InTheMoneyStocks Market Analysis

[InTheMoneyStocks]

Beware of Great News

Today the market headlines were nothing more than sensational. Corporate earnings from Intel Corp. (NASDAQ:INTC), J.P. Morgan Chase & Co. (NYSE:JPM), and CSX Corp. (NYSE:CSX) were all better than analysts expected. Everything is great in the stock world again. Day after day the stock market climbs higher shaking off European concerns, housing troubles, and 16 year high office vacancies, to name a few negative problems.

One must ask, if everything is so wonderful why is the Federal Reserve Bank's fed funds rate still at zero percent? The Federal Reserve Bank stated in the minutes from the last FOMC meeting that they would leave rates at low levels for an extended period of time as long as there was not inflation. Many investors and traders know when a country has ten percent unemployment there is not going to be any inflation. Deflation is the problem.

Bank stocks have lead the rally since February 5th, 2010. Today J.P. Morgan Chase & Co. reported very good earnings. However, a huge amount of there money came from trading. This gives us insight on who is propping the markets up. The volume has been unusually light since the March 2009 bottom signaling that the retail investor is not participating in this bull rally. Currently the big banks can borrow from the Fed at zero and buy stocks and U.S. Treasuries to make money. This is one of the major reasons for this Bull Run over the last 13 months.

Is this type of action sustainable for the long term? The answer is simple; of course it is not. Former Federal Reserve Bank Chairman Alan Greenspan used the same technique in 2002 and 2003. Back then Greenspan lowered the fed funds rate to 1 percent and that created the greatest housing and credit bubble in 100 years. Now Fed Chairman Bernanke has lowered rates to zero percent. Rates have been down at this level for well over a year now. How much longer will the fed funds rate remain down here? Everyone knows that low rates lead to an asset bubble and inflation. We understand they would love inflation; however, can the markets survive the next bubble?

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Technical Alert: Double Top On Amazon.com, Inc. (NASDAQ:AMZN) Could Lead To Short Ter

Amazon.com, Inc. (NASDAQ:AMZN) hammered into a double top from late 2009. This level looks to be a solid resistance level as the intra day price action on AMZN pulled back off the highs. While retail sales have been extremely good of late, a lot has been talked about in regards to the Kindle and its competition with the IPAD. Wall Street may start to get a little nervous about AMZN's earnings as we get closer to them. That may lend credence to the resistance level at $146.00. Earnings will be reported on April 22nd, 2010, after the markets close. Analysts expectations are for $.61 in profits per share. The whisper number is closer to the $.70 level. AMZN will need to report a strong quarter with good Kindle sales to continue its march higher.

 

[InTheMoneyStocks]

Forget Earnings. The Dollar Rollover Saves the Day Re: 9:24am Post

The U.S. Dollar Index did not disappoint the bulls today. The dollar did what it does best every time the stock market gets into trouble. It rolled over once the New York Stock Exchange rang the opening bell. This phenomenon occurs almost on a daily basis. Therefore, the overnight dollar action is really no longer important. The intra-day dollar action dominates the market. Remember when the dollar declines after the opening bell the market will rally or bounce.

 

[InTheMoneyStocks]

Markets Smoked As Goldman Sachs Fraud Charge Sends Ripples

Someone in Goldman Sachs Group, Inc. (NYSE:GS) must have angered the wrong person in the government. For a government that has had baby handling gloves for Wall Street and the financials, they had to know this would shock the markets and send rippling waves everywhere. Goldman Sachs is down 15% on news of fraud. Stocks like JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), Wells Fargo & Company (NYSE:WFC) are all down about 5%. The saying goes, if there is one rat, there are many.

This is a huge shock to a market that has been priced to perfection. While a huge shock, I am proud to say I gave the alert to buy the Direxion Daily Finan. Bear 3X Shs (NYSE:FAZ) yesterday into the close to my premium members of the Intra Day Stock Chat and Research Center, at a price of $11.01. While I had no idea Goldman Sachs was going to be charged with fraud, my analysis showed that following JPMorgan Chase's earnings, there was little to no further upside for the financial stocks. This turned out to be not only true, but a home run.

