Tuesday, September 29, 2009

Pay Attention To 1066

S&P500 technical analysis chart:
S&P500 could not close above 1066. We had fake out for a couple minutes then S&P500 pulled back. If bulls push the market higher than 1066 you could jump back. If S&P500 fails to take out 1066 you should go to cash, for natural bulls readers I recommend to get out if S&P500 drops below 1040. I'm short, but I will get out if S&P500 closes above 1080.

Monday, September 28, 2009

NASDAQ Forecast End-month Updare (Sep)

NASDAQ Technical Analysis:
Nasdaq reached my September target and pulled back at levels(2155-2160) that I mentioned in my monthly forecast. As you see in the chart 2155 acted as support in March and July 2008 and became strong resistance in September 2009. Pay attention to 2016 if Nasdaq break the up-trend (see the chart in dart blue)then drops below 2016 bulls should be very concern.

Related Topics:
NASDAQ Forecast End-month Update (Aug)

Sunday, September 27, 2009

U.S. Dollar Technical Analysis (Part-7)

Dollar could find the bottom, about 76.15 . A couple minutes ago dollar broke through the short term resistance (77.08-77.11) , it would be very positive if dollar could stay above it. Pay attention to 77.11 it's the level to watch.

Friday, September 25, 2009

Some Thoughts On Recent Market Move

In the last two days we witnessed profit taking and institutional selling, Please pay attention to 1050-1040 if S&P500 breaks these levels you should be very concern, and go to cash.
If this rally wants to continue S&P500 must move above 1066 . As you know NASDAQ is the leader in this rally it has failed to stay above 2155. If you take a look at NASDAQ chart you will see 2155 acted as major support back in July and March of 2008. As I anticipated 2155 should be the top. It becomes major resistance " NASDAQ Forecast End-month Update (Aug) ".You should keep an eye on 2155 if bulls have any steam left they must push the NASDAQ above 2155.

Please note My forecast in regard of the U.S. dollar hitting the bottom seems to become reality " U.S. Dollar Technical Analysis (Part 5) ". If dollar start to move higher we should see a huge short-squeeze in dollar, and sharp drop in equity market. Pay attention to 77.11-77.20 as possible resistance for dollar.

Wednesday, September 23, 2009

Retails At Major Resistance

XRT technical analysis:
Retail ETF failed to break the major resistance. It is extremely over bought but it would be very positive if bulls win the war and push the "XRT" above ~35.
Please note due to weak job market and consumer deleveraging, retail sales would be weak for a while, therefore fundamentals could not justify the retail sector rally.

Tuesday, September 22, 2009

U.S. Dollar Made A New Low After Hours

U.S. Dollar Index:
U.S. dolllar made a new low. it broke the 76.15 resistance and then in after hours made a new one year low. Dollar moves lower is the only explanation of equity rally in last couple days. If dollar won't get above the 76-76.15 soon we are in a big trouble.

S&P500 Short Term Supports/Resistances (09/22/09)

S&P500 in short term: extremely overbought.
S&P500 in intermediate term: extremely overbought.
S&P500 in long term: neutral.

Short Term Supports:
Mjor support:1066

Short Term Resistances:

Monday, September 21, 2009

LIBOR OIS 3M (USD) 09/21


The U.S. Futures Market

Futures North & Latin America:

Saturday, September 19, 2009

Marco Dion on the U.S. rally

Marco Dion, quantitative analyst at J.P. Morgan, says the most debt-ridden firms have led the rally in European and global stock markets, while momentum strategies have struggled.

Friday, September 18, 2009

Hundreds of thousands of iranian protesters came to streets

Its first big anti-government demonstration in two months, despite strenuous efforts by the regime to thwart it.

The opposition turned Quds Day, Iran’s annual show of solidarity with Palestinians, into a protest against President Ahmadinejad’s re-election in June and the suppression of dissent that followed. Many wore green bands to indicate support for Mr Mousavi the opposition leader. Protesters chanted dead to dictator,they shouted slogans in support of Mousavi, Ahmadinejad's main challenger in the June 12 election, they gathered in major squares around the capital before heading to the university.


Isfahan Sep,18th


Avoiding the Traps

People's emotions lead them to make bad financial moves in chaotic times. Here's what to look out for.
In a chaotic bear market like this one, it's easy for investors to fall into traps.
They might scramble to make trades based on the latest news reports. They might search for a miracle stock that will pay off big and let them recoup all their losses. Or they might go in the other direction -- and get so scared of the market that they don't make any moves at all.

