Daily chart-
A hammer was printed yesterday , with long wick signifying buying power.
provided we hold 36p ..........i am going long with stop loss of 33p, target 56p. I believe this is a good risk reward play. I will wait for volume to accumulate and increase around the 36p level and look for good pattern on 60 min and 10 min chart in order to enter a long position.
By Nicholas Santiago on January 7th, 2010 2:55pm Eastern Time
The financial stocks are soaring today. Stocks such as Bank of America(NYSE:BAC), and Wells Fargo(NYSE:WFC) are trading higher by almost 5.00 percent on the day. Meanwhile Stocks such as J.P. Morgan(NYSE:JPM), Goldman Sachs(NYSE:GS), and Morgan Stanley(NYSE:MS) are all higher by more than 2.00 percent. Most regional banks are also trading higher on the day. So whats behind today's strong move in the financial sector? It seems today's move higher can be attributed to money rotation. Institutional money has simply rotated out of the technology and commodities stocks right into the financial sector.
Financial stocks such as Regions Financial(NYSE:RF) have traded higher by more than 20 percent in the last five trading days. Hudson City Bank(Nasdaq:HCBK) has moved higher by more than 0.60 cents in two trading days. This stock usually moves like a turtle. These are incredible moves being made by this sector across the board.
What does this mean going forward? Technically speaking all of these stocks in the financial sector are now getting extended on the charts. The Financial Select SPDR(NYSE:XLF) is nearing a double top chart formation from it's October 14th, 2009 high. This is usually a very strong and important technical resistance level. Watch for profit taking in these financial stocks soon.
Nicholas Santiago,
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
CHARTING NONFARM PAYROLLS. http://chart.ly/d4f86c US Dec nonfarm payrolls are now expected unchanged following a net decline of 11K. Note that payrolls have now stood above their 3-month moving average for 4 straight months, indicating the a longer strong of improvements than in the more mess pace of improvement in the 2002-3 recovery, which was a double dip recession in the aftermath of Sep 11. As for the unemployment rate of 10%, it is now at the same level of its 3-month MA for the 1st time since July 2009 (when the unemp rate last fell and USD rose on the report). Expect USD to regain ground as long as payroll losses are less than 70K and the unemp rate is does not push above 11%.
Read more…
For the first time in 23 months, the U.S. economy is expected to create jobs. As you can imagine, the first month of job growth is a big milestone after almost 2 years of back to back job losses. Therefore we expect to see an unusual amount of volatility following the non-farm payrolls release on Friday since the bar is set high this month. Although it may be hard for most people to believe that companies are actually hiring, here are 3 reasons why job growth is possible:
#1 - 9 out of 10 Leading Indicators for NFPs Point to an Improvement in Labor Market
Believe it or not 58k jobs were created in the service sector in November due to hiring for business services, education and health care. So this would not be the first month of net hiring in certain parts of the economy. If job growth returns it should also come primarily from the private service sector with possibly a small contribution from government hiring.
Arguments for Better Non-Farm Payrolls:
1. Challenger Layoffs Decline for the Fifth Straight Month
2. 4-Week Average Claims Continue to Fall
3. ADP Reports Private Sector Job Losses at -84K, Least Since March 2008
4. Continuing Claims Falls to the Lowest since February
5. Conference Board Consumer Confidence Rises to 52.9 from 49.5
6. Employment Component of Service Sector ISM Rises to 44 from 41.6
7. University of Michigan Consumer Confidence Increases for the First Time in 3 months
8. Employment Component of Manufacturing Sector ISM Rises to 52
9. Zero Strike Activity
Arguments for Weaker Non-Farm Payrolls:
#2 – On Average, Job Growth Returns 2.27 Months After Recession Ends
Historically, it has taken an average of 2.27 months for job growth to return after a recession. The National Bureau of Economic Research will not officially date the end of this recession until months from now, but based upon the GDP data and comments from Fed Chairman Ben Bernanke, the recession ended in September. If we add 3 months to the end of the recession, job growth is expected to return in December.
#3 – 1980s Déjà Vu
Does anyone feel Déjà vu? The most recent recession is probably closest in severity to the 1980s recession and interestingly enough, the trajectory of the NFP report continues to look eerily similar to that of the 1980s. If this relationship holds, the U.S. economy should return to positive job growth anytime now.
10. Monster.com Employment Index Drops 4 Points to Lowest Level Since July
Nine out of the ten leading indicators that we typically use to predict non-farm payrolls tell us that the labor market has improved. The employment components of both manufacturing and service sector ISM increased. However, it is important to note that the headline number suggests that manufacturing is growing much more rapidly than services. For instance, the Manufacturing ISM index has risen more than 23 points since reaching its low, while the Non-Manufacturing index has only gained 13 points. In addition, the services employment component, while improving this month, has contracted for 22 out of the last 23 months. In addition, the Challenger Layoffs report showed firings subside by 72.9%, while ADP reported the fewest job losses since March 2008. Further evidence for a boost in employment can be found in consumer confidence which, judging by the advances in both the Conference Board and University of Michigan indexes, is already responding to the improved jobs outlook. Jobless Claims also continue their descent with Continuing Claims falling to the lowest since February. The only cause for concern is the Monster.com Employment Index which fell to the lowest level since July, indicating a drop off in online job ads.
