SP500, Financials and Tech Stocks Playing off of our June 19th Article

A couple weeks back on June 19th Chris Vermeulen posted an analysis on how the stock market was bottoming and that we needed a couple key sectors to participate before we would get a solid bounce. You can quickly review the charts at  "Is This Market Flashing a Buy Signal or Another Market Collapse"

Today’s report plays directly off the June 19th analysis showing you the price movement from then on.

SP500 – SPY ETF Daily Chart
As you can see during early June the market became volatile with a broadening formation. This type of price action is an early warning that a trend reversal is near. It was only two days later when we saw stocks make a new high, which is the first ingredient for a trend reversal to take place. But once a higher high was made sellers quickly jumped back into the market pulling price back down. Keep in mind the higher high which was made was another early sign that a trend reversal was likely to happen.

During this time I was watching the charts like a hawk keeping a close eye on the time and sales window which I have filtered to show me only orders with a market value of $3million dollar or larger. This helps me keep a close eye on what the big money players are doing… Following their coat tails if done correctly will help keep you out of the market at times and also gets you in before the masses jump on the wagon.

The two key sectors I talked about on June 19th were the Financials and Tech. Both these sectors must move up if we are to get a decent bounce/rally in the market.

Financial Sector Daily Chart:
By zooming out on the daily chart we can see in terms of both price and volume that the financial sector was at a major support level. Also it had just fallen sharply for more than a week making it oversold and ready for a bounce.

Only a couple days later financial stocks rocketed 11% higher as expected and the broad market (SP500) posted some decent gains for us also.

Let’s take a look at the financial sector:
The tech sector was in the same boat as the financials above… Tech stocks jumped an average 6%.

Weekend Trading Conclusion:
In short, I feel the market has shown us some decent upward momentum and everything is now at the point where a pause is likely. I expect some type of pause or pullback in the coming week and then the market has a major decision to make. Will it continue and start a new leg higher or roll over and die… That’s the next key question/action about to take shape and I will help guide you through these times each day with my pre-market morning video analysis.

Get Chris Vermeulens Daily Pre-Market Trend Trading Videos, intraday updates and weekly market reports for at a big discount for at The Gold and Oil Guy.com

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Susan Jackson: Trade Triangles Show Crude Oil and U.S. Dollar Falling Together

In today's video we have INO.com's own Susan Jackson analyzing the major markets including fall of crude oil and the U.S. Dollar.

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Crude Oil, Natural Gas and Gold Week Ending Market Commentary

Crude oil posted an inside day with a higher close on Friday as it consolidated some of this week's decline. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are oversold, diverging and are turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 97.85 are needed to confirm that a short term low has been posted. If August extends this month's decline, the 50% retracement level of the 2009-2011 rally crossing at 86.32 is the next downside target. First resistance is the 10 day moving average crossing at 94.70. Second resistance is the 20 day moving average crossing at 97.85. First support is Thursday's low crossing at 89.69. Second support is the 50% retracement level of the 2009-2011 rally crossing at 86.32.

Natural gas closed higher due to short covering on Friday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If August extends the decline off this month's high, the 87% retracement level of the March-June rally crossing at 4.119 is the next downside target. Closes above the 20 day moving average crossing at 4.593 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.430. Second resistance is the 20 day moving average crossing at 4.593. First support is Thursday's low crossing at 4.186. Second support is the 87% retracement level of the March-June rally crossing at 4.119.

Gold closed sharply lower for the second day in a row on Friday as it extended yesterday's breakout below this year's uptrend line crossing near 1529.80. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are diverging and are turning bearish signaling that sideways to lower prices are possible near term. Today's close below the reaction low crossing at 1511.40 confirms a top has been posted and trend change has taken place. Closes above the 20 day moving average crossing at 1534.60 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 1529.80. Second resistance is the 20 day moving average crossing at 1534.60. First support is today's low crossing at 1498.50. Second support is the 38% retracement level of this year's rally crossing at 1477.10.


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Rigzone: Crude Oil Falls on IEA's Surprise Move

Crude prices plummeted to a four month low Thursday after the International Energy Agency (IEA) said it would release an emergency oil supply to alleviate high prices.

In an attempt to offset the supply disruption caused by Libya's civil war, the IEA said it will release 60 million barrels of oil over a 30 day period. Its members will release 2 million barrels of oil per day (bpd). Half of the amount will be provided by the U.S. Strategic Petroleum Reserve, which currently stores 727 million barrels of crude.

