InTheMoneyStocks Daily Analysis - Page 72

Predicted: Stock Market Rallies

If you were following my Rant and Rave blog articles at InTheMoneyStocks.com, this rally was accurately called. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $129.45, +1.03 (+0.80%). The reasons to expect a rally today were simple. First, options expiration is next week. This may not seem significant but it is. Institutions sell a majority of the options to retail investors and smaller hedge funds. With the mega bearish sentiment, a huge amount of puts had been bought in the last month. A put is a bet the market will go down. Those puts are significantly in the money and the large institutions are set to take big losses. The one way to reduce those losses and possibly turn them into a profit is to have the market bounce. Considering the power of these mega institutions, the markets were going to bounce. 

In addition, when studying charts like General Electric Company (NYSE:GE) or other market leaders like Bank of America Corporation (NYSE:BAC), it is clearly seen that these stocks are into support levels that are massive. The likelihood of these stocks not bouncing at these levels was remote.

As if those reasons were not enough to cause a bounce, sentiment on television and in the media was as bearish as it has been in months. This creates a bearish feeling among the retail viewing public. In turn, the retail investor sells marking a short term low in the markets. This has always been the way the markets work, today is no different.

Gareth Soloway
InTheMoneyStocks.com
 

Predicted: Stock Market Rallies

If you were following my Rant and Rave blog articles at InTheMoneyStocks.com, this rally was accurately called. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $129.45, +1.03 (+0.80%). The reasons to expect a rally today were simple. First, options expiration is next week. This may not seem significant but it is. Institutions sell a majority of the options to retail investors and smaller hedge funds. With the mega bearish sentiment, a huge amount of puts had been bought in the last month. A put is a bet the market will go down. Those puts are significantly in the money and the large institutions are set to take big losses. The one way to reduce those losses and possibly turn them into a profit is to have the market bounce. Considering the power of these mega institutions, the markets were going to bounce. 

In addition, when studying charts like General Electric Company (NYSE:GE) or other market leaders like Bank of America Corporation (NYSE:BAC), it is clearly seen that these stocks are into support levels that are massive. The likelihood of these stocks not bouncing at these levels was remote.

As if those reasons were not enough to cause a bounce, sentiment on television and in the media was as bearish as it has been in months. This creates a bearish feeling among the retail viewing public. In turn, the retail investor sells marking a short term low in the markets. This has always been the way the markets work, today is no different.

Gareth Soloway
InTheMoneyStocks.com
 

Did You Buy: Financial Stocks Rally Sharply 

Banks are leading the market for the first time in weeks. News break, the market is rallying solidly for the first time in what seems to be weeks. This is no coincidence and most likely a key to further upside in the market. Goldman Sachs Group, Inc. (NYSE:GS) is jumping +2.99 to $134.58 (+2.27%) while Wells Fargo & Company (NYSE:WFC) is trading at $26.07, +0.71 (+2.80%) and Morgan Stanley (NYSE:MS) is at $22.55, +0.62 (+2.83%).

These are significant gains for the financial stocks which have been under continued pressure all year. Many banks are down close to 30% from their 2011 highs. Just recently, bank stocks have had an overload of bearish sentiment from analysts and the media. In addition, they have all hit major multi year pivot support lows. The fact that these all are coinciding leaves this pro trader to assume a bounce was coming. The bounce is here. It should last for almost a week, maybe longer on the financial plays. 

Gareth Soloway
InTheMoneyStocks.com
 

Market Update: Stocks Rally

The markets are rallying today as investors are scooping up cheap stocks. After a six day fall, and financial stocks hitting multi year lows, a bounce day seems to be in the cards. The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) is trading at $121.50, +1.20 (+1.00%)

 while the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) is trading at $55.54, +0.15 (+0.27%).

