- Market continues its bifurcation and still looks 'November-like' even as analysts and financial stations gush over GE's earnings.
- GE the affirmation of economic recovery? Please.
- Money rotates out of techs as fast as it rotated into them, threatening breakdowns in tech leadership.
- If growth sectors are on the wane then the recovery is over before it ever really got started.
- Still expecting more downside, and if the NYSE large caps follow as in November we will get some more downside plays and then some good upside entries as well.
GE is no affirmation of the economic recovery and policy success; or at least we hope it isn't.
Friday started off positive. Futures were up because of GE. The financial stations and pundits were gushing over GE beating earnings for a change. It has been a long time since GE posted positive revenues that is top-line growth that everyone is looking at as well as solid bottom-line growth. There was ebullient talk of GE confirming the economic recovery. They said its earnings were an affirmation of the policies at hand. Please.
I want to look at what has really happened with GE. It did manage to start the market higher on Friday. Futures were up on NASDAQ, SP500, and the DJ30 where GE resides. Those large cap NYSE indices managed to hold gains on the day, but I want to take a deeper look at GE and see if this is really an affirmation of the economic recovery and a harbinger for economic progress in the United States. If that is the case, then we are in for trouble. GE is not a growth company. Before the stimulus bill was passed, GE was struggling and looking for some way to make its model work. All of its divisions were losing. Though a lot of people cannot stand Jeff Immelt and the company was foundering under his leadership, he did find a way to turn it around.
Just as the government uses a crisis to turn things its way, GE's Immelt used the economic crisis. GE Capital made it a financial institution, so it was able to get funds. More than that, it was lobbying the Obama administration directly. It was almost sad to see the CEO of a once proud and great company acting as the lapdog for Obama during the administration's discussions on how to stimulate the economy. Jeff Immelt was everywhere that Obama was. It is like the old joke: If Obama turned the corner too sharply, Immelt's nose might have broken off. There was a lot of kissing going on, and I am not talking about on the lips.
Without getting too vulgar, GE had to have green jobs, and it saw a way in this President and administration with its pie-in-the-sky views on making green energy a reality even though, economically, it is not. Immelt saw that as their salvation, and GE pushed these green programs. It is the contractor and direct beneficiary of billions of stimulus dollars for so-called green projects. These projects could not have made it without government subsidy. GE could not make a go of them it tried and failed. It knew it needed a handout, and it took the money with every hand it had, grabbing fistfuls of dollars (apologies to Clint Eastwood) and using it to build green industries in its company. It is working for GE.
It is similar to the banks making money because the Fed loans it to them for nothing. Then they can put together bond deals for 3-5% guaranteed income. GE was getting its money for free, being subsidized for these projects. That is how it was able to turn things around and actually post profits. Anyone could do that with free money, though. If you do not have to work for it or pay interest on it, that is great seed money.
Is that the kind of harbinger you want for the economy ahead? Will it sustain us if the government provides the money? Of course not. We are already in massive debt, and we cannot sustain this. The economy has to grow on its own. We need businesses that are in business because there is a demand for them, not because the government pays them money to get involved in these endeavors. It cannot last.
If GE is the harbinger of the future, we are in trouble. China will trample us under its hooves because it is in business for business' sake; in other words, profit. It wants to improve its country, and it knows the way to do it is through entrepreneurship and letting the small businesses make their moves. That will create jobs and prosperity. GE has been a net jobs loser for over 15 years. Even with the new green industries taking off, it has been shedding jobs. That is not the model that we want for our country. It has never been the model for success. 75% or more of the jobs come from small business. These companies start up, create new technologies and new ideas, and then they grow like crazy to produce millions of jobs. It happened in the 1980's and 1990's. We had incentives for people to start companies and try new things, and it worked.