"I believe that the frequency of irrational investor behavior goes up along with market volatility," says Chris Blum, head of the U.S. behavioral-finance group for JP Morgan Funds in New York, which studies how people's emotions affect their financial decisions.
Fortunately, a bit of logic and common sense will keep you clear of these pitfalls. Here's a look at some common missteps -- and how to avoid them.

The Value Trap: A chaotic market makes it easier for investors to convince themselves that because a stock -- or a sector or a market -- is cheap, it's a great value. Sometimes, though, there's a good reason that a stock or sector is cheap: It's in trouble. You need to look past the share price or valuation and examine the fundamentals of the company, the industry and the economy before you decide that something is a bargain.
"Within industries, not all companies are created equal; some will fare better than others," says Mr. Blum. It's through research, not instinct or stock price, that investors discover the real values, he adds.

The Risk Trap: One reason investors are so vulnerable to the value trap is that another force is at work -- the urge to recoup losses. Investors who are desperate to make back some of what they have lost and return to "normal" are more willing to take outsize bets on individual stocks or narrowly focused exchange-traded funds.
But that approach is even more unlikely to work in this market environment; the combination of the credit crunch and the recession have made the stock market dangerously volatile. A concentrated portfolio is especially risky, advisers argue.
Investors can't accept that individual stocks, or stocks overall, aren't likely to deliver a reliable stream of double-digit profits each year as in the past, says Bill Schultheis, a partner at Soundmark Wealth Management LLC, a financial-planning firm in Kirkland, Washington.
To combat the risk trap, Mr. Schultheis spends a lot of time preaching the virtues of investment basics like diversification and building returns steadily through compound interest and dividends.

The Scapegoat Trap: Like the children in humorist Garrison Keillor's Lake Wobegon, people believe they are all above average -- at investing. Overconfidence makes it easy to blame your financial adviser for your outsize losses last year, and to think you'd be better off making the big decisions yourself.
But that attitude ignores a basic fact: In this market, nearly everyone is in the same boat, more or less, regardless of who's managing their money. Ditching your professional help and going it alone is a bad idea.
"There are certainly some financial advisers out there who weren't good at what they did, but the worst mistake someone can make is to fire that individual and decide to do it all themselves instead of finding someone better," says Mr. Blum.
The reality, he says, is that few investors have the time, patience or expertise needed to develop asset-allocation plans and manage diversified portfolios. "Firing a specific adviser may be rational; deciding to be your own financial adviser probably isn't," he says.

The Paralysis Trap: The market debacle has left many investors too terrified to act at all, whether to sell portfolio holdings to limit losses or take advantage of what may be appealing long-term investment opportunities. Some advisers report clients in their 30s and early 40s shunning stocks altogether, when the real risk that they face is likely to be inflation -- which may eat up their money if they keep it out of riskier investments that are likely to trounce rising inflation rates over the next decade or two.
"The chance of suffering more pain is so intense that they can't imagine a world that will be better," says Joe Sheehan, a partner at Moneta Group, a wealth-management firm in St. Louis. "Two years ago, they would have jumped at the chance to buy more of stocks they already owned at these low prices; now they are frozen in place and won't respond."
Mr. Sheehan tries to persuade clients of a simple fact: The world hasn't changed dramatically enough to justify paralysis. "About 90% of Americans are still employed; the S&P 500 is not going to zero," he says.
Mr. Sheehan finds himself pointing to psychological studies showing that people tend to rely too heavily on what has happened in the recent past when it comes to predicting the future. "That's one reason we're in this mess in the first place," he says.
Among other things, he notes, investors and homeowners believed that housing prices could only go up -- leading to the bubble that got millions of homeowners in horrible financial trouble.

The Comfort Trap: "When people are fearful, Wall Street comes out with a product that tries to make you feel good by promising you safety," says Andrew Mehalko, chief investment officer of GenSpring Family Offices LLC in Palm Beach Gardens, Florida.
For instance, Mr. Mehalko expects one of the hottest-selling products this year to be principal-protected notes, just as they were after the bear market of 2001-02. While these vehicles -- which promise to preserve your principal investment -- may provide reassurance, they often also come with hefty fees and can sharply limit your upside potential.
As a general rule, a low-risk strategy will produce minimal returns. So, while you may feel the urge to lock up all your capital in ultrasafe strategies, you need to be prepared to invest some of it in riskier products.
Meanwhile, Mr. Sheehan reports that some of his clients have even developed an aversion to mortgages. That may be rational for people with no nest egg or a job that's at risk, but it's not something that everyone should be worrying about.
"It's not logical at all," he says, because some have relatively little mortgage debt relative to home value, hold long-term fixed mortgages at the relatively low rate of 5% or so and gain from the tax deduction for mortgage interest.
Yet "all they want to do is pay off that mortgage," to get rid of "this toxic thing -- a mortgage," he says.

