By Nicholas Santiago on March 16th, 2010 3:47pm Eastern Time
The semiconductors have been one of the leading sectors of the NASDAQ since the 1990's. Recently the semiconductor index has been lagging the NASDAQ since January 2010. Historically the semiconductors have lead the index higher, which has not been the case as of late. However, today the index is flexing some muscle by trading sharply higher on the day.
Many leading individual semiconductor stocks that have been lagging by trading below their 52 week highs are showing strength today. They include Intel Corporation (NASDAQ:INTC), KLA-Tencor Corporation (NASDAQ:KLAC), Applied Materials, Inc. (NASDAQ:AMAT), and Texas Instruments Incorporated (NYSE:TXN) just to name a few. Intel Corporation is actually at a new 52 week high today breaking above it's January 2010 level.
The important chart here is not the individual names that are all running higher like a pack of wolves, it is the Semiconductor HOLDRs ETF (NYSE:SMH) chart that should be watched closely. This index looks to be at a very good resistance level on the daily chart at 27.75 – 28.25. This could certainly be a pullback level for this ETF. It is important to remember if they all trade higher together they usually all pullback together.
By InTheMoneyStocks on March 16th, 2010 10:08am Eastern Time
The U.S. Oil fund (NYSE:USO) is trading sharply higher this morning as the U.S. Dollar declines. Generally, when the U.S. Dollar is weak most commodities and inflationary stocks will catch a bid higher.
Today the Federal Reserve Bank will announce their policy statement on the Fed funds rate and the economy. The market sentiment is not expecting any change in rates from the Fed. Therefore, this is putting pressure on the U.S. Dollar giving most commodities a lift higher today. The U.S. Oil Fund (NYSE:USO) will have intra-day resistance at the 39.60 level.
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JPY weakness broadens amid expectations that Wednesdays announcement from the Bank of Japan will renew the case for quantitative easing. Reports that Japanese FinMin Kan would use FX reserves to fund DPJ programs were later denied but some sources say there may be some truth to them. USD weakness. We expect both the FOMC and BoJ decision to be negative for the JPY as long as there is no marked equity sell-off occurs as a result of the statement. USDJPY WEEKLY technicals point to further advances nearing 92 in the medium tem. GBPUSD is capped at $1.5200, which is the down channel from the Jan 19 high. GBP watchers are cautioned of a speech from BoEs Bean at 19:00 GMT. Note that todays FOMC announcement is due at 18:15 GMT and not 19:15 GMT. EURUSD still shows no signs of regaining $1.38.
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By Gareth Soloway on March 15th, 2010 6:16pm Eastern Time
The markets sold early, surged late. When the dust settled, the markets ended flat. It was a wild start to options expiration week. Options expiration week is usually the most volatile week of the month due to the games that are played by institutions. Today looked exactly like that. The markets came down quickly, as volume was mediocre at best. Once mid day hit, volume dried up. Late in the day, a few buy programs kicked in and it turned out to be a non event for the day.
What does this tell us about tomorrow? Most likely, between the economic reports at 8:30am ET and the FOMC policy statement at 2:15pm ET, there will be more volume. Generally, volume does not go hand and hand with the recent up market. However, the late day reversal does seem to give hope to the bulls for further upside. Bottom line is this, be ready for the options expiration games. You have seen it today already and will continue to see for the remainder of the week.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By TRADER X on March 15th, 2010 3:38pm Eastern Time
Gold and silver are both trading higher during today's trading session. It is rare to see gold and silver trade higher when the U.S. Dollar index is strong on the day. There could be several reasons for today's action in gold and silver.
Many traders and investors view gold as a safe haven against all fiat currencies. As we all know gold has been the currency of choice since recorded history by most civilizations. Therefore, when the U.S. Dollar declines it is highly likely that we see gold, silver and most commodities to rise. Since the March 2009 stock market lows gold has lead the market higher as the Federal Reserve Bank and the U.S. Treasury have tried endlessly to inflate this market back to health and to their credit it has worked so far. Tomorrow is the FOMC meeting when the Federal Reserve Bank makes it's statement about the economy and the Fed funds rate. Currently the Fed funds rate is at zero percent and the market is not anticipating a rate hike in the near future. Therefore, today gold traders seem to be positioning themselves ahead tomorrow's Fed meeting.
Recently gold has made a high in December 2009. Since that time gold has made lower highs on the daily chart. This type of action is telling us that gold could be very volatile in 2010 and may see lower prices throughout the year. However, in the long term as long as central banks print money and the major nations continue using a fiat money supply system it prudent to hold some physical gold for the long term.
Gold can be traded by using the SPDR Gold Trust ETF (NYSE:GLD). Often silver will trade with gold and it historically looks cheap compared to gold. Trader can use the iShares Silver Trust ETF (NYSE:SLV).
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IF THE DOLLAR CHART IS NOT ENOUGH, then not sure what is. http://chart.ly/vea8b7 The bullish engulfing pattern show in todays USD Index candle is typical of trigger to upcoming USD strength (as seen in previous occasions in the chart). S&P500 touched 1150 on Wednesday, Thursday and Friday but failed to close at that level in each of those days. EURUSD needed to close above $1.38 on Friday in order to break out of its 4-month trend line. It closed at $1.3760. Today it trades at $1.3670. USD Index was required to hold above 79.20 on Friday to sustain its 4-month uptrend. Today it trades at 80.19. Register for ASHRAFs CANADA EVENTS (VANCOUVER-MONTREAL-TORONTO) http://bit.ly/acXvOHRead more…
By Nicholas Santiago on March 15th, 2010 12:52pm Eastern Time
Today the major indexes are under some slight pressure as the U.S. Dollar index is higher by 0.50 cents to 80.34. Tomorrow is the highly anticipated FOMC meeting; the Federal Reserve Bank is expected to leave the Fed funds rate unchanged at zero percent. Currently the SPDR S&P 500 ETF (NYSE:SPY) is at good resistance levels on the daily chart at 115.00 and appears short term overbought. Considering these factors, it is not surprising to see a small pullback in the markets today. However, there is one stand out stock today that is trading higher, and it is Wal-Mart Stores Inc (NYSE:WMT).
Today Wal-Mart Stores has moved to a new high on the daily chart trading higher by 1.46 to 55.35. When a stock makes this kind of a move higher in a down market this must be viewed as good relative strength compared to the overall market. Stocks that make this type of move especially in a down tape must be respected. Companies such as Wal Mart are very defensive and often trade higher before economic down turns or market corrections. This is a possible reason for today's sharp move higher.
While Wal-Mart Stores is at a new high for 2010 it does have strong resistance levels nearby. There should be daily chart resistance at 57.00 and more at the 60.00 level in the near term. Until Wal-Mart reverses on strong volume the stock must be given the upside bias into these levels.
