InTheMoneyStocks Daily Analysis - Page 80

U.S. Dollar Index Plummets After GDP

The U.S. Dollar Index futures (DX U1) plummeted lower after the second quarter gross domestic product(GDP) number was released. Normally, when the U.S. Dollar Index declines it will help to inflate the major stocks and commodity markets, however, today could be a different scenario. Stocks such as Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), Cliffs Natural Resources Inc.(NYSE:CLF), and Southern Copper Corp.(NYSE:SCCO) are coming under early selling pressure despite the decline in the U.S. Dollar Index.

At this time, the inverse relationship between the U.S. Dollar Index and the major stock market indexes may not be intact. The stock markets are confused as the failed U.S. debt ceiling deal out of Washington remains in limbo. Traders should watch for any kind of news from the politicians, any indication of a debt ceiling deal could cause the markets to bounce intra-day. Traders should realize that the U.S. Dollar Index futures will have some short term intra-day support around the $74.00 area.

Nicholas Santiago
InTheMoneyStocks.com

Debt Man Walking

If the United States government raises the debt ceiling it will face problems down the road. If it does not raise the debt ceiling it will have to face some problems right now. Is there really a point in having a debt ceiling at all? Almost every administration in the past has raised the debt ceiling before. The question should be asked, is the United States at its breaking point where the country cannot absorb any more debt? The truth is that none of us really know for sure what the breaking point will be for the United States when it comes to debt. At some point the country will break because it has too much debt, however, we do not know if that number is $14.5 trillion, $16.5 trillion, or $50 trillion. These numbers are so large that it is impossible for the ordinary working man to understand the complexity of this situation.

The United States has long been recognized as the richest nation in the world. How can this be if this is the greatest debtor nation in the world? If you have ever been in debt on a personal level it is one of the worst feelings in the world. People have gone into deep depressions over unpaid bills and obligations. Debt and financial problems are the number one cause for divorce in the United States. Why does the government love to be in debt all of the time? The last time the United States was not in debt was when Andrew Jackson was the president, that was in 1835. Even at that time the United States had a financial panic just two years later in 1837 and then face a depression. So is debt good to have as long as it is manageable?

The major stock market indexes have been trading lower throughout the entire week including today. This country has kicked the can down the road when it comes to debt since it began. History suggests that the U.S. government will do it again. Either way the United States is a debt man walking.

Debt Ceiling Deal Is Done, Will The Rally Hold? 

This morning, the major stock market indexes are trading higher after a debt ceiling resolution was announced yesterday. The debt ceiling deal still needs to pass a critical vote in the U.S. Congress. Many traders and investors have already taken profits at the open this morning on any long positions that where bought last week. As a trader we simply want to be on the right side of the market, having an opinion simply just gets in the way.

Most stock sectors are bouncing higher this morning. The financial stocks are always a leading indicator, most financial stocks are catching a bid higher at the open. As long as the financial stocks continue to stay strong it is a good sign the rally can hold up for a couple of days. Should leading stocks such as J.P. Morgan Chase & Co.(NYSE:JPM), and Goldman Sachs Group Inc.(NYSE:GS) begin to fade or sell off then this rally could be in jeopardy.

Traders should watch the Chinese ADR's very closely today. Last night, the Shanghai Index failed to participate in the Asian stock market rally and this is a negative for the stock markets. Sohu.com Inc.(NASDAQ:SOHU) is a leading Chinese internet stock that is dropping sharply after reporting earnings this morning. This leading Chinese ADR is declining by $6.45 to $83.62 a share. SOHU stock will have some short term intra-day support around the $82.00 and $80.00 levels. Other leading Chinese internet stocks such as Baidu Inc.(NASDAQ:BIDU), and Sina Corp.(NASDAQ:SINA) have faded from their gap higher open. Traders must remember that the Shanghai Index usually leads the major stock indexes around the world. This important Asian index still looks fragile at this time.