 

[fayalac]

Re: Technical Alert: Double Top On Amazon.com, Inc. (NASDAQ:AMZN) Could Lead To Short

That is quite a resistance. Now, moving averages are still aiming upwards. Maybe you will say oscillators doesnt show the same trend, i dont know what oscillators are those, but if i have to trust in something i preffer to trust a trendline instead an oscillator.
The main problem for those who like technical analysis (i am one of them), is that you never know the timing involved in the probable turn back. If i were you i would go long.

 

[InTheMoneyStocks]

Markets Look Close To Confirming Top As Regulation & Earnings Loom

The markets are slightly lower on the back of continued worry about financial regulation in the aftermath of charges of fraud against Goldman Sachs Group, Inc. (NYSE:GS). In addition, a volcanic eruption spewing tons of soot in the air in Iceland has put a stop to most air travel across Europe. This is causing oil to drop sharply. Oil is down over $2.00 today and the United States Oil Fund LP (NYSE:USO) is down over 2%.

Volume seems to be subsiding today as Wall Street is now waiting for further information on Goldman Sachs. Wall Street understands that this charge is politically motivated with financial regulation on the horizon. President Obama needed a push to have enough votes to pass the strong financial regulation he wants and now he will have it.

In January, financial regulation started the correction, now it seems it could be starting it again. As a Chief Market Strategist, I am looking for a key confirmation signal. Should that happen, this market may have put in the top.

Aside from Goldman Sachs, other noteworthy news came from Citigroup Inc. (NYSE:C). They reported earnings of $.14, beating on revenues and EPS. Wall Street had expected a break even quarter.

Earnings overall have been very solid. From technology to financial firms, they have been beating on almost all counts. However, some companies have fallen on earnings. Why? Simply put, stock prices have run up since the February 5th, 2010 bottom and in many cases were sitting at new 52 week highs and in some rare cases, 2007 highs. This tells us that these stocks had already factored in the amazing earnings they have been reporting.

After the close today, International Business Machines Corp. (NYSE:IBM) is set to report. Analysts are expecting $1.94 per share while the whisper number sits higher at $2.01. It will be interesting to see how the stronger dollar over the last quarter impacted their earnings.

IBM is just warming up the tech sector for the big fish tomorrow. After the close on Tuesday, Apple Inc. (NASDAQ:AAPL) will report earnings. This will be the biggest tech stock of earnings season. Everyone is curious to see how sales have been. AAPL is hovering near all time highs as it sits under the $250.00 level. Earnings are expected to be around $2.43 per share. The whisper number is expected to be upwards of $2.75 per share.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Baidu, Inc. Bounces Back Following Recent Drop

Shares of Baidu, Inc. (NASDAQ:BIDU) bounced back today following a steep decline over the last few days. Last Thursday, the stock hit a new all time high of $650.00. At this range, the stock had a expensive P/E of over 100. In addition, the even number of $650.00 can be looked at as big resistance. After the markets closed, Google Inc. (NASDAQ:GOOG) reported earnings. Google began to drop sharply as analysts estimates were beaten but considering the recent run up in their stock price, it was just not quite good enough. Once Google began to fall, BIDU followed in sympathy. This was the start of the two day correction on BIDU.

BIDU fell sharply on Friday as Google was punished. In addition, the markets took a steep hit on the back of Goldman Sachs being charged with civil fraud. As BIDU tumbled, more ran for the exit, carrying the sell off into Monday in the stock. While the markets bounced back on Monday, BIDU hit a low of $602.20. At this point, it was coming into the $600 even number support after almost falling $50 in two days.

Just a side note, remember the even numbers work as support and resistance.

