Do not forget to access previous RIMM charts, or any chart for that matter, by simply plugging the ticker into the search box at the right.
Friday, April 29, 2011
RIMM Research In Motion Daily Chart H&S Gaps
Do not forget to access previous RIMM charts, or any chart for that matter, by simply plugging the ticker into the search box at the right.
RIMM Research In Motion Weekly Chart Downward Channel Gaps
Keystone's Wake Up 4-29-11
SPX is now testing resistance levels from the summer of 2008, three years ago, as the commodities bubble popped. 1363 resistance above and 1354 support below.
EOM today so the monthly charts will be worth a look this weekend.
Bloomberg
said that earnings so far show about 60% beating while close to 40% missed. Lots of mixed news; multi-nationals benefiting from lower dollar.
said that earnings so far show about 60% beating while close to 40% missed. Lots of mixed news; multi-nationals benefiting from lower dollar.Many sectors displaying negative divergences on weekly and daily charts which forecasts trouble ahead for the broad markets. Staples, healthcare and some real estate look to be the best of a bad lot. Real estate was the surprise since SRS, the inverse real estate had and still has nice positive divergence, is indicating a weakening in real estate. The RSI relative strength did take an extra tick lower for SRS which will at least mute the effect of the bounce coming for SRS in the days ahead.
The idea is that staples, healthcare and to some extent, real estate plays, are probably the best three places to hide money from the oncoming downside. Negative divergence showing on several sectors such as technology, telecom, discretionary and trannies. Energy and basic materials are rolling over with H&S’s. Financials are already trending along lower, until yesterday when they bounced, so the coming days will sort the banks out.
Financials were POMO pumped yesterday and rejoined the bull side. Some euro investigations are opening up against JPM, GS, and others, but unknown how this will affect financials today. As long as XLF remains above 16.44 then the broad market bulls are in continued up mode. If the XLF drops back under 16.44 and lower, then the market bears take the financials back and the broad markets will drift lower.
The 2-10 spread has been falling, flattening. 10-year at 3.30%, why 4% only seems like yesterday; the 2-year at 0.61%, thus 330-61=269. We are only talking small ticks here, but the 270’s were the norm over recent weeks, but 269 spread is plenty steep for banksters to be happy, and this is in line with XLF buoyancy which occurred yesterday. Keystone uses a 255 level as a marker, below is sad bankers, above is happy ones. So the spread remains comfortably above. If the spread drops under 255, well, then the banks have problems, and so will the markets. A 3.1% ten year and 0.6% two year would produce sad bankers so it is not as far away as traders think.
Utilities have exploded to the upside on POMO fuel, UTIL now at 428 well above the 411 danger zone area. Broad markets will not experience extended selling unless the utes are leading or coincidental with the downside. This is a big feather in the bulls cap. Also, SPX:VIX now at 93 well above the 68 bear selling zone so no worries by bulls. SPXA150R is above 90, this is a lofty perch consistent with topping markets. Traders remain complacent, still feeling the euphoric affects of Easter beverages, not worried about a drop in the markets at all. This is evidenced by the VIX now closing with a 14 handle and the put/call numbers showing lack of fear. Chairman Bernanke’s message, whether he intended it to be or not, is to keep the good times rolling, and traders are embracing the party atmosphere.
Many traders play the energy/ISM trade where you buy energy at the end of the month and hold it until, and sometimes thru, the ISM news on the first of the month. Trade has worked like a charm month after month. Thus, watch XLE over next couple days. If XLE is weak that would show that this trade is ending its streak and it would provide a hint to overall market direction as well. If XLE moves strongly up over next couple days, early next week, then the market bulls will respond broadly.
The long side has been the trade as the indexes continue floating upwards. Caution is warranted, the markets are not stable. Stay on guard and close to the mouse. Many sector charts with negative outlooks moving forward. The weak dollar=strong commodities=strong equities trade is still kicking but it has a long gray beard now.
Charts want to flip towards strong dollar=weak commodities=weak equities=weak euro. These changes have a way of happening suddenly.
SPX S/R 4-29-11 EOM
Today's session wraps up April; end of month today. That means the monthly charts will have new prints to review over the weekend. For today, Friday, market bulls will keep the party alive if they can punch up thru 1363 resistance. Next targets are 1365 and 1368. The buoyancy yesterday was due to financials jumping on the bull wagon, therefore, watch financials closely again today.
