Tuesday, August 03, 2010 – Closing market commentary
All three major market indexes closed lower, but the bears were not able to close last Friday’s closing prices. This is very bullish as indicated by the buying power that came in within the last ½ of trading of the day. Furthermore, after hours trading is very bullish as well.
The DIA was down $.34 or 0.32 percent, the SPY was down $.54 or 0.48percent, and the Q’s were also down for the day by $.20 or 0.43 percent. The low of the day on the SPY was $111.85, which was the support level that I indicated in my morning commentary.
Tomorrow economic reports are the ADP Payroll and the ISM Nonmanufacturing index.
Technical Analysis
Swing trading based on eastern and western studies.
Tuesday, August 3, 2010
Tuesday, August 03, 2010 – Early morning observation
Tuesday, August 03, 2010 – Early morning observation
Asia markets closed higher, especially the NIKKEI which closed up 123.70 points or 1.29 percent. . The Hang Seng mildly closed higher by 44.87 points or 0.21 percent. As of this writing, the STOXX 50 is slightly down by 4.92 percent.
The US equity futures markets are mix with the DJIA Index -7.00, S&P 500 -1.30, and the Q’s are close to flat at 0.25. This is normally expected after yesterday’s major upward move on these three major US indexes. The bulls should be able to hold these levels given yesterday’s market strength. What is critical is the Friday’s employment numbers that if its worst then estimated could drive the markets lower to last week’s levels. One of major concerns is the weak US Dollar against the Yen and very low yield on the front end of the US yield curve which indicates no economic weakness. Notwithstanding, copper prices continue to rise so there is demand for this precious metal.
Support and resistant levels for the QQQQ and SPY are as follows:
Support 1 QQQQ $46.29 and for the SPY $111.85
Support 2 –QQQQ $45.95 and for the SPY $110.98
Resistance 1 QQQQ $47.05 and for the SPY $113.32
Resistance 2 QQQQ $47.15 and for the SPY $113.84
Asia markets closed higher, especially the NIKKEI which closed up 123.70 points or 1.29 percent. . The Hang Seng mildly closed higher by 44.87 points or 0.21 percent. As of this writing, the STOXX 50 is slightly down by 4.92 percent.
The US equity futures markets are mix with the DJIA Index -7.00, S&P 500 -1.30, and the Q’s are close to flat at 0.25. This is normally expected after yesterday’s major upward move on these three major US indexes. The bulls should be able to hold these levels given yesterday’s market strength. What is critical is the Friday’s employment numbers that if its worst then estimated could drive the markets lower to last week’s levels. One of major concerns is the weak US Dollar against the Yen and very low yield on the front end of the US yield curve which indicates no economic weakness. Notwithstanding, copper prices continue to rise so there is demand for this precious metal.
Support and resistant levels for the QQQQ and SPY are as follows:
Support 1 QQQQ $46.29 and for the SPY $111.85
Support 2 –QQQQ $45.95 and for the SPY $110.98
Resistance 1 QQQQ $47.05 and for the SPY $113.32
Resistance 2 QQQQ $47.15 and for the SPY $113.84
Monday, August 2, 2010
Monday, August 02, 2010 – Market close commentary
Monday, August 02, 2010 – Market close commentary
The US equity markets followed the lead of both the ASIA and Europe markets to close significantly higher. The DIA was up $2.03 or 1.94 percent for the day, the SPY was up $2.49 or 2.26 percent, and the Q’s also had a nice gain for the day of $0.86 or 1.87 percent. Please keep in mind that the market gapped up and did not close Friday’s gaps. Consequently, this is very bullish sign, especially as the bulls were able to surpass last week’s highs for the aforementioned indexes. Unless there are any major catastrophic events, I project the equity market to continue to increase until the release of this Friday’s employment data. If it’s favorable news, the market will have one of its best performances for the year. Our US equity markets are lagging the overseas markets and it is anticipated that we will narrow this variance.
The US equity markets followed the lead of both the ASIA and Europe markets to close significantly higher. The DIA was up $2.03 or 1.94 percent for the day, the SPY was up $2.49 or 2.26 percent, and the Q’s also had a nice gain for the day of $0.86 or 1.87 percent. Please keep in mind that the market gapped up and did not close Friday’s gaps. Consequently, this is very bullish sign, especially as the bulls were able to surpass last week’s highs for the aforementioned indexes. Unless there are any major catastrophic events, I project the equity market to continue to increase until the release of this Friday’s employment data. If it’s favorable news, the market will have one of its best performances for the year. Our US equity markets are lagging the overseas markets and it is anticipated that we will narrow this variance.
