{"id":176,"date":"2009-02-17T17:51:58","date_gmt":"2009-02-17T22:51:58","guid":{"rendered":"http:\/\/www.cheapiv.com\/?p=176"},"modified":"2010-09-30T17:56:48","modified_gmt":"2010-09-30T21:56:48","slug":"176","status":"publish","type":"post","link":"http:\/\/www.cheapiv.com\/?p=176","title":{"rendered":"Trading the Market 2-17-2009"},"content":{"rendered":"

This is a return of sorts as the writer, and his entire family, had to contend with a very nasty flu bug throughout last week.<\/p>\n

It appears as though the flu has spread to the markets here on Tuesday morning.\u00c2\u00a0 The futures are looking down to the tune of nearly 250 DOW points.\u00c2\u00a0 The reasons are many.\u00c2\u00a0 While the US markets were closed for President\u00e2\u20ac\u2122s day the Japanese markets were dealing with the worst fourth quarter GDP report since 1974.\u00c2\u00a0 The world\u00e2\u20ac\u2122s second largest economy registering a number like that should give you an idea how dire things are around the world at the moment.\u00c2\u00a0 When we take into consideration that Japan\u00e2\u20ac\u2122s been struggling mightily for nearly two decades since their real estate bubble burst the GDP number becomes even more serious.\u00c2\u00a0 Europe\u00e2\u20ac\u2122s been under assault now for two consecutive days.\u00c2\u00a0 The grinding to a halt<\/em> nature of the macro numbers are partially the reason for their troubles but ratings services announcing that they may downgrade Western European banks because of their exposure in Eastern Europe has as much if not more to do with the selling from our perspective.\u00c2\u00a0 The fear is ratcheting up again.\u00c2\u00a0 Gold is jamming higher and closing in on $1000 per ounce and the VIX is back on the upswing heading towards 50.\u00c2\u00a0 Treasuries are finding a bid too so the flight to safety and protection is in full flight.<\/p>\n

Tech is under pressure here in the US as is the entire market.\u00c2\u00a0 The economic numbers have seen to that repeatedly but the delays with regards to the details of the banking plan have really hurt the psychology of investors.\u00c2\u00a0 It was reported that Rahm Emanuel has made it known that the White House isn\u00e2\u20ac\u2122t concerned with market reactions.\u00c2\u00a0 If this is true someone needs to tap Rahm on the shoulder and explain a few things to him.\u00c2\u00a0 The stock market isn\u00e2\u20ac\u2122t entirely comprised of Wall St. scammers.\u00c2\u00a0 Millions of investors around the world have their retirement funds tied to the stock market.\u00c2\u00a0 The stock market is also a key barometer for psychology.\u00c2\u00a0 Psychology is very important at all times but at times like this even more so.\u00c2\u00a0 Taking a \u00e2\u20ac\u0153damn the stock market\u00e2\u20ac\u009d approach is exactly what isn\u00e2\u20ac\u2122t needed right now.\u00c2\u00a0 That will only make digging out of this hole even more difficult.\u00c2\u00a0 The White House needs to recognize how important psychology is and how it factors into solutions etc.\u00c2\u00a0 News like this isn\u00e2\u20ac\u2122t going to raise anyone\u00e2\u20ac\u2122s spirits:<\/p>\n

NEW YORK<\/em> (Reuters) – Factory activity in New York State fell to a record low in February<\/strong> with new orders and employment falling sharply as the U.S. recession deepened, according to a survey on Tuesday from the regional central bank.<\/em><\/p>\n

The New York Federal Reserve’s Empire State factory index fell to minus 34.65 — the lowest in the history of the index<\/strong>, which dates back to July 2001. It was down from January’s already contractionary reading of minus 22.20.<\/em><\/p>\n

“The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February,” the report said.<\/em><\/p>\n

GM and Chrysler will add to negative psychology this week as millions of Americans will hear that they are back for more bailout money to stay afloat or they\u00e2\u20ac\u2122ll effectively be bankrupt if they are sent home without any proceeds.<\/p>\n

The \u00e2\u20ac\u0153stimulus\u00e2\u20ac\u009d package will be signed today but to call it a disappointment is an understatement.\u00c2\u00a0 Investors are very disappointed by this legislation and with good reason.\u00c2\u00a0 We won\u00e2\u20ac\u2122t go into them all but even something as basic as the structure of the plan is severely flawed.\u00c2\u00a0 Much of the spending is scheduled to be spent years out from now which obviously does little good in the here, which is everyone else\u00e2\u20ac\u2122s concern at the moment.\u00c2\u00a0 No one really knows how things will look in two or three or four years so that spending might not even be appropriate at those times.\u00c2\u00a0 More than likely this will be the first of many of these types of bills so it makes little practical sense to alienate so many people when our leaders<\/em> will likely need support for similar measures many times over.<\/p>\n

The one positive that we can find is that the gap can often reverse itself and in a way be therapeutic for the markets.\u00c2\u00a0 We\u00e2\u20ac\u2122re hoping that this is the case again but obviously the balance of the week will produce more market moving news that will dictate the outcome more so than the gap effect.<\/p>\n