Since the start of this article the major stock market indexes have already faded from the sharp gap higher open. Traders should continue to expect volatility throughout the trading session as there seems to be many problems with this rally. This stock market fade simply tells us that most traders and investors expected the stock market bounce at the open and don't really believe in the political fix for the stock markets.

Nicholas Santiago
InTheMoneyStocks.com

Markets Plummet, Here Is What Is Bouncing 

The major stock markets indexes have reversed and plummeted lower after the weak ISM report. All of the leading indexes are now trading lower on the trading session after starting the morning sharply higher. There are a few areas that have bounced higher since the stock market declined around 10:00 am EST and they are gold, silver and the U.S. Dollar Index.

The highly followed and traded SPDR Gold Shares (NYSE:GLD) started the morning trading as low $156.78 a share. Since that early morning low the GLD is trading at $158.16 a share, this is quite a rebound from the open. Traders should watch for intra-day resistance around the $159.00 area.

The iShares Trust (NYSE:SLV) traded down as low as $38.03 a share after the opening bell rang at the New York Stock Exchange. The SLV has bounced higher since that low pivot and is now trading at $38.60 a share. Traders should watch for intra-day resistance around the $40.00 area.

The U.S. Dollar Index futures (DX U1) have soared sharply higher by 0.40 cents since the opening bell at 9:30 am EST. As we all are accustomed to seeing, when the U.S. Dollar Index rallies higher the major stock indexes will usually decline and deflate lower. Traders should watch for some minor intra-day resistance around the $74.50 area. Traders can also follow the U.S. Dollar Index by looking at the PowerShares DB US Dollar Index Bullish (NYSE:UUP).

Nicholas Santiago
InTheMoneyStocks.com

Trade It: Panic Resumes On Markets Open 

The markets tumbled from a massive gap higher this morning. Last night, President Obama gave the nation the news. An agreement had been reached to raise the debt ceiling and cut spending. The S&P 500 futures spiked dramatically, trading over twenty points higher. This morning, the SPDR S&P 500 ETF (NYSE:SPY) opened up over 1% higher, at $130.84. However, no sooner did it open, the markets started to collapse.

The reasons for the drop were multiple. First, the deal must be voted on and passed by the House and Senate. With no political party very happy with the overall compromise, profits were taken early by those that did not want to risk a non passage of the bill. In addition, the cuts over 10 years totaled $2.8 trillion.  This is slightly below what rating firms S&P and Moody's had asked for to keep the U.S credit rating.  This $2.8 trillion in cuts ups the possibility of a debt rating downgrade. Lastly, the ISM Index for July reported in at 50.9. This shows significant slowing and a possible new recession brewing.

These factors killed the markets. A huge gap higher quickly turned into steep losses for all the major indexes. The SPDR S&P 500 ETF (NYSE:SPY) is now trading at $128.41, -0.92 (-0.71%), the PowerShares QQQ Trust, Series 1 (NASDAQ:QQQ) is trading at $57.61, -0.39 (-0.67%) and the SPDR Dow Jones Industrial Average (NYSE:DIA) is trading at $120.54, -0.59 (-0.49%).

The moral to this story is simple. Sell the rallies. Europe is still a mess, the United States will ultimately get downgraded and the economic numbers are dismal. Should the vote pass today, the markets should see a pop. However, upside may be short lived and continue to take profits.

Related: PowerShares DB US Dollar Index Bullish (NYSE:UUP)

Gareth Soloway
InTheMoneyStocks.com
 

Master Stock Trading Level Revealed

The markets are lower on fear that the bill to raise the debt ceiling and cut spending will not pass this evening. Many politicians have come out publicly today voicing their displeasure with the bill. After a major gap higher in the U.S. markets, they fell sharply. The SPDR S&P 500 ETF (NYSE:SPY) is currently trading at $128.01, -1.32 (-1.02%).

AK Steel Holding Corporation (NYSE:AKS) is trading at $11.70, -0.45 (-3.70%).  The stock has been hammered since earnings were released back on July 26th, 2011. Just today, it is inching into a major pivot low which stands to be support for a long. This level is shown on the chart below and is at $11.45.