The markets are holding their gains today based mainly on the bank stocks and transports. The financial plays have been killed lately but finally are seeing an oversold bounce. In addition, while the Dollar opened higher, it has faded all day long. As the Dollar has faded, it has pushed the markets slowly higher. Remember, during market hours the markets trade inverse to the Dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.18, +0.05 (+0.24%). The key to this helping the markets is not that it is up, but more that when the markets opened today, the UUP was at $21.24 and has faded all day.

Technology is definitely the weakest sector. Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) are both slightly negative, keeping the Nasdaq from having big gains.

Gareth Soloway
InTheMoneyStocks.com
 

Swiss Cheese Rally With Holes Everywhere 

The major stock market indexes are all surging higher this afternoon. The rally is broad based as energy, commodities, agriculture, retail, and technology are all trading higher. While this move is very strong today on the surface there are still some pockets of weakness in the market place that should be noted.

First, the volume in today's rally is very weak. The SPDR S&P 500 Trust(NYSE:SPY) is trading just 102 million shares as of 3:00 pm EST. The average daily trading volume over the past six trading day decline is around 200 million shares. Therefore, today's rally looks to be just an oversold bounce. Many investors and traders will usually look for massive volume to come into the market as a sign of capitulation. That has not yet occurred. If you want to see an example of that type of capitulation volume look at the March 16, 2011 low.

Second, many leading stocks are struggling to trade in positive territory. Apple Inc.(NASDAQ:AAPL) is the leading and most popular stock in the entire market. Apple Inc. is struggling to stay in positive territory this afternoon despite the Dow Jones Industrial Average trading higher by over 120.00 points. Other leading stocks that are trading lower on the session include F5 Networks Inc.(NASDAQ:FFIV), Google Inc.(NASDAQ:GOOG), Qualcomm Inc.(NASDAQ:QCOM), and Simon Property Group Inc.(NYSE:SPG).

When market leaders struggle to trade higher it is a warning sign that this move higher in the markets today is very suspect and may not last very long. Traders and investors should understand that the major stock indexes are very oversold on the daily charts and bounces will occur. Remember the old market adage, “nothing goes down in a straight line.”

Nicholas Santiago
InTheMoneyStocks.com

Made Of Steel

This is another trading session where the major stock indexes are starting the morning under selling pressure. Strange enough, the steel stocks are the only sign of strength during this opening hour of the trading session.

United States Steel Corp.(NYSE:X) is trading higher by 0.53 cents to $43.26 a share. The stock has been extremely weak on the daily chart trading below all of the major moving averages. Therefore, this early morning bounce in the stock could be short lived. Short term traders can watch for intra-day resistance around the $43.40 and $43.95 area.

AK Steel Holdings Corp.(NYSE:AKS) is another leading steel stock that is trading higher this morning by 0.30 to $14.98 a share. This stock actually made a short term low on May 17, 2011 at $14.33 a share. Therefore, this stock has better relative strength than United States Steel. Traders can watch for intra-day resistance around the $15.20, and $15.50 area.

Cliffs Natural Resources Inc.(NYSE:CLF) is trading higher this morning $1.10 to $86.26 a share. CLF is a leading producer of iron ore pellets which is used to make steel. This stock will have intra-day resistance around the $86.25, and $87.00 levels.

Nicholas Santiago
InTheMoneyStocks.com

Dollar Surge Means Another Down Friday 

In the past, the major stock indexes would rarely decline on a Friday, with this type of action occurring so often we coined the phrase, Friday effect. However, over the past month the major stock indexes have been plummeting on Friday's and we may have to make up a new phrase called the Friday defect. This morning, the catalyst for the stock market decline is the rising U.S. Dollar Index. Obviously, there are many other problems in the economy causing a weak stock market such as the European debt crisis, high Asian inflation, and 9.1 percent unemployment in the United States just to name a few. The stock market is no longer able to climb the wall of worry at this time.

