The total gain for the month of January is 258%. I'm writing off the two losing positions in JA Solar and Perfect World.
Big news headlines today are of the Golden Cross or Resurrection Cross that has taken place on the S&P 500 with the 50 day moving average crossing above the 200 day moving average. Folks, we use the EMA not the SMA (simple moving average) and so I did a video on the Resurrection Cross some 3 to 4 weeks ago. We've already made incredible gains this month playing the long side because of the cross. Traders using a simple moving average are only just experiencing the Resurrection Cross now. That's why we use the EMA. It gives a greater weighting to more recent data as it should. Nevertheless, the Resurrection Cross using the simple moving averages is an important psychological victory for the Bulls.
More importantly, the month of January has closed up nearly 5%. It is the biggest January since 1997. Furthermore, it confirms the First Five Trading Days in January that also closed up. The January Barometer clearly favors the Bulls this year.
As a review, created by Yale Hirsch in 1972, the January Barometer states that as the S&P 500 goes in January, so goes the year. The indicator has registered only seven major errors since 1950 for an 88.7% accuracy ratio.
The 2012 Stock Trader's Almanac forecasts stock market gains of 5-10% for 2012.
The total gain for the month of January is 258%. I'm writing off the two losing positions in JA Solar and Perfect World.
Big news headlines today are of the Golden Cross or Resurrection Cross that has taken place on the S&P 500 with the 50 day moving average crossing above the 200 day moving average. Folks, we use the EMA not the SMA (simple moving average) and so I did a video on the Resurrection Cross some 3 to 4 weeks ago. We've already made incredible gains this month playing the long side because of the cross. Traders using a simple moving average are only just experiencing the Resurrection Cross now. That's why we use the EMA. It gives a greater weighting to more recent data as it should. Nevertheless, the Resurrection Cross using the simple moving averages is an important psychological victory for the Bulls.
More importantly, the month of January has closed up nearly 5%. It is the biggest January since 1997. Furthermore, it confirms the First Five Trading Days in January that also closed up. The January Barometer clearly favors the Bulls this year.
As a review, created by Yale Hirsch in 1972, the January Barometer states that as the S&P 500 goes in January, so goes the year. The indicator has registered only seven major errors since 1950 for an 88.7% accuracy ratio.
The 2012 Stock Trader's Almanac forecasts stock market gains of 5-10% for 2012.
For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!
The total gain for the month of January is 258%. I'm writing off the two losing positions in JA Solar and Perfect World.
Big news headlines today are of the Golden Cross or Resurrection Cross that has taken place on the S&P 500 with the 50 day moving average crossing above the 200 day moving average. Folks, we use the EMA not the SMA (simple moving average) and so I did a video on the Resurrection Cross some 3 to 4 weeks ago. We've already made incredible gains this month playing the long side because of the cross. Traders using a simple moving average are only just experiencing the Resurrection Cross now. That's why we use the EMA. It gives a greater weighting to more recent data as it should. Nevertheless, the Resurrection Cross using the simple moving averages is an important psychological victory for the Bulls.
More importantly, the month of January has closed up nearly 5%. It is the biggest January since 1997. Furthermore, it confirms the First Five Trading Days in January that also closed up. The January Barometer clearly favors the Bulls this year.
As a review, created by Yale Hirsch in 1972, the January Barometer states that as the S&P 500 goes in January, so goes the year. The indicator has registered only seven major errors since 1950 for an 88.7% accuracy ratio.
The 2012 Stock Trader's Almanac forecasts stock market gains of 5-10% for 2012.
For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!
The Bulls continue to have the advantage over the Bears and here's why. The Dow, S&P 500, Nasdaq, and Russell 2000 are all in strong uptrends. Further, we're seeing upside leadership coming from the Nasdaq and the Russell 2000. So going into trading next week, the Bulls have the advantage over the Bears. Now let's look at our market internal indicators and see if they support the Bulls on top thesis for trading next week.
The TICK had a swing move down last week. Typically, after a swing move down, we have a swing move up on the TICK which is bullish for the market next week; however, the exception to that rule was back in the first part of November where bearish news out of Europe caused two weeks in a row to be down. So while the TICK is ready to swing up next week, keep your eyes and ears on bad news coming out of Europe. The TICK closed the week within our normal retail trading range and so it doesn't indicate either a bullish or bearish bias coming from institutional traders.
A whopping 86% of stocks on the NYSE are trading above their 50 day moving average. That's a bullish bias. And 65% of stocks on the NYSE are trading above their 200 day moving average. Again, that's a bullish bias.
The VIX continues to have a strong downtrend rating which is bullish for the markets folks.
The Nasdaq Advance Decline Volume chart shows a bullish bias.
We have a split on the Elder system and SPY. We have a blue high/low bar on the daily chart, and a green high/low bar on the weekly chart. Blue indicates indecision while green is a buy signal.
Financials (XLF) have a strong uptrend rating. The reason that financials are doing so well comes in part from the Fed meeting last week.
The Fed has convinced investors that it won't raise borrowing costs for a very long time. On Wednesday, the Fed said it will likely not raise rates until late-2014. So what's the big deal about that and why did this help XLF maintain its strong uptrend rating? The Fed is saying, for nearly three years we're going to do everything we can to make sure that you don’t lose money on short-term U.S. debt. This lowers the probability of losing money from short-term Treasury bonds. Interest rates reflect, in part, risks investors see in owning a bond. Higher risk = higher interest rate. Lower risk = lower interest rate. So, basically, that three year commitment not to let you lose money is squeezing the risk out of the market, driving rates lower. That will help the economy by making it easier for folks to borrow.
The U.S. dollar has a weak downtrend rating which is bullish for stocks and gold folks. The dollar broke below the 50 day moving average last week and looks set to fall back and test the 200 day moving average at 77.78
The bulls on top thesis for trading next week is supported by our market internal indicators.
Fundamental analysis reports that moved markets last week were: Wednesday's FOMC Meeting, Thursday's Durable Goods Orders, and Friday's GDP.
The FOMC Meeting revealed the Fed has retained the current policy rate range of 0.0 to 0.25 percent but the FOMC changed key language. Instead of saying that the policy rate will remain exceptionally low likely through mid-2013, the Fed now says the fed funds rate is likely to remain exceptionally low through LATE 2014.
The Durable Goods Orders report showed manufacturing is picking up steam as December durables were strong and above expectations and November was revised up notably. New factory orders for durables in December jumped another 3.0 percent, following a 4.3 percent surge the month before (prior revised estimate, up 3.7 percent). The December increase topped market expectations for a 2.2 percent gain. Excluding transportation, durables rose a healthy 2.1 percent after a 0.5 percent advance in November (prior revised estimate, up 0.3 percent). The December gain came in much higher than the consensus forecast for a 0.7 percent increase.
The GDP report showed that the economy actually did post a moderate acceleration in the fourth quarter but the recovery is still sub-par. GDP growth rose to 2.8 percent from 1.8 percent in the third quarter. The advance estimate came in lower than market expectations for a 3.1 percent boost.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Mon - Jan 30, 2012 = Personal Income and Outlays
Wed - Feb 01, 2012 = ISM Mfg Index
Fri - Feb 03, 2012 = Employment Situation
The Bulls continue to have the advantage over the Bears and here's why. The Dow, S&P 500, Nasdaq, and Russell 2000 are all in strong uptrends. Further, we're seeing upside leadership coming from the Nasdaq and the Russell 2000. So going into trading next week, the Bulls have the advantage over the Bears. Now let's look at our market internal indicators and see if they support the Bulls on top thesis for trading next week.
