Post by ukarlewitz on Jul 12, 2010 17:49:36 GMT -5
Spy made a sixth consecutive intraday high and higher close. Spy made its second consecutive close above its 20dma. Also above the 20dma are Shmh, Xlf, DJI, EEM, FXI, copper; the Qs and DJT are close and touched it intraday. Most importantly, after more than a 5% rally, the indices are holding their gains. And gained today despite a weakening Euro.
The watchout is vix. Vix dropped below 25, but bounced off its 200dma.
Getting above 109 is looking increasingly key: the 62% fib is 108.6 and the 12 month MA is 109, as is the top rail of the channel from the April peak.
Earnings - A solid start to earnings season, as shares of Alcoa (AA) and CSX (CSX) rise initially after reporting better-than-expected earnings. At Alcoa, sales rose 18% despite a drop in aluminum prices, and in a vote of confidence in economic growth, it raised projections for aluminum consumption. CSX was less ebullient but noted “volume gains across all major markets.”
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Cobra - For the past 4 trading days, SPX closed in green everyday but the volume kept decreasing everyday, this is a so called price volume negative divergence. However if you short at today’s close and cover at tomorrow’s close, it seems not much edge here for bears since year 2000.
Caldaro - Today's early morning rally carried the SPX to post a higher rally high for the fifth consecutive day, and a higher close as well. Today's high at SPX 1081 is close to a full 61.8% retracement (1085) of the entire decline from SPX 1131 to 1011. OEW short term charts remain positive, and continue to suggest this rally from SPX 1011 is just the first wave up from that low. Naturally, we could get a pullback at any time, larger than today's 11 point pullback. Overhead resistance is at the OEW 1090 swing pivot.
Alphatrends - This is a low volume rally under a declining 50dma. More likely than not, it will fail. But, buyers are in control with higher lows and higher highs on the 30' chart, so shorting is not advisable. Spy 106 is the key S level as it is the vwap since the 6/21 high.
Saut - Container companies are raising prices, which only happens when demand warrants. Then too, rail traffic is increasing and diesel fuel consumption is rising, another metric that is inconsistent with a double-dip recession. Moreover, the number of Manhattan apartment rentals doubled in 2Q10 on a YoY basis, while office vacancies in U.S. metro areas fell in 2Q10 vs. 1Q10 for its first drop since 2007. Ladies and gentlemen, these are NOT the metrics of a double-dip recession! Meanwhile, since 2008 there has been almost NO difference between the forward PE of the S&P 500 Growth and Value composite indices. Obviously, this favors growth versus value, which is why I have been emphasizing Technology in these missives. I think the selling will be contained and in the short- term be resolved with higher prices. The real upside challenge should come at the S&P 500’s (SPX/1077.96) 50-day moving average (DMA), which currently stands at 1100.30, and the 200-DMA at 1111.60.
The watchout is vix. Vix dropped below 25, but bounced off its 200dma.
Getting above 109 is looking increasingly key: the 62% fib is 108.6 and the 12 month MA is 109, as is the top rail of the channel from the April peak.
Earnings - A solid start to earnings season, as shares of Alcoa (AA) and CSX (CSX) rise initially after reporting better-than-expected earnings. At Alcoa, sales rose 18% despite a drop in aluminum prices, and in a vote of confidence in economic growth, it raised projections for aluminum consumption. CSX was less ebullient but noted “volume gains across all major markets.”
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Cobra - For the past 4 trading days, SPX closed in green everyday but the volume kept decreasing everyday, this is a so called price volume negative divergence. However if you short at today’s close and cover at tomorrow’s close, it seems not much edge here for bears since year 2000.
Caldaro - Today's early morning rally carried the SPX to post a higher rally high for the fifth consecutive day, and a higher close as well. Today's high at SPX 1081 is close to a full 61.8% retracement (1085) of the entire decline from SPX 1131 to 1011. OEW short term charts remain positive, and continue to suggest this rally from SPX 1011 is just the first wave up from that low. Naturally, we could get a pullback at any time, larger than today's 11 point pullback. Overhead resistance is at the OEW 1090 swing pivot.
Alphatrends - This is a low volume rally under a declining 50dma. More likely than not, it will fail. But, buyers are in control with higher lows and higher highs on the 30' chart, so shorting is not advisable. Spy 106 is the key S level as it is the vwap since the 6/21 high.
Saut - Container companies are raising prices, which only happens when demand warrants. Then too, rail traffic is increasing and diesel fuel consumption is rising, another metric that is inconsistent with a double-dip recession. Moreover, the number of Manhattan apartment rentals doubled in 2Q10 on a YoY basis, while office vacancies in U.S. metro areas fell in 2Q10 vs. 1Q10 for its first drop since 2007. Ladies and gentlemen, these are NOT the metrics of a double-dip recession! Meanwhile, since 2008 there has been almost NO difference between the forward PE of the S&P 500 Growth and Value composite indices. Obviously, this favors growth versus value, which is why I have been emphasizing Technology in these missives. I think the selling will be contained and in the short- term be resolved with higher prices. The real upside challenge should come at the S&P 500’s (SPX/1077.96) 50-day moving average (DMA), which currently stands at 1100.30, and the 200-DMA at 1111.60.