FOMC MINUTES INDICATE A FED DOWNGRADE of the the US econ outlook for 2010 and 2011, weighing on yields and stocks, while keeping USD mixed. FOMC revised down its 2010 and 2011 projections for GDP growth and inflation while pushing up its unemployment outlook from the April forecasts; GDP down to 3.0%-3.5% from 3.2%-3.7%, unemployment to 9.2%-9.5% from 9.1%-9.5% and Core PCE price index to 1.0%-1.1% from 1.2%-1.5%. GBP continues to outperform CAD due to robust UK employment figures and negative impact on CAD from FOMC revisions. GBPCAD eyes 1.5850 and 1.5910. JPY PAIRS may drift further in event of deteriorating US equities. Keep an eye on Chinese Q2 GDP tonight, expected around 10.5% from 11.9% in Q1. Chinese are unlikely to show a figure that is too strong in order to avoid the ire of the West about raising yuan flexibility. *** REGISTER FOR ASHRAF'S SUNDAY WEBINAR on FX, Commodities and Yield Relationships http://bit.ly/bup7tZRead more…
H4 Ascending triangle which has already broken out - not sure how to play this tbh, aside from looking for a pin or bullish engulfing bar. Though I am tempted just to jump in now :) H1 looks corretive rather than impulsive. M15 shows a bullish falling wedge. Personally I'm not put off by the previous down trend. 1.5850 is a big level on the daily, and holding nicely, and I expect more upside. The cycle seems to be the opposite of Cable.Theoretical target of 1.6275 - twice the height of the pattern.
US JUNE RETAIL SALES -0.5% (vs exp -0.2% and prev -1.1%), ex autos -0.1% from prev -1.2%. Better but not good enough is one way to sum up these figures. Youd have to remove autos, gas and building material to obtain a positive retail sales figure. The 1.3% DECLINE IN JUNE IMPORT PRICES was the biggest decrease since Jan 2009. This is a vocal message of disinflationary conditions, which will further dampen any inflationary fears from the hawkish members of the FOMC. Watch the US 10-year yield retreating towards 3.0% especially after what we believe to be another dovish set of minutes from the FOMC. EURGBP is vulnerable to 0.8260 and 0.8210 in medium term. TUNE IN FOR ASHRAF's WEBINAR THIS SUNDAY http://bit.ly/bup7tZRead more…
UK UNEMPLOYMENT fell by 20.8K in June after a 31K decline in May with the unemployment rate dropping to 4.5%--lowest since March 2009. The robust figures may not dispel doubts over the impact of upcoming decline in falling public sector jobs. The weaker than expected 2.7% increase in average earnings is in line with the softening in June headline CPI, which may provide food for thought for GBP bears. With Cable slipping towards $1.5230s, we may see a renewed attempt to retest $1.5320 but beware of late session turnarounds in the pair as profit-taking sets in. US markets await June retail sales and FOMC minutes today. Strong Intel earnings last night helped Asia but are failing to provide the follow-through in Europe. EURJPY HOTCHART sees 113.00 being tested but 113.40s remain top heavy. See calendar http://www.ashraflaidi.com/economic-calendar/Read more…
By Nicholas Santiago on July 13th, 2010 3:45pm Eastern Time
As we all know the major market indexes are extending their gains today from the July 1st pivot low. This market bounce higher has been nothing short of sensational as the indexes have advanced over 8.0 percent from the July lows. While the indexes are getting extended it is still possible to see more upside. However, one industry group should be hitting resistance very soon and that is the semiconductor sector.
The Semiconductor Holders Trust (NYSE:SMH) has had quite a rally from the pivot low on July 1st when it traded as low as $25.21. Today the Semiconductor Holders Trust is trading higher by 0.61 to $28.20. This highly followed ETF holds a basket of the most popular and widely held semiconductor stocks. The Semiconductor Holders Trust should have good daily chart resistance at the $28.50 - $28.85 level. Therefore, the ETF could still see further upside before reaching that resistance area and pulling back or consolidating.
Texas Instruments Inc (NYSE:TXN) is a leading chip stock that has also had a sharp move off the lows. This stock is now trading into an important daily chart resistance level at the $25.40 - $25.75 area. Should the stock trade above this area watch the $26.50 level as the next important support area. Pullbacks from this current level are likely if the overall market pulls back or takes a breather. In any case this is a likely profit taking area for this stock.
Broadcom Corp (NASDAQ:BRCM) has been one of the leading technology stocks since mid-May and continues to remain strong. This stock is currently at a resistance level on the daily chart and is getting a little extended. This stock does have good relative strength compared to most of it's peers. However, at this level many professional traders may look to take profits and wait for a pullback before jumping on board.
The semiconductor sector has had a tremendous bounce recently along with the stock market indexes. While the group looks strong at the moment it will be reaching important resistance levels shortly. It makes you wonder if the Intel Corp (NASDAQ:INTC) earnings report will be a sell the news event. The past few times that Intel Corp has reported earnings the stock has sold off shortly afterward. We shall see soon enough as Intel Corp reports earnings after the bell today.