The TICK had a swing move down last week. Typically, after a swing move down, we have a swing move up on the TICK which is bullish for the market next week; however, the exception to that rule was back in the first part of November where bearish news out of Europe caused two weeks in a row to be down. So while the TICK is ready to swing up next week, keep your eyes and ears on bad news coming out of Europe. The TICK closed the week within our normal retail trading range and so it doesn't indicate either a bullish or bearish bias coming from institutional traders.
A whopping 86% of stocks on the NYSE are trading above their 50 day moving average. That's a bullish bias. And 65% of stocks on the NYSE are trading above their 200 day moving average. Again, that's a bullish bias.
The VIX continues to have a strong downtrend rating which is bullish for the markets folks.
The Nasdaq Advance Decline Volume chart shows a bullish bias.
We have a split on the Elder system and SPY. We have a blue high/low bar on the daily chart, and a green high/low bar on the weekly chart. Blue indicates indecision while green is a buy signal.
Financials (XLF) have a strong uptrend rating. The reason that financials are doing so well comes in part from the Fed meeting last week.
The Fed has convinced investors that it won't raise borrowing costs for a very long time. On Wednesday, the Fed said it will likely not raise rates until late-2014. So what's the big deal about that and why did this help XLF maintain its strong uptrend rating? The Fed is saying, for nearly three years we're going to do everything we can to make sure that you don’t lose money on short-term U.S. debt. This lowers the probability of losing money from short-term Treasury bonds. Interest rates reflect, in part, risks investors see in owning a bond. Higher risk = higher interest rate. Lower risk = lower interest rate. So, basically, that three year commitment not to let you lose money is squeezing the risk out of the market, driving rates lower. That will help the economy by making it easier for folks to borrow.
The U.S. dollar has a weak downtrend rating which is bullish for stocks and gold folks. The dollar broke below the 50 day moving average last week and looks set to fall back and test the 200 day moving average at 77.78
The bulls on top thesis for trading next week is supported by our market internal indicators.
Fundamental analysis reports that moved markets last week were: Wednesday's FOMC Meeting, Thursday's Durable Goods Orders, and Friday's GDP.
The FOMC Meeting revealed the Fed has retained the current policy rate range of 0.0 to 0.25 percent but the FOMC changed key language. Instead of saying that the policy rate will remain exceptionally low likely through mid-2013, the Fed now says the fed funds rate is likely to remain exceptionally low through LATE 2014.
The Durable Goods Orders report showed manufacturing is picking up steam as December durables were strong and above expectations and November was revised up notably. New factory orders for durables in December jumped another 3.0 percent, following a 4.3 percent surge the month before (prior revised estimate, up 3.7 percent). The December increase topped market expectations for a 2.2 percent gain. Excluding transportation, durables rose a healthy 2.1 percent after a 0.5 percent advance in November (prior revised estimate, up 0.3 percent). The December gain came in much higher than the consensus forecast for a 0.7 percent increase.
The GDP report showed that the economy actually did post a moderate acceleration in the fourth quarter but the recovery is still sub-par. GDP growth rose to 2.8 percent from 1.8 percent in the third quarter. The advance estimate came in lower than market expectations for a 3.1 percent boost.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Mon - Jan 30, 2012 = Personal Income and Outlays
Wed - Feb 01, 2012 = ISM Mfg Index
Fri - Feb 03, 2012 = Employment Situation
For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!
The Bulls continue to have the advantage over the Bears and here's why. The Dow, S&P 500, Nasdaq, and Russell 2000 are all in strong uptrends. Further, we're seeing upside leadership coming from the Nasdaq and the Russell 2000. So going into trading next week, the Bulls have the advantage over the Bears. Now let's look at our market internal indicators and see if they support the Bulls on top thesis for trading next week.
The TICK had a swing move down last week. Typically, after a swing move down, we have a swing move up on the TICK which is bullish for the market next week; however, the exception to that rule was back in the first part of November where bearish news out of Europe caused two weeks in a row to be down. So while the TICK is ready to swing up next week, keep your eyes and ears on bad news coming out of Europe. The TICK closed the week within our normal retail trading range and so it doesn't indicate either a bullish or bearish bias coming from institutional traders.
A whopping 86% of stocks on the NYSE are trading above their 50 day moving average. That's a bullish bias. And 65% of stocks on the NYSE are trading above their 200 day moving average. Again, that's a bullish bias.
The VIX continues to have a strong downtrend rating which is bullish for the markets folks.
The Nasdaq Advance Decline Volume chart shows a bullish bias.
We have a split on the Elder system and SPY. We have a blue high/low bar on the daily chart, and a green high/low bar on the weekly chart. Blue indicates indecision while green is a buy signal.
Financials (XLF) have a strong uptrend rating. The reason that financials are doing so well comes in part from the Fed meeting last week.
The Fed has convinced investors that it won't raise borrowing costs for a very long time. On Wednesday, the Fed said it will likely not raise rates until late-2014. So what's the big deal about that and why did this help XLF maintain its strong uptrend rating? The Fed is saying, for nearly three years we're going to do everything we can to make sure that you don’t lose money on short-term U.S. debt. This lowers the probability of losing money from short-term Treasury bonds. Interest rates reflect, in part, risks investors see in owning a bond. Higher risk = higher interest rate. Lower risk = lower interest rate. So, basically, that three year commitment not to let you lose money is squeezing the risk out of the market, driving rates lower. That will help the economy by making it easier for folks to borrow.
The U.S. dollar has a weak downtrend rating which is bullish for stocks and gold folks. The dollar broke below the 50 day moving average last week and looks set to fall back and test the 200 day moving average at 77.78
The bulls on top thesis for trading next week is supported by our market internal indicators.
Fundamental analysis reports that moved markets last week were: Wednesday's FOMC Meeting, Thursday's Durable Goods Orders, and Friday's GDP.
The FOMC Meeting revealed the Fed has retained the current policy rate range of 0.0 to 0.25 percent but the FOMC changed key language. Instead of saying that the policy rate will remain exceptionally low likely through mid-2013, the Fed now says the fed funds rate is likely to remain exceptionally low through LATE 2014.
The Durable Goods Orders report showed manufacturing is picking up steam as December durables were strong and above expectations and November was revised up notably. New factory orders for durables in December jumped another 3.0 percent, following a 4.3 percent surge the month before (prior revised estimate, up 3.7 percent). The December increase topped market expectations for a 2.2 percent gain. Excluding transportation, durables rose a healthy 2.1 percent after a 0.5 percent advance in November (prior revised estimate, up 0.3 percent). The December gain came in much higher than the consensus forecast for a 0.7 percent increase.
The GDP report showed that the economy actually did post a moderate acceleration in the fourth quarter but the recovery is still sub-par. GDP growth rose to 2.8 percent from 1.8 percent in the third quarter. The advance estimate came in lower than market expectations for a 3.1 percent boost.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Mon - Jan 30, 2012 = Personal Income and Outlays
Wed - Feb 01, 2012 = ISM Mfg Index
Fri - Feb 03, 2012 = Employment Situation
For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!For a FREE DAILY EMAIL ALERT on the trend of the S&P 500 (SPY) click here! Just leave PACF_SPY in for the symbol and enter your name and email address!
