InTheMoneyStocks Market Analysis

InTheMoneyStocks

Experienced member
1,135 17
Trade lesson for intraday signals on spy

The SPY sold off on very strong volume this morning and formed a nice bottoming tail on the 10 minute chart. It is important to not that the heavy volume usually signals that the recent trend may reverse as sellers become exhausted in this chart. Then note the bounce higher. It also is important to find chart support on other time frames confirming a possible bounce. Therefore, the more pieces of the puzzle that you find the more you increased the odds that you will have on a scalp trade.

 

InTheMoneyStocks

Experienced member
1,135 17
INTC...Inventories Cannot Be At Zero

The market gapped higher today on the back of INTC and JPM earnings. Both companies blasted through earnings and saw the futures spike higher because of them. But what does it mean? Were they as good as one would believe from looking at all the numbers? INTC reported solid earnings, revenue and margin numbers. It was amazing to say the least. However, JNJ reported a earnings beat yesterday, but missed on revenue. These numbers from JNJ mean that they only beat because of cost cutting and the end user (consumer) was not buying more. This was not a good sign for JNJ. So what is the comparison between INTC and JNJ? These companies make totally different products. This is the key folks. I will lay it out simply. Over the last year, inventory levels have gone to almost zero. With the consumer still buying in small amounts (ie. when their computer crashes and it was a 10 year old model) inventories must be replenished slightly though at a much slower rate. This is where INTC comes into play. These numbers when compared to JNJ's lack of numbers show a replenishing of inventories going on. The end consumer is still barely buying but inventories still need to be above zero. In addition, the pumping from Bernanke, Geithner and President Obama seem to be creating a frenzy of over stocking again on inventories as everyone has been told we are out of this recession. This could spell major trouble down the road. Watch for this to be a major catalyst down the line as the market starts to realize this. Next quarter INTC should still do well but in my opinion not quite as well as they have been doing. From here on out, I believe earnings growth will slow again for INTC. JNJ's numbers tell the truth and watch future consumer related earnings for confirmation. Should all those companies show no revenue growth regardless of earnings beats, this hypothesis will be correct. We will know in the coming weeks.

 

InTheMoneyStocks

Experienced member
1,135 17
WHEN THE MARKET IS IN TROUBLE DROP THE DOLLAR. RE: 9:41am POST

It happens all the time. The dollar fades when the market declines to save the equity market. Then the weaker dollar gives a lift to everything not just commodities anymore. Even baked goods catch a bid off the weak dollar these days.

 

InTheMoneyStocks

Experienced member
1,135 17
This was pure accuracy on part of the true technical trader. This was just one of the trades nailed taken right at the market close yesterday when we hit our master level on the SPY of 109.68. You need to know your technical levels and this is a prime example, we had allocated and documented this proprietary level. Once we hit it yesterday afternoon shorts were initiated, etfs were filled and profits were taken this morning, break-even stops were placed. Personally I dont see something wrong with good trades, and taking profits.
Thanks
 

InTheMoneyStocks

Experienced member
1,135 17
Trade lesson: Catch the intra-day gap fade

TRADE LESSON: Watch for stocks that have had a multi-day rally. It is important that they are very extended from the 60 minute 20 moving average. Look for a strong gap higher to start the day into a past resistance level or a whole round number. Then enter a short position with a tight stop. Once the trade is in the money you should cover half and move the stop into the money or break even and look to cover the rest at the next support level. This trade occurs every trading day.

 

InTheMoneyStocks

Experienced member
1,135 17
Real bull or next asset bubble?

Often most bull markets are due to a decline in the fed funds rate; the interest rate that the Federal Reserve Bank charges other large institutions for overnight lending. Obviously this has a major influence on the money supply. The lower the rate, the easier credit should be, and the more money is in the system. In 1980 and 1981 these rates fluctuated from 10%-19% respectively. This a major crimp on the economy. When the so-called bull market began in 1982 many gave most of the credit to the then President Ronald Reagan and his so-called trickle down economics policy. While tax cuts are always a stimulus for the market it is really the low Fed Funds rate set by the Federal Reserve Bank that gives the huge rise in asset prices. Throughout the Reagan era the feds funds rate went from around 19.00% at one point down below 6.00% in 1986. Yes, the bull was running as the easy credit flowed and the DJIA had advanced from 817 in April 1980 to 2596 in September 1987. This was a run for the ages; however, there was a major crash and panic in 1987.


