By Nicholas Santiago on March 5th, 2010 3:26pm Eastern Time
The market is surging higher today after the government released a better than expected job report. Most traders and investors anticipated the government would release good numbers after telling the public earlier in the week to expect a bad number due to the February snow storms. With today's sharp move higher there are a few stocks that are not participating and should be watched next week after today's euphoria is over with.
The first stock that is not reacting well today is Research In Motion (Nasdaq:RIMM). The stock is down just 0.40 cents today trading at 69.58. Nonetheless, it is negative in a very strong tape. If the market starts to show weakness next week this stock should be watched closely.
Qualcomm Inc (Nasdaq:QCOM) is another stock that is slightly negative today trading lower by .50 to 38.75. Qualcomm Inc has had it's fair share of problems lately as it is still lower by over 10 points from it's January high. Should the market start to pull back next week this stock could test it's recent lows at 35.50 and possibly 32.00 if that support level fails to hold.
Microsoft Corp is another stock that is slightly negative today. The stock is lower by just 0.06 cents to 28.56. Again, this is another leading stock that is down in a bullish market. Microsoft Corp is also forming a slightly bearish chart pattern on the daily chart which could trade down to the 27.50 level.
Whenever the market gets euphoric as it is today it is important to look at the laggards. Then when the market starts to get weak or pulls back these names may lead the decline.
Nicholas Santiago
Chief Market Strategist
InTheMoneyStocks.com
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March 4, 2010 22:06 ET: NFP DOLLAR BIPOLARITY? With forecasts for Fridays US jobs report ranging from -150K to -40K and unemp. rate expected +0.1% to 9.8% + the price effect of the previous revisions, the multitude of factors weighing on the report will undoubtedly cause wild swings in the 30-60 mins after the release. USD will likely rally on NFP bipolarity i.e. with the overall report either very disappointing (big NFP decline + big rise in unemp rate OR big NFP increase and unemp rate decrease). Weve already seen the June 2009 jobs report (released in Jul) when a rare consistency in the jobs report (declining NFP losses and falling unemp rate) caused a $USDX rally along side a short-lived rally in stocks. A more recent & memorable case was the Nov jobs report (released in December 4th) which showed the smallest NFP decline in over 2 years. A strong report would spike up fed funds futures and make USDJPY among the biggest winners of the day. All $USDX pairs would rally with the opposite case being for JPY. A gloomy report would help USDX to the extent of a sell-off in equities, as it stands, THE AUDUSD DJ VU ALERT IS STILL ON and EURUSD RESISTANCE still holds as in here http://chart.ly/ d4mscs
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By Nicholas Santiago on March 4th, 2010 3:23pm Eastern Time
Economists and analysts have had opinions for as long as one can remember. To my knowledge very few analysts and economists have been correct in predicting problems in the economy or in stock prices. If they made effective calls they would have accurately predicted the 2000 and the 2007 stock market declines. Stock traders seem to have a much better handle on the direction of the economy and the movement of stocks.
In 2007 it was the stock traders that accurately forecasted the decline in the stock market when the S&P 500 (INDEXSP:.INX) was trading at 1576.00. To my knowledge it was again stock traders that accurately predicted the severe decline in oil in July 2008. At that time the U.S. Oil Fund LP ETF (NYSE:USO) was trading at near 120.00 a share before finding a low in February 2009 at 23.00 a share. Spot crude was trading at 147.00 a barrel and Goldman Sachs (NYSE:GS) and many other analysts were predicting oil to trade above 200.00 a barrel. Again it was the traders that saw the decline that followed.
Here we are today with unemployment near 10 percent in the U.S. by government standards and deficits that are mounting in the trillions of dollars that can not be calculated. The only solution by our central bank and the government for the problem is to print more money and try and inflate it back to health. Traders know that this can only work so long. Meanwhile economists say things are getting better and the worst is over. It is really similar to putting a band aid on a fractured scull. Who thinks this is really working?
Now even traders will be wrong from time to time. However, a good trader knows when he or she is wrong and they will stop out of their position taking a small loss. Economists and analysts look for reasons why they were wrong. Why didn't Citigroup Inc (NYSE:C) analysts and economists down grade their own stock when it was 55.00 a share in 2007? Currently interest rates are set by the Federal Reserve Bank instead of being traded by supply and demand. Why? History has proven that they are not better than the market. Perhaps the administration should hire a trader to get this country in order.
