WE HAVE BEEN HERE BEFORE. Both USD and JPY rally sharply against all other currencies as stocks sell-off following Germanys announcement to ban naked shorts against selected stocks & euro bonds. BUT WHAT ABOUT USDJPY ? USDJPY has now lost only 150 pips after the sharp rebound from the May 6 collapse to 87.90. But HISTORY HAS SHOWN that each time USDJPY rebounds following a +5% 1-day collapse (as was the case twice in October 2008), not only the rebounds are short-lived, but renewed sell-off tends to drag back near the previous low. While a break below 90 may not be assured for now, expect USDJPY to reach 91.70, followed by 91.20. Follow us on Twitter for more frrquent uopdates http://twitter.com/alaidiRead more…
By Nicholas Santiago on May 18th, 2010 12:50pm Eastern Time
The technology sector throughout all of 2009 was a major market leader. However, since the market seemed to find a top around late April it has been the technology stocks that have tumbled. The Powershares QQQ Trust (NASDAQ:QQQQ) which represents the NASDAQ 100 topped out on April 26th, 2010 at $50.65. The QQQQ's are now trading at $46.75 which is a decline of nearly eight percent.
While most traders focus on the major tech names such as Apple Inc (NASDAQ:AAPL), and Google Inc (NASDAQ:GOOG), they often forget about the other important stocks in the NASDAQ 100 that have been weak.
Leading tech stocks such as Qualcomm Inc (NASDAQ:QCOM) have topped out in January 2010 and continued to slide really ever since that time. Qualcomm Inc should have good daily chart support around the $35.00 level.
Cisco Systems Inc (NYSE:CSCO) topped out in late April and declined further after reporting earnings. In April the stock topped out around the $27.74 area and has been trading lower ever since that time. The stock will have short term daily chart support around the $24.00 level.
The Semiconductor Holders Trust (NYSE:SMH) is a basket of the leading semiconductor stocks. Often many traders and investors view the semiconductor index as a technology barometer. This ETF seemed to top out in the middle of April around the $30.50 level. The Semiconductor Holders Trust is now trading around $27.42. There is minor daily support around the $27.00 level on the daily chart. However, the stronger daily chart support level will be around the $26.00 – $26.50 area.
Technology has rallied sharply over the past year due to major cost cutting. Now the second half of this year is the the real test. Is there really demand for all these products that have been produced? The stock price usually tells the truth.
Read more…
By InTheMoneyStocks on May 18th, 2010 9:29am Eastern Time
This morning the U.S. Dollar Index is trading lower by $0.19 cents to $86.03. Yesterday the dollar made a short term top around the $87.06 level. As we all know by now when the dollar declines the stock market will generally inflate. This is usually lead by most commodity and inflationary stocks. However, when the dollar catches a strong bid higher most commodity and inflationary stocks will deflate. Today we can see when the dollar declines how the major stock market indexes are all trading higher.
This morning spot gold is trading lower by 16.00 points to $1212.00. The SPDR Gold Shares (NYSE:GLD) are lower this morning by $0.54 cents to $118.82. Gold did reach new highs last week and looks to be just consolidating here at this time.
Crude is higher this morning by $2.15 to $72.22 on the back of the declining U.S. Dollar. The United States Oil Fund (NYSE:USO) is higher this morning by $0.54 cents to $34.44.
Traders and investors that want to trade the U.S. Dollar index to the long side can use the PowerShares DB US Dollar Index Bullish (NYSE:UUP). For the traders and investors that would like to trade the dollar to the downside or short the currency can use the PowerShares DB US Dollar Index Bearish (NYSE:UDN).
Read more…
By IntheMoneyStocks on May 18th, 2010 10:09am Eastern Time
This morning many commodity names are all trading sharply higher this morning. This impressive pop in the commodity names come as the U.S. Dollar Index declines and the Euro currency catches a bid higher today. Simply put when the dollar falls the commodity and inflationary stocks simply inflate.
Today most energy stocks, industrial metals stocks, and agriculture stocks are all moving higher after recently trading near lows for the year. Stocks such as Exxon Mobil Corp (NYSE:XOM) are rallying higher. Recently Exxon Mobil Corp has been at a new low for 2010. Exxon Mobil Corp is higher this morning by 0.92 cents to $64.19.
The Oil Services Holders Trust (NYSE:OIH) is a basket of oil services names that is trading higher this morning by 2.80 to 112.84. This ETF has also been near the low for the year and short term oversold. Therefore, a small bounce from here is likely on the daily chart. There will be resistance around the 115.50 – 116.00 area.