What are the Expectations?
Here are the forecasts for December Non-Farm Payrolls:
Although the consensus forecasts currently calls for zero job losses and job growth in the month of December, individual forecasts by economists range from a low of -100k to a high of 85k. Of the 75 experts polled by Bloomberg, 53 percent expect a zero to positive NFP report and 47 percent expect continued job losses. This wide spectrum of NFP projections reflects the uncertainty surrounding this month’s NFP report and the potential volatility that it could trigger in the U.S. dollar. The unemployment rate is expected to remain the same with a slightly greater chance of moving below 10 percent.
In terms of the reaction in the forex market, any job growth with no major downward revisions to the November data should be initially positive for the dollar while continued job losses would be bearish for the dollar. Also, the Non-farm payrolls report is a notoriously volatile piece of news to trade as revisions and expectations also impact the market’s reaction. Traders should remember that the first reaction to the non-farm payrolls report is usually not the one that lasts for the rest of the trading day because when the equity market opens, risk flows can affect the dollar. When it comes to trading non-farm payrolls, it usually pays to wait.
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The no brainer play of the day is brought to you by the letter P for Profits and the symbol $. China Precision Steel, Inc. (NasdaqCM: CPSL) is without a doubt the highest probability runner here on the back of China commodity stocks ripping higher. Look at the charts of Sutor Technology Group Limited (NasdaqCM: SUTR) and China Direct Industries, Inc. (NasdaqGM: CDII). Both stocks are ripping over the last week and well on their way to 50% or more gains.
China Precision Steel, Inc. is in the right sector being: Steel. Look at steel stocks like United States Steel (NYSE: X) on the charts. This stock has soared as well. The last arena to conquer for a short term swing trade is China steel plays. With most of them already running, the last one is China Precision Steel, Inc. While it trades at $2.25 I have accumulated here and below over the last week in anticipation of this eventual run. Time will tell if I am right but with the moves in SUTR and CDII, I think it is a ticking time bomb. Of course this is just my humble opinion.
The sympathy play is one of my favorite high percentage plays that I utilize. I am giving it an extreme upside bias with a target at $2.75. However, I do believe it has a high probability of getting over $3.00. I will look to start taking profits as it gets into the target area.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Read more…
For the first time in 23 months, the U.S. economy is expected to create jobs. As you can imagine, the first month of job growth is a big milestone after almost 2 years of back to back job losses. Therefore we expect to see an unusual amount of volatility following the non-farm payrolls release on Friday since the bar is set high this month. Although it may be hard for most people to believe that companies are actually hiring, here are 3 reasons why job growth is possible:
#1 - 9 out of 10 Leading Indicators for NFPs Point to an Improvement in Labor Market
Believe it or not 58k jobs were created in the service sector in November due to hiring for business services, education and health care. So this would not be the first month of net hiring in certain parts of the economy. If job growth returns it should also come primarily from the private service sector with possibly a small contribution from government hiring.
Arguments for Better Non-Farm Payrolls:
1. Challenger Layoffs Decline for the Fifth Straight Month
2. 4-Week Average Claims Continue to Fall
3. ADP Reports Private Sector Job Losses at -84K, Least Since March 2008
4. Continuing Claims Falls to the Lowest since February
5. Conference Board Consumer Confidence Rises to 52.9 from 49.5
6. Employment Component of Service Sector ISM Rises to 44 from 41.6
7. University of Michigan Consumer Confidence Increases for the First Time in 3 months
8. Employment Component of Manufacturing Sector ISM Rises to 52
9. Zero Strike Activity
Arguments for Weaker Non-Farm Payrolls:
10. Monster.com Employment Index Drops 4 Points to Lowest Level Since July
Nine out of the ten leading indicators that we typically use to predict non-farm payrolls tell us that the labor market has improved. The employment components of both manufacturing and service sector ISM increased. However, it is important to note that the headline number suggests that manufacturing is growing much more rapidly than services. For instance, the Manufacturing ISM index has risen more than 23 points since reaching its low, while the Non-Manufacturing index has only gained 13 points. In addition, the services employment component, while improving this month, has contracted for 22 out of the last 23 months. In addition, the Challenger Layoffs report showed firings subside by 72.9%, while ADP reported the fewest job losses since March 2008. Further evidence for a boost in employment can be found in consumer confidence which, judging by the advances in both the Conference Board and University of Michigan indexes, is already responding to the improved jobs outlook. Jobless Claims also continue their descent with Continuing Claims falling to the lowest since February. The only cause for concern is the Monster.com Employment Index which fell to the lowest level since July, indicating a drop off in online job ads.
Read more…
US dollar regains ground after the post-FOMC minutes sell-off, now gaining across the board with the exception of the CAD. We noted on twitter last night that we disagreed with the market reaction of selling off USD after the FOMC minutes, which were communicated by the media to be pro-low interest rates. But there were also some FOMC members who did show concern about excessive dollar depreciation. GBPUSD clearly breaks below $1.5940 now heading towards next target at $1.5880. GBPCAD drops for the 6th straight day, eyeing its 24-year low. USDJPY still on its way to the 200-day MA of 93.50. MANY THANKS for those who voted for us on the Shorty Awards. Your support is tremendously appreciated ! http://shortyawards.com/alaidiRead more…