Nicholas Santiago
Chief Market Strategist
InTheMoneyStocks.com
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By InTheMoneyStocks on March 4th, 2010 3:37pm Eastern Time
The major indexes have been in a very tight rage today ahead of tomorrow's government job report. The administration has already prepared the market that the jop number could be poor due to the February snow storms in the north east. This should be viewed as a sadbagging tactic that has been used by the government many times before. the definition for sandbagging is to conceal or misrepresent one's true position, potential, or intent especially in order to take advantage of. The February job numbers will probably be good as most are now thinking that they will be poor. In any case the market is not stupid and will sort it out in due time.
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By Gareth Soloway on March 4th, 2010 11:43am Eastern Time
The markets initially rallied today on the back of great retail sales numbers and an announcement that Wal-Mart Stores, Inc. (NYSE:WMT) raised its dividend. Stocks like Abercrombie & Fitch Co. (NYSE:ANF), Family Dollar Stores, Inc. (NYSE:FDO) are soaring today as sales numbers, expected to be poor because of all the snow and weather problems, were actually amazingly good. Family Dollar Stores has jumped today almost 9.00% while Abercrombie & Fitch Co. has also rocketed up 10.50%.
In addition, Jobless Claims showed a solid reduction this week, dropping to 469,000, down 29,000 from last week. The markets had been worried as each of the last two weeks, jobless claims had risen close to the scary 500,000 number. This number today was definitely a relief to the markets.
With these two pieces of data helping give the market a bid, the dollar was also on the rise. This somewhat took the steam out of the markets. After gapping higher, the U.S. Dollar started to jump. Pending Home Sales also were announced at a disappointing drop of 7.60%. Considering this is closing in on the last chance to get the first time home buyer tax credit, numbers like this tell us the housing problems are far from over and another leg lower is likely.
After the gap higher, the 10:00am ET data, along with the rise in the dollar sent the markets lower. The SPDR S&P 500 ETF (NYSE:SPY) hit the double bottom from yesterday which signaled support. Sure enough, the markets bounced off of that level. The key to the chart on the intra day SPY is the head and shoulders pattern that has formed. Watch for a break of the neck line. Should this break, the SPY could sell all the way to a target of $111.00. Possibly as soon as tomorrow. If that neck line does not break, then the markets could hold up into early next week.
Join the amazing Research Center at InTheMoneyStocks. Get 40 minute videos daily, guidance on the markets, stocks, commodities and currencies from the pros and get an education, the likes of which people only dream of. Enjoy the profits at InTheMoneyStocks.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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EURO's UPCOMING resistance standing near $1.3820-30 in the event of improved risk appetite, SEE CHART http://chart.ly/d4mscs Neither tomorrow's BoE nor ECB interest rate announcements are expected to show anything new, but do allow for the small possibility of any dovish remarks from the BoE (Noon GMT). Theres also talk about Greece using its austerity plan to bypass the sceptical German and go to the IMF for assistance. Ashraf noted in todays CNBC interview that Greeces austerity plan was strict to the extent that it appeared to be from the IMF http://bit.ly/bX3LVl . Expect more speculation about whether Germany will provide loan guarantees and, which of the next credit rating agencies will praise todays plan (as did Moody's).
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By InTheMoneyStocks.com on March 3rd, 2010 2:23pm Eastern Time
The markets have continued to fade off the highs of the day though still positive. The dollar has been hit hard today as the Greece situation continues to look better. The safety of the dollar looks less attractive when global risk subsides. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is lower by 0.75%. On an interesting note, I continue to see a little decoupling from the dollar in certain ways. It seems now when the dollar falls, the market does inch higher, however, when the dollar stalls and goes flat, the markets fall. In addition, when the dollar pushes up, the markets fall as well. This is a change from how the markets have acted over the last few months.
The Beige book was released here at 2:00pm ET. Overall it was nothing that the markets did not expect. The Federal Reserve gave the report as expected and the markets barely reacted. The key on the SPDR S&P 500 ETF (NYSE:SPY), as you will see in the video, is whether or not it holds the 50 moving average. Should it break, the markets could dump out nicely to the lows of the day or below. Volume is staying super light at this point, on pace for the lightest trading day of the year.
