Cable put in a big outside bar on the weekly chart. we have what looks like strong support at 19525-50 level. on the daily we have a similar downward channel which broke and held on close.
After the hanging man on the daily chart the DAX has started to retreat, which interestingly has coincided with the euro making a come back, although a time lag exists between the two variables.
Fibonacci retracements from last pivot low = 5880 = 38.2%, 5830 = 50% , 5780 = 61.8%
major red trend line on daily chart signifies resistance as it has been breached so previous support now = resistance.
we have a symmetrical wedge formation(black trend lines) that has broken out to the upside but it may be classed as a false break out so one must be careful as the market could bounce. Technical Analysis states that the market has a tendency to revisit the break out level as it shakes out the rookies before resuming its original direction , in this its northwards.
The engulfing candle on the daily can't be ignored as it was accompanied with large volume, therefore I will be playing this inside bar and opening up a short position anywhere in the 1880-1860 region with stop loss @ 1890 and target 1820.
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We Have No Evidence They Are, but They Could Be. We Do Not Know Source of Money That Pushed Market Cap Up $6+ Trillion since Mid-March.
The most positive economic development in 2009 was the stock market rally. Since the middle of March, the market cap of all U.S. stocks has soared more than $6 trillion. The “wealth effect” of rising stock prices has soothed the nerves and boosted the net worth of the half of Americans who own stock.
http://www.zerohedge.com/article/trimtabs-asks-who-responsible-non-stop-market-rally-march-gives-some-suggestionsRead more…
By InTheMoneyStocks.com on December 31st, 2009 4:23pm Eastern Time
The markets closed out the 2009 year with a sharp sell off in the last 30 minutes of trading as it appears institutions jumped ship prior to the new year. Profit taking may be signaling future early 2010 selling. Major calls continue to be spot on from the Research Center and Intra Day Stock Chat as swing trade shorts like MSFT at $31.50 are now up more than $1.00. In addition, master level $113.00 on the SPY which had been called out over 1 month ago, was the high on the markets for 2009 and probably a great cherry on top for premium subscribers who have gotten amazing calls all year long. Join us for 2010 to reap the rewards the 2009 member recieved. Chief Market Strategists at InTheMoneyStocks.com continue to believe the profits and calls will be as good, if not better and the volitility will be huge. Be ready to swing the market. Live, Learn, Profit!
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By Chief Market Strategist Gareth Soloway on December 31st, 2009 12:26pm Eastern Time
Over the last few days the markets have hovered flat as many sectors have pulled back. While technology and commodities seem to be stalling out, a few short term leader has emerged to take its place, keeping the market flat and not allowing it to pull back significantly. The financial stocks have stepped in to keep this market strong as they have roared higher the last few days. Stocks like GOLDMAN SACHS GRP (NYSE: GS), JP MORGAN CHASE CO (NYSE: JPM), WELLS FARGO & CO NEW (NYSE: WFC), MORGAN STANLEY (NYSE: MS) have all raced higher.
The financial stocks leading this market this week was actually not a surprise to me. In fact, going back as far as last weekend I made a call in my free Weekend Technical Analysis Video that is seen by tens of thousands around the world that the financial stocks would keep this market in check and steady into year end. How did I know this? That is what I will reveal to you all.
It really is not rocket science. That is the beauty of what we do here at InTheMoneyStocks.com. It is really just understanding and reading the charts accurately. Each chart is like a book. Each book says something. It is up to each and every once of us to learn the language and read it correctly. As noted last weekend in my free Weekend Technical Analysis Video, the financial stocks were all forming beautiful in spirit of Bull Flag patterns. From Goldman Sachs to Wells Fargo, they all had the perfect setup. In addition, technology and many other sectors had taken the market higher over the previous week or two. This left little doubt in my mind there was a high probability that they would be the sector to keep this market steady. We all know at this point the markets were not going to dump in a major way into the year end. Trust me, the government does not pump trillions into the market and the economy only to have it wither and die at year end. So the question was just which sector. Sure enough, financial stocks to the rescue.
