Monday, January 17, 2011

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Friday, January 14, 2011

Morning Madness

  • Futures are down slightly this morning
  • CPI 0.5% vs 0.4% expected
  • Core CPI 0.1% vs 0.1% expected
  • Retail Sales Ex-Auto 0.5% vs 0.6% expected
  • More economic reports due out in 20min
  • EUR/USD has enjoyed a huge run up and now is looking at resistance at 1.344 and support at the 50 day moving average 1.332
  • GBP/USD has also made a nice run after breaking the downward trendline and is now finding support at 1.58
  • USD/JPY is having trouble clearing the 50 day  moving average at 83.03 - will watch for a break of this level to determine direction
  • S&P500 has cleared the 1276 level and has started to pull back
  • Bulls need to continue to hold the 1276 level
  • Bears will look for a close below this level but more importantly shoot for the 1262 level
  • Bulls still have the market until we break the 1262 level
  • Dip buying continues so watch this market after the weak opening
Stock Watch

FSLR is forming a nice inverted head and shoulds pattern.  The neckline is right at the gap which makes the resistance even stronger.  FSLR has enjoyed a nice run so a sideways consolidation would be perfect here.  We should expect some kind of pullback or consolidation before pushing to much higher.

Wednesday, January 12, 2011

Morning Madness

  • Again, another primitive Morning Madness from a remote computer
  • Futures are up modertaly this morning showing a lot of strength
  • No major economic reports due out today
  • EUR/USD is bouncing back and headed for the 200 day moving average at 1.306
  • GBP/USD has found the strength it needs to break its 150 day moving average and downward trendline -watch it on the 50 day moving average at 1.572
  • USD/JPY also showing strength as it bounces between its 50 day moving average (82.96) and fibonacci resistance at (83.67)
  • The bears need to keep the market under 1276 and hopefully close below 1262
  • Bulls need to close above 1276 -we tested that level yesterday only to fail and sell off
  • Dip buying continues to remain strong

Tuesday, January 11, 2011

Morning Madness

  • Futures are up moderately this morning
  • No economic reports due out today
  • Market found support at 1262 level where it was quickly bought up
  • Head and shoulders on the SPX 60min is still in play
  • Market could play out like on Sept. 1st and Dec. 1st bouncing off of support and a big breakthrough to the upside
  • EUR/USD is trying to bounce back at these levels - resistance at 200day moving average 1.307
  • GBP/USD still trying to get through the 150 day moving average - resistance at the downward trendline 1.562
  • USD/JPY showed weakness yesterday as it broke under support
  • Bulls still need to claim the 1276 to put this consolidation to rest
  • Bears are still looking to claim the 1262 level to drive this market down
  • Dip buying remains strong as we saw yesterday
 Stock Watch

ALKS has a nice gap to fill and has been consolidating nicely at this point.  Wait for a break of the 200 day moving average at 12.68 before going long and use that point as a good stop loss.  Good risk/reward in this trade.

Monday, January 10, 2011

Morning Madness

  • Futures are currently slightly negative
  • No economic reports due out today
  • EUR/USD is trying to bounce back a little this morning
  • GBP/USD is still trapped between the 150-200 day moving averages
  • USD/JPY still trading above support, will watch for a bounce here
  • Overnight weakness occurred in the /ES and could help drive this market down
  • Bulls need to push past the 1276 level to further this market -at least hold the 1262 level
  • Bears need to start by taking over the 1262 level
  • If bears can take the 1251 level then they will have finally put in a lower-low
  • Dip buying has still been strong and could continue so be careful
Stock Watch

MU (long)
 MU has put in a nice resistance at 8.78 so wait for a break of these levels before going long.  You have good support from all three moving averages.  Could place a stop-loss at the low of 8.40 which will give you 4.5% risk.
BFR (short)
 BFR has had a nice run up from last May but now looks like it is creating a top.  It has built good support at 11.16 so a close below this would be a strong sign of weakness.  You also have the 50 day moving average trading above helping drive this stock down. 

Sunday, January 9, 2011

Weekly Forecast - Jan 9th

First off let me apologize for the late Weekly Forecast.  I usually try to have these out by Sunday afternoon if not Saturday.  We are currently working on converting this site from a blog to a real site.  Hopefully we will have the new site online by the end of the week.