All eyes will be on the vote this evening. If it does not pass the markets will most likely dump in dramatic fashion. It is possible to see the Dow Jones Industrial Average lower by 500 or more points tomorrow. A debt downgrade would likely follow. It is unlikely it does not pass but there is always a small chance. Should it pass, expect a gap and go tomorrow.

Gareth Soloway
InTheMoneyStocks.com

Let Us Trade The Politicians

The major stock market indexes all sold off lower this morning after staging a sharp gap higher open. The catalyst for the stock market pop at the open was obviously the passing of a debt ceiling resolution in Washington. Shortly after it looked as if a compromise was made by both parties, statements from leading members of the Congress have said that they are not sure if they will vote for the deal. The stock market only wants to have certainty. Even if the debt ceiling was not increased the stock market would have declined for a few days and then found a low. If there is one thing that the politicians should have learned by now, it is that the markets hate uncertainty. How can someone really invest or trade when they do not know if the rules are going to be changed in the middle of the game? There simply is no certainty in anything that the politicians do.

This afternoon the House of Representatives was scheduled to vote on the debt ceiling compromise at 2:00 pm EST, however, that vote has been postponed until tonight. If traders want to know why the Dow Jones Industrial Average is in a 300 point intra-day range, this is the reason why. It is important to also note that the global markets are also facing uncertainty from politicians and bankers abroad.

Italy has been in the news as the latest country to need a bailout in the European Union. Earlier, yields spiked higher in Italian debt signaling further problems for that country. The same thing occurred in Spanish debt as yields spiked higher in that country, which is again very negative. This is just so much uncertainty surrounding these countries that traders must simply remain nimble in this type of environment.

The United States is supposed to be the leader of the free world. It does not seem like it is a free world anymore, nor does it seem as if the United States is the leader. It really seems that the Chinese are the leaders and we all know they are not free, they are still governed by a communist government. Last night, the Shanghai Index traded flat as a board. The Shanghai Index did not rally on the back of the U.S. Debt ceiling news. That was the first clue that told us this stock market could be weak after the opening bell. Maybe we should trade in these politicians for a news set of talking heads. These people simply cannot make a firm decision. Raise the debt or don't raise the debt, lets just make a decision already.

Nicholas Santiago
InTheMoneyStocks.com

Gold Miners Still Lag the Metal

This morning, the gold mining stocks are trading slightly higher on the trading session. The popular Market Vectors Gold Miners ETF (NYSE:GDX) is trading higher by 0.56 cents to $57.90 a share. Recently, the GDX rolled over on the daily chart after trading as high as $61.71 a share on July 25, 2011. Meanwhile the SPDR Gold Shares (NYSE:GLD) are trading higher by $1.33 to 159.05 a share. This tells us that the gold mining stocks are obviously lagging the precious metal. Traders can watch for intra-day resistance on the GLD around the $58.25 area.

Other leading gold mining stocks that are trading higher this morning include Newmont Mining Corp. (NYSE:NEM), Yamana Gold Corp. (NYSE:AUY), and Agnico Eagle Mines LTD (NYSE:AEM). All of these stocks look to have limited upside on an intra-day basis.

Nicholas Santiago
InTheMoneyStocks.com

The Dollar Goes Whistling Dixie

The U.S. Dollar Index is probably the most important chart that any trader can follow. This morning before the opening bell the U.S. Dollar Index futures (DX U1) traded as high as $74.91 per contract. Once the personal income data was released at 8:30 am EST, the U.S Dollar Index has reversed most of its pre-market gains by declining over 0.50 cents to $74.37 per contract.

It is important for traders to understand that a 0.50 cent move in U.S. Dollar Index can move the major stock market indexes. Traders can easily see how the major stock indexes rebounded higher as the U.S. Dollar Index declined. The inverse relationship between the stock market and the U.S. Dollar Index is still very much intact.

