By InTheMoneyStocks on May 11th, 2010 3:29pm Eastern Time
CNBC reported that Congressman Frank is seeking compensation for those that lost money during last weeks market crash. Since the so called 'Fat Finger' trader cannot be located anywhere it seems that it would be only fair to give compensation to those traders and investors that lost money that day. Are you kidding me or what? This is an absolute joke.
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By Gareth Soloway on May 11th, 2010 11:31am Eastern Time
The SPDR Gold Trust (NYSE:GLD) gapped higher today on the back of continued fears of massive global currency devaluation. Before 10am ET, the GLD took out the all time highs, hitting a price of $119.34. It is hard to imagine how gold will fall sharply in the coming months and years. Fear drives it higher, Europe printing a trillion dollars to bailout countries drives it higher, and the United States printing just as much if not more does the same.
The U.S. Dollar has soared recently, mostly because the Euro has been hammered. A rising dollar usually drops the price of gold while a falling dollar usually spikes gold. That has not been the case this time. At some point the dollar will pull back and that could drive gold even higher or at least keep it from falling back sharply. While small pull backs will occur, it is hard to imagine how gold could see an extended drop and not continue to make new highs.
Gold stocks are responding today with a big move higher. Yamana Gold Inc. (NYSE:AUY) is near the highs of the day at $11.38 +0.69 (6.45%). Randgold Resources Ltd. (NASDAQ:GOLD) is jumping higher $87.49 +5.09 (6.18%)
Gold stocks may be the one bright spot in this market right now. What could make gold fall? In the long run, it does not seem anything can. However, in the short run, if the fears in Europe subside, and we have a quiet period without any big default news or problems, gold could see a pull back.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By Nicholas Santiago on May 11th, 2010 1:00pm Eastern Time
The large major U.S. banks are all holding steady today after yesterday's $1 trillion bailout by the European Central Bank(ECB). In reality the E.C.B. and the International Monetary Fund (IMF) bailed out the European banks that hold the debt from the defaulting nations such as Greece, Spain, Portugal, Italy, Ireland, and many others. This program is very similar to the Toxic Asset Relief Program (TARP) that the United States passed in October 2008.
Today the leading major banks such as J.P. Morgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), and Wells Fargo & Co (NYSE:WFC), are all trading slightly higher on the session continuing their upside momentum from yesterday.
Goldman Sachs Group Inc (NYSE:GS), and Morgan Stanley (NYSE:MS) are both positive on the session. Remember Goldman Sachs Group and Morgan Stanley are both structured as banks since the financial crisis in 2008. Therefore, these leading financial institutions can borrow from the Federal Reserve Bank at a very low interest rate.
Anytime $1 trillion dollars can be thrown at the stock market in the form of a bailout the stock market should get a rally. That is exactly what we have seen yesterday and today. Right now the sky is clear and all is well again in the stock market until the next storm cloud starts to form.
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The 4% Monday rally in US equities resulted into a 4% Tuesday selloff in Shanghai and 1% selloff in the Nikkei, before European bourses sank in the red with 1.6% and 1.1% declines in the FTSE and the Dax. Despite better than expected UK manufacturing figures, UK markets remain jittery due to the potential of a Labour/LibDem deal following Gordon Browns resignation. The concept of selling the bounce remains extends from the euro into global equities. The 2.8% annual rise in Chinese CPI reminds markets of Chinas need to further tighten policy beyond the 75-bps in reserve requirement hikes. Considering that DOW FUTURES ARE DOWN 102 pts, we expect AUDUSD rallies to extend retreat towards 0.8920, with rebounds capped at 0.9010, while AUDJPY is vulnerable to 81.15-20.
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VARIOUS INTERPRETATIONS to Gordon Browns speech, in which he announced that his Labour Party is ready to discuss a coalition with LibDems. Brown announced he will step down to allow for these negotiations to go on, which is a negative for GBP as it paves the way for the possibility of establishing a labour/LibDem. While markets have proven their clear preference to see Conservatives in power (via GBP rebound following Camerons Friday speech), any signs of the alternative are showing the opposite impact on the currency. And so, GBP is not falling on the mere announcement of Browns stepping down but on the implications for a possible arrangement between Labour and LibDems. EURGBP eyes 0.8680, GBPUSD is dragged by a bearish oscillator crossover towards $1.4780.
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By Gareth Soloway on May 10th, 2010 1:00pm Eastern Time
While the markets have surged today on the back of a European backstop worth almost one-trillion dollars, the markets are snoozing intra day. The SPDR S&P 500 ETF (NYSE:SPY) gapped higher today into the 10 minute 200 moving average, up 4%. Since that point, the markets have inched higher and lower in a tight range as if sleeping on a cloud. In the coming days, it is possible to see a little more upside, possibly to $117.50 on the SPY. After this 200ma, that will be the next major level.
Oil surged higher today on the back of a recalculation of demand from Europe after the loan package was put forth. In addition, the Euro surged while the dollar dropped. That also helps jump start oil to the upside. United States Oil Fund LP (ETF) (NYSE:USO) filled a major gap last Thursday and Friday and is now jumping 1.57% on the day.