Maybe the Obama administration is getting the idea. The talk of lowering the corporate tax rate and the new credits for investment and research may actually help. We will have to see. Regardless, GE is certainly not the example that we want to hold out as the future of our economy. But, as usual, I digress. I am very passionate about this, but there is a very good reason that we do not want to hold GE up as a success story. It really is not, even with the catchy Alan Jackson commercials that show a bunch of GE workers line dancing.
What we saw on Friday was very telling. One of the reasons GE maybe significant (but it would not be significant in itself) is that more rotation is ongoing. There was rotation back into large tech just a few weeks back, but it is turning back around as quickly as it came up. AAPL is heading to the downside. DELL is getting sold back down after rallying. CSCO rallied higher, sold off, and now it has having struggling again. Some stocks are doing well in tech, but they are not the large ones.
What companies are doing better? You have to look at which indices are holding up. SP500 and the DJ30 are holding up. UTX broke to a new rally high on Friday. MMM is breaking to the upside as well. Some of the old, staid stocks of yesteryear that are no longer growth companies are making moves to the upside. We saw this right before the 2007-2008 crash. Those old-economy companies were suddenly driving a lot of the action because of the growth overseas in China, India, and Brazil. They needed the old-style products that these companies produced in order to build the infrastructure and build out their countries. These stocks were acting like growth stocks again.
The economy moved higher, but it was not the growth we normally had that created new technologies. We relied on paper profits and commodity prices rising in order to make our supposed economic growth. It ended poorly. The US is at its best when creating new technologies and new methodologies for making products. We come up with either new products and new technologies or we come up with new ways to do something that has been done one way for decades. We do not do very well when we simply ride the wave of consumption by other nations, and we need to consider that. Our President and his administration want to make our country an exporting country. They want us to be a country that fuels the goods that other countries use as they grow and create new technologies. That is backwards.
We have always been the country that creates the technologies that other countries use. That increases our wealth and standard of living, and we then buy the other products to fuel our standard of living that other countries produce. Do we really want to say that we are no longer a leading country? If we look at the GE model as a success story, then we are indeed going to have serious problems. We may already see it showing up in the dollar.
Dollar: The dollar was heading lower again on Friday (1.3615 Euro versus 1.3478 Thursday). The dollar has been clobbered the last two weeks. It rallied to the top of its recent trading range, so you might expect a pullback. It tried to hold at the bottom of the range, but the bottom has fallen out. This consolidation has failed. It looks as if the dollar is heading back down and will continue down to test the lows hit in Q4 of 2010.
If GE is so great for the country and is the model we want to follow, the dollar should have been stronger. The dollar should be improving if this is an affirmation that our economic recovery is here to stay. Like I said, if it is an affirmation we are in trouble. Then we are not getting much bang for our buck. We will be peaking at a much lower height than we typically do in our recoveries. The dollar has fallen during our economic recovery. That does not make any sense at all. Our dollar should be rising if we are truly recovering. Instead, we are trying to solve debt problems with more debt and printing money. Our dollar is telling us that will not work.
Bonds: Bonds rallied on the day. Bonds were hammered on the week, but the 10 year held (3.40% versus 3.43% Thursday). It has held the bottom of this recent range. The key is whether it will break to the upside or break down. Bonds should be selling if our economy is recovering. As they sell, interest rates rise. Interest rates should rise in a recovering economy because you have a little inflation and demand for money down the road. Money will be worth more, so interest rates rise. Interest rates here are trading in a range and are threatening to fall because bonds are threatening to put in a bottom and rally.
Bonds should not be rallying if your economy is continuing to recover. This will be a very important market to watch over the next week or two to see if bonds hold this range and bounce or if they break lower. All the markets have gone back and forth this week, trying to get in line with each other. They refuse to do that. They ultimately will and we will see what happens, but there are some disturbing things going on. A rally in bonds is not a good indication for the economy ahead.
Gold: Gold is not showing what you would think it would show. It has topped and it is heading lower. It put in a triple top, it broke down below its recent lows, and it will head lower from the looks of it. That would indicate there is no inflation ahead. If there is no inflation ahead, would that mean that the Fed will simply stop printing money? It might, but it said it will not do it right now. Maybe the economy is not going to be as strong as they think it will be, and therefore there will not be the demand for money and goods we have created. Then gold would not be in as much demand as an inflation hedge.