The Chasing-the-News Trap: If you're a financial-news junkie, it's tempting to try to react to each twist and turn of the market. But the best thing you can do is turn off the news, put the remote control down on the coffee table and step away from your television set.
In times like these -- an almost unbelievably volatile stock market, a distorted bond market and an economic meltdown -- newshounds can do tremendous damage to their portfolios. Trying to judge exactly the right moment to get into the market -- and then jump out again a day or two later -- is likely to leave you with big headaches and outsize trading expenses.
An "atmosphere of constant, breathless hysteria" isn't conducive to making smart investing moves, says Carol Clark, an investment principal at Lowry Hill, a wealth-management firm in Minneapolis. "That's not what long-term investing is all about.
"Many of those [300-point] interday moves simply don't make a lot of sense in the first place, so how can it be sensible to try and respond to them?" she asks.
Instead of acting on every new development, it's better to look past the noise and invest small amounts regularly, an approach known as dollar-cost averaging. A strategy based on a solid asset-allocation plan and dollar-cost averaging is more likely to lead to sustainable gains over the longer haul.
Ms. Clark offers one final observation. Usually, investors find themselves in traps "because your emotions have run away with your logical thinking," she says. "You need to find ways to start thinking logically again."
Sometimes it helps to do something as simple as making a list of your investment goals and putting it on the refrigerator. Whenever you're tempted to act impulsively in response to something you see on television or hear from a friend at a dinner party, you can go back to that list and remind yourself that yanking money out of the market may not be the best strategy.
"Then, when you feel an urge to turn on CNBC, you train yourself to look at the list instead," she says.

Thursday, September 17, 2009

Weekly New Jobless Claims (Sep,17th)

The current level is 545,000. Bulls might argue that this is a fantastic number,but they are confused because they don't pay attention that jobs pole shrinked significantly due to heavy layoff in last couple months and comppanies fired employees on a unpresented rate. unless the retails sales won't be as good as economist anticipating we should not see expolntinal growth in unemployment. but if retail sales faille to satizfy the expectations we should see the second round of layoffs. Continuing claims increased 129,000. this very bad news, because it shows people have tough time to finding job.

U.S. Dollar Technical Analysis (Part 5)

U.S. Dollar Chart: The U.S. dollar is bouncing around ~76 for a last couple days. If dollar stays above the 76.15 it could move higher. I believe dollar is at the intermediate bottom, yes you heard it right I said it. On the other hand failure to hold to ~76 means dollar will head lower. Next level to watch is 75.33 support. As you see in the chart dollar has been moving lower in last couple days, I believe this the only logical explanation for recent rally in equity markets. Please note that if I read the tape incorrectly and 76 fails to hold dollar will drop to 73-72 level.

Wednesday, September 16, 2009

1066 Key Level For S&P500

Pay attention to 1066. As I mentioned in my previous posts it's the key resistance, if S&P500 could stay above it by next week, bulls have a good chance to push the S&P to 1125

Retail Sales

Retail store sales chart:
Real retail sales excluding motor vehicles and gasoline was 0.6%:

We got the retail store sales on Tuesday.
It jumped 2.7% in August, following a revised 0.2% drop the previous month. The gain in August was above economists expectation for a 2.0% surge. Thanks to 3 billion dollars government subsidies auto sales jumped a huge 10.6% for the latest month, but here is the catch excluding motor vehicles, retail sales rebounded 1.1%, following a revised 0.5% fall in July. The market was looking for a 0.4% gain for August.Please note gasoline sales spiked 5.1% on higher prices otherwise the retails sales data would be much lower, excluding motor vehicles and gasoline, retail sales posted a 0.6% advance, following a 0.4% decrease the previous month.

Overall retail sales on a year-ago basis in August were down 5.3 percent, improving from down 8.5 percent in July. Excluding motor vehicles, the year-on-year rate rose to down 6.2 percent in August from down 8.6% the month before. Please note that August is the month that people go to shop for school and we should see a jump in retail sale, but it was 8.6% down year to year.
As long as S&P stays above 1007-1015 we are technically in the bull market, but fundamentals is very weak and can't justify the rally. As you see in the chart above Year to year retail sales is badly lower, I need to remind my readers last year at this time we were in the edge of collapse, but despite the +50% rally the retails sales does not show a strong improvement. Actually year to year we were 6.2% lower. If I want to base my analogy on fundamentals this rally would be a humongous bear market rally not a new bull market.
If you believe we are in bull market you should know you are trading base on pure technical, but I would go with fundamentals.