Below is a chart of Goldman Sachs Grp (NYSE: GS), showing the in spirit of Bull Flag patterns I noted for free to the world last weekend. Enjoy the education. Live, Learn, Profit.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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By Nicholas Santiago on December 31st, 2009 12:33pm Eastern Time
How long can the Fed funds rate stay at zero percent? This is the overnight lending rate from the Federal Reserve Bank to the large banks such as J.P. Morgan Chase (NYSE:JPM), and other giant institutions. In June of 2009 the 10 year Treasury yield reached a high of 4.00% and this was really the only pullback in the stock market since the March 2009 bottom. Obviously the higher yield hurts the mortgage market. The key 10 year bond yield is now creeping back up toward that level again. Today the yield traded as high as 3.92% intraday. The Proshares Ultrashort 20+ year Treasury (NYSE:TBT) has risen from $42.00 on October 2nd, 2009 to $51.00 on New Year’s Eve. That is a better than 20 percent gain in three months for this ETF. The iShares 20+ long Treasury Bonds (NYSE:TLT) has done the opposite, however, this is a onetime ETF so the percentage loss is about 10.00 %.
So what is the point and who really cares? Well, considering the Federal Reserve Bank has been buying all these toxic mortgage assets and artificially trying to keep the yields low so the housing markets can try to recover it is unlikely that they want to see rising rates. Since the government started the modified mortgage program (program that helps people stay in their homes who can't afford to by reducing their payments by 20 percent) nearly 40 percent of the homeowners who enrolled were delinquent within one year. If the key 10 year Treasury yield raises this cannot be good for the so called economic recovery.
Many will argue that a rise in the rates or a step yield curve helps the large banks such as J.P. Morgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Citi Group (NYSE:C), and Bank of America (NYSE:BAC). This is true if they were lending money or making loans. Everyone knows they are not and are simply making money by purchasing Treasuries. Remember when yields go higher Treasury Bond prices decline. This suddenly seems like the creation of another Frankenstein by the government and the Federal Reserve Bank.
Is this the next bubble in the making? What is going to come from all of this craziness? Many say this is the new normal. Perhaps it is. Will inflation take over the deflationary tailspin that the country is in? There are a lot of questions that remain unanswered. However, the last time that the bond market spoke this year the stock market listened.
Nicholas Santiago,
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
The US DOLLAR INDEX could be sending signals similar to those in July 2008, when the bottoming process turned into a full fledged rally that was boosted by massive deleveraging in equities and commodities. The fact that the current USD rally is emerging despote strengthening oil and stocks suggests more powerful USD dvances ahead at the next downleg in equities. We will closely watch horizontal-shaped 100-week MA, currently at 78.90, which proves as the main barrier to the important 81.40 level, currently the 50% retracement of the decline from the March high to the November low. USDJPY has already hit the 93 target projected for Q1, but it's mostly yen weakness that is driving the move rather than USD strength. *** WISHING YOU ALL THE BEST OF WEALTH & HEALTH IN 2010 & BEYOND ***
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The sell-off in global equities helped to drive the dollar higher against all of the major currencies this morning and the momentum in the greenback was further fueled by the much stronger than expected Chicago PMI report. Manufacturing activity in the Chicago region expanded for the third month in a row with the index rising from 56.1 to 60.0, the highest level since January 2006. The details of the Chicago PMI report reveals overall strength. Aside from a small contraction in supplier deliveries, every single one of the other underlying components increased in the month of December. We were particularly encouraged by the rise in production, new orders and employment. For the first time since November 2007, manufacturers in the Chicago region added jobs, which fits into the overall improvement that we have seen in U.S. data over the past few weeks.
The combination of the strong Chicago PMI and Philly Fed reports suggest that manufacturing conditions have improved nationally. The ISM manufacturing index is due for release next week and based upon the latest numbers, we expect a dollar positive report on the first trading day of 2010. The expansion in the employment component of Chicago PMI also points to smaller job losses in the manufacturing sector which bodes well for next Friday's non-farm payrolls report.
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