Maybe if things were totally going to collapse, gold might be rallying in fear. It is not doing that, so maybe we will not get a collapse. We may just not get the growth we want. Is that not second-rate status? Will we just have to make do with mediocre growth like Europe has always done? Is that the way we do things in the US? We never settle for that. We are the leaders, but our other markets indicate that may be the way we are going.
Oil: Oil should have rallied with the dollar falling, but it did not. When the dollar is worth less, it takes more dollars to buy oil, but it faded at the end of the week. Still very much in its uptrend, and at the very top of its range. I do not believe oil is about to fall under any threat of the economies in the world tumbling. I still expect oil the move higher. This is becoming more of a US story in my book, just as everyone thinks things are okay.
Believe me, I wish things are okay. I am really tired of a bad economy, pessimism, and banks not lending money. I am tired of companies being scared to spend money unless it is free from the government. I talk to businesses all the time, and they are having these troubles. You cannot get money as a small business. Banks would rather take the money they get free from the government and put it in bond packages and get guaranteed returns. Why take a risk on some startup company?
Again, this is not the US way. This is not the way we became the greatest economic power on earth. We reward entrepreneurship. We want the little guy out there starting that new business with that new, better idea. We do not want to give the money away to the GEs of the world who push technologies that are not economically viable. We end up losing money on them. Germany loses money on its solar products. France stopped funding its solar projects because it lost money. It may have created jobs because they needed to make the products that were being subsidized, but they lost money on the projects overall. They did not save anything. That is why France is sticking with its nuclear reactors and gave up on solar. Someday it will be viable, but that is not today. We are not going to make it viable by spending money and trying to make it work.
This is not like the space race. We could make a device to get us to the moon and we did it. It did not matter what the costs were because we felt like we needed to beat the Soviets to the moon. Do we have to beat anyone to this technology? They make us think we have to, and they make us think we have to get off of oil. Ultimately we have to, but we need to let the market figure out the best way to do it. France tried to do it with solar and it did not work. The market said that was not the way to do it.
There will be ways to make it work, and private industry will do the job. We just have to make the money available to private industry rather than taxing it away and giving it to companies like GE. We have to let the people keep their money. We need to let the guys with better ideas get the money they need to fund their projects, and then we will solve the problem. Again, I digress, but the idea that GE is a success story shows how clearly our country is pointing in the wrong direction. The powers-that-be do not understand what has made this country a great economic power.
Volume. Volume declined on Friday. NASDAQ at least sold on volume of 1.92B shares. It was 16% lighter. NYSE (the Dow and the SP500) rallied on 6% stronger volume to 1.2B shares. That was something of a positive. When looking at the action later, however, we will see it may not be that positive.
Breadth. Decliners led 1.4:1 on the NASDAQ, and advancers led 1.2:1 on the NYSE. Not very powerful at all. It was all large caps; the small caps were not participating in the move.
SP500. Futures were up early, and the SP500 started the session higher. It gapped to the upside and rallied nicely. It could not hold the move, however. It came back and managed to hold at the late-Thursday peak. It held there mid-morning, at lunch, and then rallied. It bounced off of that, made a lower high, sold back down, and then managed to hold that level again on the close. It did hold some logical support, but when looking at the daily chart versus the five-minute chart, there was a doji. It was the second doji in a row, and it was rejected at the prior peak. We had a doji that reached lower and bounced off the 18 day EMA, and then one reached higher on Friday and was rejected.
Going back to November and looking at the breakout, you can see the breakout and the lateral move. Then there was the reversal day, a pair of doji, and then a selloff. Here we have the breakout over the 127% Fibonacci extension, the rally, the reversal day, and a pair of doji. This one on Friday was a bearish signal. Stocks started higher and were shoved back down on higher volume. There was some churn at this level. They tried to rally and were unable to do so significantly. They were basically flat and churning.