Oil, gold, and silver, are all coming under heavy selling pressure as the U.S. Dollar Index rallies higher by 0.43 cents to $74.63 per contract. It would be prudent for short term day traders to look for the stock markets to bounce off the lows intra-day if the U.S. Dollar Index pulls back. However, if the U.S. Dollar Index continues to surge higher on the session then it is very likely the major stock indexes will see further selling pressure throughout the trading session.

Nicholas Santiago
InTheMoneyStocks.com

Alert: Markets Drop Sharply As Dollar Spikes 

The markets have flushed into the key SPDR S&P 500 ETF (NYSE:SPY) support level at $127.60. This level was a long signal taken for a scalp. As of now, the SPY is trading at $127.80. Half of the position is off the table for a $0.20 profit while the remainder has a $0.50 profit target and has a break even stop.

The markets are taking a beating as the Dollar has advanced higher from the open. More worries are bubbling up out of Greece as word is, a bailout is expected by the end of the month.

This is a rare drop in the markets for a Friday. However, with the continued worry out of Europe and now the United States in regards to the job market and debt ceiling, few investors want to hold positions over the weekend.

Commodities are taking a beating today on the back of the stronger Dollar. The United States Oil Fund LP (NYSE:USO) is trading at $39.23, -0.91 (-2.27%) while the SPDR Gold Trust (NYSE:GLD) is trading at $149.58, -0.98 (-0.65%).  These commodity declines are sending shares of market leading stocks like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) sharply lower.

As volume lightens up on this Friday session, the markets may continue to float off the lows. That is why I am holding the second half of my SPY trade long with a break even stop. The first half makes it a profitable trade, no matter what. This is trading discipline.

Gareth Soloway
InTheMoneyStocks.com
 

Predicted For Profits: Banks Rip Higher

The bank stocks ripped higher as CNBC reported that the Federal Reserve was saying the bank capital surcharge would be around 2% to 2.5% instead of 3%.  This causes a massive bounce in the markets, a buy program of sorts. This is one of the first buy programs lead by the bank stocks in months. Goldman Sachs Group, Inc. (NYSE:GS), Morgan Stanley (NYSE:MS) and Bank of America Corporation (NYSE:BAC) all went from the negative side to the positive side.

The bank stocks have shown signs of a bottom in recent days as they have all tagged massive support levels on their daily charts. In addition, it was clear something was up with them today. Early in the day, while the markets were dropping 1.5%, stocks like Goldman Sachs were on the flat line. Since the beginning of 2011, it has been extremely rare to see the financial plays as the strongest sector.

Gareth Soloway
InTheMoneyStocks.com
 

Energy Bounce Lifts Markets Early

This morning, the major stock indexes are bouncing higher across the board. While most sectors are trading in positive territory, it is the energy sector that is leading the markets higher. The energy sector accounts for roughly 16.0 percent of the S&P 500 Index.

Exxon Mobil Corp.(NYSE:XOM) is the leading integrated energy stock in the stock market. Today, XOM is trading higher by 0.60 cents to $80.37 a share. Traders and investors must always follow the action in this stock as it has the largest market capitalization in the entire market at $400 billion. Therefore, when this stock trades higher on the session it is a good chance that the major stock indexes are trading higher as well. XOM will have intra-day chart resistance around the $80.65 and $81.00 levels.

Other energy stocks that are trading higher this morning include Frontier Oil Corp.(NYSE:FTO), ConocoPhillips(NYSE:COP), and Chevron Corp.(NYSE:CVX). Traders should follow Exxon Mobil very closely as this stock should lead most other energy stocks.

Nicholas Santiago
InTheMoneyStocks.com

Financial Stocks Play Follow The Leader

Since early May, it has been the large financial stocks that have lead the stock market declines. Many leading financial stocks have struggled throughout most of 2011. All traders and investors must keep a close eye on the leading financial stocks as these stocks are leading the major stock indexes at this time. In this case, the financial stocks have lead the market indexes lower. The financial stocks account for roughly 14.0 percent of the S&P 500 Index.