Today, Tuesday, April 20th, BIDU is bouncing solidly off the $600 level. It is trading up about 2.25% as it is back to the $627.00 range. The next step is to closely watch the consolidation in the next few days. That will alert you as to whether or not it is a bear pattern or bullish pattern. The stock remains somewhat expensive even after the pullback and as a Chief Market Strategist, I would have to look for a move lower in the near term after this bounce.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Metal Stocks Signal Weakness In Overall Economic Recovery And Send Up Red Flags

After unbelievable moves higher, many metal stocks are now seeing unique price action over the last couple weeks, going against the flow of the markets. The markets have inched higher, making a new 52 week high in the last week, but key stocks that are a solid gauge of a healthy economic rebound have stalled and some have fallen sharply. This may be as sign of trouble brewing as they can often be an economic leading indicator.

Take a look at these charts below. Southern Copper Corporation (NYSE:SCCO) topped out in January at a 52 week high of $36.29. While most other stocks have since taken out that January high in the recent stock market run up, Southern Copper has not. The stock hit a low of $30.84 today, well off that January high. This is a tremendous fall since January. Southern Copper is known as a leader, and strong price action would dictate global economic growth.

Next, let's look at AK Steel Holding Corporation (NYSE:AKS). The stock also topped out at a 52 week high at $26.75 in January and has since never even looked back. In fact, in the last two weeks, the stock has collapsed lower, hitting $18.51 today. This again does not show us a robust growth situation in the global economy which is what the markets supposedly have rallied on, over the last few months.

Stocks like United States Steel Corporation (NYSE:X), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) and many other metal plays show the same chart.

In understanding how the metal stocks play a key role in showing economic growth, it leaves me to wonder if we truly do have as robust of a recovery on our hands or if it can last once the stimulus is taken away. In addition, it makes me wonder if these stocks rolling over could be a leading indicator for the markets to lose ground shortly. Join the Research Center to gain access to the secret techniques, guidance, plays and education that the hedge funds utilize to make billions.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

SPY Alert: Gap Fill Signals Possible Resistance As Market Soars Off Of Lows. Amazon E

SPDR S&P 500 ETF (NYSE:SPY) dropped sharply early in the morning on the back of a downgrade of Greek debt and earnings from eBay Inc. (NASDAQ:EBAY) that surprised the market on their negativity. However, like so many other days in the last few months, the markets just will not stay down. Again, the credit must be given to the bulls as the market has reversed coming up underneath gap fill on the SPY. This will be a significant resistance level and may work as a solid shorting opportunity for a short term intra day trade.

The bears continue to get smoked as every significant attempt at a drop gets thrown in their faces with a late day light volume rally. The culprit aside from light volume seems to be the dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading just slightly off the lows of the day after falling in the last hour. Notice how the markets have jumped to the highs of the day and to gap fill.

The markets await Amazon.com, Inc. (NASDAQ:AMZN) earnings after the close today. Amazon is strong today, higher by 2.00%. I expect earnings to be in the range of $0.70 to $0.75 per share. If earnings come in this range, and the future outlook is improved, Amazon may be able to trade higher. If it comes in lower, the stock may fall sharply after the recent run up. Watch for comments on the Kindle and sales projections. With Apple and the IPAD as a major competitor, people may assume sales of the Kindle will fall sharply.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

RealTick graphics used with permission of Townsend Analytics, Ltd. ©1986-2010 Townsend Analytics, Ltd. All Rights Reserved. RealTick is a registered trademark of Townsend Analytics, Ltd

 

[InTheMoneyStocks]

All Is Well In Stock Land. Or Is It?

Since February 5th, 2010 the major market indexes have had one of the most impressive rallies in an incredibly short span, trading higher by more than 15 percent. The SPDR S&P 500 ETF (NYSE:SPY) traded as low as 104.58 on February 5th, 2010 and is now trading at 121.25. That is almost 17 points higher in less than 3 months. The SPDR Dow Jones Industrial Average ETF (NYSEIA) , and the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQQ) have traded higher in the same fashion. Rarely do individual high flying stocks make this type of a move in a year’s time, let alone individual indexes in less than 90 days.