Key stock movers are Google Inc. (NASDAQ:GOOG). They continue to decide whether or not to continue operations in China. I highly doubt they will simply walk away from that type of population. On a business level, it does not make sense. The stock seems to agree with it trading higher today by 1.00%. Yesterday, Google also had a solid up day.
Commodity stocks continue to have a solid day on the back of the weak dollar. Oil has jumped above $80 today as well. This is helping keep the markets up. Also, join the Research Center at InTheMoneyStocks.com to get live calls, entries, guidance, education, picks and analysis. Learn how to master the markets. I look forward to seeing you there!
Watch that intra day 50 moving average! It is key!
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By Nicholas Santiago on March 3rd, 2010 1:04pm Eastern Time
The airline stocks have climbed higher throughout 2009 and this first quarter of 2010. The stocks of many of the major carriers have nearly doubled in price since early November 2009. Similar to most industry groups, the airline stocks trade together.
The best airline of the group looks to be Southwest Airlines Co (NYSE:LUV). This stock is technically still very strong on the daily chart. Southwest Airlines Co is trading above its daily 20 and 50 moving averages, which signal that the trend is up and the stock has good support at $12.00. This company also has a slightly different business model from the legacy carriers in that they have only one type of aircraft that they fly. This factor in their business model has kept this airline profitable for many years as most of the others struggle to survive and make profits.
The next airline that looks good on the charts is Continental Airlines Inc (NYSE:CAL). This stock is rumored to be taken over by either American Airlines (NYSE:AMR), or United Airlines (Nasdaq:UAUA) as the industry seeks to consolidate. This stock has nearly doubled in price since early November and is currently at a double top resistance formation on the daily chart.
While United Airlines (Nasdaq:UAUA) and American Airlines (NYSE:AMR) both look very strong technically, on the charts at this current time there is one issue. United airlines has more than doubled in price from the early November 2009 time frame. This stock could be due for a pullback as it is now getting extended. American Airlines (NYSE:AMR) has nearly doubled in stock price from early November 2009 and remains technically strong on the daily chart. However, both stocks are not likely to be a takeover candidate as they are both very large companies. Therefore, they are likely to acquire another airline such as Continental Airlines (NYSE:CAL) or U.S. Airways Group (NYSE:LCC).
U.S. Airways Group (NYSE:LCC) looks strong technically on the daily charts. This stock is a likely takeover candidate as it has desired routes in the United States.
When the airlines rally like this it usually can only mean few things. The first would be crude oil is falling and that is not the case. The second is the economy is improving and that still remains to be seen. Right now consolidation would be the best guess of what is most likely going to take place in this sector
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By InTheMoneyStocks.com on March 3rd, 2010 11:41am Eastern Time
United States Steel Corporation (NYSE:X) is running higher today on the back of a solid drop in the dollar. X is up $2.00 (3.57%). The dollar is getting hammered today as global optimism is chasing money away from the safety of the U.S Dollar. The PowerShares DB US Dollar Index Bullish
(Public, NYSE:UUP) is trading higher by lower by $0.19 (0.80%).
While X has had a great move higher since its 200ma daily low almost a month ago, it is coming into significant resistance. The key level here is $57.50. On the chart this shows directly as a possible drop level.
Another stock that looks to be nearing massive resistance is Steel Dynamics, Inc. (NASDAQ:STLD). Just like U.S. Steel, this stock has jumped significantly into massive daily resistance at $17.50. From this level, I am looking for a pullback of sizable proportions.
Both stocks are in the same sector and are extremely over extended. I will release my exact entries should the swing trade meet my criteria in the Research Center at InTheMoneyStocks.com. My bias is now on the bearish side. Let's see how these play out!
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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GREEK SHOOTS FOR EURO? Euro holds firm and Greek bond spreads fall to 2-week lows as Greece announces 4.8 bln austerity plan to help it meet its fiscal targets this year. These measures are not only a way to prevent credit rating agencies from hitting out with another downgrade, but also part of the Greek govts progress report that will be submitted in mid March. EURUSD remains capped at 1.3660s 61.8% retracement of the 1.3785-1.3442 decline. Watch the 4-hr stochastics for a potential negative crossover. Gold stuck at the 1135037 level, which is BOTH the 50% retracement of the 1226-1044 decline & neckline of Rev H&S formation.
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