This entire move over the last week has been on elevated volume. The move eked higher on Tuesday and really went nowhere. Wednesday it reversed on stronger volume. On Thursday it bounced off the low and looked better, and then Friday it showed even stronger volume when it was rejected. That is not good action. It is not terrible, but we have to be cautious given the circumstances. This is a very Novemberesque type of week, and it could set up for some more downside.
That may not be the case because there were those stocks on the NYSE and the Dow moving well. Some of the old industrials are moving higher, and that is part of the rotation. We are seeing money rotate their way as it did in 2007 and into 2008.
NASDAQ. As quick as the money moved into techs, money is moving out of them now. We had the reversal day on Wednesday, a doji on Thursday, and then the Friday selloff a gap and reversal. That is another engulfing pattern right now. We have a quite negative picture of the NASDAQ near term. Techs are losing the money that was being thrown their way, and we are likely to head lower in the near term. No surprise there at all when you look at the leadership action that has been getting beaten about the head and shoulders in technology.
SP600. The small caps are the same picture. The reversal day, the breakout, and the reversal day. It is heading lower and not even trying to move higher. We have a clearly downward bias in SP600 near term.
SOX. The SOX had a similar day. Semiconductors gapped higher, reversed, and closed lower. They are still holding the 18 day EMA and looking solid overall. If there is a leadership out of the technology sector that could stand out, it could be the semiconductors. We will be watching them over the next week to see how they hold near support.
With respect to the charts, this shows that money has been leaving the growth areas. It is the SOX to a certain extent, and definitely the small cap index a very important leadership index. NASDAQ for sure, and NASDAQ 100 as well. Growth areas are being sold. To the contrary, the DJ30 hit a new rally high on volume. Money is rotating into the old, staid stocks. SP500 as well. Money has been moving into them, although not as crisply as on the Dow.
Rallies start in certain ways. Small caps and growth stocks lead the initial moves in a rally because they will grow the most. They will get the money and make the biggest gains. They are growth. People want to invest in growth rather than income when an economy starts to turn. Growth is where all of the money is made.
After a recovery gets underway and has run for quite some time, the growth areas peak. The small caps give way and just will not grow as they did early in the cycle. Then there are the income stocks. These are the big companies with cash cows that do not create anything new; they just make innovations on what they already have. It is the "new and improved" syndrome. They are trying to squeeze more dollars out of products that do not have research and development costs anymore, so they are called the cash cows. They make the money for the company, and they are income companies. They do not have the double-digit growth anymore. They have single-digit growth, but they produce a lot of cash flow because of the products they developed long ago.
MSFT is a classic example, and CSCO is one as well. They no longer innovate, they just use the machines and products they have made to make income. When they are that big, there is no way to grow at a rapid rate. That is why they end up paying dividends after awhile they have to figure out what to do with all the cash. They have a bunch of cash but they are not growing. They give it away to their shareholders, which is what they should do. That is where the money is going right now, and that is an indication that an economic recovery is getting older. That is very sad if that is the case. We have not even pulled out of the housing market meltdown yet, and it looks like our economic recovery has hit its zenith.
These are bold calls to make with the indices just down a few points. I have been very much an advocate of the fact that they broke out from long bases and have plenty of room to continue to move to the upside. I have been an advocate of the base theory. We have a nice base from NASDAQ. It can still rally, no doubt. It has just bumped up against the prior highs, and it will have some trouble right now. The question that we have to answer is, after this nice run we have going, will the economy sustain itself? That question is very much open for debate with our debt and so many of trillions of dollars being printed. It will be difficult trying to get rid of debt with more debt. It has never worked in the history of the world.