J.P. Morgan Chase and Co.(NYSE:JPM) is by far the most important financial company that traders and investors should follow. This stock remains below all of its daily chart 50, and 200 moving averages. When this type of formation forms it tells us that the stock is in a downtrend, and in a weak technical position on the charts. This morning, JPM is trading lower by 0.25 cents to $40.80 a share. Traders can look for some minor intra-day support around the $40.65 and $40.00 levels.

Other leading financial stocks that continue to struggle include Bank of America Corp.(NYSE:BAC), Wells Fargo & Co.(NYSE:WFC), and Citigroup Inc.(NYSE:C). These stocks continue to remain weak on the daily charts. This tells us that the entire financial sector is trading together. It is still very important for traders to follow the leading stock in the sector, which is J.P. Morgan Chase & Co., for overall direction in the financial stocks.

Nicholas Santiago
InTheMoneyStocks

Chip Stocks Remain Weak

The semiconductor stocks remain weak this morning despite the major stock indexes trading positive this morning. The semiconductor stocks have struggled to catch a bid since early May 2011. This sector remains very weak and is now approaching the March 2011 lows.

The Semiconductor Holders Trust(NYSE:SMH) is trading lower by 0.17 cents to $32.84 a share. The SMH should have some short term intra-day support around the $32.40 level. This is a level where the daily chart is signaling support and should be solid in the short term.

Broadcom Corp.(NASDAQ:BRCM) is a leading semiconductor stock that has been declining lower since January 2011 when it traded as high as $47.39 a share. This morning, BRCM stock is trading lower by 0.60 cents to $32.51 a share. The stock remains weak on all time frames. Short term traders can watch for intra-day support around the $32.45, and $32.00 levels.

Texas Instruments Inc.(NYSE:TXN) is another leading semiconductor stock that is making a new low for 2011. This morning, the stock is trading lower by 0.42 cents to $31.73 a share. TXN is now trading below its daily chart 50, and 200 moving averages which put the stock in a confirmed downtrend. Traders can watch for intra-day support around the $31.60, and $31.00 levels.

Often the semiconductor sector will lead the Nasdaq Composite Index. Recently, the semiconductor stocks have lead the Nasdaq Composite lower. Since May 2, 2011 the Nasdaq Composite has declined lower by 8.2 percent.

Nicholas Santiago
InTheMoneyStocks.com

Markets Struggle To Hold Gains

The market is trading just around the flat line as it struggles to hold key early trading day gains.  The SPDR S&P 500 ETF (NYSE:SPY) is trading at $127.78, +0.18 (+0.14%). The weakness continues to be a result of worried investors who have started to panic after six consecutive weeks of losses. This is the longest losing streak for the markets in years.

As of now, the only saving grace seems to be a slightly lower Dollar. The markets move inverse to the Dollar and thus a weaker Dollar will help prop the markets up. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.34, -0.06 (-0.26%).

When analyzing the markets, the big question is whether or not a bounce is coming this week. This week is options expiration and big money most likely will try and bounce it. Ultimately, the SPY will go to the $125.50 level, it is just a matter of whether or not it happens this week or next week. Based on current factors, it is highly likely this week will end with a slight gain when all is said and done.

Gareth Soloway
InTheMoneyStocks.com
 

Gold And Silver Fail To Rally On Dollar Pullback 

This afternoon, both gold and silver are trading lower despite the intra-day sell off in the U.S. Dollar Index futures(DX U1). Usually, gold and silver will surge higher when the U.S. Dollar Index pulls back or decline lower. Today, the precious metals are not reacting to the intra-day decline in the U.S. Dollar Index and this is a change in character for the precious metals.

The SPDR Gold Shares(NYSE:GLD) are trading lower by $1.69 to $147.57 a share. Short term traders can look for intra-day support around the $147.47, and $146.50 levels. The GLD has remained very weak this afternoon and this tells us that all support levels are minor.