The news is wonderful, fantastic, and outright bullish. Stocks such as Apple Inc. (NASDAQ:AAPL), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), and countless others have reported blockbuster earnings numbers. New 52 week highs have increased recently. The Retail Holders Trust ETF which tracks the retail sector is at new highs for the year and near its all time high which was in 2007. These are moves that are off the charts and impressive by all standards.

While everything looks great in the stock world there is one problem with this rally. Why is the Federal Reserve Bank keeping the Fed funds rate at zero percent? This rate allows the liquidity to flow endlessly. It allows the major banks to make money without lending due to the steep yield curve. They can simply borrow interest free money and buy the stock market, U.S. Treasuries, and issue high interest credit cards. What a business to be in when you can get free money.

The last time the Fed funds rate was lowered to unprecedented levels was in 2001 when Alan Greenspan lowered rates to 1.00 percent. At that time the economy was recovering from the dot com bubble and the 911 tragedy. In just five short years that action by former Fed Chairman Greenspan caused the greatest credit bubble since the Great Depression in 1929. Currently Ben Bernanke has the Fed funds rate at zero percent for well over a year now. One can only wonder what kind of bubble this is creating. In a few more years we could be looking at the next great bubble. However, this time it could be worst as unemployment is still high and the housing crisis is still intact.

Yes, the stock market is in bull mode right now. Why wouldn't it be when you think about it? The artificial stimulus is running wild. Everyone lives for the moment and never thinks about tomorrow. The only problem is tomorrow's bubble may not be so easy to come back from. Lowering the Fed funds may not work the next time around. You have been warned.

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Agriculture Stocks Consume Food For Thought

As I look across sector after sector, my eyes do not deceive me as they see 100, 200, 300% gains in the last year in many stocks. Financial stocks, retail stocks and others are truly amazing to behold. The economy seems to be on a one way track higher, not even willing to look back at the past and charging towards a robust future, filled with growth and prosperity and bubbles.

The money is flowing free, the Federal Reserve and U.S Government has made sure of that. After hundreds of billions in bailouts and stimulus packages and the Federal Reserve printing trillions, the steroids are truly flowing throw the veins of the market and the roid rage is ripping this market up day after day.

While I glance at countless stocks hundreds of percentage points off their lows, I cannot help but find one sector that does not mesh with the overall economic recovery theory. I sit here and find myself trying to figure out why agriculture stocks have not moved higher off their lows? By no means do I wish to portray a feeling that the economy is not in a recovery mode but instead I wish to give pause on the possibility that these stocks are showing us the recovery is just a short term move on the back of trillions in printed money and government spending. Ultimately, only so much debt can be printed and once that stops, will the average American pick up the slack? With unemployment where it is, it seems unlikely. Let's not forget, unemployment by government standards is 9.7% but the true unemployment rate is estimated to be around 18%.

Potash Corp./Saskatchewan (NYSEOT), The Mosaic Company (NYSE:MOS), Monsanto Company (NYSE:MON) are all still nearer their lows than their highs of 2008. Potash Corp. hit a high in 2008 of $241.62. It is just slightly over $100 right now and in the last two weeks has fallen over 10%. The Mosaic Company is much the same. The most shocking would be Monsanto Company, which is within 5% of the lows it hit when it was crushed in late 2008. These were the lows for the last 3 years. Note the chart below.

So why is Monsanto Company at the lows, why is Potash or Mosaic off the lows but lagging all the other sectors in a major way? These are stocks that thrive on a true recovery and with them lagging, it makes me wonder if the recovery is only Federal Reserve and government spending based. If it was a wide based recovery, amongst the people, these stocks would be among the leaders. This is food for thought, pun intended. In a year, let's look back and see what has happened. It should be clear by then.

