Santiago on July 21st, 2010 2:37pm Eastern Time
When Alcoa Inc (NYSE:AA) kicked off earnings season on July 12th the stock market was in a bullish mode. The major indexes has bounced since the early July time frame and everyone was bullish in the media. The next batch of earnings that followed all translated to a negative reaction in their stock price. However, the market held up well trading higher into July 16th which was options expiration. On that expiration Friday the Dow Jones Industrial Average closed down 266.00 points that day. Google Inc (NYSE:GOOG) was one of the last major companies to disappoint the street and react poorly to earnings on July 15th.
Now it seems the market sentiment has shifted again. The market indexes are catching bids higher off of the Chinese government making comments that they may loosen credit instead of their earlier stance of monetary tightening. Most commodity stocks have been flying higher on these comments. However, one must question the length of time that this will last. All of the sudden the street no longer cares about earnings or corporate guidance. The street now cares about China and their economic policies. The Chinese government has now become the lead dance partner in the global economy. This is very similar to a poorly written soap opera. Stay tuned as July should be filled with fireworks.
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By Nicholas Santiago on July 21st, 2010 2:37pm Eastern Time
When Alcoa Inc (NYSE:AA) kicked off earnings season on July 12th the stock market was in a bullish mode. The major indexes has bounced since the early July time frame and everyone was bullish in the media. The next batch of earnings that followed all translated to a negative reaction in their stock price. However, the market held up well trading higher into July 16th which was options expiration. On that expiration Friday the Dow Jones Industrial Average closed down 266.00 points that day. Google Inc (NYSE:GOOG) was one of the last major companies to disappoint the street and react poorly to earnings on July 15th.
Now it seems the market sentiment has shifted again. The market indexes are catching bids higher off of the Chinese government making comments that they may loosen credit instead of their earlier stance of monetary tightening. Most commodity stocks have been flying higher on these comments. However, one must question the length of time that this will last. All of the sudden the street no longer cares about earnings or corporate guidance. The street now cares about China and their economic policies. The Chinese government has now become the lead dance partner in the global economy. This is very similar to a poorly written soap opera. Stay tuned as July should be filled with fireworks.
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