Monday, August 02, 2010 -Mid day observation
Monday, August 02, 2010 -Mid day observation
The bulls are once again starting a new month very strong. Major gaps exist within the DIA, SPY, and Q’s from last Friday's close. If bulls run the market this afternoon watch out as a squeeze will require the bears to cover. The bulls won the first 1 ½ of trading today while the bears won the next 1 ½, but marginally. The bears are trying to pull the market lower as I write, but bulls are pushing back. I feel the market is going to rally at 1:30 PM. I am playing MSFT which has some good support at $25.94 and resistance at $26.29 for today. It should break out and test last week’s high of $26.40 and test a new weekly high for this week.
The bulls are once again starting a new month very strong. Major gaps exist within the DIA, SPY, and Q’s from last Friday's close. If bulls run the market this afternoon watch out as a squeeze will require the bears to cover. The bulls won the first 1 ½ of trading today while the bears won the next 1 ½, but marginally. The bears are trying to pull the market lower as I write, but bulls are pushing back. I feel the market is going to rally at 1:30 PM. I am playing MSFT which has some good support at $25.94 and resistance at $26.29 for today. It should break out and test last week’s high of $26.40 and test a new weekly high for this week.
Monday, August 2, 2010 - Early Morning observation
Monday, August 02, 2010 – Early morning observation
Asia markets closed higher. The NIKKEI closed up by 33.01 points or 0.34 percent and the Hang Seng closed up nicely by 382 points or 1.82 percent. As of this writing, the STOXX 50 is up 51.45 points or 1.88 percent.
The US futures markets are higher substantially as follows:. The DJIA Index +117.00, S&P 500 14.0, and NASDAQ 100 21.75, respectively. I will be a seller of my long positions premarket and repurchasing my longs at their Friday’s gap level. I would buy a small position at these gap levels to make sure it holds. For example, 10% of my allocated funds on the Q’s at or near $45.81. Then by next order will be 25% at $45.69, 25 percent at $45.22, and 20 percent at 44.93 percent and 20 percent at $44.64. I don’t feel that the bears will be able to pull the Q’s below $45.69 given the strength of the futures market as of this writing. The VXX is in the low $20 so it’s surprising that we will have such a move in the markets as indicated by the futures. I will update my market remarks by around noon after I analyze the morning trading activity. Good luck making fast money trading.
Asia markets closed higher. The NIKKEI closed up by 33.01 points or 0.34 percent and the Hang Seng closed up nicely by 382 points or 1.82 percent. As of this writing, the STOXX 50 is up 51.45 points or 1.88 percent.
The US futures markets are higher substantially as follows:. The DJIA Index +117.00, S&P 500 14.0, and NASDAQ 100 21.75, respectively. I will be a seller of my long positions premarket and repurchasing my longs at their Friday’s gap level. I would buy a small position at these gap levels to make sure it holds. For example, 10% of my allocated funds on the Q’s at or near $45.81. Then by next order will be 25% at $45.69, 25 percent at $45.22, and 20 percent at 44.93 percent and 20 percent at $44.64. I don’t feel that the bears will be able to pull the Q’s below $45.69 given the strength of the futures market as of this writing. The VXX is in the low $20 so it’s surprising that we will have such a move in the markets as indicated by the futures. I will update my market remarks by around noon after I analyze the morning trading activity. Good luck making fast money trading.
Sunday, August 1, 2010
Economic reports release dates for the week of July 2nd.
Indicator Release Date Period Prior Value Median Forecast
==============================================================
ISM Manu Index 8/2 July 56.2 54.0
Construct Spending MOM% 8/2 June -0.2% -0.5%
Pers Inc MOM% 8/3 June 0.4% 0.2%
Pers Spend MOM% 8/3 June 0.2% 0.1%
Factory Orders MOM% 8/3 June -1.4% -0.3%
Pending Homes MOM% 8/3 June -30.0% 3.7%
ADP Payroll ,000’s 8/4 July 13 35
ISM NonManu Index 8/4 July 53.8 53.0
Initial Claims ,000’s 8/5 31-Jul 457 455
Nonfarm Payrolls ,000’s 8/6 July -125 -60
Private Payrolls ,000’s 8/6 July 83 90
Unemploy Rate % 8/6 July 9.5% 9.6%
Hourly Earnings MOM% 8/6 July -0.1% 0.1%
Keep a close eye on the personal spending report and on Friday’s employment situation. These reports will have major impact on the direction of the equity markets this month. Also, this weekend former Federal Reserve Chairman Alan Greenspan said the slowing economic recovery in the U.S. feels like a “quasi-recession” and the economy might contract again if home prices decline.