For the market bears, they need to push down thru 1354 support to get anything going. If that can be accomplished then a test of 1350 wil come as well. Bulls are in control now, copper is the only bearish sector.
For the market bears, they need to push down thru 1354 support to get anything going. If that can be accomplished then a test of 1350 wil come as well. Bulls are in control now, copper is the only bearish sector.
· 1404
· 1399-1400
· 1391
· 1388-1389
· 1386
· 1377
· 1370-1371
· 1368
· 1365
· 1360-1363
· HOD Thursday 1361.71
· 1357-1358
· 1354
· LOD Thursday 1353.60
· 1350
· 1343-1344
· 1341
· 1337
· 1331-1333
· 1328-1329
· 1325-1326
· 1318-1323
· 1314-1316
· 1312
· 1305-1308
Thursday, April 28, 2011
XOM Exxon Mobil Weekly Chart Overbot Rising Wedge Negative Divergence
Keystone's Market Action 4-28-11
The white smoke fades today after the Chairman’s magician show. The dollar took the worst of it and in turn has sent gold and silver jumping again. If there is one thing that Bernanke probably wants a do-over on, it would be the talk of a strong dollar policy. Ben has to conceal his laughter as he utters ‘strong dollar’. We know that some Fed members like Bullard and Lasher are hawkish. The vote was unanimous which means all the Fed members had a pizza party and agreed to play nice. Typically, you have to give to get. If the hawks gave, to get some type of inflation shout out during the press conference, they should demand their money back.
Bernanke attempted to say that inflation was a hair higher but even this tiny attempt to recognize inflation went unnoticed and markets interpret the Chairman to say ‘let the good times roll’, so the good times are rolling, and the buck is taken out back.
Financials and copper are the only bearish leaning sectors now and in fact, the financials are favoring the bull side of the bull-bear line as this is written. Watch XLF 16.33, whatever side price moves will be in concert with how the broad markets move today.
Copper remains bearish and it is a recognized market leader, but it a lonely leader of one, itself. Consider markets to be unstable. Volatility, VIX, now has lost the 15 handle again, trying to regain that level now. CPC put/call hovers around the 0.7’s, there is no fear in these markets; traders are in agreement that the markets will not stop going up. (contrarian signal typically)
The POMO pump spigot was turned back on today, and the financials, XLF, were pushed higher between 10 AM and 11 AM as the Tuesday chart and post discusses, and today there was success, as long as XLF can maintain 16.33. Financials must firmly rejoin the bull camp if markets want to head higher. Very simply, use XLF as your gauge today, if XLF is above 16.33, then the broad markets will go up, if the XLF is below 16.33 today, then the broad markets will sell off.
Chairman Bernanke's Desk Conference
A satirical look at the first official Fed FOMC Press Conference 4-27-11;
Chairman Bernanke’s Desk Conference
by The Keystone Speculator
by The Keystone Speculator
In what resembles a poorly scripted SNL (Saturday Night Live
) sketch, Chairman Bernanke walks onto the stage, and in Get Smart fashion, immediately drops under camera view, one-half of his body disappearing behind a desk. Ben lowers his stature before he utters a word. Perhaps Ben felt a need for protection from incoming tomatos, and a sturdy desk is just the ticket.
) sketch, Chairman Bernanke walks onto the stage, and in Get Smart fashion, immediately drops under camera view, one-half of his body disappearing behind a desk. Ben lowers his stature before he utters a word. Perhaps Ben felt a need for protection from incoming tomatos, and a sturdy desk is just the ticket.The financial reporters sit at dining tables; remnants of a late morning feast stain the shiny white tablecloth. The cookie-munching journalists look to be victims of after-lunch drowsies, sluggishly asking token questions only to justify their plate. Perhaps one of them could have at least asked if the desk was mahogany. In fact, the Chairman would have scored points if he mentioned the desk is on loan from Fred Fafooshnik Office Supply on Elm Street, but I suspect such a fine desk is custom shipped from his summer office.
I will not be too hard on the press core, however, and their soft-ball questions, I see they are quite busy judging by the jelly donut stains on their ties and the powdered sugar smudges on their glasses. One reporter could only read his question after brushing away what appear to be toast crumbs from his notes.
The Chairman started the virgin conference off with a thud. He obviously never attended a football game where the team runs out onto the field tearing thru a banner as fist pumps fill the air. Of course, in fairness, the Fed is not a sporting event—they are more like a circus. I knew something was missing yesterday and it was the calliope music. Regardless, a subtle golf-type fist pump may have been a nice touch.