Nicholas Santiago
InTheMoneyStocks.com

Transports Sink Again

The important and highly followed transportation index is once again declining this morning. The iShares Dow Jones Transportation ETF (NYSE:IYT) is trading lower by $1.50 to $90.86 a share. The IYT has declined by over $10.00 since making a 52 week high on July 7, 2011. Many traders and investor follow the transport index very closely because this index usually represents economic growth and expansion. It is important to note that the IYT is now trading below the important 50 and 200 moving averages which puts the index in a weak technical position. The index is short term oversold at the moment. Traders can watch for some minor support around the current level.

Other leading transportation stocks that are declining this morning include FedEx Corp.(NYSE:FDX), CSX Corp.(NYSE:CSX), and Frontline LTD(NYSE:FRO). All of these stocks remain weak on the charts at this time, however, they are also very oversold in the near term. Oversold stocks will usually be candidates for short term bounces.



Nicholas Santiago
InTheMoneyStocks.com

Stock Markets Sell On Fears, Ignore Vote 

The markets are looking past the Senate vote today at 12pm ET and they do not like what they see. It looks like the debt ceiling and spending cuts bill will pass and be signed into law by President Obama. However, the economic news continues to be ugly, Italy and Spain are a mess and the U.S. still faces a possible debt rating downgrade. This is sending the markets sharply lower today into the lunch hour. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $127.39, -1.39 (-1.08%).

Sentiment in the markets is very bearish based on all these factors. The debt deal is minor now as Wall Street looks towards a new recession. The selling today is broad based with money flowing into gold and silver for protection. The SPDR Gold Trust (ETF) (NYSE:GLD) is trading at $160.00, +2.28 (+1.45%) and the iShares Silver Trust (ETF) (NYSE:SLV)  is trading at $39.31, +1.02 (+2.66%).

Gareth Soloway
InTheMoneyStocks.com
 

The Strongest Down Market Stocks To Buy 

As the markets hover around their lows on fears of a new global recession, certain stocks are looking more attractive than others. The markets are nearing a major break down based on the daily 200 moving average on the S&P 500. Wall Street players must be very careful when picking up anything long, choosing the correct stocks at the perfect levels.

3M Company (NYSE:MMM) is showing significant strength even while trading slightly lower on the day. With the S&P 500 down 1.5%, MMM is only lower by .70%. In addition, the S&P 500 is trading below the lows from yesterday, but MMM is trading above. This tells pro traders that MMM may be a solid play on the long side in an otherwise weak market.

Cree, Inc. (NASDAQ:CREE) is another strong player in the market today. As the S&P 500 hits new lows of the day, CREE is holding on the positive side trading at 33.17, +0.15 (+0.45%). In addition, CREE put in a solid technical bottom over a week ago. This is being confirmed by the strength in the stock today.

Gareth Soloway
InTheMoneyStocks.com
 

Vampire Market

Since July 21, 2011, the Dow Jones Industrial Average has dropped lower by 786.0 points, the popular stock index is now trading below the psychological 12,000 level. This is one fast and massive drop for all of the major stock indexes in such a short period of time. The debt ceiling bill has been passed by the politicians and the stock market participants do not care. If the politicians caved on the debt deal because of the stock market they sure look silly now. In any case, there is now blood in the street, we call this a vampire market. This is when the institutions either run for cover or they step in and buy stocks. It is important to remember that it is the institutions that move markets, not the small retail trader at home with a small online trading account.

The problems in the European Union seem to be getting worst by the day. Investors are now looking at France as another weak link in the already broken European Union. The iShares MSCI France Index Fund (NYSE:EWQ) has been plummeting lower since early May. Today the EWQ traded lower by 0.79 cents to $23.97 a share. The EWQ is short term oversold at the moment, however, the trend is down and the index is trading below all of the major moving averages. If the EWQ does not bounce soon the problems in the European Union are going to get a lot worst.