“We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession,” Greenspan said in an interview on NBC’s “Meet the Press.”
In addition, China’s manufacturing grew at the slowest pace in 17 months in July as the government clamped down on property speculation and investment in energy-intensive and polluting factories.
The Purchasing Managers’ Index fell to 51.2 from 52.1 in June, the Federation of Logistics and Purchasing said on its website yesterday. A reading above 50 shows an expansion. A separate China PMI is due to be released today by HSBC Holdings Plc and Markit Economics.
==============================================================
ISM Manu Index 8/2 July 56.2 54.0
Construct Spending MOM% 8/2 June -0.2% -0.5%
Pers Inc MOM% 8/3 June 0.4% 0.2%
Pers Spend MOM% 8/3 June 0.2% 0.1%
Factory Orders MOM% 8/3 June -1.4% -0.3%
Pending Homes MOM% 8/3 June -30.0% 3.7%
ADP Payroll ,000’s 8/4 July 13 35
ISM NonManu Index 8/4 July 53.8 53.0
Initial Claims ,000’s 8/5 31-Jul 457 455
Nonfarm Payrolls ,000’s 8/6 July -125 -60
Private Payrolls ,000’s 8/6 July 83 90
Unemploy Rate % 8/6 July 9.5% 9.6%
Hourly Earnings MOM% 8/6 July -0.1% 0.1%
Keep a close eye on the personal spending report and on Friday’s employment situation. These reports will have major impact on the direction of the equity markets this month. Also, this weekend former Federal Reserve Chairman Alan Greenspan said the slowing economic recovery in the U.S. feels like a “quasi-recession” and the economy might contract again if home prices decline.
“We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession,” Greenspan said in an interview on NBC’s “Meet the Press.”
In addition, China’s manufacturing grew at the slowest pace in 17 months in July as the government clamped down on property speculation and investment in energy-intensive and polluting factories.
The Purchasing Managers’ Index fell to 51.2 from 52.1 in June, the Federation of Logistics and Purchasing said on its website yesterday. A reading above 50 shows an expansion. A separate China PMI is due to be released today by HSBC Holdings Plc and Markit Economics.
Best trade advice for this week – July 2nd
Trading symbol UNG which closely follows price movement of natural gas prices in the forward month of natural gas prices moved up 60 cents or 7.83 percent for the week ending July 30th. I wrote some $6 put contacts for Oct. and January 2011 given the support level of $6.72 on UNG or $3.82 in near month futures contracts. Seasonally, July is a good month to get long natural gas ahead of its best five months, August through December. I would be a buyer of UNG at $7.82 and if it breaks this level another position at $7.55 with a stop loss order $7.50. Presently it’s trading above shorter term moving averages and there is a technical gap at $7.82 that needs to be closed. There is a technical intraday gap at 8.75 that needs to be closed. I have also been seeing weakness in weekly natural gas storage report that is released every Thursday morning, especially within the annual data comparison to current storage levels. We have few storms projected through the gulf and NE has been experiencing very hot temperatures these past few weeks. My projected gain on this trade is $9.93 cents within the next 45 days of trading. Please remember that you should consider adjusting your buy and sell levels by a few pennies on both sides of the trade. Also remember that bulls and bears make money while pigs get slaughtered.
Key Equity Market Indicators
Symbol $ Chg. YTD % Chg. YTD $ Chg. 3rd qtr. $ Chg. MOM July $ Chg. WOW
DIA $1.85 1.80% $6.97 $6.97 $0.43
SPY ($0.19) (0.17%) $7.05 $7.05 ($0.14)
QQQQ $0.20 0.44% $3.10 $3.10 ($0.25)
VXX ($11.50) (33.75%) ($8.63) ($11.50) ($1.08)
The above are some of the key indicators that I closely monitor to gauge the breath of the market. As you can see from the chart above, the bulls made an impressive bullish move in the month of July 2010 given higher than expected 2Q earnings announcements. Consequently, the DIA and the Q’s are up for the year while the S&P 500 is close to flat. I have also noticed that copper prices, especially buyers in the three month contracts have increased within the last two weeks and there is a positive correlation so far between copper prices and the S&P 500. Notwithstanding, the currency pair USD/JPY is trading near an all time low and yields on US debt obligations, especially within the front end of the curve have appreciated within the last few weeks. Thus, indicating a slowdown in economic growth and potentially further declines in the equity markets. Furthermore, the traders took some profits off the table at the end of the month even though the bulls fought strongly in last two days of trading in July.