I for one am looking at these as a possible true indicator of a future, six months to a year out. That is of course, assuming the government and Federal Reserve have stopped a majority of their trillions of Viagra pumping activity. For now, as a Chief Market Strategist, seeing these stocks under perform is troublesome as they could be hit hard should the hard to come by pull back occur. I will stay away from them in the short term.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

RealTick graphics used with permission of Townsend Analytics, Ltd. ©1986-2010 Townsend Analytics, Ltd. All Rights Reserved. RealTick is a registered trademark of Townsend Analytics, Ltd

 

[InTheMoneyStocks]

Metal Stocks Having A Rare Bounce Day

After being crushed in recent weeks, metal stocks like Southern Copper Corporation (NYSE:SCCO), United States Steel Corporation (NYSE:X) and AK Steel Holding Corporation (NYSE:AKS) are jumping. The fact that these stocks are getting a bounce is not surprising at all. They have all seen massive amounts of selling in the last couple weeks. The surprising factor is that with the market at the 52 week highs, these stocks have been sold so heavily prior to the bounce today.

The recent selling in these stocks makes me pause and just wonder if the recovery is all the markets think it is. Common sense dictates a recovery would be headed by a stock like Southern Copper Corp or U.S Steel.

When all is said and done, we will have to watch and see what type of bounce these stocks get. My thought process initially is to look for a bear flag bounce on them and then look for more downside. As they say, the trend is your friend. Should they eclipse the January highs, continued upside is likely.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Dawn Rises After The Blood Bath Yesterday Ahead Of Federal Reserve

The sun rose again, after the dramatic sell off yesterday. The markets dropped over 2% on the back of ugly news out of Europe on Greece and Portugal while back in the United States, Goldman Sachs Group, Inc. (NYSE:GS) was getting grilled by the Senate on Capitol Hill. The markets had their biggest down day in months. Gold shot higher yesterday, regardless of the dollar soaring. Usually if the dollar is higher, gold will be lower. However, the fear that swept through Europe and the steep selling in U.S. Equities, caused a run for safety in gold. The SPDR Gold Trust (NYSE:GLD) jumped over 1.5% yesterday.

While fear swept through the markets, today, the sun rose again, the markets quieted down and all things seemed to be in order once again. The markets are whipping around slightly, but generally holding the flat line. It is extremely hard to kill a bull and the markets are now turning their attention to the Federal Reserve Interest Rate Policy Statement at 2:15pm ET. Wall Street expects the Federal Reserve to sooth the markets fears with weak dollar policy which is extremely bullish for equities. Will they do it?

Goldman Sachs Group is seeing a solid move higher today, now that the grilling on Capitol Hill is over. Goldman is higher by 2.5%. In addition to the solid gains from Goldman, JPMorgan Chase & Co. (NYSE:JPM) is jumping almost 3%. JPMorgan Chase and Exxon Mobil Corporation (NYSE:XOM) are leading the markets higher based on their inclusion in the Dow Jones Industrial Average (INDEXDJX: .DJI). These two major components of the DOW 30 are key to the markets holding up.

Other Dow driving components up nicely today are Alcoa Inc. (NYSE:AA), American Express Company (NYSE:AXP), Bank of America Corporation (NYSE:BAC) and Caterpillar Inc. (NYSE:CAT). Most of these DOW stocks took a major hit yesterday on the market drop.

Keep a close eye on this market. We are in the middle of a massive new storm based on the European debt crisis. It now looks to be spreading. Right now the markets are holding steady ahead of the Federal Reserve.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Currencies Dominate Every Market Move

The Greece worries have been lingering for months now. It seemed that every week, the media would report that a bailout plan was in place yet it still has not happened. It reminds me of the boy who cried wolf. One day reports say a bailout by the European Union is a done deal, the next day it does not happen. Back and forth we go. Then the media reports a bailout by the International Monetary Fund(IMF) and it still does not happen. Now the other PIIGS are starting to fall.

Today Spain has been downgraded by S&P to negative. Portugal was already downgraded. It is obvious that other nations are next to fall such as Ireland, and Italy. The Euro currency continues to get pounded against the U.S. Dollar. When the dollar rises it simply puts pressure on inflationary stocks and most commodities. Recently the Proshares DB US Dollar Index (NYSE:UUP) is higher by 0.77 cents since April 14th, 2010. While this may not sound like much this is a big move in the currency markets. Simply put, the dollar is only rallying higher due to the weakness in Europe.