A major new web page has been added to provide you with even more value!
It focuses on fundamental analysis of news events that impact the market and your stocks.
It's called The Wall Street Drub Report.
It's got the look and feel of the Drudge Report that many of you have come to love.
The links are just a treasure of information. It's like the ultimate stock trading portal.
Make sure you bookmark the site at: http://www.guerillastocktrading.com/drub
A major new web page has been added to provide you with even more value!
It focuses on fundamental analysis of news events that impact the market and your stocks.
It's called The Wall Street Drub Report.
It's got the look and feel of the Drudge Report that many of you have come to love.
The links are just a treasure of information. It's like the ultimate stock trading portal.
Make sure you bookmark the site at: http://www.guerillastocktrading.com/drub
Folks, the Bulls have a strong advantage over the Bears going into trading next week.
The Dow, Nasdaq, S&P 500, and Russell 2000 all have strong uptrend ratings for the first time in months. All the major indices have done a breakout above their previous October 2011 highs. The S&P 500 has confirmed the Resurrection Cross of the 50 day moving average crossing above the 200 day moving average.
Even the notorious January options expiration Friday experienced only a shallow pullback revealing just how strong the Bulls are right now.
We even have the Nasdaq and the Russell 2000 beginning to re-assert themselves as leaders in this strong uptrend. I've been talking to you about the absence of such leadership coming from the Nasdaq and the Russell 2000 for weeks now. That is starting to change which is very bullish for this market.
Let's look under the hood at the market internals and see if they support the Bulls on top thesis for trading next week as well as if they reveal to us what institutional traders are doing.
The TICK closed at 835. This suggests institutional traders were in the market buying across entire sectors last week, really keeping market makers busy. If you're a new subscriber, the TICK records buys as +1 and sells as -1. In a perfect world, market makers match up a buy with a sell (because in order to have a buyer you need to have a seller and vice versa for shorting) and the TICK reads 0 as each cancel each other out. But when you have buying across entire sectors in a short period of time, market makers are temporarily unable to match up a sell order with every buy order. The theory is that it's primarily institutional traders that cause these imbalances because of the vast greater amounts of money they trade with when compared to amateur traders. Normal retail trading puts the tick between -600 and +600, more conservative analysts say between -800 and +800. This week's 835 close on the TICK is bullish because it suggests institutional traders were in this market buying this week.
Now since we see institutional traders in this market buying this week, let's look at what sectors performed the best. This will let us see what sectors institutional traders are buying. The best performing sectors this week were:
#1 = Energy +2.28%
#2 = Technology +2.17%
#3 = Consumer Discr. +1.81%
#4 = Financials +1.58%
#5 = S&P 500 +1.53%
The percentage of stocks on the New York Stock Exchange that are trading above their 50 day moving averages has climbed to 83%. That's bullish. The percentage of stocks trading above their 200 day moving averages has climbed to 58%. Folks, that's the first time we've had a bullish reading this high in 7 months. This to is bullish.
Looking at the Nasdaq Advance Decline Volume chart, we have a breakout on the volume and a strong bullish bias.
The VIX continues to have a strong downtrend rating. This is very bullish for this market folks. It means that PUT buying and PUT hedging continues to occur in lesser amounts.
Using Financials and Home Builders as market internal indicators, because the recession we are in was predicted by the plunge in these two markets, both have uptrend ratings.
All of our market internal indicators due support the thesis that the Bulls have a strong advantage over the Bears going into trading next week.
Now, let's look at other markets of interest to subscribers.
On our It's All About The Oil Dummy chart, you'll see that oil and the S&P 500 diverged from each other last week. Folks, something has to give, either the S&P 500 has to fall back down to oil, or oil has to rise up to the S&P 500. The greater probability has to do to oil rising up to catch up to the S&P 500. The reason we have to give the greater probability to an oil rising scenario is because of the strong uptrend rating on the S&P 500. Also, if we look at the chart of DBO, we could be forming a Bullish Head and Shoulders pattern. If oil closes above $104, it will close the right shoulder and we could see the next leg up.
Gold has a weak uptrend rating. It's not keeping up with the rest of the major indices. That can be evidenced by the fact that the major indices have all cleared their November highs while gold is no where near to clearing that mark.
Silver had a huge day on Friday and now has a weak uptrend rating. The Stock Trader's Almanac talks about how silver tends to outperform gold at this time of year.
Fundamental analysis reports that moved markets last week were: Wednesday's PPI and Industrial Production reports, and Thursday's CPI and Housing Starts.
The PPI report revealed that, at the producer level in December, inflation was tugged down by gasoline and food costs but the core was warmer than expected. Producer prices edged down 0.1 percent after rebounding 0.3 percent the prior month. The latest number posted lower than market expectations for no change.
The Industrial Production report showed that industrial production in December posted a healthy gain but the manufacturing component was even more robust. Overall industrial production rebounded 0.4 percent after dipping 0.3 percent in November. The latest number came in slightly lower than the consensus forecast for a 0.5 percent jump. By major components, manufacturing made a 0.9 percent comeback, following a 0.4 percent drop in November. The market median forecast for the manufacturing component was for a 0.5 percent gain. Econoday has added this component to its consensus forecasts. In December, utilities fell 2.7 percent while mining output expanded 0.3 percent.
The CPI report showed consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.
The Housing Starts report revealed that new residential construction slipped in December but remains somewhat healthy after the jump the prior month. Permits are encouraging. Starts declined 4.1 percent, after surging 9.1 percent in November. December's annualized pace of 0.657 million fell short of market expectations for 0.678 million units and is up 24.9 percent on a year-ago basis. The dip in the latest month was led by a 20.4 percent drop in the multifamily component, following a 23.0 percent boost in November. The single-family component advanced 4.4 percent after rising 3.0 percent the month before.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wed - Jan 25, 2012 = FOMC Meeting Announcement
Thu - Jan 26, 2012 = Durable Goods Orders
Fri - Jan 27, 2012 = GDP
Folks, the Bulls have a strong advantage over the Bears going into trading next week.
The Dow, Nasdaq, S&P 500, and Russell 2000 all have strong uptrend ratings for the first time in months. All the major indices have done a breakout above their previous October 2011 highs. The S&P 500 has confirmed the Resurrection Cross of the 50 day moving average crossing above the 200 day moving average.
Even the notorious January options expiration Friday experienced only a shallow pullback revealing just how strong the Bulls are right now.
We even have the Nasdaq and the Russell 2000 beginning to re-assert themselves as leaders in this strong uptrend. I've been talking to you about the absence of such leadership coming from the Nasdaq and the Russell 2000 for weeks now. That is starting to change which is very bullish for this market.
Let's look under the hood at the market internals and see if they support the Bulls on top thesis for trading next week as well as if they reveal to us what institutional traders are doing.