Tuesday, September 15, 2009

CNBC Interview With Roubini

I highly recommend my readers to watch the CNBC interview with Roubini on financial crisis. He thinks we are going to get "U" shape or "W" shape recovery..


Monday, September 14, 2009

Green Shoots Of Economic Revival!

S&P500 Resistances & Supports (Sep 14nd)

S&P500 in short term: extremely overbought.
S&P500 in intermediate term: extremely overbought.
S&P500 in long term: neutral.

Short Term Supports:

Short Term Resistances:

Friday, September 11, 2009

Copper Technical Analysis

Copper Chart:
What could determine long copper price?

1)Incremental cost of supplies.
2)Supply and demand.
3)Price dynamics – impact on supply and demand.
4)Adverse effects of Dollar value on commodities prices.
5)Availability of money to finance projects.
6)Demand response to price.

Copper is tight to global growth, but in recent weeks it failed to stay above the major resistance (40.60) . If copper heads lower in coming days, it would be a warning signal for bulls. To me copper is the canary in a coal mine, if speculation of strong recovery begins to faint, it should reflect in copper price first.

There are 3 resistances that you should pay attention to:
S1: 37.80
S2: 33.44
S3: 28

Please note that copper is the consolidation phase as long as it moves in 38 to 41 range. On the other hand if copper could move above 41.16 it has potential to shoot higher. Note that dollar value is declining that should cause the commodities to move higher but copper did not follow the normal trend, it follows the recovery story. If the recovery becomes a mirage you should witness big drop in copper price.

4 Major Resistances In S&P500

We have 4 major resistances:

1: 1050 October,08 rally.

2: 1066, if S&P get above it would be very positive and we could easily shoot for 1120.

3: 1120-1125 it should act as strong résistance, if we move above it next stop will be 1225.

4: if S&P break through the 1225 we will not go down for couple years.

Thursday, September 10, 2009

The U.S. trade deficit

The U.S. trade deficit in July worsened significantly and oil had only a little to do with it. Businesses appear to be gambling on recovery actually happening as nonoil imports spiked. The overall U.S. trade gap worsened to $32.0 billion from a revised $27.5 billion gap in June. The latest deficit was notably more negative than the consensus estimate for $28.0 billion in red ink. The good news is that exports posted a gain of 2.2 percent after a 2.1 percent increase in June. However, imports jumped 4.7 percent after a 2.5 percent rise in June. The worsening in the trade deficit was due to a wider nonpetroleum goods deficit which grew to $23.5 billion from $19.8 billion the previous month. Import gains were widespread but led by autos and consumer goods. The jump in auto imports likely was related to the cash-for-clunkers program. Imports of capital equipment also rose sharply, indicating that businesses are starting to look ahead for upgrading production facilities as the economy rebounds. Meanwhile, the petroleum gap grew to $17.9 billion from $17.3 billion the previous month. The wider petroleum deficit was due to both higher oil prices and more barrels imported. Crude oil prices jumped to $62.48 per barrel from $59.17 in June. The number of barrels that was imported in July rose 5.7 percent. Nonetheless, the widening in the oil deficit was far less than that for the nonoil gap.Year-on-year, overall exports improved to minus 22.4 percent from minus 22.7 percent in June while imports edged up to down 30.4 percent from minus 31.3 percent the previous month.Today's trade report showed a spike in the trade deficit partly due to cash-for-clunkers but businesses still anticipate demand to be up for consumer goods excluding autos and for capital equipment. And manufacturing is getting a boost from exports. Overall, global trade is warming up a bit and that is good news.
Market Consensus Before AnnouncementThe U.S. international trade gap had both good news and bad news for June. The overall U.S. trade gap widened to $27.0 billion from a revised $26.0 billion deficit the previous month. Exports advanced 2.0 percent while imports rebounded 2.3 percent. Part of the bad news was that consumers were paying more for oil products. The widening in the trade shortfall was due to a wider petroleum deficit which expanded to $17.2 billion from $13.3 billion in May. In contrast, the goods excluding petroleum gap shrank significantly to $20.0 billion from $22.6 billion in May. Behind the boost in the petroleum gap were both higher oil prices and more barrels imported. But the good news in June was the 2.0 percent gain in exports. This was good news for U.S. manufacturers.

New Weekly Jobless Claims (Sep,10th,2009)

New Weekly Jobless Claims Chart:

Wednesday, September 9, 2009

Why Can't Federal Reserve Bank Stop Deflation ?

