Archive for December, 2009
Light Trading Sqeezes Out A New High For 2009 - Happy Holidays!
I will not be publishing a new Daily Report today, only these market comments. This week, seasonality has taken over and we are marching higher. A weak GDP number and horrendous new home sales were not enough to shake confidence. This morning, durable goods orders came in at .2% when a rise of .5% but was expected. The market took the number in stride and it focused on slightly better initial jobless claims. The Santa Claus rally would officially begin today and over the last 40+ years it has had a 75% success ratio. On average, the last five trading days …
Finish Your Holiday Shopping. The Market Will Trade in A tight Range!
Trading volumes will really fall off the next two days and I don’t believe we will see a big move in either direction. Often, the market can swing wildly when the big money is away. That does not appear to be the case this week. Yesterday, Q3 GDP came in much lighter than expected. Analysts were looking for 2.8% growth and we came in at 2.2% growth. If you strip out cash for clunkers, growth would have been less then 1%. That begs the question, “Will this economy grow without government stimulus?” Economists believe that consumer spending, business inventories and improved …
Seasonal Strength Alone Will Not Push the Market Through Major Resistance!
The market is once again trying to break through heavy resistance. The NASDAQ has already broken out to new highs and is strong today. Keep in mind that the QQQQ is still 60% below its all-time high and the SPY is only 30% off of its high. It is starting to make up ground. Seasonality is driving the market higher and even a small bid can lift the market in light volume. Bears are not going to stand in the way. This morning, the final revision to Q3 GDP was posted. It dropped down to 2.2% when analysts were looking for …
“Merger Monday” Provides A Spark. This Is The 8th Bullish Monday In A Row!
Prepare for a light volume week with choppy price action. Resistance is building and I believe it will hold through year-end. Last week, the market took another shot at SPY 112. Strong seasonality, dovish comments from the FOMC and bullish open interest in call index options were not enough to spark sustained buying. Profit-taking is strong at this level as traders lock-in profits. The last five trading days of the year are normally bullish and the “Santa Claus Rally” would officially start this Thursday. If it fails to materialize, it is a bearish sign for 2010. This morning, “Merger Monday” is …
Sell Out of the Money Call Spreads - Only Buy Puts On A Technical Breakdown!
As I’ve been saying, I grow more bearish with each passing day. The market momentum has stalled and negative news is increasing. Credit issues in Europe are heating up. The PIIGS (Portugal, Ireland, Italy, Greece and Spain) are weak and the threat of an Eastern European collapse will weigh on banks. Credit in the US is also an issue and it spans from the government, to the states, to municipalities, to Americans. Our government has fired all of its bullets and the deficit is so big that even Democrats don’t want another stimulus program. In 10 years, 100% of our national …