Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Heads Higher Led by Financials...

Stock-Markets / Stock Markets 2010 Sep 09, 2010 - 08:27 AM GMT

By: Mark_McMillan

Stock-Markets

Best Financial Markets Analysis ArticleThe market is defying all of those newsletters calling for a move lower...

Recommendation: Take no action.


Daily Trend Indications:

- Positions indicated as Green are Long positions and those indicated as Red are short positions.

- The State of the Market is used to determine how you should trade. A trending market can ignore support and resistance levels and maintain its direction longer than most traders think it will.

- The BIAS is used to determine how aggressive or defensive you should be with a position. If the BIAS is Bullish but the market is in a Trading state, you might enter a short trade to take advantage of a reversal off of resistance. The BIAS tells you to exit that trade on "weaker" signals than you might otherwise trade on as the market is predisposed to move in the direction of BIAS.

- At Risk is generally neutral represented by "-". When it is "Bullish" or "Bearish" it warns of a potential change in the BIAS.

- The Moving Averages are noted as they are important signposts used by the Chartists community in determining the relative health of the markets.

Current ETF positions are:

Long at DIA $102.80
Long QQQQ at $44.76

Daily Trading Action

The major index ETFs opened higher and ramped steadily higher on the market open. For most equity indexes, the zenith was reached around 11:00am with a gradual erosion in price following. Equity indexes made an attempt to move higher and challenge the level of the morning lows but it was only the NASDAQ-100 that succeeded in that attempt by around 1:00pm. The markets once again moved lower for an hour until the Fed released its beige book and the markets once again moved higher but never reached even the level of the second day's high before once again succumbing to some intraday profit taking closing well off their highs. The Dow rallied up to its 200-Day Moving Average (DMA) at its peak and the NASDAQ-100 closed well above that important level. The Russell-2000 (IWM 63.48 +0.37) gained more than one half of one percent but again traded up to resistance of the downtrend line drawn from the April 26th high and through the July 27th high and many highs that followed that date. The Semiconductor Index (SOX 320.90 -1.41) continues to behave badly (relative to the other equity indexes) and moved a half of one percent lower on the day. The Bank Index (KBE 22.79 +0.30) gained nearly one and a half percent while the Regional Bank Index (KRE 22.16 +0.22) gained one percent. The 20+ Yr Bonds (TLT 104.86 -0.84) lost a fraction of one percent and closed on its 20-DMA. NYSE volume was light with only 866M shares traded. NASDAQ volume was average with 2.004 shares traded.

There was a single economic report of interest released as well as the Fed's Beige Book:

  • Consumer Credit (Jul) came in at -$3.6B versus an expected -$5.25B

The report wasn't released until an hour before the close and although the market did sell off a bit from that time, it wasn't particularly market moving in itself. The Fed released its Beige book and hour earlier which did help the market to rally as it confirmed what Fed spokespersons have been saying. That is, the economy doesn't' appear to be headed for a double dip but rather appears to be continuing a somewhat lethargic expansion and recovery.

The major indexes were led higher by a rise in the bank indexes. The interest in the Portuguese debt auction and its ultimate success helped European stock indexes to rally which carried over into U.S. markets. In fact, it was the optimism that powered U.S. banks higher, which helped Financials (+1.1%) to have the best sector performance of the day. Nine out of ten economic sectors in the S&P-500 moved higher on the day while only Utilities (-0.5%) moved lower.

The dollar continued to slide with the Euro seeing a gain of +0.3% while the pound moved +0.7% higher.

Implied volatility for the S&P-500 (VIX 23.25 -0.55) fell modestly to close at its 200-DMA. Implied volatility for the NASDAQ-100 (VXN 23.53 -0.46) also fell modestly sitting below its 200-DMA.

The yield for the 10-year note rose four basis points to close at 2.65. The price of the near term futures contract for a barrel of crude oil rose fifty-eight cents to close at $74.67.

Market internals were positive with advancers leading decliners by 2:1 on both the NYSE and the NASDAQ. Up volume led down volume 3:1 on the NYSE and by 7:3 on the NASDAQ. The index put/call ratio fell 0..96 to close at 1.51. The equity put/call ratio fell 0.06 to close at 0.54.

Commentary:

Wednesday's trading was about what we expected and the opposite of what pretty much every financial newsletter writer has been expecting. Equities are at a key juncture with the 200-DMAs in play as resistance area, but the NASDAQ-100 has twice moved above that level. The Russell-2000 continues to be constrained by an intermediate term downtrend line and the Dow by its 200-DMA. A break out for the Russell-2000 and the Dow might finally break the backs of the bears and let the market reach a high such that profitable short positions could finally be put on. Until then, we feel we have to stay with our long positions and wait for bears to throw in the towel.

Volume hasn't yet returned to pre-summer levels on the NYSE but the NASDAQ saw a nice increase in volume up to average. Of course, that average has come down a long ways since the summer dip in volume and we await the return of more significant volume by next week.

We hope you have enjoyed this edition of the McMillan portfolio. You may send comments to mark@stockbarometer.com.

If you are receiving these alerts on a free trial, you have access to all of our previous articles and recommendations by clicking here. If you do not recall your username and/or password, please email us at customersupport@stockbarometer.com.

By Mark McMillan

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2010 Copyright Mark McMillan - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in