The TICK closed at 835. This suggests institutional traders were in the market buying across entire sectors last week, really keeping market makers busy. If you're a new subscriber, the TICK records buys as +1 and sells as -1. In a perfect world, market makers match up a buy with a sell (because in order to have a buyer you need to have a seller and vice versa for shorting) and the TICK reads 0 as each cancel each other out. But when you have buying across entire sectors in a short period of time, market makers are temporarily unable to match up a sell order with every buy order. The theory is that it's primarily institutional traders that cause these imbalances because of the vast greater amounts of money they trade with when compared to amateur traders. Normal retail trading puts the tick between -600 and +600, more conservative analysts say between -800 and +800. This week's 835 close on the TICK is bullish because it suggests institutional traders were in this market buying this week.
Now since we see institutional traders in this market buying this week, let's look at what sectors performed the best. This will let us see what sectors institutional traders are buying. The best performing sectors this week were:
#1 = Energy +2.28%
#2 = Technology +2.17%
#3 = Consumer Discr. +1.81%
#4 = Financials +1.58%
#5 = S&P 500 +1.53%
The percentage of stocks on the New York Stock Exchange that are trading above their 50 day moving averages has climbed to 83%. That's bullish. The percentage of stocks trading above their 200 day moving averages has climbed to 58%. Folks, that's the first time we've had a bullish reading this high in 7 months. This to is bullish.
Looking at the Nasdaq Advance Decline Volume chart, we have a breakout on the volume and a strong bullish bias.
The VIX continues to have a strong downtrend rating. This is very bullish for this market folks. It means that PUT buying and PUT hedging continues to occur in lesser amounts.
Using Financials and Home Builders as market internal indicators, because the recession we are in was predicted by the plunge in these two markets, both have uptrend ratings.
All of our market internal indicators due support the thesis that the Bulls have a strong advantage over the Bears going into trading next week.
Now, let's look at other markets of interest to subscribers.
On our It's All About The Oil Dummy chart, you'll see that oil and the S&P 500 diverged from each other last week. Folks, something has to give, either the S&P 500 has to fall back down to oil, or oil has to rise up to the S&P 500. The greater probability has to do to oil rising up to catch up to the S&P 500. The reason we have to give the greater probability to an oil rising scenario is because of the strong uptrend rating on the S&P 500. Also, if we look at the chart of DBO, we could be forming a Bullish Head and Shoulders pattern. If oil closes above $104, it will close the right shoulder and we could see the next leg up.
Gold has a weak uptrend rating. It's not keeping up with the rest of the major indices. That can be evidenced by the fact that the major indices have all cleared their November highs while gold is no where near to clearing that mark.
Silver had a huge day on Friday and now has a weak uptrend rating. The Stock Trader's Almanac talks about how silver tends to outperform gold at this time of year.
Fundamental analysis reports that moved markets last week were: Wednesday's PPI and Industrial Production reports, and Thursday's CPI and Housing Starts.
The PPI report revealed that, at the producer level in December, inflation was tugged down by gasoline and food costs but the core was warmer than expected. Producer prices edged down 0.1 percent after rebounding 0.3 percent the prior month. The latest number posted lower than market expectations for no change.
The Industrial Production report showed that industrial production in December posted a healthy gain but the manufacturing component was even more robust. Overall industrial production rebounded 0.4 percent after dipping 0.3 percent in November. The latest number came in slightly lower than the consensus forecast for a 0.5 percent jump. By major components, manufacturing made a 0.9 percent comeback, following a 0.4 percent drop in November. The market median forecast for the manufacturing component was for a 0.5 percent gain. Econoday has added this component to its consensus forecasts. In December, utilities fell 2.7 percent while mining output expanded 0.3 percent.
The CPI report showed consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.
The Housing Starts report revealed that new residential construction slipped in December but remains somewhat healthy after the jump the prior month. Permits are encouraging. Starts declined 4.1 percent, after surging 9.1 percent in November. December's annualized pace of 0.657 million fell short of market expectations for 0.678 million units and is up 24.9 percent on a year-ago basis. The dip in the latest month was led by a 20.4 percent drop in the multifamily component, following a 23.0 percent boost in November. The single-family component advanced 4.4 percent after rising 3.0 percent the month before.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wed - Jan 25, 2012 = FOMC Meeting Announcement
Thu - Jan 26, 2012 = Durable Goods Orders
Fri - Jan 27, 2012 = GDP
Folks, the Bulls have a strong advantage over the Bears going into trading next week.
The Dow, Nasdaq, S&P 500, and Russell 2000 all have strong uptrend ratings for the first time in months. All the major indices have done a breakout above their previous October 2011 highs. The S&P 500 has confirmed the Resurrection Cross of the 50 day moving average crossing above the 200 day moving average.
Even the notorious January options expiration Friday experienced only a shallow pullback revealing just how strong the Bulls are right now.
We even have the Nasdaq and the Russell 2000 beginning to re-assert themselves as leaders in this strong uptrend. I've been talking to you about the absence of such leadership coming from the Nasdaq and the Russell 2000 for weeks now. That is starting to change which is very bullish for this market.
Let's look under the hood at the market internals and see if they support the Bulls on top thesis for trading next week as well as if they reveal to us what institutional traders are doing.
The TICK closed at 835. This suggests institutional traders were in the market buying across entire sectors last week, really keeping market makers busy. If you're a new subscriber, the TICK records buys as +1 and sells as -1. In a perfect world, market makers match up a buy with a sell (because in order to have a buyer you need to have a seller and vice versa for shorting) and the TICK reads 0 as each cancel each other out. But when you have buying across entire sectors in a short period of time, market makers are temporarily unable to match up a sell order with every buy order. The theory is that it's primarily institutional traders that cause these imbalances because of the vast greater amounts of money they trade with when compared to amateur traders. Normal retail trading puts the tick between -600 and +600, more conservative analysts say between -800 and +800. This week's 835 close on the TICK is bullish because it suggests institutional traders were in this market buying this week.
Now since we see institutional traders in this market buying this week, let's look at what sectors performed the best. This will let us see what sectors institutional traders are buying. The best performing sectors this week were:
#1 = Energy +2.28%
#2 = Technology +2.17%
#3 = Consumer Discr. +1.81%
#4 = Financials +1.58%
#5 = S&P 500 +1.53%
The percentage of stocks on the New York Stock Exchange that are trading above their 50 day moving averages has climbed to 83%. That's bullish. The percentage of stocks trading above their 200 day moving averages has climbed to 58%. Folks, that's the first time we've had a bullish reading this high in 7 months. This to is bullish.
Looking at the Nasdaq Advance Decline Volume chart, we have a breakout on the volume and a strong bullish bias.
The VIX continues to have a strong downtrend rating. This is very bullish for this market folks. It means that PUT buying and PUT hedging continues to occur in lesser amounts.
Using Financials and Home Builders as market internal indicators, because the recession we are in was predicted by the plunge in these two markets, both have uptrend ratings.
All of our market internal indicators due support the thesis that the Bulls have a strong advantage over the Bears going into trading next week.
Now, let's look at other markets of interest to subscribers.
On our It's All About The Oil Dummy chart, you'll see that oil and the S&P 500 diverged from each other last week. Folks, something has to give, either the S&P 500 has to fall back down to oil, or oil has to rise up to the S&P 500. The greater probability has to do to oil rising up to catch up to the S&P 500. The reason we have to give the greater probability to an oil rising scenario is because of the strong uptrend rating on the S&P 500. Also, if we look at the chart of DBO, we could be forming a Bullish Head and Shoulders pattern. If oil closes above $104, it will close the right shoulder and we could see the next leg up.