As for the forecast, this week starts earning season so the upcoming weeks should be full of excitement.  Look for more day trading to happen as we play the earnings game.  As always we will kick this earnings season off with Alcoa reporting tomorrow before the bell. 

Let's see what this week has in store for us....

S&P 500
The SPX has had a continued run up since last September as it has climbed about 230 points.  Since December it seems that every new run up is met with a period of consolidation which typically last about a week.  We are in that period of consolidation right now.  We had a nice push up on Monday and have kept a solid range throughout the week.

SPX (hourly)
On the SPX hourly chart we can see that run up and period of consolidation.  Currently we are stuck between the 1276 and the 1262 area, and as you can see from the rest of the chart our consolidation periods don't normally take up such a wide price range.  It is also good to notice we are forming a bit of head and shoulders as the market works on the right shoulder.  This leads me to believe that if the bears manage to take the 1262 level before the bulls claim 1272 then we could have a game changer.

The EUR/USD saw a major decline last week pushing it past all support levels.  It now sits below its upward trendline and 150 and 200 day moving averages.  Threre are not to many support levels between here and 1.26.  We could see a retrace back to the 1.30 level but further weakenss should be expected out of the EUR/USD.

 GBP/USD still remains caught under its downward trendline.  It is also bouncing between the 150 and 200 day moving average.  The currency pair has been on a short term upward trendline but even that might not be enough to push in through the downward trendline at 1.56.  The pound/dollar will continue to be weak until it makes a higher-high at 1.59.  I would expect to see another sell off at the 1.56 level to push it back down to 1.534.

USD/JPY saw a nice bounce back with strength last week.  The strength pushed the pair through the 50 day moving average and resistance at 82.79.  It is now finding support at both of these levels.  Further strength could be seen out of this pair as it pushes towards resistance at 83.67.  I would like to see a move towards 84.41 out of this pair, and I think that move may be in the cards.

The NYSI Reversal Indicator in all its glory is still calling for a further move to the upside.  Right now it is caught in the middle with no signs of stopping.  Shorts should be careful on entering any trades here until it reaches the extremes.

Should be a quiet week for economic reports:

Monday: Nothing major
Tuesday: Nothing major
Wednesday: Import/Export Prices, Petro Status (nothing major)
Thurday: Internatinoal Trade, Producer Price Index, Jobless Claims
Friday: Consumer Price Index, Retail Sales, Industrail Production

I think this week could experience some weakness in the markets.  If the markets which to remain correlated with its currency pairs than further weakness should be expected.  As mentioned earlier we also have the beginning of earnings season so record earnings could change the tone of the weak from negative to positive.  No real weakness will happen until the bears take the 1263 level.  As of right now the bulls are still in control with dip buying still remaining strong.  We will definitely be on the look out for short setups this week.

Saturday, January 8, 2011

Portfolio - CSCO (long)

Went long on CSCO this Friday with a break of resistance.  Decided to go long on CSCO to play the gap fill giving us a lot of room to the upside.  There is also a clearly defined hammer candle from Thursday that should lead to further upside.  Our buy-stop of 20.97 (purple line) was hit and filled in the morning and our current stop-loss is 20.52 (red line).  At that stop-loss we are currently risking about 2.2%.


Weekly Digest - Week of 01/03/11

Market Performance

Sector Performance
 Market continued higher this week, as if anyone is surprised.  The week began strong as the market opened the month and new year up about 1%.  Volume has come back into the market as people return from vacation.  The market also gained strength on Wednesday with strong ADP employment numbers.  The rest of the week was filled with weakness as the market gave back gains.  The S&P is now trapped in a range 1262 - 1278 and we will watch the week ahead for a break of these levels.  Technology and healthcare came out strong with basic materials and consumer goods dragging behind.  This continues to show that there is always a bull and bear market somewhere.  Market continues to push up without much correction which we will address in our Weekly Forecast. 

Our trading this week has been strong now that volume is backing up the price action.  Monday we went long on Dean Foods (DF) which we closed Friday for a 9% gain.  We also went short on CoinStar (CSTR) on Wednesday as we were looking for a gap-fill plus a hedge in the market.  Unfortunately the cards wern't right in this trade as we were stopped out on Thursday for a 5% loss.  On Friday we went long in Cisco (CSCO) looking for another gap-fill play.  We will continue to hold this into next week since it hasn't moved yet.

Stay tuned for our Weekly Forecast and chart analysis on CSCO