Gold on the other hand is dropping nicely. Gold is losing ground because of the fear trade subsiding. With a European collapse in the short run off the table, traders that ran into gold for safety are now selling it, opting for higher risk assets. The SPDR Gold Trust (ETF) (NYSE:GLD) is down 0.83% on the day.
Gareth Soloway
Chief Market Strategist
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!
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By Gareth Soloway on May 10th, 2010 11:46am Eastern Time
If you can't fix it, print some more money. That is the policy of the world leaders today as Europe has in place an almost one-trillion bailout package of sorts. After last weeks market decline, this is not surprising. Bottom line is, if you can't fix it, print it.
Stocks continue to hold most of their gains today. The DOW, S&P 500 and NASDAQ all up 4%. Key moves from stocks like Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Exxon Mobil Corporation (NYSE:XOM) and JPMorgan Chase & Co. (NYSE:JPM) all keeping the markets up in a major way. Oil is surging today, after key technical levels were hit on Friday and gold is pulling back with the fear trade subsiding.
As every country prints money, the markets get a solid bounce in the short term. However, the problems down the line get even more scary and ominous. It puts the world on a course that most of us shudder to think about and makes me as a Chief Market Strategist believe the huge M-A pattern on the monthly chart of the S&P 500, will play out.
On Friday, I talked to my subscribers about the likely possibility of European leaders doing something drastic to try and stabilize and prop up the markets. In tune with that, I had a short term positive bias on oil, negative on the U.S. Dollar. In addition, while I told them it was an extremely risky bet based on the current volatility, the markets were likely to see a bounce early in the week. Every call I made was correct. How did I understand this? Simply put, technical levels on the charts. Hundreds of charts were at master technical support levels. In addition, understanding the nature of the beast was key. There was no way Europe or the United States would stand by and allow the markets to continue to collapse. Doing so would have gone right in the face of what Ben Bernanke and President Obama have done for the last year and a half. Understand it, learn it and profit by it!
Gareth Soloway
Chief Market Strategist
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!
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By InTheMoneyStocks on May 10th, 2010 9:31am Eastern Time
Stock index futures are soaring higher ahead of the opening bell after the European Union announced a bailout plan. Since this announcement last night the U.S. Dollar Index is lower by more than 1.00 point since Friday's close to $83.47. This decline on the dollar will help lift most commodities and inflationary stocks.
The United States Oil Fund (NYSE:USO) is trading higher this morning by $0.80 to $37.11. Spot crude is higher by $2.06 to $77.15.
The SPDR gold Shares (NYSE:GLD) is lower by $0.87 cents to $117.47. Spot gold is lower by $10.00 to $1200. The recent move higher in gold is due to the fear in Euro currency. Today the Euro is slightly stronger.
Often markets will rally and trade higher on the back of a falling U.S. Dollar. Should the dollar trade lower it is likely that this mornings rally will hold up. However, should the dollar rally this market is likely to fade from this gap open high.
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GBP is 3rd BIGGEST LOSER in FX today (after JPY and USD). David Camerons Conservatives have signalled a willingness to partner their way into a majority but have not succeeded in ridding markets from what could be a prolonged period of hung parliament. The ensuing rally in global equities could well see another bounce in GBPUSD extending towards $1.5, but the presence of the trend line resistance at $1.5110 (from the Apr 27 high), is unlikely to be breached without a successful Tories/LibDem coalition. EURUSD faces imeediate resistance at $1.3140
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The U.S. Dollar Index PowerShares DB US Dollar Index Bullish (NYSE:UUP) surged higher this past week as investors moved money out of other currencies and put it back into the dollar. When the week was all said and done the dollar gained $2.48 and made a new high for the year. The rally in the dollar is now 24 weeks long. This type of move higher is a lot of meat and potatoes in the currency world. When the dollar moves higher it will often put pressure on most commodities such as oil, copper, and iron. However, when the dollar declines most of these currencies will inflate and trade higher. Therefore, the movement and direction of the U.S. Dollar has a profound effect on the overall markets. The dollar will now have weekly resistance around the $86.00, and $87.00 levels.
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By InTheMoneyStocks.com on May 9th, 2010 4:04pm Eastern Time
What a week for the the entire stock market! The S&P 500 Index (SPDR S&P 500 ETF (NYSE:SPY) lost $75.80 for the week to close at $1110.88. This was the worst week for the index since the bull rally began in March 2009. This past week we have heard numerous reports that the sharp decline was caused by a computer error or the so called 'fat finger' trader that may have clicked the billion share button instead of the million share button. In both cases market regulators do not know what caused the massive sell off on Thursday May 6th, 2010. It is surprising that the financial media will not simply call it a crash. After all, that is what it appears to be. We find it rather ironic that the low on that day of the sharp crash like decline was exactly the weekly 50 moving average on the S&P 500 weekly chart before staging a huge intra-day bounce. Technical trading once again proves itself as the dominant method when fear enters the market - and the technicals combined with the InTheMoneyStocks methodology called this sell off to the penny. This past weekly close caused a lot of technical damage on the charts and further downside is possible in the near term from the current pattern. The weekly support for the S&P 500 is $1075.00 and $1050.00.
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