Nonetheless, it is not all doom and gloom nearer term. Even the small cap index has bumped up against its prior highs, and that is why it is showing some issues. That could very well be the reason it is selling back. I do not want to get too worried about the future of the world. We can only make do with what we have in front of us. Right now that shows that growth is under pressure. It has been bleeding money, and thus stock prices have been going down. That is why we have been taking them off the table over the past few sessions as they come back and tested support. I would rather save our profits and maybe have to buy back into them versus having them run us over to the downside.
Financial. Some money is definitely going into the financials. JPM was up again. MS was surging to the upside. WFC was moving to the upside. Not all banks were doing as well on Friday, however. BAC reported earnings and had a tougher session, but it still finished in very good shape. Money is still going into financials. It dogged them for a long time, but now it is definitely flowing that way.
Industrial. You would think money would go to industrials given the big push toward exports, but it is not. They have had a good run. Remember I said that CAT's pattern might be showing tiredness? It broke to the upside, so it looked like it was in good shape, but it immediately reversed. Now it is selling, with an engulfing pattern on Friday. It could be in some trouble there. We already sold our last positions in CMI, and it is diving on higher volume. It is not all the growth story of the 2007-2008 period. Worse than that, it is going back into cyclicals.
Metals. FCX gapped lower on Thursday, and continued down on Friday. RS reversed with an engulfing pattern on Wednesday and another one on Friday with a gap higher and a roll over, diving lower.
Retail. Some of the darlings are in trouble. DECK has formed an island reversal and gapped higher. It traded laterally for a month and a half, and now it has gapped lower. LULU looks like it is in trouble. We closed our remaining positions today. What has been doing okay? PG is moving higher. MMM is breaking higher. JNJ is doing all right and trying to base. UTX is breaking to a high in the rally.
These are not dynamic companies, but they are not terrible. UTX and MMM are great companies, but others such as PG and JNJ are your defensive or cyclical stocks. Those do not spell good things for the economy when they start to outperform.
Consumer/Old Economy. If not for IBM and GE, the Dow would not been as strong as it is now. I will not say that the Dow is being propped up just by these two companies, but they are really helping it. It has the financials giving it a boost as well, but it is not growth companies leading the charge. I am sure many of you disagree with me, but you can see that if we have a growth model of funding large companies that do not produce jobs, then we have issues. Especially when the history of our economy is small businesses producing the vast majority of our jobs. Not only jobs in general, but the good jobs the jobs that lead to real wealth.
MSFT did this; there are more millionaires who work for MSFT than probably any other company even DELL. CSCO has a lot. CSCO, DELL, MSFT, INTC it is the who's who of the 1980's and 1990's. They have made so many new jobs and raised our standard of living so high, yet they started out of garages and roach motels. You are telling me we need to put money into companies that have already made it and are no longer growing jobs? That is just wrong. It is the recipe for disaster, and it is Japan's recipe as well. But I digress once more.
VIX: 18.47; +0.48
VXN: 20.17; +0.54
VXO: 16.11; -0.49
Put/Call Ratio (CBOE): 0.79; -0.14
Bulls versus Bears:
This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.
Bulls: 56.0% versus 57.3%. The headwinds in NASDAQ and the small caps capped out the bulls for now, but still holding high levels though off the 58.8% high on this leg. Still high in a string of high readings but below the 5 year high at 62.0. Still bearish enough. Closing in on the level considered bearish, i.e. where so many are in the market and believe it is going up that the ammunition to send it higher runs low. This is where you start to be careful and watch for breakdowns, but there is also a lot of liquidity being pushed into the market and that can continue the move despite excess bullishness. The crossover level at 29% bulls is long gone, but it did its job. The high on the last leg was 56.0% after starting at 35.6% on the low in February, the lowest it has been since July 2009 . . . until this last leg. 35% is the threshold level suggesting bullishness. Again, to be seriously bearish it needs to get up to the 60% to 65% level.