The iShares Silver Trust(NYSE:SLV) is trading lower by $1.42 to $33.83 a share. Short term traders can watch for intra-day support around the $33.50 and $33.00 levels. The SLV will trade very similar to the GLD, therefore, all bounces are short term.

Nicholas Santiago
InTheMoneyStocks

Big Market Rally, Some Tech Stocks Still Struggle 

This morning, the major stock indexes are soaring higher in a broad based advance. As we know, the major stock indexes have been under pressure over the past month. At this time many traders are wondering if this rally is just a short term bottom, or just a one day bounce from a very oversold condition. In any case, the markets are higher at the start of the day. Despite this morning's rally, there are a few stocks that struggling to stay positive and we shall review them.

Netflix Inc.(NASDAQ:NFLX) is one of the leading stocks in the NASDAQ 100(NASDAQ:QQQ). This morning, NFLX stock is trading lower by 0.10 cents to $257.11 a share. This stock remains strong on the daily chart by trading above its daily chart 50 and 200 moving averages. Netflix stock is usually very volatile during the trading week leading up to an options expiration which is this Friday. Traders should watch for NFLX intra-day support around the $256.00 area. Should the stock decline further the next important intra-day support level will be around the $254.00 area. Please remember this stock is very volatile.

Cisco Systems Inc.(NASDAQ:CSCO) is another leading NASDAQ stock that remains weak this morning. The stock is trading higher by 0.07 cents to $15.13 a share. CSCO stock is trading below all of its major moving averages on the daily chart and this puts the stock in a weak technical position. Traders can watch for intra-day support around the $15.03 and $14.75 levels. Stocks that are in confirmed down trends and fail to rally in strong markets should usually just be avoided as long trades.

Nuance Communications Inc.(NASDAQ:NUAN) is a leading tech stock that continues to hold above its daily chart 50 moving average. This stock is trading higher by 0.10 cents to $20.66 a share this morning. Short term traders can look for intra-day support around the $20.50 area. Should the stock decline further during the trading session the $20.00 area will be the next important support level.

Nicholas Santiago
InTheMoneyStocks.com

Some Auto Stocks Have Stalled Engines

Today, the major stock indexes are staging the best rally they have had in several weeks. Everything looks fine in stock land, however, some of these leading auto stocks are struggling to catch a bid higher this morning.

Nicholas Santiago
InTheMoneyStocks.com

Alert: Stock Markets Rally On These Key Factors 

The market shot higher today right out of the gate. While many investors and analysts have been extremely bearish in the last few days, this Chief Market Strategist has been bullish, slowly accumulating long positions. The reasons why I was bullish for this week are simple. I will do my best to explain them.

First, the overly bearish sentiment after six straight down weeks was palpable.  The markets always try and stay in equilibrium. Whenever the markets get too bearish or too bullish, the opposite price movement always occurs.

In addition, many people forgot it was options expiration. Institution sell a majority of the puts and calls to retail players. They receive a premium for that. If price goes against the institutions, it is in their interest to push the market in the opposite direction into options expiration to recoup those losses and turn a profit. In this case, the overly bearish sentiment in the markets had retail investors buying far more puts than calls. Prior to the rally today, those puts were in the favor of the retail investor handsomely, while the institution was going to be taking a loss. As we always know, generally, institutions never take losses. Today, those put options are worth a lot less and the institutions is looking to turn a profit into options expiration.

With the bearish sentiment reaching a crescendo, a plethora of economic news was set for release this week. The negative view of stocks had put a damper on economic expectations. In other words, the data this morning for retail sales could have been horrible, and still better than the market expected, thus creating a rally.

Lastly, the Dollar had soared into a key resistance point on the daily chart. This level happened to be the 50 and 20 moving average. With both moving averages together and price into them, it was almost impossible to not imagine a pull back in the Dollar. Sure enough, a weaker Dollar has helped the markets inch higher.

