US 2-YEAR YIELDS remain at 0.58%, flirting with their all time lows as not only the Fed funds rate is seen unchanged for at least another 9 months but also due to the possibility of further easing. Aside from reiterating rates will remain low for an extended period, he could raise easing alternatives to cutting rates, such as lengthening maturity of its Agency/mortgage back securities or reducing interest on bank reserves (in order to encourage banks to lend out more), in which case renewed USD weakness will ensue. Also keep an eye on 10 yr yields flaling below the 2.90% level. AUDUSD maybe among the big winners from a dovish testimony in the event that equities are emboldened by a dovish Bernanke. 0.8880-00 will be the resistance to break (61.8% retracement of the Apr-May decline), a An intraday pullback to 0.8750 is not ruled out but daily tone remains well bid. AUDJPY seupported at 76.20 before a possible bounce to 77.50 in Asian session in event of positive equity reaction to Bernanke.
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THE LOONIE RALLY extended into Asian trade as US crude oil closed Tuesday at its 200-day MA of $77.57. IT WOULD BE INACCURATE to attribute CADs strengthening to the BoC rate hike, as the decision was accompanied by a downward revision of 2010 and 2011 Canadian GDP growth, which proved CAD negative for at a good 2 hours. More appropriately, CAD gains emerged on the heels of the broadening rally in risk appetite around Tuesday London close, which was accelerated by French and Spanish newspaper articles quoting Spanish economics minister and France Fin Min that all their banks will pass the tests. USDCAD eyes 1.0320 trend line support, a break of which to extend losses towards 1.0280. Bernanke to speak at 14:00 pm EDT (18:00 GMT) and NOT as 10:00 am EDT (14:00 GMT) as has been usually the case.
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If this really is a bulliish falling wedge, then right now I think the setup looks great to go north. Perfect 50% fib bounce, creating a daily bullish engulfing candle. We shall see. Sanity checks welcome!
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CAD DROPS ACROSS THE BOARD on combination of a dovish rate hike from the Bank of Canadas and broadening risk aversion. The BoC did raise rates to 0.75% as was expected but cut its 2010 GDP growth forecast to 3.5% from 3.7%, while indicating Canadian housing activity declining markedly. USDCAD upside eyes subsequent resistance at 1.0620. EURUSD failed to regain $1.30, extending losses below $1.29. The revenues miss by Goldman Sachs and further declines in US housing starts (lowest since Oct 2009) have weighed negatively on risk appetite. EURUSD is seen supported at $1.22770 trend line support, ahead of Fridays stress test.. AUDUSD seen retesting 0.8680. YEN CROSSES EXTEND LOSSES.
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STERLING EXTENDS SELLING vs. USD and EUR as UK public sector borrowing hit a new record high in June reaching 21 bln, with net debt at 64% of GDP. UK July CBI Trends survey is due at 10 am GMT (11am BST) expected at -24 from -23. More data disappointment from the UK could see cable breach $1.5190, while GBPJPY is seen eyeing 131.70, after recurring failure of 133.40s. EURUSD touched $1.3028 and is expected to retest the level before preliminary $1.3080 and $1.3130 later in the week ahead. Barring any negative surprises from Fridays publication of the European stress tests, we could see EURUSD build a new floor above $1.29. EURGBP eyes 0.8580. GOLDMAN SACHS earnings before the bell and Apple after the Bell. HERE's the RECORDING OF ASHRAF's SUNDAY WEBINAR for Hamzei Analytics http://bit.ly/7FnxeRead more…
Someone recently asked me if trading Elliott Wave patterns could be done for day trading...This was action and live commentary on the Dow Jones on 19/07/2010.This is just an example of how the theory can be applied. I did not trade this as I am more of a “swing trader”... however this is how I was looking at the market in real time.It is not difficult when you know the rules. When you get used to looking at movement structures, the logic comes naturally... just a matter of time and practice.This was a good call, but it was by no means guaranteed. For those of you sceptical of Elliott Wave... I would say “always keep a healthy degree of scepticism”... it is by no means a “holy grail” and don’t let any analyst try and convince you that it is!But it has it’s uses at times.Note: The (A)-(B)-(C) pattern completed and there was a sharp sell off... but this doesn’t mean that the upside is over and done for just yet... as with the a-b-c pattern, there was no “confirmation”.Following a completed pattern, you want to see something that will confirm the pattern is indeed a key point. In this case, as with the simple a-b-c pattern we are looking for an “impulse”... should be fail to see it (ie: only a 3 wave move) then we can do just as we did with the a-b-c pattern... and that is re-label it with 1 degree higher possibility and expect a wave ((C)) 5 wave rally.This is one of the most annoying things about Elliott... patterns can expand to higher degrees when you think they have just completed... this is why “confirmation” is so important.I hope you find this interesting and it helps you in approaching and tackling the practical application of the theory.Max
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By ITMS News on July 19th, 2010 4:56pm Eastern Time
Texas Instruments sales for the second quarter ended last month were $3.5 billion, that missed analyst estimates $3.52 billion. Going forward Texas Instruments guided in line with analyst estimates.
IBM shares drop 3.24% after Q2 results.
IBM misses on revenues.
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By Nicholas Santiago on July 19th, 2010 3:42pm Eastern Time
Today the major stock market indexes are bouncing back a little from last Friday's bloodbath decline. The SPDR S&P 500 ETF (NYSE:SPY) is trading higher today by 0.68 cents to 107.34. The SPDR Dow Jones Industrial Average (NYSE:DIA) is posting a similar gains. In any case the market is trading higher on extremely light volume. So let's take a look at the heavy hitters moving the markets today.
The first major stock that seems to be lifting the Dow Jones Industrial Average and the S&P 500 index is International Business Machines (NYSE:IBM). Big Blue has reversed all of Friday's declines today trading higher by 2.16 to $ 130.19. This stock will report earnings after the bell today, therefore, the stock could have a lot of the positive news already built in to the current price. Should IBM pop higher after earnings then the stock will have daily chart resistance around the $132.00 - $132.50 area.
Exxon Mobil Corp (NYSE:XOM) is trading higher today by 0.52 to $58.47. While this is not a major move higher today leading energy stock it is still enough of a pop to help the major indexes to trade higher. Simply put when Exxon Mobil Corp trades higher rarely will the markets not follow. Exxon Mobil Corp still has the largest market capitalization in the stock market and that must be respected.
Simon Property Group Inc (NYSE:SPG) is the leading commercial real estate stock in the sector. Today Simon Property Group Inc is moving higher by 1.18 to $83.34. The daily chart could be forming a consolidation pattern which is bullish. This stock will have daily chart resistance around the $85.00 level and much more around the $88.50 area should it trade there.
On a trading day when the volume is extremely light there are a few stocks that will lift the major stock indexes. These three stock are today's heavy hitters and they are all trading higher on the session. Please remember that the Dow Jones Industrial Average is just thirty stocks that are price cap weighted. Therefore, the move higher in IBM carries much more weight than the move higher in Exxon Mobil Corp. In any case when these stocks trade higher the markets will often follow.
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