The IEA last tapped emergency resources in September 2005 after Hurricane Katrina disrupted production on the U.S. Gulf Coast.

Light, sweet crude lost $4.39 Thursday, settling at $91.02 a barrel. Prices traded as low as $89.69 and peaked at $94.47. Meanwhile, Brent crude ended Thursday's session at $107.26 a barrel, down $6.95. Goldman Sachs claims IEA's surprise release could cause Brent prices to decrease by $10-$12 a barrel by the end of July.

Likewise, natural gas for July delivery settled lower at $4.193 per thousand cubic feet. The drop came on government reports showing an increase in U.S. inventories. The U.S. Energy Information Administration (EIA) said stockpiles grew by 98 billion cubic feet last week. This marks the year's second largest increase in U.S. natural gas inventories.

The intraday range for natural gas was $4.15 to $4.34 Thursday. Front month gasoline futures settled down 13.57 cents at $2.84 a gallon. Prices fluctuated between $2.785 and $2.955 a gallon.

Posted courtesy of Rigzone.Com

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Does Helicopter Ben Really Know Best?

Yesterday it was Greece, today it’s Ben Bernanke and the FED. What is really going on with the equity market is that no one has strong feelings either on the upside or downside . This neutrality is reflected in our +55 reading indicating that the market remains in a trading range. Today we want to do something a little bit different, I am going to go through each of the markets quickly, and then zoom in and focus on two markets crude oil and silver. I think you’ll find our analysis quite interesting and informative.

Now let’s take a look at what’s happening in the markets....

S&P 500: +65. The market action continues to reflect a trading range. Major downside support is at $1,250. Upside resistance begins at $1,300.

Silver: +75. We talk about this market in more detail in the video, so tune in!

Gold: +100. All systems are go for gold but the market appears to be going up grudgingly. The weekly Donchian channel has resistance at $1,575 today. Major support at $1,513.

Crude Oil: -75. We also cover this with more detail in today’s video.

The Dollar Index: -80. Our indicators are still negative longer-term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower range of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market remains in a broad trading range.

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New Video: Greece Votes Tonight, Sell Indicators for Crude Oil, Gold Buy Signals Galore!

All eyes are on Greece as the vote will be taken this afternoon at five o’clock Eastern standard Time. That is a vote of confidence on the last 30 measures and also on the government. As you know, the market has been in an oversold condition and I think today’s rally was reflective of that move from an oversold condition.

Crucial 5 PM Vote comes in when the markets are closed. If there is a vote that is negative then these markets will come crashing down tomorrow. This is just like gambling in that no one knows what’s going to happen with the Greek government. My own view is if they do agree on what they’re doing it will just be kicking the can down the road.
Now let’s take a look at the markets.....

S&P 500: +55. The market action continues to reflect a trading range. Yesterday we mentioned that this market was at the lower range of the channel and expected amounts. Today is that bounce. Major downside support is at $1,250.

Silver: +55. This market continues to contract and it does look like it is getting ready for a move one way or the other. We would wait for our trade triangles to kick in to give us that direction. Market is oversold and expect to see a bounce from current levels. Near term resistance at $39.00. Support at $34.00.

Gold: +100. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -100. Today’s action in crude oil is very negative. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market did bounce as we expected from the lower levels of the Donchian channel. Look for more two way action in this market.

The Dollar Index: -80. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.

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U.S. Financials Still Look Sick....Would You Have Bet on the Malaysian Index?

The big news over the weekend was Greece and the 17 nations were unable to come to an agreement to put together a package for that beleaguered country. This agreement has been pushed off yet again until July. Markets both here and Europe initially reacted in a negative fashion but have come back and appear to be regrouping and rethinking the implications of this delay.

The bank stocks however still look sick and the trends are clearly down in this sector.

The Shanghai and Hong Kong indexes are also looking very negative as are most equity indexes around the world. The only index that is looking positive using our trade triangle technology is the Malaysian index.

Let’s take a look at the major markets now.....

S&P 500: -60. The market action continues to reflect a trading range. The market is at the lower end of the Donchian channel and is oversold so we may see a rally to resistance around $1,300. Major downside support is at $1,250.