Gold has a weak uptrend rating. It's not keeping up with the rest of the major indices. That can be evidenced by the fact that the major indices have all cleared their November highs while gold is no where near to clearing that mark.
Silver had a huge day on Friday and now has a weak uptrend rating. The Stock Trader's Almanac talks about how silver tends to outperform gold at this time of year.
Fundamental analysis reports that moved markets last week were: Wednesday's PPI and Industrial Production reports, and Thursday's CPI and Housing Starts.
The PPI report revealed that, at the producer level in December, inflation was tugged down by gasoline and food costs but the core was warmer than expected. Producer prices edged down 0.1 percent after rebounding 0.3 percent the prior month. The latest number posted lower than market expectations for no change.
The Industrial Production report showed that industrial production in December posted a healthy gain but the manufacturing component was even more robust. Overall industrial production rebounded 0.4 percent after dipping 0.3 percent in November. The latest number came in slightly lower than the consensus forecast for a 0.5 percent jump. By major components, manufacturing made a 0.9 percent comeback, following a 0.4 percent drop in November. The market median forecast for the manufacturing component was for a 0.5 percent gain. Econoday has added this component to its consensus forecasts. In December, utilities fell 2.7 percent while mining output expanded 0.3 percent.
The CPI report showed consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.
The Housing Starts report revealed that new residential construction slipped in December but remains somewhat healthy after the jump the prior month. Permits are encouraging. Starts declined 4.1 percent, after surging 9.1 percent in November. December's annualized pace of 0.657 million fell short of market expectations for 0.678 million units and is up 24.9 percent on a year-ago basis. The dip in the latest month was led by a 20.4 percent drop in the multifamily component, following a 23.0 percent boost in November. The single-family component advanced 4.4 percent after rising 3.0 percent the month before.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wed - Jan 25, 2012 = FOMC Meeting Announcement
Thu - Jan 26, 2012 = Durable Goods Orders
Fri - Jan 27, 2012 = GDP
Guys, I'm sorry I have to make the update quick today. My Dad had a heart attack. It's his third. He's had so many heart surgeries that his stents have stents. I've been at the hospital for awhile now. He's doing pretty good and should be going home tomorrow.
The Mid-January Break was a bust this year. If you follow me on Twitter then you already know that my stop loss was hit today on TZA. No problem. I'll play it again next year. Remember, it has almost a 70% success rate since 1994. That's awesome. A gold bug said to me today, see Lance, I told you that 68.8% wasn't a good enough percentage to bet on. Dude. If you can't make money with a nearly 70% success rate then you're so clueless that when you were asked the difference between roast beef and pea soup, you replied, "I can roast beef but I can't pea soup!"
The Dow, S&P 500, Nasdaq, and Russell 2000, are all in strong uptrends! Furthermore, we have leadership coming from the Russell 2000 and Nasdaq! That's perfect.
The TICK was over 1100 today which suggests institutional traders are buying.
Semiconductors and Networking sectors rocked!
Here's the way I'm going to play this market. I'm in cash right now. I've got a bunch of longs I want to buy. If tomorrow starts off with a gap up and good buy side volume, I'll go long these stocks. If there's a pause or pullback, I'll stay back in the safety of cash. The reason is that Friday is options expiration Friday and according to the Stock Trader's Almanac January's option expiration Friday is often a huge down day. A whopping 13 of the last 15 option expiration Fridays in January have been down. I view this Friday as a BBE (Big Bad Event) where I'd rather be on the sidelines and the safety of cash.
Guys, I'm sorry I have to make the update quick today. My Dad had a heart attack. It's his third. He's had so many heart surgeries that his stents have stents. I've been at the hospital for awhile now. He's doing pretty good and should be going home tomorrow.
The Mid-January Break was a bust this year. If you follow me on Twitter then you already know that my stop loss was hit today on TZA. No problem. I'll play it again next year. Remember, it has almost a 70% success rate since 1994. That's awesome. A gold bug said to me today, see Lance, I told you that 68.8% wasn't a good enough percentage to bet on. Dude. If you can't make money with a nearly 70% success rate then you're so clueless that when you were asked the difference between roast beef and pea soup, you replied, "I can roast beef but I can't pea soup!"
The Dow, S&P 500, Nasdaq, and Russell 2000, are all in strong uptrends! Furthermore, we have leadership coming from the Russell 2000 and Nasdaq! That's perfect.
The TICK was over 1100 today which suggests institutional traders are buying.
Semiconductors and Networking sectors rocked!
Here's the way I'm going to play this market. I'm in cash right now. I've got a bunch of longs I want to buy. If tomorrow starts off with a gap up and good buy side volume, I'll go long these stocks. If there's a pause or pullback, I'll stay back in the safety of cash. The reason is that Friday is options expiration Friday and according to the Stock Trader's Almanac January's option expiration Friday is often a huge down day. A whopping 13 of the last 15 option expiration Fridays in January have been down. I view this Friday as a BBE (Big Bad Event) where I'd rather be on the sidelines and the safety of cash.
Guys, I'm sorry I have to make the update quick today. My Dad had a heart attack. It's his third. He's had so many heart surgeries that his stents have stents. I've been at the hospital for awhile now. He's doing pretty good and should be going home tomorrow.
The Mid-January Break was a bust this year. If you follow me on Twitter then you already know that my stop loss was hit today on TZA. No problem. I'll play it again next year. Remember, it has almost a 70% success rate since 1994. That's awesome. A gold bug said to me today, see Lance, I told you that 68.8% wasn't a good enough percentage to bet on. Dude. If you can't make money with a nearly 70% success rate then you're so clueless that when you were asked the difference between roast beef and pea soup, you replied, "I can roast beef but I can't pea soup!"
The Dow, S&P 500, Nasdaq, and Russell 2000, are all in strong uptrends! Furthermore, we have leadership coming from the Russell 2000 and Nasdaq! That's perfect.
The TICK was over 1100 today which suggests institutional traders are buying.
Semiconductors and Networking sectors rocked!
Here's the way I'm going to play this market. I'm in cash right now. I've got a bunch of longs I want to buy. If tomorrow starts off with a gap up and good buy side volume, I'll go long these stocks. If there's a pause or pullback, I'll stay back in the safety of cash. The reason is that Friday is options expiration Friday and according to the Stock Trader's Almanac January's option expiration Friday is often a huge down day. A whopping 13 of the last 15 option expiration Fridays in January have been down. I view this Friday as a BBE (Big Bad Event) where I'd rather be on the sidelines and the safety of cash.
You guys are going to get a new dedicated server to access on GuerillaStockTrading.com
This means that access times should be a lot faster and the website will be up 99% of the time.
My goal is to make GuerillaStockTrading.com the first website you go to after Yahoo Finance, to get the important breaking news most likely to impact your trading account.
To do that, I need a dedicated server that is super fast and always up.
If you guys visit the blog on a daily basis, you'll know GuerillaStockTrading.com got shut down yesterday right at market open for eating up too much system resources on the shared web hosting server. That can't keep happening but it will with over 600 visitors a day and the big spike that comes at market open.
As you read this, I'm lost in WHM hell right now with tech support trying to make the transition over to the new server as smooth as possible. I will keep you posted when things are ready to go but right now, let's get to the weekend update.