The Currencyshares Euro Trust (NYSE:FXE) which tracks the Euro has sold off over 5.00 points since April 14th, 2010. Then we have the British Pound which is not doing much better than the Euro. The British Pound can be tracked by using the Currencyshares British Pound ETF (NYSE:FXB). While the British Pound is not part of the European Union the currency is in rather poor shape. However, it is trading off it's March 25th, 2010 low of 147.48. The daily British Pound chart still looks weak.

The important point to remember is when the U.S. Dollar declines this will usually benefit the market. Watch an intra-day dollar chart and you will clearly see how the dollar and the stock indexes will often trade inverse to each other tick for tick.

Nicholas Santiago
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Baidu, Inc. Kick-Starts Small Cap China Buying Frenzy

With earnings that would make a parent proud, Baidu, Inc. (NASDAQ:BIDU) reported some unbelievable numbers. It does appear that Google Inc.'s (NASDAQ:GOOG) exit has sparked massive new revenue for the company. Not only did they blow away earnings estimates, but BIDU also upped guidance tremendously for next quarter. The stock is soaring today, higher by $84.19 (+13.50%).

While BIDU rips higher on earnings, the door has now opened on many small cap plays that have failed to indulge in any of the recent run up in stocks. There are quite a few of these. Some have started to run today, others have already run today and even more have yet to run. Chinese small cap stocks have been lagging in a major way recently and are due for a monster pop to catch up to their counter parts in the United States.

Charts of China small caps on the dead lows are everywhere. Many of them are trading well below book and even some below cash. Growth in these stocks should be equal to those in the United States. With a market that has run to insane levels, these China small caps could be the last area where massive returns are possible.

I will not go into which small cap China stocks I like or hold. There are quite a few and many look like big possible gainers. That is for premium members of the Research Center and Intra Day Stock Chat at InTheMoneyStocks.

The U.S. markets rising again for the second day in a row after that brutal sell off on Tuesday. The dollar is getting hit as the Euro recovers from the smack down after problems with Portugal and Spain joined Greece. Volume is also back to the light side.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Credit Card Players Have Risks If Unemployment Does Not Fall

Credit card providers like MasterCard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), American Express Company (NYSE:AXP) and Capital One Financial Corp. (NYSE:COF) have had an amazing run, but recently they have fallen back slightly. While they have had a meteoric rise in the last few months and since the March 2009 lows, the big question going forward, is their credit default risk and has that been priced in?

With unemployment levels remaining near their high level of 9.7% and the real unemployment levels near 18%, one has to wonder if these credit card providers are not pricing in the risk for continued high default levels. Jobless claims have remained stubbornly high, seeming to find themselves around 450k average each week. They have not fallen like most economists would have liked. Everyone says this is going to be a jobless recovery which is code word for massive government stimulus. Without jobs, can people pay their credit cards?

Next Friday the markets get the Unemployment Report and Non Farm Payrolls. This could be another clue as to the recovery and how these credit card providers will fair.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[wackypete2]

Re: Credit Card Players Have Risks If Unemployment Does Not Fall

We've seen the massive fee and rate hikes imposed by the credit card issuers right before the new regs went into effect. IMO this is what's keeping balance sheets propped up for now, but it can't last. If defaults rise it will outpace the "padded" income. Also, right before the new regs kicked in many cc companies canceled a lot of credit cards with spotty history even though payments were being made. I believe these are the cards most susceptable to default that would not otherwise have defaulted. Families with temporarily limited income will continue to pay on cards or revolving loans they can still use, and those that are closed make an easy target to put at the bottom of pile.

In short, I wouldn't touch any cc companies right now on the long side, and since the recent trend has been up, shorting against the trend isn't advised either.