Silver: +55. I would watch this market very carefully as I feel that it is probably at the lower end of its range. We would use the Donchian channel as support. We may bounce around for another couple of weeks but come July I think we’ll see this market on the move. Market is oversold and expect to see a bounce from current levels. Near term resistance at $36.00. Support at $34.00.

Gold: +90. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -90. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market is however heavily oversold and at the lower end of the Donchian channel. We would expect to see a bounce from current levels but would like to see more positive action.

The Dollar Index: -65. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Big resistance at $76.00.

The Thomson Reuters/Jefferies CRB Commodity Index: -70. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.



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Is This Market Flashing a Buy Signal or Another Market Collapse?

Since the first trading session in May we have seen the stock market sell off. The old saying “sell in May and go away” was dead on again this year. Here we are 7 weeks later with the stock market continuing to lose ground. This extended sell off has everyone all worked up that this is the beginning of another market collapse.

Let’s take a quick look at the SP500 hourly chart covering the month of June.

As you can see, price is still falling but every couple of trading sessions we get some big money players nibbling on stocks accumulating shares and running the market higher. This type of price action is typically an early signal that the market is trying to bottom.

There are two key ingredients for a higher stock market and both have been missing from the mix for a couple months. The two key sectors which have a significant weighting in terms of the broader market are the financial and technology stocks.

Let’s take a look at the financial sector:
As you can see on the bottom of this chart, financials started to lag the market in late January. Ever since then this sector has been in a strong downtrend pulling the broad market averages lower with it. The good news is that this sector has just reached a major support zone and is looking ripe for a bounce and possible rally.

The other main ingredient to a higher stock market is the technology sector.

Looking at the technology sector:
Here we can see technology stocks have been pulling back for several weeks. Tech stocks are now trading down at a major support zone and they look oversold. A bounce from this level is very likely in the coming week.

Weekend Trading Conclusion:
In short, I continue to feel the market is trying to bottom here and we are at the tipping point when things get volatile and choppy just before we get a trend reversal in the S&P 500. Keep an eye on the short term charts of financials and technology sectors. Once they start making higher highs and higher lows on the 60 minute charts I believe it will be the start of a nice bounce and possible rally.

Get Chris Vermeulens free weekly technical analysis on sectors here at The Gold and Oil Guy.Com

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Politicians Around the World Just Kicking The Can Down the Road

I guess the most common expression I'm hearing is "kick the can down the road". It would seem as though politicians the world over are pretty much the same. None of them wants to face the truth that there is no more money. So what do they do they, "kick the can down the road".

And once again the taxpayers have to come up with the money. Lending more money to Greece is the height of insanity in my opinion simply because How can they possibly pay back the first tranches of money that was already has been lent to them? But that's what's happened today Merkle and Sarkozy made concessions and basically declared that "happy days are here again" are they really? I was talking to a good friend of mine this morning who is one of the smartest people I know and I asked him point blank, what do you think of the global and US economy? Here is what he said to me. "It is a time to be cautious and guarded" they were his exact words. I'll let you think about that.

So what can we as investors do to protect ourselves and hopefully profit in uncertain times? Well, for starters we need to understand the market conditions we are in the best we can. Second we need to identify where the money is still moving and in which direction. Adam Hewison has put together a great free video summing up the current conditions and trends of the major markets. The video is brief, to the point and very actionable...best of all its free. Click here to take a look.



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EIA: Natural Gas Weekly Update....Increases in Inventory Sending Prices Lower

The past week was characterized by passing of the earlier week’s heat wave. The Henry Hub price decreased 31 cents per million Btu (MMBtu) for the week (6.4 percent) to close at $4.52 per MMBtu on June 15. During the midst of the heat wave, working natural gas in storage last week rose to 2,256 billion cubic feet (Bcf) as of Friday, June 10, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). The implied increase for the week was 69 Bcf, leaving storage volumes positioned 275 Bcf below year-ago levels. At the New York Mercantile Exchange (NYMEX), the July 2011 natural gas contract price lost every day of the week, closing at $4.577 per MMBtu on Wednesday. The natural gas rotary rig count, as reported June 10 by Baker Hughes Incorporated, fell by 8 to 879 active units, continuing the trend of recent weeks. Meanwhile, oil-directed rigs were up 10 to 969, maintaining the disparity between the two drilling strategies.

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