Bears: 20.0% versus 19.1%. Bouncing back up after a down week but still lower than it was just three weeks back (20.5%). Down from 28.3% in September. The 37.7% peak at the height of the crossover is well in the rearview mirror but bears remain well below the 35% level, above which is considered bullish for the market overall. Hit 18.7% on the low in April. Hit a high of 27.8% level on the prior leg in February. For reference, cracking above the 35% threshold considered bullish. Hit a high on the prior run at 47.2%. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.
Stats: -14.75 points (-0.55%) to close at 2689.54
Volume: 1.924B (-16.41%)
Up Volume: 702.781M (+107.289M)
Down Volume: 1.214B (-513.793M)
A/D and Hi/Lo: Decliners led 1.43 to 1
Previous Session: Decliners led 2.56 to 1
New Highs: 62 (+23)
New Lows: 24 (-5)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
Stats: +3.09 points (+0.24%) to close at 1283.35
NYSE Volume: 1.262B (+6.03%)
Up Volume: 713.139M (+168.293M)
Down Volume: 533.935M (-95.838M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Decliners led 1.82 to 1
New Highs: 198 (+50)
New Lows: 16 (-15)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
Stats: +49.04 points (+0.41%) to close at 11871.84
Volume DJ30: 250M shares Friday versus 181M shares Thursday. GE added to IBM high volume.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
Economic data is starting back up. Case-Shiller and Consumer Confidence on Tuesday. Wednesday we will actually have a two-day FOMC rate decision. I do not expect many changes there. The interesting part will be how many dissenters there are with the economic improvement that appears to be here. There is economic improvement, it is a question of how strong it will be. It has probably been the weakest recovery we have ever had outside of the Great Depression. Given the action of the small caps and the market indices, there is a question as to where we are exactly with respect to the recovery.
Everyone is so excited on ALL the financial stations. I have guys who are always bears who are talking about things being beautiful right now. They say we will only go up, up, up, in 2011. It sounds just like the home builders did in May of 2005 when that market topped. It does give me pause when everyone is so confident about the future.
New home sales are out and initial claims. There are durable orders, pending home sales, and the GDP for Q4 on Friday as well as the Michigan Sentiment. That is a lot of good stuff, but it all comes down to earnings right now and technical action. A lot more earnings are coming out. The problem is SP600 and NASDAQ have rolled over on the earnings while the SP500 and the Dow continue to move higher on earnings. Houses divided do not stand for very long, and it will be interesting to see where they go.
You know where I stand. I think this is Novemberesque action. That does not mean the market will crash, but it means that it will likely correct. Ultimately when this thing winds down, it might not end up very well. That is down the road, however, and I do not want to talk about down the road right now. I want to talk about what to expect in the near term.
We have been taking money off the table. It looks like SP500 is having some issues; it is churning, and showing the same action it did in November. We will look for downside plays if we can find any decent ones on the SP500 stocks. The financials look too strong, but there are other areas that we might be able to mine for some downside, including some of the indices. If the SP500 is actually showing what it did in November, then it is going to come back more toward the 50 day EMA. We can make money on index plays using that theory.
There will also be upside because the semiconductors are still holding up quite well. We started putting some of them on the report on Thursday as they were coming back to near support and holding. We will continue to look for those. This will be a situation where you look for stocks that are holding up well. You buy into those that do when they bounce and the market comes back. Those are your leaders. Those have the money and are holding up because no one wants to sell them. That means there will be good demand for them and the prices are going to rise when things improve.
We have some possibilities to the downside. We will also be looking for possibilities and opportunities to the upside just as we saw in November. This is still just an early-stage run in the breakout of a longer-term base. That means there will be money flowing back into these stocks, and we want to be there when it does. We have been protecting our downside and taking the position that it is better to save the profit now in case things get uglier than anticipated. We can always buy back in. You just have to keep that mantra going. Protect what you have made and take advantage of opportunity when it arises. You stay ahead of the market that way. You keep building those brokerage accounts, and that is the name of the game. Get that risk/reward right, and then ride it for all its worth. That is another way of saying "let our winners run." If it doesn't work, kill it.
