Ashrafs INTERVIEW on BNN earlier today http://bit.ly/c08IiA discussing the euro resiliency, stress tests and the Canadian dollar ahead of Tuesdays Bank of Canada decision. The BoE is widely expected to add to last months 25-bp rate hike, with a similar tightening to 0.75%, but the CAD reaction shall depend on whether the BoC will downgrade its Q2 GDP outlook from the prior 3.8%. After flagging the Euro crisis as a risk, the BoC could well add the US slowdown to its red flags, in which case could lend support to USDCAD above 1.05. OIL MAKES ANOTHER decline from 77.30/40 region fukrther weighing on CAD, which could retest 1.0590-95.
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By Gareth Soloway on July 19th, 2010 12:25pm Eastern Time
The SPDR S&P 500 ETF (NYSE:SPY) is trading flat on the day at $106.66. After the massive drop on Friday, the markets seem to be taking a breather. This is often the case after an big move up or down and is called consolidation. In addition, the day after the weekend during the summer months is known for having some of the lightest trading volume of the year. Today is no different.
Gold, SPDR Gold Trust (ETF) (NYSE:GLD) is dropping sharply again. An in spirit of bear flag on the daily chart is playing out perfectly to the downside. After institutions got everyone so bullish on gold, it has now collapsed lower in dramatic fashion taking the small retail investors money with it. Essentially, after all the hype of massive short term inflation and running into safety as the Euro crashed, deflation is the real issue. I have been alerting to this deflationary issue for the last month. While the printing of money will cause long term inflation, assets are still being wiped out across the globe faster than the printing of money. Deflation in the short term is the higher risk, but not for the long term.
Short term gold may go a little lower although it does look semi attractive at the $114.50 level and then at the daily 200 moving average at $111.50 - $112.00.
Gareth Soloway
Chief Market Strategist
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By Gareth Soloway on July 19th, 2010 12:48pm Eastern Time
Housing, building and building supply stocks continue to see little rest from heavy handed sellers. After the government tax credit expired, these stocks have collapsed as the buyers of houses have vanished. The fact that there is no tax credit available and this has caused buyers to vanish should be no shock to anyone. In fact, the tax credit has been the only thing that has kept the housing market from having another leg down. Many may think that is a good thing, but as we see now, it was only postponing the inevitable. Instead of the next leg down in housing occurring months ago, it will now happen and has started to happen.
I expect housing prices to decline another 10-15% in the coming two years. In some areas, housing may drop as much as 20%. Many stocks will continue to see the brunt of this in their stock price. Stocks like The Home Depot, Inc. (NYSE:HD) and Lowe's Companies, Inc. (NYSE:LOW) area already trading at or near 52 week lows. Stocks like KB Home (NYSE:KBH) have seen their stock price cut in half in the last four months as they are also at a 52 week low. Even Toll Brothers, Inc. (NYSE:TOL) is trading near its 52 week lows, having fallen from a high four months ago of $23.67 to its current level at $16.25.
Bottom line is this, the housing recovery still is nowhere in sight. Housing prices will drop further in the next year. While all these stocks listed will most likely head generally lower, bounces should be played as short term swing trade buys at key levels. I will never short these stocks at their dead lows. Any thought of shorting would be held for a monster bounce. There is always money to be made if the entry is precise. To get these trades and others along with analysis, education and guidance, join the Research Center.
Gareth Soloway
Chief Market Strategist
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STERLING WEAKEST OF THE LOT shrugging the rise in risk appetite and the resulting gains in EUR. The rally in EURUSD seems more sustainable than the bounce in US stocks, especially after the US NAHB housing survey slopped to 14 in July from a downwardly revised 16. Last weeks forecast for a lower EURGBP has further deteriorated after the clear breakout above the 0.84 resistance. Weekly stochastics in EURGBP point towards 0.8530 and 0.8580, purely on a technical play especially as the breach of the May trendline resistance ensues. Sticking with my $1.30 target for EURUSD followed by $1.3070, which could occur BEFORE the results of the European stress tests due on Friday at 16:00 GMT. CAD TRADERS WATCH FOR BoC RATE DECISION tomorrow, More on this later on.
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By Nicholas Santiago on July 19th, 2010 11:01am Eastern Time
The transportation index is one of the most important sectors in the stock market. Many traders and investors will follow the transportation index very closely for clues to whether the economy is growing or contracting. Remember everything that we buy has to be transported from somewhere to someone, before being sold. The transports are also watched by many traders and investors that use Dow Theory and other cyclical trading methods. In early July this index never confirmed a new low for the year while the Dow Jones Industrial Average did. However, this non-confirmation move in the transportation index was painting a different picture and the market indexes rallied throughout the first half of July. Today the transports are declining again continuing its sell off from last Friday when the index dropped over 137.00 points. Today the negative commercial airline sector is weighing on the transportation index.