Now lets fast forward to the roaring 1990's. The markets again faced a declining housing market in the late 1988 throughout the early 1990's. There was a recession taking place and a new President was elected. It's always about the economy when it comes to Presidents and this time a second birth of the bull began. The fed funds rate was steadily kept around 5.00-5.50 % and the market continued to climb. In 1999 the rate was decreased to less than 5.00% and the bull market advance was a run for the ages as the DJIA crossed over the 11,000 level. Then as we all know in 2000 the great bear awoke as the stock market began a 2.5 year decline as the Dow lost 4700 points from peak to trough.


In 2003, the Fed funds rate was lowered to 1.00 %, this was really uncharted waters from the Federal Reserve Bank. Again a new President was elected, taxes were cut and this gave birth to one of the greatest bubbles in American history. It has been called the great housing and credit bubble of the new millennium. Even as the former Fed Chairman Alan Greenspan increased rates by a quarter point at every FOMC meeting beginning in 2004 and continued to do this until 2006 when the fed funds rate was as high as 5.25%. As we all know in October 2007 the great collapse began as the DJIA peaked at 14,200. Since that top the fed funds rate has steadily been lowered to the current 0 - 0.25% rate.


As of now the low rate and massive global stimulus has rallied the markets over 50% from the March 2009 low. However, this has come with a cost as the U.S. Dollar is near its 2008 lows and commodity prices have soared recently. The last time the dollar was this low oil was at $147 a barrel and that certainly was a factor to the major break in the market. The big question now is going to be what does the Federal Reserve Bank do for an encore? The fed funds rate obviously cannot go any lower. Therefore, the plan they have must be simply to inflate this market back to health. One can only ask why would they want to do that? Wouldn't this just be doing exactly what was done to create the original problem? There can only be one answer, and that is to attempt to fight deflation. The recent breakout of gold is telling us that they will inflate at all costs. The only real currency that the world has ever known (gold) does not lie. When you really think about it the market has had a huge rally off it's March lows and so has gold. The only problem with this rally is that since the U.S. Dollar has fallen so much what have you really made in the market? Gold right now is the better trade over the DJIA.


Can the Fed really bail us out of the possible deflationary spiral that has plagued Japan since the late 1980's? Only time will tell. The one thing we all know is that the fed funds rates can't stay at zero forever. What are they to do for an encore? Perhaps they may buy gold to protect their own accounts. This is surely going to be a volatile decade ahead of us.



Nicholas Santiago,
Chief Market Strategist
InTheMoneyStocks - Technical Analysis Trading | Stock Market Chat Room | Learn to Trade
 

InTheMoneyStocks

Experienced member
1,135 17
Price, Pattern, Time = Success!

Note the two charts below. The first shows a bull flag pattern on the SPY noted earlier today when the SPY was at $108.28, while the second chart shows the success of reading chart patterns and the SPY just hit a high of $109.11. Price, Pattern and Time!



Chart shows the monster move in the SPY as it rallies off the Bull Flag Call. $$$$$$
 
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TAjammy

Established member
867 18
it had massive volume on the sell off , and low volume on the pull back up- how is this bullish?
 

millsy500

Well-known member
355 21
big volume usually shows the end of a trend, a low vol pullback is a succesful test or a sign of strength
 
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TAjammy

Established member
867 18
okay. it's just i thought high volume meant the big boys were interested in bringing it down.
 

firewalker99

Legendary member
6,655 598
Note the two charts below. The first shows a bull flag pattern on the SPY noted earlier today when the SPY was at $108.28, while the second chart shows the success of reading chart patterns and the SPY just hit a high of $109.11. Price, Pattern and Time!
Always easy in hindsight...
 

InTheMoneyStocks

Experienced member
1,135 17
The Markets Sell Off Even Though AMZN, MSFT And Housing Data Is Strong...Why? The USD

The dollar continues to be in sole control of this market. Every move up or down is dictated by the dollar in the inverse. This is truly an amazing evenet in the markets history. Regardless of blowout numbers by AMZN or MSFT beating estimates, the markets are south. The dollar is higher on the day and could be making a turn to for an M-A pattern on the weekly chart. Keep watch of this. It may be the ultimate key to the markets future.
 

Shakone

Senior member
2,458 665
I don't trade stocks, only currencies, so I'm a complete moron when it comes to this. But perhaps you could answer a question for me. Suppose the banks think the rally in the stock market has gone far enough, and they want to get short again/offload. Would they not wait for a big figure to be breached (say 10,000/11,000) so everyone wants to buy. And then part by part offload some of their positions. They wouldn't want to dump all their stocks in one go, because then the ES and DOW would plummet. So perhaps they would do it little by little, and you would see the market hover around the level and just above, and then one day it would just head south and not look back for months. Is this how they would do it? I've never really concentrated on accumulation distribution phases.