Read more…
OIL TESTS 200-DAY MOVING AVERAGE (77.33) for the 1st time this month, probing the 1.0286 support (61.8% retracement of the 0.9928-1.0866 rally), a breach of which is apt to call up 1.0220s. The fact that CAD has outperformed crude oil over the past 2 months intensifies CADs prospects during advancing energy prices. USDX loosk to test 83.15--38% retracement of the 74.17-88.80 rally. 83.15 also coincides with the 100-day MA. A close below 83 this week would be highly rewarding to CAD & CHF.
Read more…
By Gareth Soloway on July 13th, 2010 12:53pm Eastern Time
With Alcoa Inc. (NYSE:AA) having reported better than expected earnings results, all eyes turn to the next major earnings announcements for the remainder of the week. The market has seen a significant rally in the past seven trading days. The Dow Jones Industrial Average is up around seven percent. This tells a tale of slightly raised expectations now for earnings, compared to where they were two weeks ago. Especially after Alcoa reported better than expected results, the rest of the group this week will have to follow to hold onto the rally in their stocks.
After the close of trading today, Intel Corporation (NASDAQ:INTC) reports earnings. This is the first major tech stock to report and will be looked at with a magnifying glass. Expectations are for a profit of $0.43 - $0.45 per share.
Thursday, a flood of earnings will be reported. In the morning, JPMorgan Chase & Co. (NYSE:JPM) will report. They are expected to report a profit of $0.71 per share. However, Wall Street feels they will come in closer to $0.85 per share. This will set the bar for the rest of the financial companies in the coming days.
Thursday after the market closes, Advanced Micro Devices, Inc. (NYSE:AMD) will report. They are expected to report a profit of $0.06 per share. However, again expectations are for a profit as high as $0.16 per share. In addition, Google Inc. (NASDAQ:GOOG) is set to report. This will be a huge report for the tech sector. Google has rallied in the last week from a low of $435.00 to a high today of $492.00. Earnings are expected to come in at $6.55 per share with a whisper number of around $6.70. With the recent jump in Google's stock price, these earnings are most likely factored in. They will have to beat significantly and have a positive outlook for the stock to continue higher.
Friday morning key stocks that report are Bank of America Corporation (NYSE:BAC) and General Electric Company (NYSE:GE). Bank of America is expected to report earnings of $0.22 per share. The market expects them to beat slightly, coming in at $0.26 per share. General Electric is expected to report earnings at $0.27 per share and is also expected to beat slightly at $0.30.
While the earnings whisper numbers are very key to the stocks performance, it is only one piece of the puzzle. The outlook this earnings season will be extremely significant due to the fear of a double dip recession. To get more analysis, swing trades, guidance and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
By Nicholas Santiago on July 13th, 2010 1:16pm Eastern Time
What can we say about the market since the July low? It has been a straight move higher since July 3rd for the major stock market indexes. This rally has been broad based and many of the leading stocks have all lead the charge. On the surface this rally looks great, however, there are some negatives and we shall see what they are.
The first negative for this rally is that the volume has been extremely light. This is telling traders and investors that the public is not really involved and the institutional money is still cautious. As we have seen since the March 2009 market bottom most rallies take place on light volume and decline on extremely heavy volume. Please understand that light volume rallies can last a while and are not necessarily indicative of major decline on the horizon.
The second negative is that the move higher in the market has not even paused or consolidated from the July 1st pivot. Most rallies that are going to be sustainable will often pullback and not create that V-bottom pattern. Therefore. While the market can continue to climb it is likely the pullback will be fierce when it does occur.
The third negative factor that I see for this rally is that it is options expiration week. Often the institutional money will take the market the opposite direction of the small retail options trader. Think about how many small retail options traders bought puts on the market in early July thinking that the market was going to crash. After all every news business channel on the television was talking about the massive head and shoulders top pattern that was in place on the major indexes. There were very few people if anyone that was saying early July was a buy. Remember rarely will the small retail options trader ever exercise an option. They will usually close out the position before expiration, therefore, options expiration will usually have a lot of games played by the institutional money.
This market has had a huge rally since the early July lows. There certainly may be more left in the tank for the market's upswing, however, this week looks like a lot of games being played by the institutional money. Look at stocks in the agriculture space such as Monsanto Co (NYSE:MON), Potash Sask Corp (NYSE:POT), and the Market Vectors Agribusiness ETF (NYSE:MOO). This sector has been the laggard of 2010 and has just burst higher into this options expiration week. While this industry group was oversold the institutional money is certainly moving this sector up due to all the puts on these leading stocks. Stay cautious during this week of options expiration as the pro will usually have field day with the amateur.
Read more…
USD EXTENDS LOSSES on intensifying risk bounce as GBP, CHF and CAD outperform major currencies. GBP EXTENDS GAINS above $1.51 as the focus on the 3.1% reading in CORE CPI overshadowed the retreat in the headline CPI to 3.2% y/y. $1.5140s appear vulnerable to a $1.5220 in the event that Intel earnings deliver another break above expectations (EXP $0.43 from -$0.07). EUR rallies against USD and JOY but struggling vs CHF, eyeing 1.32550, which is seen as a hedge against EURUSD longs. ARABIC SPEAKERS WATCH Ashraf on CNBC-Arabia at 16:15 GMT (19:15 Dubai Time)
Read more…
dollar index..eod data0.4 pts by 3 reversal hilo plotat support now.bearish chart uneless the trend reveerses in the marked support zones.the market does not seem to like obama policies.there is a downside count of 78.4 area/green lines
Read more…