Other leading European stock indexes that are trading lower this afternoon include iShares MSCI Spain Index (NYSE:EWP), iShares MSCI Germany Index (NYSE:EWG), and iShares MSCI Italy Index (NYSE:EWI). All of these indexes are short term oversold at the moment, however, that does not mean they cannot trade lower. Yes, there is blood in the street right now, this is a vampire market.

Nicholas Santiago
InTheMoneyStocks.com

Financial Stocks Hold The Cards

This morning, the major stock indexes are fading into the sunset once again by giving up the pre-market gains. Traders and investors are now starting to have fear that the major stock indexes can break sharply lower. There are a lot of stocks that are very oversold which tells us that a bounce could occur. It is the financial stocks that should be followed most closely this morning. If the financial stocks begin to break down then the important support levels that are in place on many leading stocks may collapse and trade lower. Therefore, as long as the financial stocks hold up the major stock indexes have a chance to bounce today.

J.P. Morgan Chase & Co.(NYSE:JPM) is the most important financial stock in the entire stock market. This financial giant is trading lower by 0.07 cents to $39.76 a share. Should JPM stock start to decline sharply lower the major stock indexes should come under heavy selling pressure. JPM stock will have short term intra-day support around the $39.50 area. Should the stock trade higher on the session there will be intra-day resistance around the $40.21 level.

Goldman Sachs Group Inc.(NYSE:GS) is considered the leading broker dealer in the entire stock market. This stock is actually trading higher this morning by $1.13 to $132.35 a share. Traders can watch for intra-day resistance around the $133.75 area. Should the stocks decline during the session the stock will have intra-day support around the $131.00 area.

Wells Fargo & Co.(NYSE:WFC), Bank of America Corp.(NYSE:BAC), and Morgan Stanley(NYSE:MS) are all trading flat on the session. This group of stocks is probably the most important group of stocks to follow today. If these stocks decline it could spell trouble for the major stock indexes once again.

Nicholas Santiago
InTheMoneyStocks.com

New 52 Week High List Shrinks To New Lows 

This morning, there are less and less new 52 week highs on the New York Stock Exchange. When the new 52 week high list shrinks it tells us that the major stock indexes are coming under institutional selling pressure. The stocks that are making new 52 week highs include Clean Harbors Inc.(NYSE:CLH), Yamana Gold Inc.(NYSE:AUY), Rogers Corp.(NYSE:ROG), and Mastercard Inc.(NYSE:MA).

The amount of stocks that are hitting new 52 week lows is continuing to grow. This is usually a bearish sign for the major stock indexes. Traders should realize that the major stock indexes are oversold in the short term, therefore, a bounce in the markets cannot be ruled out in the near term. In any case, traders must still use caution in this environment.

Nicholas Santiago
InTheMoneyStocks.com

Epic Stock Market Reversal May Signal Bottom 

Today the markets were crushed again, the SPDR S&P 500 ETF (NYSE:SPY) falling from a close yesterday of $125.49 to $123.53. This epic fall came on the back of continued worry about Italy, Spain and fear of a new possible deep recession in the United States. Volume was huge on the flush that took the markets into the 10:30am ET time frame. Then, all of a sudden things turned. As if the Plunge Protection Team came out to join the party and prop things up, the markets erased a majority of the steep losses. With volume continuing to be this high, it may be a sign of short term capitulation and depending where the markets close, maybe a bottoming tail. A bottoming tail is a reversal signal as well.

Gold and silver are surging today with the SPDR Gold Trust (ETF) (NYSE:GLD) trading at $162.47, +0.95 (+0.59%) and the iShares Silver Trust (ETF) (NYSE:SLV) trading at $40.61, +0.79 (+1.98%). Oil is taking a hit today, the United States Oil Fund LP (ETF) (NYSE:USO)  is trading at $35.98, -0.42 (-1.15%).

The key to determining where this market is headed in the next few days will depend on where the markets close today. The volume is signaling capitulation which is the height of fear. Generally, this is a bottom signal. The next step is to watch where the markets close. If a bottoming tail does appear, an up move in the markets over the next few days should follow.

