CRUDE OIL extends its 5-day loss, the longest losing streak since mid January (when oil oscillators descended in a downward spiral and oil lost $17). $83.00 stands as the next support. We reiterate that oil will continue its underperformance relative to gold based on a rising GOLD/OIL RATIO, which is expected to reach 14.50-80 before quarter end from its current 13.65. EURUSD successfully broke above its 21-week trend line after regaining the $1.35 figure to a 3-week high of $1.3570. NEXT RESISTANCE POINT stands at $1.3780, which, a break of which would qualify for a return towards the $1.40 figure. failure to retest $1.3770s, may lead to gradual retereat back towards $1.330s.
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By Nicholas Santiago on April 12th, 2010 12:58pm Eastern Time
Today's volume may rival the lightest volume trading day of the year. Unfortunately, this is a very dull market and as we all know by now a dull market usually favors the upside; hence the market adage, “never short a dull market.” However, beginning this afternoon the dull market and light volume could change, so be ready.
Earnings season will soon be underway as Alcoa Inc. (NYSE:AA) is scheduled to report earnings today. The stock is still well below its January highs of 17.60. Currently the stock could have some upside, however, the 15.50 level looks to be good resistance on the daily chart. Should the stock have a negative reaction after its earnings release it will have support around the 13.00 level. While Alcoa Inc. has rarely been a huge mover it will often bring some much needed volatility and volume to this snooze of a market.
Tomorrow afternoon another important stock will report earnings. This time it will be the technology leader Intel Corp. (NASDAQ:INTC). Intel Corp. has a bullish daily chart pattern in place. Therefore, the stock could see an initial move higher after their earnings report. However, playing earnings is always a risky game. The upside for Intel Corp. looks to be the 24.00 level while the downside for Intel Corp looks to be 21.00. In either case this stock should help to increase the volume and volatility in this market.
J.P. Morgan Chase & Co. (NYSE:JPM) is the next major stock to report earnings after Intel Corp. They are scheduled to report earnings before the open on Wednesday, April 14th, 2010. J.P. Morgan Chase and Co. and the other large banks have really been the market leaders since March 2009. It is possible that the stock has much of its earnings release already factored in. However, the financial stocks have lead the markets higher and remain technically very strong. Please remember that the Fed fund's rate (overnight lending rate to the large banks) is at zero percent. Therefore, the large banks do not have to make loans to make money; they can simply buy U.S. Treasuries and stocks in order to see a positive return.
Regardless of how the market interprets the current earnings releases it should bring back some volume and volatility. The major stock indexes have had extremely light volume since the February 5th, 2010 pivot low. Hopefully, this earnings season will bring back some good trading action and opportunities, but for now we have to trade what the market gives us.
Nicholas Santiago
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!
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By InTheMoneyStocks.com on April 12th, 2010 12:57pm Eastern Time
The markest await earnings from Alcoa Inc. (NYSE:AA). The stock sold off sharply on Friday but has rebounded today.
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GOLDs RALLY has been attributed to both the safe haven element during the uncertainty regarding Greece as well as continued signs of global expansion, led by China. Gold did manage to close above 1158 on Friday61.8% retracement of the decline from the 1226 high to the 1044 low. Although the recent rally has breached our misplaced expectations for continued downside, we warn over a bearish divergence in daily stochastics. Only a break below 1140 would revive expectations of a near-term sub-1100. GOLD vs GBP tests its all time high but fails to close above it (756), while GOLD vs. JPY hit the highest level since the Dec 4 record high before retreating back.
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SHOW THEM THE MONEY is exactly and finally what the Eurozone and IMF did when Eurozone members agreed to provide 30 bln in standby loans to Greece this year, supplemented by IMF loans of reportedly as much as 15 bln. The interest rate would be at around 5% for a 3-year loan, less than 7.40% demanded by bond markets. These funds are more a show of Eurozone/IMF solidarity aimed at enabling Greece to tap the bond markets at sustainable interest rates (below 7%), than an actual disbursement of funds. Greece reiterates it has not ask for money, but will use these agreements to raise as much as 1.2 bln through 3 and 6 month paper. EURUSD seems poised to extend gains towards $1.3780, while EURCHF may push towards 1.4550 as the SNB could feel encouraged to buy the pair with the wind at its back.
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The U.S. Oil Fund LP (NYSE:USO) closed basically flat this past week. The USO is very close to breaking out if its long sideways base that it has been in since June 2009. Every time the USO has reached these levels it has pulled back sharply. With that being said, as long as the USO is trading above the weekly 20 and 50 moving averages it is still in a technically strong position in the near term. The next major weekly resistance levels for the USO are 43.00, and 46.00. The weekly support levels are 37.00, and 35.00 should the USO pullback.
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The U.S. Dollar Index closed lower for a second consecutive week giving gold (NYSE: GLD), oil (NYSE: USO) and many other commodities a boost. The overall pattern for the dollar is still bullish after breaking out and closing above the weekly 200 moving average. Also note the PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP). As long as the dollar remains above the 79.50 level it is still in a technically strong position on the weekly chart. If the dollar does slide lower it is prudent to expect the stock market indexes to trade higher. There is weekly resistance at 83.00. 84.00, and 85.00. The weekly support levels for the dollar will be 80.00, 79.00, and 78.00.
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The SPDR Gold Trust (ETF) (NYSE:GLD) rallied higher this past week by 3.38 to 113.64. The daily chart is signaling a head and shoulders break out pattern that would signal a target just above the double top. However, the GLD has resistance at 113.00 and 115.00, therefore, pullbacks are possible. Last week we mentioned that as long as the GLD stays above the weekly 20 moving average it must be given an upside bias, and that still remains the case. It is also important to watch the U.S. Dollar Index chart as gold and the dollar will generally trade inverse to each other
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By ITMS News on April 11th, 2010 2:47pm Eastern Time
The bull run lives on as the S&P 500 cash index gained another 16 points this past week. Also note the SPDR S&P 500 ETF (NYSE:SPY). This move higher comes as the Dow Jones Industrial Average (INDEXDJX:.DJI) tagged the psychological 11,000 level in the final 30 minutes of the trading day on Friday, April 9th. The market continues to climb higher despite the rather poor volume trends. The overall rally is now 57 weeks long in time. This climb higher has been rather remarkable as it has rallied for a lengthy period without a single ten percent correction. The next major weekly resistance level for the S&P 500 will be the 1225 level. The 1200 level will be minor at this point, however, it is still an important psychological number for the public.
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CAD CHARTS: Considering our NEGATIVE STANCE ON OIL oil and latest price action in CAD, these charts http://chart.ly/rb56fy suggest signs of a temporary CAD stabilization vs. GBP and USD. Weekly oscillators in GBPCAD are converging with the weekly price action, especially as such combination has proven bullish in prior occasions. GBP element of GBPCAD stabilization may emerge from the cacophony of election polls favouring the Tories. Any rebound from the current 1.5455, is seen limited at 1.6350s. USDCAD parity corresponds with the 76% retracement of the rally from the 40-year low of Nov 2007 to the Mar 2009 high. Todays jobs report helped USDCAD mark a floor at parity, but more is required in the way of Canada FX rhetoric and oil pullback (already struggling to regain $86) for the pair to regain 1.0130. A rebound in USDCAD faces preliminary resistance at 1.0380-00, but only a severe event risk on global risk appetite would lift USDCAD above 1.05.
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