Southern Copper Corp (NYSE:SCCO) is a leading copper producer that is trading higher this morning by 0.54 to 28.02. This is another stock that has been oversold on the daily chart and near it's 2010 low. The stock has daily chart resistance at the 29.71 level.
When the U.S. Dollar is lower it will usually help inflate many of the beaten down commodity related stocks. Should the dollar reverse and trade higher it would be prudent to expect the commodity and inflationary stocks to come under pressure.
Read more…
GBP drops across the board despite the highest annual CPI since Nov 2008 (3.7%). The bulk of sterlings climb occurred ahead of the figures before Cable dropped a full cent to $1.4430. Traders are not only confident in the Bank of Englands repetitive calls that rising UK inflation will be temporary, but also preoccupied about the spending decisions that must be taken by the new govt and the impact on overall growth. Aussie drops after the RBA minutes made the case for a possible pause in its tightening cycle. AUDUSD eyed 0.8680, but only a protracted selloff in equities is expected to add on to losses towards 0.8570s. Traders who see EUR to be oversold may see some stabilization against GBP, followed by further gains into 0.8640-45.
Read more…
By Nicholas Santiago on May 17th, 2010 3:19pm Eastern Time
There is an old saying in the stock market; "a rising tide lifts all boats." These days that should be changed to "a falling dollar inflates all markets." Today is a perfect example of that new market saying playing out perfectly. The U.S. Dollar Index rallied at 9:30 am EST when the New York Stock Exchange opened causing stocks to decline as commodities deflated. Then the market seemed to find a low around 12:00 pm EST when the dollar made its intra-day high. Therefore, it is safe to say that the major market indexes are trading inverse to the dollar.
Today many major commodity names have caught strong bids off the low of the day. Stocks such as Cliffs Natural Resources Inc (NYSE:CLF), United States Steel Corp (NYSE:X), and Freeport McMoRan Copper & Gold (NYSE:FCX) have all bounced sharply off the intra-day lows. Remember, all commodities trade in U.S. Dollars, therefore, they will trade inverse the dollar.
Last night the dollar reached some short term resistance levels at $87.00. Until the dollar crosses above that level the dollar could have a short term pullback. Any pullback in the dollar should help lift and inflate the markets. As of now this would just be short term and nothing more. There has been a lot of recent technical damage done to the major stock indexes and that is not going to be repaired easily.
Read more…
By Gareth Soloway on May 17th, 2010 11:16am Eastern Time
The SPDR S&P 500 ETF (NYSE:SPY) hovers at the lows of the day and is slowly moving towards the double bottom from Friday. This will be short term support. It is all on the back of a fall in the Euro CurrencyShares Euro Trust (NYSE:FXE) in mid morning trading. The Dollar PowerShares DB US Dollar Index Bullish (NYSE:UUP) in response is appreciating in value.
As the Euro falls and the Dollar rises, the markets are moving lower. For this market to rally, the Euro must bounce back. As the markets remain weak on a drop in the Euro, commodity stocks continue to be under the most pressure. Exxon Mobil Corporation (NYSE:XOM) is lower by over 1% and metal stocks like United States Steel Corporation (NYSE:X) are down nearly 5% on the day.
Commodity stocks whether it is oil, coal, steel or copper have lead the decline in the markets. This stems from the dollar being so strong and a major problem with the global recovery Wall Street had believed in. If the dollar can weaken, oil will bounce along with the commodities and these pounded stocks will see a short resurgence.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
To get more in-depth analysis, along with exact entries/exits, swing trades, and scalp trades, join our Research Center or Intra Day Stock Chat NOW and join the ranks of the Pros!
Read more…
By Gareth Soloway on May 17th, 2010 11:47am Eastern Time
Have you tried to find someone bullish on the Euro CurrencyShares Euro Trust (NYSE:FXE)? I have had no success in finding anyone out there that is bullish. What does that mean? It means I am moving to the bullish side on the Euro and slightly bearish on dollar. Why would I do this? The short Euro trade has been done to death in the short term. Over the weekend, every financial media outlet was talking about the Euro crashing, coming to par with the Dollar. Every analyst was saying the same thing as well. The trade is far too crowded to the short side on the Euro and in my opinion, expect a sharp bounce later this week. It may not be a long bounce, but it will be steep.
