By Nicholas Santiago on July 16th, 2010 11:02am Eastern Time
Everyone knows that the home-builder stocks were waving the warning flag in 2006 that a major crisis was coming. The home-builder stocks topped in July 2005 and began there decline lower. However, the major stock market indexes continued to climb higher into October 2007. Most smart traders and investors recognized this in 2006 and knew that eventually the stock market could not continue higher when the prior rally from 2003-2007 was based off the housing market boom.
Once the market crash took place throughout 2008 and early 2009 everyone was talking about the commercial real estate stocks leading the markets lower and being the main catalyst. As we all know the Ishares Dow Jones U.S. Real Estate ETF (NYSE:IYR) actually lead the rally higher from the March 2009 stock market low. During the entire 2009 and early 2010 rally it was the commercial real estate stocks that lead the markets higher. This index is no longer being talked about as a catalyst for the next major decline. Remember the market rarely does what everyone is expecting when most traders and investors are watching the same thing at the same time.
Leading commercial real estate stocks such as Simon Property Group Inc (NYSE:SPG), and Vornado Realty Trust (NYSE:VNO) should be watched very closely. These leading stocks have often signaled major and minor stock market pullbacks downturns. The news about the commercial real estate stocks is essentially worthless. It is the price action in these leading stocks that will tell the truth. Therefore, do not get caught up in listening to the talking heads in the media. Watch and learn to read the charts. Remember every talking head in the media was talking about commercial real estate as being the next shoe to drop in March and April 2009. The charts did not say this and the charts were correct. Watch the price action in these names and judge it for yourself.
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By Gareth Soloway on July 16th, 2010 11:56am Eastern Time
A minor pivot day was alerted for today and the market dropped accordingly. Options expiration has come to a close and the institutions no longer have a reason to hold the market up. The massive rally late yesterday was a perfect fake out as called. The obvious timing of the Goldman Sachs Group, Inc. (NYSE:GS) and BP plc (ADR) (NYSE:BP) news sent the shorts running and the last few put holders screaming away. The massive late day surge in the markets even lured some call buyers in for an attempt at some easy money on a possible rally today. Needless to say, the whips of options expiration have been well documented to our Research Center and Intra Day Stock Chat members.
The economic news has continued to be poor and the earnings have been average. Over the last two weeks, the run up in the markets has factored in great earnings as many stocks have jumped over ten percent. This type of run up into earnings means each company's report better be stellar. That has not been the case as Google Inc. (NASDAQ:GOOG) and Bank of America Corporation (NYSE:BAC) disappointed.
The SPDR S&P 500 ETF (NYSE:SPY) is getting hammered today, down 1.90%. The dollar is inching higher, gold and oil are getting crushed. The bear flag pattern on the SPDR Gold Trust (ETF) (NYSE:GLD) is playing out beautifully. This was a call given in the Research Center. To get more analysis, guidance, swing trades and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
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By Gareth Soloway on July 16th, 2010 12:55pm Eastern Time
The SPDR S&P 500 ETF (NYSE:SPY) pulled back perfectly to the 20 moving average today as fear crept back into the markets and options expiration came to a close. The markets have seen a meteoric rise in the last two weeks as the retail put buyers saw their profits vanish. The markets are hovering just off the lows of the day on the 20 moving average, just a day after the markets hammered into the 50 moving average on the upside. The SPY is lower by 2.20%. Economic news continues to be poor and earnings are mediocre. In addition, the Chinese Shanghai Index has yet to see any sort of bounce. This is and has been a warning sign for the world markets. Gold, SPDR Gold Trust (ETF) (NYSE:GLD) is dropping sharply after a beautiful consolidation in spirit of bear flag pattern formed. Oil, United States Oil Fund LP (ETF) (NYSE:USO) is also getting hit and the dollar is slightly higher.
Gareth Soloway
Chief Market Strategist
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By InTheMoneyStocks on July 16th, 2010 3:00pm Eastern Time
Today the major market indexes are all getting slaughtered across the board. At the beginning of the month InTheMoneyStocks.com subscribers were alerted to look for the markets to rally. After that move played out perfectly and profits were taken, then subscribers were made aware that a sell off would occur today on July 16th. InTheMoneyStocks subscribers were able to benefit on the long and short sides of the market throughout the month of July earning profits from every move! Learn to read the charts like the Pros and you can make the money regardless of what the market does.
Investors, swing traders, those looking to earn huge profits in their 401k, IRA, or other retirement accounts Join the Research Center NOW and position your portfolios on The Right Side of The Market!
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July 15 (Bloomberg) — Goldman Sachs Group Inc. said the dollar will weaken against the euro by January as U.S. growth slows, marking the bank’s second reversal in two months after it forecast in June the greenback would surge to a seven-year high.http://fedupusa.org/2010/07/15/how-to-lose-money-listen-to-goldman/"
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EURUSD BREAKS above $1.29, regaining the 100-day MA for the first time since December mainly on a weakening US dollar and good news on the earnings front. Euros momentum shows the elements of an extenstion towards $1.3120. US equities made a late session rally on news that Goldman Sachs would settle its lawsuit with the SEC, but news of Googles earning miss was not ignored by Asian markets. Nikkei-225 fell 2.9% on what is said to be fears of prolonged yen strength. Were maintaining negatve stance on GBPJPY despite emerging rallies in GBPUSD and GBPCAD.
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By Nicholas Santiago on July 14th, 2010 3:36pm Eastern Time
Welcome to 'whipsaw Wednesday'. This is the Wednesday during the week of options expiration. Often this day is the most volatile and choppy day of the week during options expiration. Today that is very evident as the SPDR S&P 500 Index ETF (NYSE:SPY) and SPDR Dow Jones Industrial Average ETF (NYSE:DIA) have been all over the map today. For example the SPY traded down to 109.00 shortly after the open then rallied up to the 110.00 area by lunch time. After reaching that level the SPY traded back down to the 109.00 level again. All of this action occurred by 2:30 pm EST. This is why we call this day 'whipsaw Wednesday'.
It is important to remember that a lot of institutional games get played during the week of options expiration. Look at last month when the market was in a severe downtrend. The market somehow caught a big bid higher for the week of options expiration. Last month was also a quadruple witching which means that options contracts were expiring on stock index futures, stock index options, stock options and single stock futures. You don't think after the amount of puts bought on the market last month at the lows that the institutional money was not going to allow the amateur retail options trader to cash in do you? Of course not. The same goes for this month. I can only imagine how many inexperienced traders bought puts on the indexes in early July after hearing about the so called 'Death Cross', and the head and shoulders top pattern on every business channel in the world. Remember it is the institutional money can move markets when they see fit and they can certainly do it for a week if they need to.
As traders and investors all we can do is try to follow the big institutional money on both the long and short side. That is what a trader does. There are very few people that can move a stock as large as Exxon Mobil Corp (NYSE:XOM), or Google Inc (NASDAQ:GOOG). It is the institutional money that moves these stocks. That is why we always say if you can read the chart you can make the trade. Options expiration week is always a time to be cautious as the institutions will move the stock price away from the popular strike if it will benefit them. Look at today's action as there was a whole lot of shaking going on.
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