To recognize this momentous occasion, and the desire for the Fed to provide more transparency, context and color to their statements, Ben chose to, well, read a statement. The journalists did not seem to mind, one elbowed the other to point at the two donuts remaining in the food tray. Another reporter wiped bagle crumbs from the corner of his mouth. Thus, in the spirit of communication, the Fed Chairman performed the top no-no in communication, reading from text on camera, a painfully boring process to view. And considering that he simply read a written statement, hey, how about emailing that to me, I’ll take a look at it later.
Ben’s answers shed light on the Fed, but on the blemishes not the tan. We now realize that the Fed is pretty much powerless to do about anything to help the economy. Ben’s responses are summed up by we have no effect there, nope, can’t do that, and, we would like to, but we have no power with that either. If this is the case, why does he get such a nice desk? Why do we need the Fed if it is powerless to do anything?
New revelations from the Fed are occurring all the time. We found out late last summer, at the start of the Bernanke QE2 POMO Fist Pump Rally, I knew a fist pump was in here somewhere, that the Fed’s mandate is to keep equity markets buoyant. Forget that talk about rates and full employment stuff. The Fed has placed all the eggs in the wealth effect basket, but, the Easter Bunny already came and went. Perhaps the Tooth Fairy will be along any minute? How ironic that the Fed is the Tooth Fairy since we go to sleep every night and wake up with billions of dollars under out pillows. Damn if I know how it got here, just hurry up and spend it before it disappears.
Witnessing Ben’s handwringing—oh woe is me—attitude over how powerless he is at least places him in the clear when the next bubble bursts. When the torches and pitch forks show up, he can conveniently point down the street to the other folks that did all this nasty stuff to the economy and markets.
Chairman Bernanke succeeded today. He did not want to rock the boat, or paint himself into a corner, or any other cliché you can come up with, so he did succeed, especially since he did not produce a YouTube moment.
I’ll give the Chairman a free pass if he has bad knees, but I would rather see a Fed Chairman standing exuding authority behind a podium, pounding the surface to accentuate points. Instead, we see a Fed Chairman sitting behind a desk, as if he is taking a social security application, hiding behind oak protection, waiting for folks to clear so he can pull the Skittles package from the center drawer, and enjoy all the colored delights without sharing. And come to think about it, at least he could have shown us what were in the drawers—the desks’, most definitely not his—that would be a whole different kind of show.
No worries however, more entertainment is ahead since this is now a repeating SNL
sketch four times per year; The Fed’s Desk Conference.
sketch four times per year; The Fed’s Desk Conference.Wednesday, April 27, 2011
XLF Financials Minute Chart shows POMO Pump
Use a 16.30 level as a guide this week. Market bulls need XLF above 16.30 so the broad market party lives on; the financial bears remain in control as long as XLF is under 16.30. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.
Keystone's Wake Up 4-27-11
The run up yesterday is testimony to the uber bullishness in place now. VIX remains low although it did stealthily move from under 15.40 to over 15.60 in the last 45 minutes of trading. CPC put/call moved flat yesterday between 0.6 and 0.8 for almost the entire day; there is no fear in these markets, traders expect a continued up move.
This means that the consensus of traders expect the Chairman to do a simple tap dance all afternoon and not change any direction or make any moves, or even hints at moves, at all. This means the upside should be limited and the greater risk is to the downside.
Also, purely technical-wise, some traders had short protection in place with a 1344 stop and once that level was hit, a short-covering rally popped the SPX from the 1343 level to almost tag 1350 in only 16 minutes; a half percent rise in the index in a heartbeat. The SPX 1340 gap fill finally occurred after preaching about that for the last two months. All gap fills are now lower. This does not mean the SPX cannot go up, it simply means that more of a magnetic force will want to pull price towards the empty gaps that now only exist below.
No POMO pump this morning since the FOMC will be performing the verbal cheerleading all day long. POMO pumps are back for Thursday and Friday mornings.
For Chairman Bernanke’s virgin press conference, the markets have priced in a steady-eddy, no surprise event for today. Bernanke will not allow reporters to paint him into a corner; Ben will try to display a non confrontational posture despite reporters typically making him nervous. The third man on the field today, to use a football analogy referencing the officials, is the reporters' questions. If the press conference pit bulls turn into pussy cats lobbing softball questions for Bernanke to hit out of the park, the market move yesterday will be verified.