It's no surprise that this opinion is so popular. Well-written articles by qualified experts appear all the time, arguing that the Federal Reserve Bank has already "stopped the bleeding" and "saved the day."

First of all, between October 2007 and March 2009, the DJIA lost 58%, high to low. If 58% of your house burned to the ground, would the same experts be saying that the fire crews "saved the day"?

More importantly, in our opinion everyone who says that the Fed is in control overlooks one key point: social mood.

Conventional economists look at deflation in a very cause-and-effect way: stocks fall, the economy follows, investors and consumers lose confidence, and so on. Now that the Fed has "restored the confidence," the process gets reversed. I have long argued that this is not how it works.

Bob Prechter, EWI's founder, takes five chapters in his prescient Conquer the Crash -- which predicted deflation long before it became mainstream news -- to explain social mood's primacy. Here's an excerpt from Chapter 13, "Can the Fed Stop Deflation?":

In contrast to the assumptions of conventional macroeconomic models, people are not machines. They get emotional. People become depressed, fearful, cautious and angry during depressions; that’s essentially what causes them. A change in the population’s mental state from a desire to expand to a desire to conserve is key to understanding why central bank machinations cannot avert deflation.

When ebullience makes people expansive, they often act on impulse, without full regard to reason. That’s why, for example, consumers, corporations and governments can allow themselves to take on huge masses of debt, which they later regret. It is why creditors can be comfortable lending to weak borrowers, which they later regret. It is also why stocks can reach unprecedented valuations.

Conversely, when fear makes people defensive, they again often act on impulse, without full regard to reason. When lending officers become afraid, they call in loans and slow or stop their lending no matter how good their clients’ credit may be in actuality. Instead of seeing opportunity, they see only danger. Ironically, much of the actual danger appears as a consequence of the reckless, impulsive decisions that they made in the preceding uptrend. ...Corporations likewise reduce borrowing for expansion and acquisition, fearing the burden more than they believe in the opportunity. Consumers adopt a defensive strategy at such times by opting to save and conserve rather than to borrow, invest and spend.

Anything the Fed does in such a climate will be seen through the lens of cynicism and fear. In such a mental state, people will interpret Fed actions differently from the way that they did when they were inclined toward confidence and hope.

If people and corporations are unwilling to borrow or unable to finance debt, and if banks and investors are disinclined to lend, central banks cannot force them to do so. During deflation, they cannot even induce them to do so with a zero interest rate. That’s what has been happening in Japan for over a decade, where rates have fallen effectively to zero but the volume of credit is still contracting.

Thus, regardless of assertions to the contrary, the Fed’s purported “control” of borrowing, lending and interest rates ultimately depends upon an accommodating market psychology and cannot be set by decree.

In other words, you can lead the horse to water, but you can't make him…err, borrow. Which is the exact environment we've been in for the past two years: Banks won't lend and consumers won't spend. This will not change until social mood really improves.

S&P500 Possible Moves In September 2009

S&P500 Monthly Forecast:
Broadening top pattern still intact as long as S&P500 would not violate 1050-1066. I'm looking for consolidation in weeks to come, not a huge move in neither directions. Note drops below 950 is the game changer. So far bulls have the upper hand Unfortunately I don't have a crystal ball, but I think this bear market rally is overdone and soon we should see a nice pull back. Despite the all nosies in TV about new bull market I don't see S&P has enough steam left to take out the 1130-1200 this year.
I wend short when S&P500 was at 1035; I covered most of my short positions on Sep 1st, and I moved to the side line. I'm looking for a good entry to go short again.

Related Topics:
S&P500 Broadening Top Pattern

Tuesday, September 8, 2009

Home Builders Technical Analysis

Home-builders got close to upside the main channel. It tried to breakout 3 times and every single time it failed and pull back hard,it would be very interesting to see if bulls could push it higher, please note that fundamentals do not support higher price. I already went over fundamentals therefore I'm not going to repeat myself. Keep an eye on $16 if XHB could move above it; there would be some hopes for bulls to the move the XHB higher.

Friday, September 4, 2009

Employed and unemployed persons by occupation, not seasonally adjusted

Employed and unemployed Table:
I don't need to add anything it speaks for itself.

Thursday, September 3, 2009


Wednesday, September 2, 2009

Ted Spread Chart (Sep 2nd)

Value: 20.22

S&P500 Resistances & Supports (Sep 2nd)

S&P500 in short term: overbought.
S&P500 in intermediate term: extremely overbought.
S&P500 in long term: neutral.

Short Term Supports:

Short Term Resistances: