By InTheMoneyStocks.com on April 26th, 2010 1:03pm Eastern Time
Today the Dow Jones Industrial Average is higher by $31.00 points to $11,235.00. Today's upside action follows last Friday's strong rally. While the overall market remains positive there are some leading stock names that are down sharply and should be watched.
The first stock that is getting hit to the downside today after reporting earnings is BlackRock, Inc. (NYSE:BLK). Today the stock is lower by $16.50 points or 7.83% to $194.57. The company reported earnings that were worst than analysts expected, as a result the stock is paying the price today. BLK does have some daily chart support around the 190.00 level. This level could be utilized for an intra day trade to the long side.
The next stock that is trading down sharply is Charles River Laboratories (NYSE:CRL). This company provides research models and laboratory animal support expertise to help its global partners advance research and drug development. The company announced today that it planned to acquire the Chinese medical company WuXi Pharma Tech Inc (NYSE:WX) for $1.6 billion.
Goldman Sachs Group, Inc. (NYSE:GS) is another major name that is selling off sharply again. The stock is trading lower by $4.35 to $153.05. Goldman Sachs Group Inc. has been on the hot seat ever since April 16th, 2010 when the SEC charged them with fraud. Goldman Sachs will have daily chart support around $148.00.
These are some of the largest point losers of the day. This comes as the Dow Jones Industrial Average is trading higher on the session. Stock that are negative when the indexes are positive should be watched closely as they usually represent weak relative strength intra-day.
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By Gareth Soloway on April 26th, 2010 1:11pm Eastern Time
A pinch of earnings, a dash of mergers and acquisitions and the market is showing us a stereotypical Monday. Monday's for the last two to three months have been known to be light on volume and generally flat to positive. Today the volume is light and of course, that is keeping the markets steady on the flat line.
Earnings from companies like Caterpillar Inc. (NYSE:CAT) and Whirlpool Corporation (NYSE:WHR) were positive for the market. Caterpillar is a key component of the DOW, so needless to say, that is a very beneficial play to have higher today for the markets. Not so great earnings from BlackRock, Inc. (NYSE:BLK) are one of the small negatives today, but the market seems to be shrugging it off on the back of extremely light volume. Always remember, light volume helps the markets on the upside as it shows lack of institutional involvement which means the average retail investors, Joe Blow, is out there excited about a recovery that the media and the President have been pumping, therefore buying the market. Joe Blow is generally late to the party.
Interestingly enough, a bear flag is in formation on the SPDR S&P 500 ETF (NYSE:SPY). While normally, this technical pattern has a high probability of playing on to the downside, the volume environment is not conducive to it and may cause it to fail. Generally, in the last three months, bear flags work out about 40% of the time while bull flags work out 90% of the time. I would continue to believe these odds are true for the current pattern.
Jackson Hewitt Tax Service Inc. (NYSE:JTX) continues to run higher today, now up almost 20% from the alert I gave on Friday at $1.66 (view Research Center - Hot Charts & Alerts). The analysis I did was based off a hedge fund buyer, great bull flag on the daily chart (90% of success) and a huge amount of shorts that may cover on any squeeze.
After the close today, Texas Instruments Incorporated (NYSE:TXN) reports earnings. Analysts estimates are coming in around $0.51 per share. Market expectations however, are slightly higher at $0.54 per share.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By Gareth Soloway on April 26th, 2010 12:06pm Eastern Time
As I scan through the market today, I see a market that is much like recent weeks, flat on the day, unable to fall sharply. While that may be the case, new technical patterns and signals are jumping out every minute. Setups that could be the next winning swing trade and money maker. Below are some of the ones I am stalking closely and may at any point be playing.
1. Ford Motor Company (NYSE:F) is hitting a double top on the daily chart at $14.50. This should be near term resistance and the stock may see a pull back off this level.
2. Google Inc. (NASDAQ:GOOG) is coming into the daily 200 moving average at a price of $532.00. The 200 moving average has not been tagged on Google's daily chart in since April 2009 as is likely a solid area for a possible bounce short term.
3. The Home Depot, Inc. (NYSE:HD) is hitting a key pivot from 2007. This level can be viewed as resistance at $37.00. The Home Depot, Inc. has been a rocket ship of late and is technically short term overbought as well.
4. Jackson Hewitt Tax Service Inc. (NYSE:JTX) is moving higher on the back of a beautiful daily in spirit of bull flag pattern. Not only is this chart primed for a lift off but it also has millions of shorts. A short squeeze could ensue causing it to go parabolic. The levels of resistance are $1.94, $2.14 and $2.40.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By Gareth Soloway on April 26th, 2010 11:42am Eastern Time
After being crushed in recent weeks, metal stocks like Southern Copper Corporation (NYSE:SCCO), United States Steel Corporation (NYSE:X) and AK Steel Holding Corporation (NYSE:AKS) are jumping. The fact that these stocks are getting a bounce is not surprising at all. They have all seen massive amounts of selling in the last couple weeks. The surprising factor is that with the market at the 52 week highs, these stocks have been sold so heavily prior to the bounce today.
The recent selling in these stocks makes me pause and just wonder if the recovery is all the markets think it is. Common sense dictates a recovery would be headed by a stock like Southern Copper Corp or U.S Steel.
When all is said and done, we will have to watch and see what type of bounce these stocks get. My thought process initially is to look for a bear flag bounce on them and then look for more downside. As they say, the trend is your friend. Should they eclipse the January highs, continued upside is likely.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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EUROZONE SPREADS SOAR FURTHER as Greek-German 10 year spreads hit new record of 6.35% and Portuguese-German 10 yr spreads at 2.14% from last weeks 1.8%. More doubts were thrown about the expediency of a German disbursement after parliamentary floor leader Kauder said Greece has NOT YET met the conditions required to reduce its budget deficit. EURGBP breaking further below the 100-WEEK MA and the 50% retrcmnt (0.8750) targetting 0.884 later in quarter. US CRUDE capped at 85.60 trend line. Chancellor Merkel to make a statement at 13:00 GMT. Cable seen supported at $1.5490. Ashraf interview on CNBC Friday with Maria Bartiromo the Baltic Dry Index, copper, gold, China's trade balance and Brazil's Bovespa http://stk.ly/anojz8Read more…
EURO GAPPED LOWER to $1.3310 in early Monday Asia before retesting 1.3390s on back-&-forth reports about EU/IMF confident on cementing a Greece deal, but traders cannot ignore the fact that it will take at least 2 weeks for any disbursement from individual Eurozone nations and IMF to take place. TWO THINGS are important: 1) IMF will attempt to disburse its EUR 30 bln first so that it wins time for Athens because it could take longer for Germany to mobilize its EUR 8.3 bln before the May 9 elections. 2) IMF may ask for further austerity measures, beyond those already triggering national strikes. The levels noted in this EURUSD CHART http://chart.ly/dhxw4q are the resistance levels required to be broken and NOT the targets for the euro. We continue to expect a break of $1.31 this quarter, before seeing $1.27-1.28 before end of summer. Bundesbank Chief WEBER to speak today at 16:00 GMT and TRICHET to speak at 16:30 GMT in NY today.
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The PowerShares DB US Dollar Index Bullish (NYSE:UUP) gained 1.32 for the week closing at 81.35. While this is a big move for the dollar there is another phenomenon going on here. The dollar seems to rally overnight, as it does trade 24 hours. However, when the opening bell rings at the New York Stock Exchange it seems to fade or outright sell off. This declining action gives a lift to the stock market especially most commodity and inflationary stocks. Note the iShares S&P GSCI Commodity-Indexed (ETF) (NYSE:GSG), or more specifically the Exxon Mobil Corporation (NYSE:XOM) to trade this relationship. The days when the dollar does not fade at the open it will usually reverse lower when the stock index futures are close to breaking a key support level. This is very strange activity for the dollar but well worth noting as it will always cause a reaction. Therefore, the overnight action in the dollar seems to be rather unimportant. In any case the weekly dollar chart continues to find some resistance at the 82.00 level. The weekly dollar chart pattern is still bullish and in a sloppy consolidation. The weekly resistance levels are 82.00, 83.00, and 84.00.
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By InTheMoneyStocks.com on April 24th, 2010 10:31am Eastern Time
The S&P 500 Index, S&P 500 INDEX,RTH (.INX) continued its winning ways by gaining 25 points at the close of Friday's trading to finish at an impressive 1217.00. This index is now higher by 82% from the March 2009 low of 666.00; this bull run is full steam ahead at this time. Every dip is being bought and this week the buying was on heavier volume which is a change in character. The weekly 200 moving average is coming into play soon. Therefore, there should be some resistance at the 1225.00 level. However, while everything looks wonderful in the stock market world it is important to remember that this market has not had a single ten percent correction yet. The two minor corrections that the market did have were eight percent declines and about four weeks in time. As for now the trend is up and the markets are strong. The weekly resistance levels for the S&P 500 Index are 1225.00, and 1250.00. The S&P Index can be tracked and traded by the SPDR S&P 500 ETF (NYSE:SPY).
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By Gareth Soloway on April 24th, 2010 11:40am Eastern Time
As I look across sector after sector, my eyes do not deceive me as they see 100, 200, 300% gains in the last year in many stocks. Financial stocks, retail stocks and others are truly amazing to behold. The economy seems to be on a one way track higher, not even willing to look back at the past and charging towards a robust future, filled with growth and prosperity and bubbles.
The money is flowing free, the Federal Reserve and U.S Government has made sure of that. After hundreds of billions in bailouts and stimulus packages and the Federal Reserve printing trillions, the steroids are truly flowing throw the veins of the market and the roid rage is ripping this market up day after day.
While I glance at countless stocks hundreds of percentage points off their lows, I cannot help but find one sector that does not mesh with the overall economic recovery theory. I sit here and find myself trying to figure out why agriculture stocks have not moved higher off their lows? By no means do I wish to portray a feeling that the economy is not in a recovery mode but instead I wish to give pause on the possibility that these stocks are showing us the recovery is just a short term move on the back of trillions in printed money and government spending. Ultimately, only so much debt can be printed and once that stops, will the average American pick up the slack? With unemployment where it is, it seems unlikely. Let's not forget, unemployment by government standards is 9.7% but the true unemployment rate is estimated to be around 18%.
Potash Corp./Saskatchewan (NYSE:POT), The Mosaic Company (NYSE:MOS), Monsanto Company (NYSE:MON) are all still nearer their lows than their highs of 2008. Potash Corp. hit a high in 2008 of $241.62. It is just slightly over $100 right now and in the last two weeks has fallen over 10%. The Mosaic Company is much the same. The most shocking would be Monsanto Company, which is within 5% of the lows it hit when it was crushed in late 2008. These were the lows for the last 3 years. Note the chart below.
So why is Monsanto Company at the lows, why is Potash or Mosaic off the lows but lagging all the other sectors in a major way? These are stocks that thrive on a true recovery and with them lagging, it makes me wonder if the recovery is only Federal Reserve and government spending based. If it was a wide based recovery, amongst the people, these stocks would be among the leaders. This is food for thought, pun intended. In a year, let's look back and see what has happened. It should be clear by then.
I for one am looking at these as a possible true indicator of a future, six months to a year out. That is of course, assuming the government and Federal Reserve have stopped a majority of their trillions of Viagra pumping activity. For now, as a Chief Market Strategist, seeing these stocks under perform is troublesome as they could be hit hard should the hard to come by pull back occur. I will stay away from them in the short term.
Gareth S
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