The major commercial airlines are all declining sharply after a poor market reaction to Delta Airlines Inc (NYSE:DAL) quarterly earnings announcement. Delta Airlines is trading lower today by 1.14 to $10.57. Please remember since this company merged with Northwest Airlines it has now become the largest airline in the world. Therefore, this stock carries a lot of weight in this sector. Delta Airlines Inc will have some daily chart support around the $10.50 level.
UAL Corp (NASDAQ:UAUA) is trading lower by 1.68 to $19.66. This is another sharp move lower on the airline sector. UAL Corp will have daily chart support around the $18.80 - $18.50 area in the near term. Should that level fail to hold as support then the $17.00 level will be the next important support area.
AMR Corp (NYSE:AMR) is trading lower today by 0.29 to $6.57. AMR Corp has been beaten up since June 16th when the stock traded as high as $8.88. AMR Corp will have some daily chart support around the $6.25 - $6.00 levels.
Today the transportation index is under pressure. The Ishares Dow Jones Transportation Index (NYSE:IYT) is lower today by 0.94 to $73.51. The weak commercial airline sector is primarily the cause of the decline in the transportation sector. Please remember when this sector declines it is a sign of market weakness and consumer contraction.
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By InTheMoneyStocks on July 18th, 2010 9:03pm Eastern Time
The S&P 500 Index lost 13.88 points for the week ending July 16th, 2010. While this decline in the broad based index does not sound like much, the week was full of surprises. Last week we had mentioned that it was options expiration and the week should be choppy and volatile. As you probably know by now the market tanked on Friday July 16th as options expiration was coming to a close. The decline was for a drop of over 31.00 points on the S&P 500 Index. This decline erased all of the earlier gains from the prior four trading days. Often that is what occurs during options expiration week as the institutional money will usually play a lot of games to catch the novice trader or investor off guard. This coming week should also be filled with many surprises as we are now in the heart of corporate earnings season. So far a decent low was made in early July and price still remains above that level. Should the S&P 500 Index close below that level then this market is likely to experience a lot more fear and selling. Note the SPDR S&P 500 ETF (NYSE:SPY) for an alternative means of profiting from the S&P500 swings.
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I am short from Friday at 112.20 on the break of the H4 pin.Target 110.70 - previous support on H4 and daily pivot. Looks like a triple top failure on H4, at a previous daily pivot i.e. 113.25 area. My stop is 113.50.Hope this works :)
I wonder if EJ is turning up very gradually on the weekly and daily, but either way, just wanted to post this channel... well I think it's a reasonable channel, that has now broken to the upside. What do you think?
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FOREX webinar with the honorable Ashraf Laidi @alaidi in 40 minutes http://bit.ly/bup7tZ
alaidi
@HamzeiAnalytics will try to make the webinar as thrilling as your speedboat ride in Chi !
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Rational:CHF/JPY Weekly: almost bearish engulfing bar. 84 looks like a key level. Weekly trend remains down.Daily: Bearish Engulfing Outside Bar at key level. Daily TL broken. Recent move up looks corrective rather than impulsive.1st Target 80.70, 2nd Target 78.85, and maybe on to previous weekly low.I plan to trade a break of the daily bar, or I will take an H4 setup if I find something I like forming before a break of the daily bar.I didn't have much time to trade last week, and missed lots of moves, but soon I'll be back to this with a lost more focus. The Cable correction I spoke about last week wasn't as large as expected, but upside continuation did materialise as I suggested, so I am happy, I read it right more or less. However, GBP/CHF turned into a mess. The triangle I had highlighted became quite weak, as it's breakout level wasn't respected. A setup materialised on Friday, but there's too much over head res for now, and I got out at BE.I have a short open on eur/jpy at 112.20, target is 110.70 - I'll try and post the setup later.Good trading to you all :)
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"You have to learn the rules on how to trade this market, or you will just be a pawn for the maestro. This market must be timed right, both long and short. This market needs to be measured daily. Black Boxes are also turning levels into zone’s as they are programmed to stop you out of your longs and squeeze you out of your shorts."
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Prior Week
Bullish Market Movers
‘Successful’ EU Sovereign Bond Sales
Overall Positive US Earnings
Goldman Sachs Fraud Case Settlement
Bearish Market Movers
US Earnings Negatives
Poor Economic Data
Coming Week
EU Bank Stress Tests – The Main Event This Week
EU Bond Sales
US Corporate Earnings Week II
Conclusion-Downside Risk Greater, EU Banks Stress Tests Likely To Decide Near Term Market Direction
Prior Week
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