These are just some of the keys that have sent the markets soaring today. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $129.21, +1.51 (+1.18%), the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) is trading at $120.81, +1.35 (+1.13%) and the PowerShares QQQ Trust, Series 1 (NASDAQ:QQQ) is trading at $55.38, +0.74 (+1.35%).

Gareth Soloway
InTheMoneyStocks.com
 

Markets Keep Gains After Bernanke Speech 

This afternoon, the Federal Reserve Bank Chairman Ben Bernanke just gave a speech in which he said the politicians should raise the U.S. debt ceiling. The institutional investors seem to love this news as the major stock market indexes are all soaring sharply higher on the day.

It is important to note that the trading volume is not very heavy during the trading session. This is telling us that the major stock indexes may just trade higher in the near term. Often, major bottoms are made with heavy volume such as the March 16, 2011 low. This afternoon the SPDR S&P 500 Trust(NYSE:SPY) is trading just 106 million shares as of 3:08 pm EST. The SPY traded 238 million shares last Friday when the market stock indexes sold off sharply into the weekend. When we see this type of volume today, it tells us that there is still very little conviction by the major financial institutions that move markets. 

Nicholas Santago
InTheMoneyStocks.com

Pre-Market News And Views

This morning, the S&P 500 e-mini futures(ES M1) are plummeting lower by 12.00 points to 1278.25 per contract. The decline in the futures comes as the problems in the European Union seem to be growing by the minute. The economic data in the United States also remains very poor. The Consumer Price Index(CPI) was released at 8:30 am and showed that food and gasoline prices pushed up inflation in the past few months. Please tell us something we don't already know.

The real catalyst for the sharp stock market decline is the stronger U.S. Dollar Index. The U.S. Dollar Index is soaring higher by 0.91 cents to $75.60 per contract this morning. Anytime the European Union comes under pressure the U.S. Dollar Index will catch a bid higher and that is certainly what is taking place ahead of the opening bell. Greece is facing massive protests, strikes and violence this morning. There are still many more problems in Europe besides Greece. Countries such as Ireland, Portugal, Belgium, Italy, and Spain could face protests soon. Hang on, this market could get bumpy!

Last night, the Asian markets were mostly lower. The highly followed Shanghai Index(NYSE:FXI) finished lower by 0.91 percent. This index is the most important index in Asia as it has lead the U.S. markets for the past five years. Simply put, when China declines it will often lead to a stock market decline in the United States. This afternoon, I shall release new support levels for the Shanghai Index. Traders can watch the iShares FTSE China 25 Index Fund (NYSE:FXI) to be under pressure at the start of the day.

All commodities are coming under pressure ahead of the opening bell at the New York Stock Exchange(NYSE). Oil, gold, silver, and copper are all trading below yesterday's closing prices. It is important to note that these commodities could trade higher if the U.S. Dollar Index pulls back intra-day. We have seen this type of action occur many times before and we cannot rule that out today.

This is the Wednesday before options expiration, therefore, it is prudent to expect a lot of volatility in today's trading session. Often, the Wednesday before options expiration is the most volatile trading session of the week.
 

Nicholas Santiago
InTheMoneyStocks.com
 

U.S. Dollar Index Soars

The U.S. Dollar Index is surging higher this morning as the problems in the European Union continue to escalate. Greece is facing heavy protests, strikes, and rioting this morning by many of its citizens. The yield on the Greek 10 year bond is spiking higher this morning. To add insult to injury, the rating agency Moody's, is expected to cut the credit rating of three major French banks that have exposure to Greek debt. We can only wonder what is going to happen to Portugal, Ireland, Belgium, Spain, Italy, and others throughout the rest of the year.

The stronger U.S. Dollar Index is putting selling pressure on the major stock market indexes, and leading commodities. Should the U.S. Dollar Index pullback intra-day the stock and commodity markets may inflate off of the lows. Short term traders must keep an eye on the U.S. Dollar Index chart at all times this morning.

Nicholas Santiago
InTheMoneyStocks.com