Both the Dow and the S&P 500 have been downgraded from a strong uptrend to an uptrend. I'm betting we are going to have a pullback in the markets last week which is why I went long TZA on Friday. TZA is a short the Russell 2000 ETF.
The seasonal January Mid-Month Break is upon us. It is the tendency of the market to pullback in the middle of January. This happens about 70% of the time. Fundamental analysis seems to be supporting the pullback next week profit thesis with the downgrades of 9 countries coming from Standard and Poors and the bad news that creditors and Greece are unable to reach a compromise.
The Nasdaq and Russell 2000 are both downgraded to a sidelines rating.
The TICK plunged in the second half of trading last week. When we looked at the TICK on Wednesday, we had a huge 1100+ spike which suggested institutional buying; however, but the close Friday, the TICK closed for the week at -93. This means that the TICK does not reveal either a bullish or bearish bias right now.
Fundamental analysis reports that moved market last week were: Thursday's Retail Sales, and Friday's International Trade.
The Retail Sales report showed December retail sales advanced but less than expected. Part of the slowing was due to upward revisions to November and October. Retail sales in December edged up 0.1 percent, following a 0.4 percent rise in November (originally up 0.2 percent) and 0.7 percent gain in October (previously up 0.6 percent). The December figure came in lower than the consensus forecast for 0.4 percent. Excluding autos, retail sales actually fell 0.2 percent in December after increasing 0.3 percent in November (originally up 0.2 percent) and increasing 0.5 percent in October (previously up 0.6 percent). The market median forecast was 0.4 percent. Gasoline sales dropped 1.6 percent after a 0.9 percent increase in November.
Friday's International Trade revealed that in November, the U.S. trade deficit widened sharply due largely to a jump in oil imports but also due to a dip in exports. The trade gap grew to $47.8 billion from $43.3 billion in October (originally $43.5 billion). The latest shortfall was much more negative than the consensus forecast for $45.0 billion. Exports declined 0.9 percent after dipping 0.7 percent in October. Imports rebounded 1.3 percent in November, following a 1.0 percent decline the prior month.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wednesday - Jan 18, 2012 = Producer Price Index, Industrial Production
Thursday - Jan 19, 2012 = Housing Starts, Consumer Price Index
You guys are going to get a new dedicated server to access on GuerillaStockTrading.com
This means that access times should be a lot faster and the website will be up 99% of the time.
My goal is to make GuerillaStockTrading.com the first website you go to after Yahoo Finance, to get the important breaking news most likely to impact your trading account.
To do that, I need a dedicated server that is super fast and always up.
If you guys visit the blog on a daily basis, you'll know GuerillaStockTrading.com got shut down yesterday right at market open for eating up too much system resources on the shared web hosting server. That can't keep happening but it will with over 600 visitors a day and the big spike that comes at market open.
As you read this, I'm lost in WHM hell right now with tech support trying to make the transition over to the new server as smooth as possible. I will keep you posted when things are ready to go but right now, let's get to the weekend update.
Both the Dow and the S&P 500 have been downgraded from a strong uptrend to an uptrend. I'm betting we are going to have a pullback in the markets last week which is why I went long TZA on Friday. TZA is a short the Russell 2000 ETF.
The seasonal January Mid-Month Break is upon us. It is the tendency of the market to pullback in the middle of January. This happens about 70% of the time. Fundamental analysis seems to be supporting the pullback next week profit thesis with the downgrades of 9 countries coming from Standard and Poors and the bad news that creditors and Greece are unable to reach a compromise.
The Nasdaq and Russell 2000 are both downgraded to a sidelines rating.
The TICK plunged in the second half of trading last week. When we looked at the TICK on Wednesday, we had a huge 1100+ spike which suggested institutional buying; however, but the close Friday, the TICK closed for the week at -93. This means that the TICK does not reveal either a bullish or bearish bias right now.
Fundamental analysis reports that moved market last week were: Thursday's Retail Sales, and Friday's International Trade.
The Retail Sales report showed December retail sales advanced but less than expected. Part of the slowing was due to upward revisions to November and October. Retail sales in December edged up 0.1 percent, following a 0.4 percent rise in November (originally up 0.2 percent) and 0.7 percent gain in October (previously up 0.6 percent). The December figure came in lower than the consensus forecast for 0.4 percent. Excluding autos, retail sales actually fell 0.2 percent in December after increasing 0.3 percent in November (originally up 0.2 percent) and increasing 0.5 percent in October (previously up 0.6 percent). The market median forecast was 0.4 percent. Gasoline sales dropped 1.6 percent after a 0.9 percent increase in November.
Friday's International Trade revealed that in November, the U.S. trade deficit widened sharply due largely to a jump in oil imports but also due to a dip in exports. The trade gap grew to $47.8 billion from $43.3 billion in October (originally $43.5 billion). The latest shortfall was much more negative than the consensus forecast for $45.0 billion. Exports declined 0.9 percent after dipping 0.7 percent in October. Imports rebounded 1.3 percent in November, following a 1.0 percent decline the prior month.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wednesday - Jan 18, 2012 = Producer Price Index, Industrial Production
Thursday - Jan 19, 2012 = Housing Starts, Consumer Price Index
You guys are going to get a new dedicated server to access on GuerillaStockTrading.com
This means that access times should be a lot faster and the website will be up 99% of the time.
My goal is to make GuerillaStockTrading.com the first website you go to after Yahoo Finance, to get the important breaking news most likely to impact your trading account.
To do that, I need a dedicated server that is super fast and always up.
If you guys visit the blog on a daily basis, you'll know GuerillaStockTrading.com got shut down yesterday right at market open for eating up too much system resources on the shared web hosting server. That can't keep happening but it will with over 600 visitors a day and the big spike that comes at market open.
As you read this, I'm lost in WHM hell right now with tech support trying to make the transition over to the new server as smooth as possible. I will keep you posted when things are ready to go but right now, let's get to the weekend update.
Both the Dow and the S&P 500 have been downgraded from a strong uptrend to an uptrend. I'm betting we are going to have a pullback in the markets last week which is why I went long TZA on Friday. TZA is a short the Russell 2000 ETF.
The seasonal January Mid-Month Break is upon us. It is the tendency of the market to pullback in the middle of January. This happens about 70% of the time. Fundamental analysis seems to be supporting the pullback next week profit thesis with the downgrades of 9 countries coming from Standard and Poors and the bad news that creditors and Greece are unable to reach a compromise.
The Nasdaq and Russell 2000 are both downgraded to a sidelines rating.
The TICK plunged in the second half of trading last week. When we looked at the TICK on Wednesday, we had a huge 1100+ spike which suggested institutional buying; however, but the close Friday, the TICK closed for the week at -93. This means that the TICK does not reveal either a bullish or bearish bias right now.
Fundamental analysis reports that moved market last week were: Thursday's Retail Sales, and Friday's International Trade.
The Retail Sales report showed December retail sales advanced but less than expected. Part of the slowing was due to upward revisions to November and October. Retail sales in December edged up 0.1 percent, following a 0.4 percent rise in November (originally up 0.2 percent) and 0.7 percent gain in October (previously up 0.6 percent). The December figure came in lower than the consensus forecast for 0.4 percent. Excluding autos, retail sales actually fell 0.2 percent in December after increasing 0.3 percent in November (originally up 0.2 percent) and increasing 0.5 percent in October (previously up 0.6 percent). The market median forecast was 0.4 percent. Gasoline sales dropped 1.6 percent after a 0.9 percent increase in November.
