By Nicholas Santiago on July 8th, 2010 3:49pm Eastern Time
Yesterday the major stock indexes all rallied sharply higher causing a major short squeeze into the close. Today the large cap energy stocks are inching higher helping the markets gain for a second consecutive trading session. This is a slight change of character from the usual 3:00 pm sell off that we have seen over the past two months in the major stock indexes.
Exxon Mobil Corp (NYSE:XOM) is the leading energy stock in the market. This stock also has the largest market cap in the stock market at $275 billion. Therefore, when this stock trades higher the market will often follow it's lead. Today Exxon Mobil Corp is trading higher by 0.19 to $58.60.
Chevron Corp (NYSE:CVX) is another leading energy stock and a major Dow Jones Industrial Average component. Today Chevron Corp is trading higher by 0.71 to $70.17. This stock does have daily chart resistance around the $71.50 area and more around $73.00. When Chevron Corp and Exxon Mobil Corp trade higher together the entire energy sector will usually trade higher.
Chesapeake Energy Corp (NYSE:CHK) is a leading natural gas stock that sold off sharply from late June. The stock is bouncing from the recent lows made three trading days ago. Chesapeake Energy Corp will have daily chart resistance around the $22.40 and $23.00 levels.
When the energy stocks move higher it is usually a sign that the stock market indexes are inflating higher. Most of the stocks in the energy sector have been extremely oversold and a bounce was due. As long as the energy stocks continue to climb the markets should hold up and trade off the lows. Remember Exxon Mobil Corp is a very important stock to follow and a stock market barometer.
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By Gareth Soloway on July 8th, 2010 11:44am Eastern Time
The markets gapped higher again today, trying for a third straight up day and a five percent gain in total. Jobless claims finally showed a solid drop coming in at 454,000. The 450,000 level is a major milestone. Wall Street is hoping next week we will see a move below that key level. Continuing claims also dropped dramatically. However, it is highly likely that many people are no longer able to collect unemployment. That would result in the dramatic drop in continuing claims.
The markets gapped higher today to the $107.00 level on the SPDR S&P 500 ETF (NYSE:SPY). Initially the markets inched higher but quickly fell back down. On a technical analysis basis, the market is extremely extended from yesterday, it needed to pause and have a small pull back. Since that gap higher, the markets have fallen to gap fill and are hovering slightly higher on the day.
Financial stocks which helped the market rally the last couple days are stalling and pulling back. The two key stocks to watch are Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM). Both are down over one percent on the day. The other key stocks responsible for helping the markets rally are also pausing today. These stocks are the oil and commodity plays. Follow Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM). These two stocks are fractionally lower on the day. As we always discuss, anytime a rally is sustainable, the financial and commodity stocks must participate. If they do not, be suspect of the rally. The last few days, these two groups did join forces.
The key turn date we alerted to worked out perfectly. This was given to our premium members of the Research Center and Intra Day Stock Chat last week. Positions long were taken in accordance and profits have been big. The master turn dates are based off unique technical analysis methods we have developed over years of market study. We encourage you to join the Research Center to get market guidance, swing trades, alerts, education and more.
Gareth Soloway
Chief Market Strategist
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Apart from the obvious resistance of 1090 on snp and 108.50 for SPY we also have a negative trend in play despite wed/thurs mornings exuberance.Theres no stopping Euro now it seems, however I would be surprised if we had seen the bottom due to low spy volume confirmation. EJ I see as still negative also
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By Nicholas Santiago on July 7th, 2010 3:27pm Eastern Time
Everything in the market is catching a bid today. Over the past few days the major stock market indexes were extremely oversold and it seemed as if the markets would never have another positive session. Today the major indexes are higher by about 2.00 percent across the board. Many major commodity names are all surging higher. Stocks such as Cliff Natural Resources Inc (NYSE:CLF), United States Steel Corp (NYSE:X), and Southern Copper Corp (NYSE:SCCO) are all trading sharply higher. When commodity stocks and technology stocks trade higher it is usually the making of a good rally and today that is the case.
The one problem with today's move higher is simply the poor action in Exxon Mobil Corp (NYSE:XOM). While the stock is positive on the session it is certainly lagging the other major names in the energy sector. If the markets are going to see any significant rally last a few days or longer it will need Exxon Mobil Corp to participate. This stock has the largest market capitalization in the stock market and that alone will carry a lot of weight. When Exxon Mobil moves higher most traders will pay attention.
So far today's action cannot be denied. It is important to remember that many amateur traders went short at the lows and will need to cover their positions. Therefore, today's move can get a little overdone to the upside do to those traders buying back their out of the money short positions. As we say when you can read the charts then you can make the money. Today is just one day and really nothing more. The month of July should have a lot of short term whips and surprises in store.
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By Nicholas Santiago on July 7th, 2010 10:04am Eastern Time
As we all know the major stock market indexes have been under severe pressure since late April 2010. Many traders and investors are are screaming about the so called “death cross” and a break of a major head and shoulders top pattern on the daily chart. Both signals on the charts are extremely bearish and will point to much lower prices ahead. However, often when everyone is looking at the same thing and a pattern becomes so widely publicized the move will rarely play out as expected. Many traders and investors were expecting the major market indexes to roll over yesterday into the close and as we all know by now they seemed to hold up staging a late day rally.
This morning the always important U.S. Dollar Index is trading flat helping to inflate the major stock indexes such as the SPDR Dow Jones Industrial Average (NYSE:DIA), and the Powershares QQQQ Trust (NASDAQ:QQQQ). It is also important to remember at this time that the Shanghai Index has bounced over the past several days and this will generally help the other global markets. The European markets are trading flat today as they will usually take the lead from the U.S. markets even though they open much earlier for trading. The Euro currency is trading slightly lower today and that is generally a negative for the global markets. Today the Currencyshares Euro Trust (NYSE:FXE) is trading lower by 0.17 to $125.62. The FXE will have some intra-day support at $125.41.
This morning the major markets indexes are trading slightly positive. All markets around the world remain on very fragile ground at this time. There has been a ton of technical damage done on the charts since the late April decline. All in all at his time the market lives to fight another day.
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By Gareth Soloway on July 7th, 2010 11:57am Eastern Time
The turn date Chief Market Strategists alerted to on July 6th and 7th, 2010 to their premium members has been a perfect profit hit. The markets are surging higher today after the small up day yesterday. Worries continue to decline across the board as commodity, financial and technology stocks are getting scooped up quickly in a buying frenzy. Earnings season starts next week and Wall Street is beginning to believe earnings will not be as bad as the market has priced in. In addition, next week is options expiration and due to the heavy put buying in the market in the last month, it seems likely the markets will get a bounce in the opposite direction.
The SPDR S&P 500 ETF (NYSE:SPY) continue to hover near the highs of the up 1.4%. Commodity stocks are finally rallying with Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) leading the charge. In addition to the gains in the commodity sector, the financial stocks are rallying. Stocks like Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) are having stellar days.
The turn date was isolated and revealed early to mid last week. Based on the charting proprietary methodology of Chief Market Strategists, they were able to decipher that July 6th and 7th the market would turn higher. This was released to the Research Center members and Intra Day Stock Chat members. Everyone positioned themselves accordingly and are now reaping the rewards in the form of profits. The SPY has a major level of resistance at $104.50 and then $105.00. Ultimately, we could see this market chop around and eventually rally to $107.00.
The key with any rally that is going to hold is to see the financial and commodity stocks rally together. Today that is happening and is a major positive for the market. To get more information, guidance, swing trade calls and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
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