Stocks and ETF's to play if this happens are all in the commodity arena. Look at an ETF like United States Oil Fund LP (NYSE:USO) or stocks like Southern Copper Corporation (NYSE:SCCO), AK Steel Holding Corporation (NYSE:AKS) or Chevron Corporation (NYSE:CVX). These will most likely have a sharp snap back rally on any weakness in the Dollar which would come from strength in the Euro.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
By Gareth Soloway on May 17th, 2010 12:05pm Eastern Time
Early in the day, stocks like Apple Inc. (NASDAQ:AAPL) were higher while other sectors were weak. That has changed as of mid day in the markets. The markets continue to be under pressure from a falling Euro and rising Dollar. Technology which had held up nicely is now swooning. Apple Inc. hit a high today of $256.18 in early trading but now sits at $248.00, over $8.00 off its highs. The markets are breaking the lows from Friday as things in Europe continue to look ugly.
Other technology stocks that initially started the day with gains are Oracle Corporation (NASDAQ:ORCL), QUALCOMM, Inc. (NASDAQ:QCOM) and Microsoft Corporation (NASDAQ:MSFT). It is amazing to see every sector in the market eventually succumb to the Euro drop and the Dollar strength. The markets rallied non stop months ago on a weak dollar and now cannot handle a rise in the dollar. While it seems that currencies have all the control in the markets over the ups and downs, it is the underlying factors of why the currencies are moving in their directions that really drives the market. Stay tuned as this market continues to get slammed down.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
To get more in-depth analysis, along with exact entries/exits, swing trades, and scalp trades, join our Research Center or Intra Day Stock Chat NOW and join the ranks of the Pros!
Read more…
By Nicholas Santiago on May 17th, 2010 12:19pm Eastern Time
This morning the major market indexes are all trading lower continuing Friday's decline. While many sectors such as energy and industrial metals are trading lower it is the financial stocks that are really putting the pressure on the stock market. This morning there is a lot of chatter that the Volker rule will pick up steam and become law. Paul Volcker is the former Federal Reserve Bank Chairman from 1973 – 1987. His current plan is to restrict banks from making certain kinds of speculation(proprietary trading) investments if they are not on behalf of their customers. Paul Volcker has argued that such speculative activity played a key role in the financial crisis of 2008. He is now a key advisor to President Obama.
This morning stocks such as J.P. Morgan Chase & Co (NYSE:JPM), Wells Fargo Co (NYSE:WFC), Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS), and Morgan Stanley (NYSE:MS) are all trading lower. Since the bull rally began in March 2009 it has been the financial stocks that have bounced and rallied the most since that time. Therefore, what leads markets higher will often lead markets lower and right now they are the main financial stocks.
This is options expiration week and a lot of puts have been bought on the major stocks now. Therefore, it is possible for the stock market to see a small bounce this week. However, when the financial stocks decline traders will listen. Right now these financial stocks are saying there is trouble ahead even if the markets do bounce this week into Friday's expiration.
Read more…
By Gareth Soloway on May 17th, 2010 1:24pm Eastern Time
Oil, United States Oil Fund LP (ETF) (NYSE:USO) is down sharply today as the dollar continues to be strong. Fear that Europe will kill the global recovery is also causing demand recalculation. Almost all commodity stocks are getting hammered but light may be at the end of the tunnel.
While many think the Euro will go to par against the dollar, I think a short term bounce is on the horizon and could start as soon as the next few days. Oil and other commodity stocks have fallen off a cliff and are due for a short term bounce. This is only a short term bounce of course, but could be an opportunity to keep the profits rolling.
Chevron Corporation (NYSE:CVX) is coming towards the 200 moving average at $75.00. This looks to be prime spot. Oil near $70 also looks to be solid for a short term bounce. AK Steel Holding Corporation (NYSE:AKS) is nearing its double bottom level from the big DOW 1000 point drop at $14.00. Southern Copper Corporation (NYSE:SCCO) is coming into a triple bottom on the daily chart at $26.40. Even Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has great support at a triple bottom around $65.50 on the daily chart which will act as good support.
Bottom line is this, just looking at the United States Oil Fund (USO) chart, it is clear in the short term commodities have fallen too far too fast on this panic. Watch for an oversold short term bounce in my opinion.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
ALERT: Get in-depth analysis, along with exact entries/exits, swing trades, and scalp trades, direct from our Pros, join our Research Center or Intra Day Stock Chat NOW and enter the ranks of the Pros!
Read more…