If, however, the Chairman is grilled on the dollar position, and whether or not QE will continue thru the June end date, and a multitude of other mile post accountability questions, perhaps today will turn exciting. Chances are that Bernanke says QE2 will wind down as expected in June and he will stay away from making any statements about shrinking the balance sheet or raising rates, and the press conference should go off without a hitch.
Markets are in the bulls favor now although traders are complacent and have no fear of a pull back. This means the risk is to the downside, upside should be limited, especially as financials continue to not participate. Dr. Copper remains sick and the POMO pumping yesterday could not bring copper up into a respectable range, so this leader must be taken seriously.
If SPX 1350 handle is hit at the open then the move will accelerate a few handles higher. Indexes should idle in front of the press conference today. Market bears have no hope unless they can push under SPX 1337 today.
The Chairman decides the dollar direction today by his actions, or inactions. If the dollar continues down=commodities and equities continue up, or, visa versa, if Bernanke missteps or provides even a slight whiff of hawkishness, then the dollar bounces=commodities and equities sell off.
SPX S/R 4-27-11
SPX stopped only 45 pennies away from the psychological 1350 level yesterday. If the 1350 handle is touched today, SPX should accelerate higher a few handles. Market bears need to see the 1337 handle lost to get anything going lower.
Markets will probably idle in front of the press conference at 2:15 PM EST, where the fate of the dollar, and thus the markets, will then be known.
Markets will probably idle in front of the press conference at 2:15 PM EST, where the fate of the dollar, and thus the markets, will then be known.
· 1377
· 1360
· 1350
· Tuesday HOD 1349.55
· Tuesday Close 1347.24
· 1347
· 1343-1344
· 1341
· 1337-1339
· Tuesday LOD 1336.75
· 1331-1333
· 1328-1329
· 1325-1326
· 1318-1323
· 1314-1316
· 1312
· 1305-1308
· 1298-1301
· 1294-1295
· 1286-1287
Tuesday, April 26, 2011
Keystone's Market Action 4-26-11
The SPX 1340 gap fill is here; Keystone has been waiting two months for this. 1343 was the closing high and 1344 was the HOD in February so watch these levels. More than likely, markets will idle into the Three Ring Circus tomorrow where the fate of the dollar, and thus, the commdoites and equities markets, will be determined.
The gap fill of that 1340 is important since it closes out any open business above. Some technicians are embracing an inverted H&S now in the charts with this SPX 1340 level serving as a neckline but Keystone does not. Keystone does not place much worth in any inverted H&S, or C&H for that matter, that occurs after a stock has rallied and trended up. An H&S forecasting a turn down, yes, but an inverted H&S, no. Keystone only uses the inverted H&S pattern, and cup and handle pattern, after a stock or index has been beaten down and is trying to bottom. But, does this mean that the inverted H&S projection by other technicians will not come to be? Of course not. Time will tell but Keystone is on the other side of those analysts.
Gold and silver pulling back a little after the spike highs yesterday but again, markets should go into a holding pattern ahead of Chairman Bernanke. Over 30 billion is currently shorting the dollar, that is quite a trade all going in one direction, even a hawkish cough from Bernanke, that pops the dollar even only a few pennies, may unravel this trade in a short covering explosion, but, have to wait until tomorrow to find out.
All major sectors are bullish except for copper and financials. Watch copper during the POMO pumping now since copper buoyancy will give the market bulls further reason to buy. Watch retail, RTH, for hints of overall broad market direction as well.
VIX remains low, CPC at 0.7, there is no fear in the markets at all, traders are complacent and expect the indexes to simply continue up day after day moving forward, usually a contrarian indicator.
Thus, we'll see how the SPX reacts around this 1340 gap, the 1343 close and the 1344 HOD from February, as well as support at 1338-1339, then 1336, and then stronger support at 1332-1333. Probably sideways into Bernanke's Q&A tomorrow afternoon. SPX now at 1343.39, broke thru the February high close, not yet the HOD at 1344. This will serve as drama for today but the high percentage thought points to a close at the 1340 gap, perfectly setting up tomorrow for Chairman Bernanke's moment in the sun.
Monday, April 25, 2011
SRS Ultrashort Real Estate ETF Daily Chart Oversold Falling Wedge Positive Divergence
Thus, things are setting up for the next leg down in the housing market. Tomorow is the Case-Shiller report, lately these two Gloomy Gus's have had less than stellar news to report with their index. Since the SRS charts want to bounce now, the Case-Shiller report must hold some ominous news. We will know in a few hours. Regardless, as the days and weeks progress, SRS will move up which means the builders will weaken. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.
Keystone's Wake Up 4-25-11
The Easter bunny hops away but the stomach pain from eggs and candy remains. The markets now hop into a week of high drama. The FOMC two-day meeting begins tomorrow, the rate decision is after lunch on Wednesday, no change expected, but the larger event is the first Q&A session by chairman Bernanke at 2:15 PM EST. The question about a weak versus strong dollar will move the markets in a big way. More dovish talk, weak dollar policy, means higher commodities and equities, but, any blurbs about an end to QE, hawkish talk, will lead to dollar strength and commodity and equity weakness. No one knows, the drama will have to play itself out.
Congress remains out of session until next Monday, and equites are typically bullish when the fools are not at the controls, as last week showed.
Copper, financials and utilities are important today. Gold and silver continue to move higher but copper not so much this morning. When gold closed above the 1480, Keystone's 80 20 Rule targeted 1525 and gold is not wasting any time to get there. Utilities, UTIL, must remain above 410.87, call it 411, all this week, otherwise, the broad markets will sell off. UTIL starts at 418+ comfortably 7 or 8 points above this danger zone.
Watch AAPL as well, 352 was the level at the iPad2 release when Steve Jobs made his last media appearance, and 355 is sturdy resistance, so the 352-355 zone was identified last week as a major test for Apple. Price jumped big last Friday but then fell on its sword, reversing, and closing at 350.70, almost 5 points off the high and below this critical 352-355 zone. If AAPL does not get above 355, this would be viewed as bearish for the broad markets overall.
Earnings started off weak with AA but last week most companies posted acceptable numbers, lots beating by the proverbial penny. There were issues to add to the drama such as Apple, a mixed bag on tech and the railroads disappointed. RSK meets earnings estimates a few minutes ago but has poor guidance. JCI beats by a penny. SNDK saying good things about flash memory. Thus, looks like the mixed earnings bag will continue. 180 of the S&P are reporting this week.
China has been very quiet lately but view them as a wild card capable of releasing news at any time that may move markets. New Home Sales hit at 10 AM.
Look for the gap fill at SPX 1340 to close out business up top. Watch the potential triple top forming. If SPX moves up even only a handle at the open this will lead to testing of 1339, 1340, 1341, 1343, 1344 resistance levels. Market bears will need to see the 1333 level lost to have any hope today, if that occurs, then tests of 1331, 1328 and 1325 support would be in order.
Congress remains out of session until next Monday, and equites are typically bullish when the fools are not at the controls, as last week showed.
Copper, financials and utilities are important today. Gold and silver continue to move higher but copper not so much this morning. When gold closed above the 1480, Keystone's 80 20 Rule targeted 1525 and gold is not wasting any time to get there. Utilities, UTIL, must remain above 410.87, call it 411, all this week, otherwise, the broad markets will sell off. UTIL starts at 418+ comfortably 7 or 8 points above this danger zone.
Watch AAPL as well, 352 was the level at the iPad2 release when Steve Jobs made his last media appearance, and 355 is sturdy resistance, so the 352-355 zone was identified last week as a major test for Apple. Price jumped big last Friday but then fell on its sword, reversing, and closing at 350.70, almost 5 points off the high and below this critical 352-355 zone. If AAPL does not get above 355, this would be viewed as bearish for the broad markets overall.
Earnings started off weak with AA but last week most companies posted acceptable numbers, lots beating by the proverbial penny. There were issues to add to the drama such as Apple, a mixed bag on tech and the railroads disappointed. RSK meets earnings estimates a few minutes ago but has poor guidance. JCI beats by a penny. SNDK saying good things about flash memory. Thus, looks like the mixed earnings bag will continue. 180 of the S&P are reporting this week.
China has been very quiet lately but view them as a wild card capable of releasing news at any time that may move markets. New Home Sales hit at 10 AM.
Look for the gap fill at SPX 1340 to close out business up top. Watch the potential triple top forming. If SPX moves up even only a handle at the open this will lead to testing of 1339, 1340, 1341, 1343, 1344 resistance levels. Market bears will need to see the 1333 level lost to have any hope today, if that occurs, then tests of 1331, 1328 and 1325 support would be in order.
SPX Daily Chart Triple Top in Play
Lots of drama this week with the FOMC meeting and Chairman Bernanke's first Q&A on Wednesday afternoon. Volume is trailing off slightly as the three tops are formed, the trend of larger volume down days versus lower volume up days remains in place as well, so the edge is given to the bears, for now.
A key element to this potential triple top will be if the lower trend line is broken, or not, and that trend line is moving up thru the 1300-1325 area right now. If the lower trend line fails that will verify that the triple top is in place and lower prices are on tap moving forward with a target of that March low at 1250-ish. If that occurs, the triple top pattern will ulltimately target 1160-1175. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.
Sunday, April 24, 2011
SPX S/R 4-24-11
Any positive move in the futures overnight will send the SPX up a few handles at the open, up thru Thursday's HOD to test 1339, then fill the gap at 1340, and then test 1341, 1343 and 1344. If futures are lower overnight into the opening by 3 or 4 handles, and the 1333 level is lost, then tests of 1331, 1328 and 1325 support will be in order.
· 1404
· 1400
· 1377
· 1360
· 1350
· 1344
· 1341
· 1338-1339
· 1337.49 HOD Thursday
· SPX Starts the Week Here
· 1336
· 1331-1333; 1332.83 LOD Thursday
· 1328-1329
· 1325-1326
· 1318-1323
· 1314-1316
· 1303-1312
· 1298-1301
· 1291-1295
· 1286-1287
· 1282
· 1274-1277
· 1270
· 1262-1263
· 1257-1259
· 1252
· 1243-1244
· 1235
· 1224-1225
· 1220
· 1217
Friday, April 22, 2011
Keystone's Key Events and Market Movers for Week of 4-25-11
1. POMO Pumps for QE2: Markets receive bullish pumps between 10 AM and 11 AM each day favoring market bulls. No pumping on Wednesday 4/27/11 due to FOMC rate decision and Chairman Bernanke’s first Q&A session in the afternoon. Pumps continue thru 5/11/11 when the next schedule into June will be announced. N-D 75, D-J 75, J-F 80, F-M 80, M-A 80, A-M 80 B, projection M-J 80, J 50. Thus, POMO pumps should stay at this current pace for the next 10 weeks. POMO pumps=bullish equity markets.
2. FOMC Rate Policy: FOMC two day meeting 4/26/11 and 4/27/11. Rate decision is 12:30 PM EST (used to always be 2:15 PM), expecting no change, but now Chairman Bernanke’s new Q&A session starts 4/27/11 at 2:15 PM. Expect a question on the strong vs. weak dollar policy that will greatly impact markets. Currently, weak dollar=strong euro=strong commodities=strong equities, but, if Bernanke even hints a little bit at the end of QE2, a stronger dollar will reverse all markets in a heartbeat.
3. Japan Quake-Tsunami-Nuclear Disaster; Currency Intervention: The disaster continues without any end in sight but the global markets are largely ignoring the situation. Supply concerns will start to hit now, however, especially automobile parts and technology markets. Additionally, Japan is performing policy manipulation and currency intervention to keep the dollar/yen in the 85-86 target zone. Below 83 now so expect further intervention now. Possible effect dollar/yen up=dollar index up=equities down=euro down.
4. Ongoing Wars: Libya, Iraq and Afghanistan. Libya not a big deal concerning oil, Saudi’s can easily step up production. A premium is now built into gold, silver and oil markets. The ME premium in gold is about 10%, oil and silver ME premiums are well over 30% now. Any positive resolution to the Colonel Gaddafi situation, or ME tensions in general, will cause this premium to come back out super fast. Rational price of oil is low to mid 80’s but rationality never matters in trading. Silver and gold rising on pure speculation with ETF’s buying and simply stockpiling commodities. Wars and ME unrest continue=bullish for commodities, and visa versa.
5. Continuing Geopolitical Events other than Ongoing Wars such as Egypt, Syria, Saudi Arabia, Bahrain, N. Korea: Dollar bullish and equity bearish. Gold, silver and oil bullish. Bahrain is the big worry; this will seriously affect oil supply. Yemen as well since it is a southern border. Bahrain news impacts commodities in real time. Any bad Bahrain news=higher gold, silver and oil prices, and, visa versa.
6. State and Muni Crisis; Union Busting: Muni’s should experience pain first. Muni’s rely on State funds. Many State budgets turn over in June and July, now only a month away. