Archive for September, 2010
Sellers Were Able To Beat Stocks Back Below SPY 115. Watch The Late Day Action
The market has very quietly been grinding higher in the last week. Typically, prices move lower early in the day and buyers step in late in the afternoon. We have gradually been inching closer to major resistance at SPY 115, but we have not had a catalyst to push us through. This morning, Q2 GDP rose to 1.7% from 1.6%. That was better than expected. Initial jobless claims came in at 453,000. The four-week moving average has dropped below 460,000 and while that is not cause for celebration, the market is content with the number. Chicago PMI jumped to 60.4 from …
China’s PMI Was Strong. The One Potential Spoiler Is Out of the Way!
Early weakness and late strength characterize the trading pattern we’ve seen during the last week. Buyers are waiting for a dip and they are getting anxious. After an 8% rally in a matter of weeks, you would expect a normal correction. Asset Managers don’t want to chase stocks when they are at the top of the range, but they don’t want to miss a year-end rally either. Each little pullback attracts buyers. Earnings season is approaching and the market has rallied the last four quarters heading into it. November elections are also expected to favor Republicans and that is bullish. The …
No News Is Good News. Lighten Up On Bullish Positions!
No news is good news. The market continues to tread water and there aren’t many economic releases to stand in its way. This morning, consumer confidence fell to its lowest level since February. It came in at 48.5 and analysts were looking for 53.2. People are pessimistic because they are out of work. Severance packages and unemployment benefits are running out and the purse strings have been tightened. The market was prepared for a bad number and after an early decline, prices rebounded. Yesterday, the market tested the downside early in the morning. When bears could not get anything going, the …
Scale Out of Long Call Positions The Next Few Days. Friday Could Pose Risk!
Last week, the market was able to rise above horizontal resistance at SPY 113. It has been able to hold that level in is knocking on the door of major resistance at SPY 115. The big question this week is, “Can it break out?” The economic news through Wednesday is pretty light and that favors the bulls. Tomorrow, consumer confidence will be released and is likely to disappoint, but weakness is factored in. Heavy overhead resistance is likely to stay intact because we need a major catalyst to push us through. On Thursday, GDP, initial claims and Chicago PMI be released. …
A Close Above SPY 115 Would Be Very Bullish - Stay Long Until Thursday!
Without question, this market wants to go higher. Yesterday, it was able to shrug off a negative initial jobless claims number and it rallied after a negative open. Late in the day, sellers were able to push the market a little lower. After rallying 8% in three weeks, you would expect to see a little weakness. This morning, the market was poised to open higher and then a favorable durable goods orders number sparked a massive round of buying. The overall number was a little weaker than expected, but business spending improved and that was the focal point. Last month’s decline …