Normally July is the best performing Dow and S&P month for the 3rd quarter and the summer rally is the weakest of all quarters. Consequently, I anticipated that the month of July 2010 will be a strong month given the noted favorable earnings announcements while a wave of negative economic reports was being released (i.e., lower US and global GDP figures, July’s Beige Book minutes, and etc). I anticipate that both August and September months will be down months and bearish given the latest economic reports, lack of buying power of the consumer, it’s a midyear election year, and it’s a double zero year.
Symbol $ Chg. YTD % Chg. YTD $ Chg. 3rd qtr. $ Chg. MOM July $ Chg. WOW
DIA $1.85 1.80% $6.97 $6.97 $0.43
SPY ($0.19) (0.17%) $7.05 $7.05 ($0.14)
QQQQ $0.20 0.44% $3.10 $3.10 ($0.25)
VXX ($11.50) (33.75%) ($8.63) ($11.50) ($1.08)
The above are some of the key indicators that I closely monitor to gauge the breath of the market. As you can see from the chart above, the bulls made an impressive bullish move in the month of July 2010 given higher than expected 2Q earnings announcements. Consequently, the DIA and the Q’s are up for the year while the S&P 500 is close to flat. I have also noticed that copper prices, especially buyers in the three month contracts have increased within the last two weeks and there is a positive correlation so far between copper prices and the S&P 500. Notwithstanding, the currency pair USD/JPY is trading near an all time low and yields on US debt obligations, especially within the front end of the curve have appreciated within the last few weeks. Thus, indicating a slowdown in economic growth and potentially further declines in the equity markets. Furthermore, the traders took some profits off the table at the end of the month even though the bulls fought strongly in last two days of trading in July.
Normally July is the best performing Dow and S&P month for the 3rd quarter and the summer rally is the weakest of all quarters. Consequently, I anticipated that the month of July 2010 will be a strong month given the noted favorable earnings announcements while a wave of negative economic reports was being released (i.e., lower US and global GDP figures, July’s Beige Book minutes, and etc). I anticipate that both August and September months will be down months and bearish given the latest economic reports, lack of buying power of the consumer, it’s a midyear election year, and it’s a double zero year.
Saturday, July 31, 2010
Introduction
Hello,
I have over twenty years of trading experience under my belt and I am very fortunate to have been able to leave the executive corporate world at the tender age of 37 eight years ago to follow my dream of making money for myself by trading.
I would like to share my trading advice as well as the breath of the market so that my followers could also make money and not get burnt based on Wall Street’s manipulations of the markets. My personal goal is to eventually start my own paid subscription service in the near term future. I would recommend that you follow my advice for at least a week before you actually start investing so that you can feel comfortable with my recommendations. I base my investment decisions on all my years of studying eastern and western technical analysis and keeping very abreast of global economic data and the actions of the Federal Open Market Committee and leading economic countries as over 30 percent of S&P 500 sales are derived from abroad.
Swing trading provides investors a huge opportunity to make profits. As the market sentiments evolve, long term investing becomes less of a dominant form of investing. Swing trading has many advantages over long term investing, especially when implementing with a timing techniques of both eastern and western studies.
I will provide you tomorrow with my market advice and the securities that I personally trade. The bulls dominated the global equity market this month (i.e., July 2010). Are you well position for August 2010 and for the rest of the year? Are you diversified in different investment vehicles (equities, currencies, commodities, and etc.)?
Ralph
I have over twenty years of trading experience under my belt and I am very fortunate to have been able to leave the executive corporate world at the tender age of 37 eight years ago to follow my dream of making money for myself by trading.
I would like to share my trading advice as well as the breath of the market so that my followers could also make money and not get burnt based on Wall Street’s manipulations of the markets. My personal goal is to eventually start my own paid subscription service in the near term future. I would recommend that you follow my advice for at least a week before you actually start investing so that you can feel comfortable with my recommendations. I base my investment decisions on all my years of studying eastern and western technical analysis and keeping very abreast of global economic data and the actions of the Federal Open Market Committee and leading economic countries as over 30 percent of S&P 500 sales are derived from abroad.
Swing trading provides investors a huge opportunity to make profits. As the market sentiments evolve, long term investing becomes less of a dominant form of investing. Swing trading has many advantages over long term investing, especially when implementing with a timing techniques of both eastern and western studies.
I will provide you tomorrow with my market advice and the securities that I personally trade. The bulls dominated the global equity market this month (i.e., July 2010). Are you well position for August 2010 and for the rest of the year? Are you diversified in different investment vehicles (equities, currencies, commodities, and etc.)?
Ralph
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