We have had some great runs in 2010 and into 2011 and some new plays as well. Some of those are flagging now because there is rotation. We will look to where the money is rotating. We will look for a pullback possibly from some NYSE large caps if they follow NASDAQ and the SP600 lower in a temporary correction. Then we will seek opportunity back to the upside because I feel this run will continue. There is still money coming into the economy, and the Fed is still willing to push it into the economy.
Have a great weekend!
Support and Resistance
NASDAQ: Closed at 2689.54
The 10 day EMA at 2716
2725 from July 2007 interim peak
2729 is the 127% Fibonacci extension of the August 2010 run
2735 from late 2007 interim peak
2825 is the 2007 closing peak.
2862 is the 2007 peak
The 50 day EMA at 2631
2593 is the November 2010 high
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak
2550 from May and June 2008 peaks
2540 is the gap up point from early November
2535.28 is the April 2010 intraday peak
2530 is the April 2010 closing peak
2518 is interim peak from April 2010
2511 is the lower range of the November gap up point
2482 is the recent October peak
2460 is the November 2010 low.
2434 is the May interim peak and the 78% Fibonacci retracement of the April selloff.
2425 is an interim peak from May 2010
2382-2395 from 2008
The 200 day SMA at 2395
S&P 500: Closed at 1283.35
1313 from the August 2008 interim peak
1325-27 is the March 2008 closing low and the May 2006 peak
1364 is the March 2007 low
1370 is the August 2007 low
The 10 day EMA at 1281
1278 is the 127% Fibonacci extension of the August 2010 run
The 18 day EMA at 1274
The 50 day EMA at 1242
1227 is the November 2010 peak
1220 is the April 2010 peak
1185 from late September 2008
1174 is the May 2010 high, 78% Fibonacci retracement of April peak
1173 is the November 2010 low
1170 is the prior March 2010 high
1156 is the Sept 2008 low
The 200 day SM A at 1153
1151 is the January 2010 peak
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
1129 to 1131 is the June and August 2010 peaks
Dow: Closed at 11,871.84
11,893, from March 2008 closing low
12,110 from the March 2007 closing low
13,058 from the May 2008 peak on that bounce in the selling
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
The 18 day EMA at 11,711
The 50 day EMA at 11,491
11,452 is the November 2010 peak
11,258 is the April 2010 peak
11,205 is the April closing high
11,100 from the 7-08 low
10,963 is the July 2008 low
10,920 is the recent May high
The 200 day SMA at 10,798
10,730 is the January 2010 peak
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
January 25 - Tuesday
Case-Shiller 20-city Home Price Index, November (09:00): -1.3% expected, -0.80% prior
Consumer Confidence, January (10:00): 53.5 expected, 52.5 prior
FHFA Housing Price Index, November (10:00): 0.7% prior
January 26 - Wednesday
MBA Mortgage Purchases, 01/21 (07:00): +5% prior
New Home Sales, December (10:00): 300K expected, 290K prior
Crude Inventories, 01/22 (10:30): 2.62M prior
FOMC Rate Decision, January (14:15): 0.25% expected, 0.25% prior
January 27 - Thursday
Initial Claims, 01/22 (08:30): 408K expected, 404K prior
Continuing Claims, 01/22 (08:30): 3835K expected, 3861K prior
Durable Orders, December (08:30): 1.5% expected, -0.3% prior (revised from -1.3%)
Durable Orders ex-Transportation, December (08:30): 0.6% expected, 3.6% prior (revised from 2.4%)
Pending Home Sales, November (10:00): -0.5% expected, 3.5% prior
January 28 - Friday
GDP-Adv., Q4 (08:30): 3.8% expected, 2.6% prior
Chain Deflator-Adv., Q4 (08:30): 1.6% expected, 2.1% prior
Employment Cost Index, Q4 (08:30): 0.4% expected, 0.4% prior
Michigan Sentiment -, January (09:55): 73.2 expected, 72.7 prior
By: Jon Johnson, Editor
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