Peter

 

[InTheMoneyStocks]

Financial Stocks Give Short Term Signals, While Metal Stocks Give Long Term View

The markets are bouncing back today after a $145 billion bailout of Greece and no further negative news on Goldman Sachs Group, Inc. (NYSE:GS). The dollar has surged all morning as most economists and traders expect Greece to just be the tip of the iceberg. Portugal and Spain are next on the list of countries in Europe that may need a bailout. The list can go on and on. Many are comparing Greece to Bear Sterns in the financial meltdown. If that is the case, then who is going to be the Lehman Brothers of the debacle.

Goldman Sachs is bouncing today, solid backing from Warren Buffet over the weekend has helped quiet the fears. Buffet continues to think Goldman Sachs did nothing wrong. Financial companies are strong today as the fear is subsiding. JPMorgan Chase & Co. (NYSE:JPM) is higher by 2% while Wells Fargo & Company (NYSE:WFC) is up 1.5%.

The metal stocks continue to be under an insane amount of pressure. Even with the market higher, United States Steel Corporation (NYSE:X) is down over 3%, AK Steel Holding Corporation (NYSE:AKS) is lower by 2.5% and Southern Copper Corporation (NYSE:SCCO) is down a whopping 4.25%. Part of this is the strength in the U.S. Dollar as the PowerShares DB US Dollar Index Bullish (NYSE:UUP) is up 0.71% but the other worry is that these stocks are telling us the recovery is not all it is cracked up to be. I have written several articles about the metal stocks lately, prior to the markets fall. In them, I discussed how they were falling and it was a leading indicator or the market. The analysis looks to have been dead on. AK Steel has solid support at $16.25 and then $15.00. U.S Steel has good support at $53.00 and $50.50 and Southern Copper has good support at $29.30 and $28.00. Keep an eye on these levels to find a short term bouncing opportunity.

The markets continue to hold slightly to the upside. Volume has returned to the light side which helps keep the markets floating. Watch the financial stocks for a short term market bias and the metal stocks for a longer term bias.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com

 

[InTheMoneyStocks]

Markets Slammed As Writing Was On The Wall From The Metal And Agriculture Stocks

The writing was on the wall and most of my previous articles over the last week told the Street this was the case. In recent days, I talked about the metal stocks like AK Steel Holding Corporation (NYSE:AKS), Southern Copper Corporation (NYSE:SCCO) and United States Steel Corporation (NYSE:X) being a leading indicator for this market. These metal stocks dropped sharply in recent weeks. When the metal stocks rally, it shows economic activity, in fact, it is one of the best signals of economic activity. The fact that these stocks have been crushed in recent weeks was a tell tale sign the market was near a dramatic fall.

In addition, I noted this same signal on the agriculture stocks like Monsanto Company (NYSE:MON), The Mosaic Company (NYSE:MOS) and Potash Corp. (NYSEOT). These again are major leading indicators of economic activity. The key about the metal and agriculture stocks is not that there is no economic activity out there, it is more the organic growth that is missing. The economy has recovered somewhat based purely on massive government stimulus spending. Again, the problem with that is that it is not sustainable and the metal and agriculture stocks have been telling us this.

The best signal of all came last Tuesday. Last Tuesday the InTheMoneyStocks confirmation signal was triggered to the downside. Ever since then, the market was shortable on every bounce. It has worked like a charm. Understanding the technical signals is number one in this market along with reading the the metal and agriculture stocks.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks

 

[InTheMoneyStocks]

Apple Inc. Hits Gap Fill Support For Easy Short Term Long Swing

Apple Inc. (NASDAQ:AAPL) hit the master gap fill level of $249.25 this morning on the back of heavy selling in the markets. For any swing trader or day trader who follows technical analysis, this was a no brainer buying opportunity. Gap fill is one of the top ten plays utilized by technical traders to make solid returns.

The gap formed after Apple reported their quarterly earnings on April 20th, 2010 in the after hours market. The stock gapped higher the next morning. This created the gap that technical traders will play to the long side, once it is filled. After hitting an all time high of $272.46, Apple sold sharply in recent days filling the gap at $249.25.

Since that gap fill this morning, Apple has jumped back higher, hitting a high of $258.14. That is a whopping $8.89 profit in just one day. Learn the technical levels, join the Research Center.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com