Friday's International Trade revealed that in November, the U.S. trade deficit widened sharply due largely to a jump in oil imports but also due to a dip in exports. The trade gap grew to $47.8 billion from $43.3 billion in October (originally $43.5 billion). The latest shortfall was much more negative than the consensus forecast for $45.0 billion. Exports declined 0.9 percent after dipping 0.7 percent in October. Imports rebounded 1.3 percent in November, following a 1.0 percent decline the prior month.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Wednesday - Jan 18, 2012 = Producer Price Index, Industrial Production
Thursday - Jan 19, 2012 = Housing Starts, Consumer Price Index
The Dow continues to have a strong uptrend rating. The big news is that the S&P 500 has now joined the Dow. Both the Dow and the S&P 500 have a strong uptrend rating. The Nasdaq has an uptrend rating. Even bigger news is that the Russell 2000 now has an uptrend rating.
The Russell 2000 is starting to show some upside leadership. For the last 2 days, small caps have been leading large caps higher. Two days does not a market make and so we need confirmation of this leadership role over the coming days and weeks.
The S&P 500 has just had a Resurrection Cross with the 50 day moving average crossing above the 200 day moving average.
All the major indices are in uptrends which means the Bulls have strengthened their advantage over the Bears. The Bulls are on top at mid-week. Let's look at the market internals and see if they support this Bulls on top thesis.
The percentage of stocks on the NYSE that are trading above their 50 day moving average has risen to 78%. That's bullish folks. The percent of stocks trading above their 200 day moving average has risen to 49%. That's close enough to a neutral rating.
On the Nasdaq Advance Decline Volume chart, clearly the Bulls have the advantage when you compare up and down volume to total volume as evidenced by the high reading above the 0 line on the NYUD to NYTV ratio chart.
The VIX continues to be in a downtrend and has just had a Burial Cross. The VIX was the lone wolf several weeks ago being the only chart that pointed to a bull run. In fact, the VIX continues to favor the Bulls with its ongoing downtrend rating. Even better, the VIX has just had a Burial Cross with the 50 day moving average crossing below the 200 day moving average.
Market internals support the Bulls on top thesis for trading the remainder of this week.
Illumina (ILMN), the stock I was stopped out of for a loss and then had to buy back today, has had huge news. They've created a machine that can sequence someone's entire genome in 24 hours. Currently, it takes about 2 to 3 weeks. It will be sold as an upgrade to existing customers of HiSeq 2000 machines for $50,000. The cost to sequence a genome with this machine is estimated to be between $1,000 and $3,000. This machine will start selling in the second half of 2012. The stock exploded on the news with huge buy side volume. My long term profit thesis on this stock is still intact.
In the video below, I'll introduce you to another hot looking stock that I have not bought yet for my own personal trading account and I'll answer several subscriber questions.
Disclosure: Long Illumina (ILMN)
The Dow continues to have a strong uptrend rating. The big news is that the S&P 500 has now joined the Dow. Both the Dow and the S&P 500 have a strong uptrend rating. The Nasdaq has an uptrend rating. Even bigger news is that the Russell 2000 now has an uptrend rating.
The Russell 2000 is starting to show some upside leadership. For the last 2 days, small caps have been leading large caps higher. Two days does not a market make and so we need confirmation of this leadership role over the coming days and weeks.
The S&P 500 has just had a Resurrection Cross with the 50 day moving average crossing above the 200 day moving average.
All the major indices are in uptrends which means the Bulls have strengthened their advantage over the Bears. The Bulls are on top at mid-week. Let's look at the market internals and see if they support this Bulls on top thesis.
The percentage of stocks on the NYSE that are trading above their 50 day moving average has risen to 78%. That's bullish folks. The percent of stocks trading above their 200 day moving average has risen to 49%. That's close enough to a neutral rating.
On the Nasdaq Advance Decline Volume chart, clearly the Bulls have the advantage when you compare up and down volume to total volume as evidenced by the high reading above the 0 line on the NYUD to NYTV ratio chart.
The VIX continues to be in a downtrend and has just had a Burial Cross. The VIX was the lone wolf several weeks ago being the only chart that pointed to a bull run. In fact, the VIX continues to favor the Bulls with its ongoing downtrend rating. Even better, the VIX has just had a Burial Cross with the 50 day moving average crossing below the 200 day moving average.
Market internals support the Bulls on top thesis for trading the remainder of this week.
Illumina (ILMN), the stock I was stopped out of for a loss and then had to buy back today, has had huge news. They've created a machine that can sequence someone's entire genome in 24 hours. Currently, it takes about 2 to 3 weeks. It will be sold as an upgrade to existing customers of HiSeq 2000 machines for $50,000. The cost to sequence a genome with this machine is estimated to be between $1,000 and $3,000. This machine will start selling in the second half of 2012. The stock exploded on the news with huge buy side volume. My long term profit thesis on this stock is still intact.
In the video below, I'll introduce you to another hot looking stock that I have not bought yet for my own personal trading account and I'll answer several subscriber questions.
Disclosure: Long Illumina (ILMN)
The Dow continues to have a strong uptrend rating. The big news is that the S&P 500 has now joined the Dow. Both the Dow and the S&P 500 have a strong uptrend rating. The Nasdaq has an uptrend rating. Even bigger news is that the Russell 2000 now has an uptrend rating.
The Russell 2000 is starting to show some upside leadership. For the last 2 days, small caps have been leading large caps higher. Two days does not a market make and so we need confirmation of this leadership role over the coming days and weeks.
The S&P 500 has just had a Resurrection Cross with the 50 day moving average crossing above the 200 day moving average.
All the major indices are in uptrends which means the Bulls have strengthened their advantage over the Bears. The Bulls are on top at mid-week. Let's look at the market internals and see if they support this Bulls on top thesis.
The percentage of stocks on the NYSE that are trading above their 50 day moving average has risen to 78%. That's bullish folks. The percent of stocks trading above their 200 day moving average has risen to 49%. That's close enough to a neutral rating.
On the Nasdaq Advance Decline Volume chart, clearly the Bulls have the advantage when you compare up and down volume to total volume as evidenced by the high reading above the 0 line on the NYUD to NYTV ratio chart.
The VIX continues to be in a downtrend and has just had a Burial Cross. The VIX was the lone wolf several weeks ago being the only chart that pointed to a bull run. In fact, the VIX continues to favor the Bulls with its ongoing downtrend rating. Even better, the VIX has just had a Burial Cross with the 50 day moving average crossing below the 200 day moving average.
Market internals support the Bulls on top thesis for trading the remainder of this week.
Illumina (ILMN), the stock I was stopped out of for a loss and then had to buy back today, has had huge news. They've created a machine that can sequence someone's entire genome in 24 hours. Currently, it takes about 2 to 3 weeks. It will be sold as an upgrade to existing customers of HiSeq 2000 machines for $50,000. The cost to sequence a genome with this machine is estimated to be between $1,000 and $3,000. This machine will start selling in the second half of 2012. The stock exploded on the news with huge buy side volume. My long term profit thesis on this stock is still intact.