The Technical Picture:<\/strong><\/p>\n

\"\"<\/p>\n

We\u00e2\u20ac\u2122ve decided to go with the Dow Jones Industrials for this week\u00e2\u20ac\u2122s chart because the index is ever so close to new lows.\u00c2\u00a0 At 1<\/strong> we can see that the cumulative Adv\/Decl line has already broken down through the support line we\u00e2\u20ac\u2122ve drawn.\u00c2\u00a0 That\u00e2\u20ac\u2122s an ominous sign.\u00c2\u00a0 To us this suggests that as a whole the market has begun to \u00e2\u20ac\u0153throw in the towel\u00e2\u20ac\u009d on prospects of higher prices for the moment.\u00c2\u00a0 There\u00e2\u20ac\u2122s no way around it.\u00c2\u00a0 Many investors feel let down by the lack of banking plan details and the dubious stimulus bill.\u00c2\u00a0 Those developments worsened the technicals in real time.\u00c2\u00a0 At 2<\/strong> we highlight the key price lows of NOW and back in November.\u00c2\u00a0 Our 3s<\/strong> all show the same story.\u00c2\u00a0 The market breadth oscillators all show a \u00e2\u20ac\u0153rollover\u00e2\u20ac\u009d to the downside.\u00c2\u00a0 Put another way, we view this as a failure of positive momentum and\/or an intensifying of negative or downside momentum.<\/p>\n

Our parting comment is this:\u00c2\u00a0 Will someone please get Paul Volcker and Larry Summers in front of the cameras instead of Nancy Pelosis, Harry Reid, Tim Geithner and Rahm Emanuel?\u00c2\u00a0 This is a time for serious business not politics.\u00c2\u00a0 Both major parties playing politics for the last two decades has only contributed to this problem.\u00c2\u00a0 Stop digging the hole please.\u00c2\u00a0 It\u00e2\u20ac\u2122s sufficiently deep enough.<\/p>\n

Earnings Highlights & Economic Releases for the week: <\/strong><\/p>\n

Feb. 17 \u00e2\u20ac\u201c WMT – Wal-Mart Stores, Inc.<\/strong> operates retail stores in various formats worldwide.\u00c2\u00a0 As with most stocks balancing on the edge of the abyss, WMT is no different.\u00c2\u00a0 It recently made a new low at $46.25.\u00c2\u00a0 This was several weeks after the stock gapped down from $55 to $52.\u00c2\u00a0 This environment is tough, but Walmart is one of the most efficient retailers out there.\u00c2\u00a0\u00c2\u00a0 Weak earnings or poor guidance will most likely break the short term support.\u00c2\u00a0 Major support comes in around the mid $42s.<\/p>\n

<\/strong><\/p>\n

Feb. 18 \u00e2\u20ac\u201c CMCSA – Comcast Corporation<\/strong>, together with its subsidiaries, operates as a cable operator in the United States. It offers various consumer entertainment and communication products and services.\u00c2\u00a0 If they can manage to hold the support of $12.5 and the market can stabilize, then there is a shot for a triple bounce.\u00c2\u00a0 There are a lot of what \u00e2\u20ac\u0153ifs\u00e2\u20ac\u009d in that statement.\u00c2\u00a0 The next major supporting low is $11.37 and that comes from 10\/2002.\u00c2\u00a0 Let\u00e2\u20ac\u2122s hope it does not break that level!<\/p>\n

<\/strong><\/p>\n

Feb. 19 \u00e2\u20ac\u201c GG – Goldcorp, Inc.<\/strong>, together with its subsidiaries, engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and central and South America.\u00c2\u00a0 The 52 week high is $52.65 and the low is $13.84.\u00c2\u00a0 Needless to say that is quite a range.\u00c2\u00a0 Gold has been very volatile and has helped GG regain its current price of $32.36.\u00c2\u00a0 If gold stays on its pace then GG should have a strong year.\u00c2\u00a0 It is forming a nice triangle so look for good earnings to give it a nice pop.<\/p>\n

<\/strong><\/p>\n

Feb. 20 \u00e2\u20ac\u201c LOW – Lowe\u00e2\u20ac\u2122s Companies<\/strong>, Inc. and its subsidiaries operate as a home improvement retailer in the United States and Canada. The company provides a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance. The lowest low back in 10\/10\/08 was $15.76.\u00c2\u00a0 Housing does not seem to be picking up and the economy is not doing any better.\u00c2\u00a0 If earnings are weak, based on guidance and the current market outlook, then look for it to test the October low, then possibly the $12.50 level.<\/p>\n","protected":false},"excerpt":{"rendered":"

This is a return of sorts as the writer, and his entire family, had to contend with a very nasty flu bug throughout last week. It appears as though the flu has spread to the markets here on Tuesday morning.\u00c2\u00a0 The futures are looking down to the tune of nearly 250 DOW points.\u00c2\u00a0 The reasons […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[20,22,88,89],"class_list":["post-176","post","type-post","status-publish","format-standard","hentry","category-week-ahead","tag-banks","tag-economy","tag-federal-reserve","tag-technical-picture"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/176","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=176"}],"version-history":[{"count":0,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/176\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=176"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}