Gareth Soloway
InTheMoneyStocks.com
 

Do You Buy: Panic Sends Markets Down

The markets opened flat and started selling. After collapsing in the first hour of trading on comments out of Europe and panic in the United States, the markets caught a significant bid, surging towards the flat line. After almost achieving a neutral standing, the markets have starting to come back down. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $124.57, -0.92 (-.73%), the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) are trading at $56.14 -.13 (-.23%) and the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) is trading at  $117.45 -1.01 (-.85%).

The fear is palpable today in the markets. Wall Street traders are shaking in their boots. However, the VIX is not confirming this move. This is a major divergence and must be watched closely. The VIX is a volatility indicator and fear index. With it not confirming the move down in the markets, it may signal a sharp move on the horizon. To follow the VIX, watch the iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX).

The winners today are Research In Motion Limited (USA) (NASDAQ:RIMM) which is trading at $25.02, +0.87 (+3.60%) and MasterCard Incorporated (NYSE:MA) which is trading at $322.67, +24.18 (+8.10%). MasterCard is trading sharply higher on solid earnings.

Gareth Soloway
InTheMoneyStocks.com
 

Markets Close Green, These Are The Plays 

The markets are attempting to recover from massive losses today. If the markets are able to squeeze out a flat close or slightly positive, many major stocks look to be amazing buys. The key to going long is the massive fear in the markets and the reversal signal of capitulation in the markets today, should a flat or positive close occur.

The first stocks to pop will be large cap players that were at or near their 52 week highs just weeks ago. Many of these stocks are performing well today. Possible plays will be 3M Company (NYSE:MMM), Caterpillar Inc. (NYSE:CAT), International Business Machines Corp. (NYSE:IBM). Other plays would also be Bank of America Corporation (NYSE:BAC) and Cisco Systems, Inc. (NASDAQ:CSCO).

The key is to see if this market closes flat or green today. That will be the signal of a high probability reversal in the markets.

Gareth Soloway
InTheMoneyStocks.com
 

Understand The Stock Market Break Out Or Break Down

Note the chart below shows a consolidation pattern and a close above it. The key now is to get a close above the 20ma on the intra day. Should that happen, more upside is likely. The first step is in, let's see if it can complete the move with the second step. Should this happen, markets may close flat to positive. However, if the markets fail on this move and close back below the up sloping trend line, the markets will head for the lows of the day. Truly an amazing wild day in the markets. Also note that the VIX was never confirming the move down today.

Gareth Soloway
InTheMoneyStocks.com
 

Shake That Tail

This morning, the sky was falling as the major stock indexes plummeted, however, after a heavy volume surge after the open the major stock indexes started to recover a bit off the lows. At one point, the Dow Jones Industrial Average(DJIA) was down by more than 150.00 points before bouncing higher. This afternoon, the DJIA is trading lower by just 20.00 points. The big question is whether this market can hold up into the closing bell. Traders should always remember the old market adage, it is not how the market starts, it only matters how the markets finish.

There are many stocks that are making potential bottoming tails on the charts. Leading stocks such as Rackspace Hosting Inc.(NYSE:RAX) has reversed its earlier declines and is now trading positive by 0.53 cents to $39.53 a share. VMWare Inc.(NYSE:VMW) also reversed higher and could be making a potential bottoming tail on the daily chart. These are leading stocks and that is why they must be followed closely. Other stock that have rallied sharply off of the morning lows include Sandisk Corp.(NASDAQ:SNDK) and Riverbed Technology Inc.(NASDAQ:RVBD).

When stocks rally off of the early morning lows this sharply it will often signal a possible near term bounce. It is still very important for stocks to see follow through in the coming days should they even hold up into the close. Tomorrow many traders and investors will be in pause mode ahead of the U.S. government job report on Friday morning. In the meantime, there are a lot of potential bottoming tails to look at on the charts.

Nicholas Santiago
InTheMoneyStocks.com