In the video below, I'll introduce you to another hot looking stock that I have not bought yet for my own personal trading account and I'll answer several subscriber questions.
Disclosure: Long Illumina (ILMN)
The first five trading days in January have closed up! Chalk one up for the Bulls. Here are the actual gains for the first five trading days in January:
Dow = +1.43%
S&P 500 = +1.84%
Nasdaq = +2.74%
Russell 2000 = +1.7%
The Nasdaq is leading so far for the month of January. This is bullish folks. We like to see tech leading the market higher. The reason we like to see tech leading is that in sector rotation theory, the Nasdaq leads the market out of a recession. The reason tech leads the market out of a recession is that companies utilize technology to increase worker productivity and to lower costs.
We also want to see small caps leading the market higher and that's something we don't have right now. December and January should have small-caps leading large-caps higher. This small-cap leadership is missing right now. So while the Nasdaq leading the market up is good, we need to see leadership coming from small-caps.
The January Barometer is comprised of two parts: The First Five Trading Days, and The Entire Month Of January. The Bulls have won the first five trading days. Now we'll see if the month of January closes up. Over 80% of the time, if the month of January closes up, so does the market for the entire year.
A subscriber writes in to ask what stocks within the strong uptrending Dow look the best. Here are the top strong uptrending stocks on the Dow with the best looking charts: General Electric (GE), Chevron (CVX), Home Depot (HD), Boeing (BA), Exxon Mobil (XOM), Travelers (TRV), Cisco (CSCO), McDonalds (MCD), Intel (INTC), Walt Disney (DIS), and Merck (MRK).
Another subscriber writes in to ask about the trend of Oil. Folks, Oil is in a strong uptrend but there's more to Oil than technicals. External news events are always impacting the price of Oil. The possibility of a war with Iran pushes Oil up for a couple of days, then Saudi Arabia comes out and says they will increase production to make up for any short fall caused by a war with Iran and Oil falls back down. Oil is so politicized and so impacted by external news events that you can't just look at the chart to trade it. But I figure that this subscriber already knows that so, just looking at the chart, it's in a strong uptrend. DIG is in an uptrend.
The first five trading days in January have closed up! Chalk one up for the Bulls. Here are the actual gains for the first five trading days in January:
Dow = +1.43%
S&P 500 = +1.84%
Nasdaq = +2.74%
Russell 2000 = +1.7%
The Nasdaq is leading so far for the month of January. This is bullish folks. We like to see tech leading the market higher. The reason we like to see tech leading is that in sector rotation theory, the Nasdaq leads the market out of a recession. The reason tech leads the market out of a recession is that companies utilize technology to increase worker productivity and to lower costs.
We also want to see small caps leading the market higher and that's something we don't have right now. December and January should have small-caps leading large-caps higher. This small-cap leadership is missing right now. So while the Nasdaq leading the market up is good, we need to see leadership coming from small-caps.
The January Barometer is comprised of two parts: The First Five Trading Days, and The Entire Month Of January. The Bulls have won the first five trading days. Now we'll see if the month of January closes up. Over 80% of the time, if the month of January closes up, so does the market for the entire year.
A subscriber writes in to ask what stocks within the strong uptrending Dow look the best. Here are the top strong uptrending stocks on the Dow with the best looking charts: General Electric (GE), Chevron (CVX), Home Depot (HD), Boeing (BA), Exxon Mobil (XOM), Travelers (TRV), Cisco (CSCO), McDonalds (MCD), Intel (INTC), Walt Disney (DIS), and Merck (MRK).
Another subscriber writes in to ask about the trend of Oil. Folks, Oil is in a strong uptrend but there's more to Oil than technicals. External news events are always impacting the price of Oil. The possibility of a war with Iran pushes Oil up for a couple of days, then Saudi Arabia comes out and says they will increase production to make up for any short fall caused by a war with Iran and Oil falls back down. Oil is so politicized and so impacted by external news events that you can't just look at the chart to trade it. But I figure that this subscriber already knows that so, just looking at the chart, it's in a strong uptrend. DIG is in an uptrend.
The first five trading days in January have closed up! Chalk one up for the Bulls. Here are the actual gains for the first five trading days in January:
Dow = +1.43%
S&P 500 = +1.84%
Nasdaq = +2.74%
Russell 2000 = +1.7%
The Nasdaq is leading so far for the month of January. This is bullish folks. We like to see tech leading the market higher. The reason we like to see tech leading is that in sector rotation theory, the Nasdaq leads the market out of a recession. The reason tech leads the market out of a recession is that companies utilize technology to increase worker productivity and to lower costs.
We also want to see small caps leading the market higher and that's something we don't have right now. December and January should have small-caps leading large-caps higher. This small-cap leadership is missing right now. So while the Nasdaq leading the market up is good, we need to see leadership coming from small-caps.
The January Barometer is comprised of two parts: The First Five Trading Days, and The Entire Month Of January. The Bulls have won the first five trading days. Now we'll see if the month of January closes up. Over 80% of the time, if the month of January closes up, so does the market for the entire year.
A subscriber writes in to ask what stocks within the strong uptrending Dow look the best. Here are the top strong uptrending stocks on the Dow with the best looking charts: General Electric (GE), Chevron (CVX), Home Depot (HD), Boeing (BA), Exxon Mobil (XOM), Travelers (TRV), Cisco (CSCO), McDonalds (MCD), Intel (INTC), Walt Disney (DIS), and Merck (MRK).
Another subscriber writes in to ask about the trend of Oil. Folks, Oil is in a strong uptrend but there's more to Oil than technicals. External news events are always impacting the price of Oil. The possibility of a war with Iran pushes Oil up for a couple of days, then Saudi Arabia comes out and says they will increase production to make up for any short fall caused by a war with Iran and Oil falls back down. Oil is so politicized and so impacted by external news events that you can't just look at the chart to trade it. But I figure that this subscriber already knows that so, just looking at the chart, it's in a strong uptrend. DIG is in an uptrend.
Stocks Above I Currently Hold In My Own Trading Account: Long LIFE
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The total gain for the month of January is 258%. I'm writing off the two losing positions in JA Solar and Perfect World. 
The Bulls continue to have the advantage over the Bears and here's why. The Dow, S&P 500, Nasdaq, and Russell 2000 are all in strong uptrends. Further, we're seeing upside leadership coming from the Nasdaq and the Russell 2000. So going into trading next week, the Bulls have the advantage over the Bears. Now let's look at our market internal indicators and see if they support the Bulls on top thesis for trading next week.
Folks, the Bulls have a strong advantage over the Bears going into trading next week.
Guys, I'm sorry I have to make the update quick today. My Dad had a heart attack. It's his third. He's had so many heart surgeries that his stents have stents. I've been at the hospital for awhile now. He's doing pretty good and should be going home tomorrow.
You guys are going to get a new dedicated server to access on GuerillaStockTrading.com
The Dow continues to have a strong uptrend rating. The big news is that the S&P 500 has now joined the Dow. Both the Dow and the S&P 500 have a strong uptrend rating. The Nasdaq has an uptrend rating. Even bigger news is that the Russell 2000 now has an uptrend rating.
The first five trading days in January have closed up! Chalk one up for the Bulls. Here are the actual gains for the first five trading days in January:
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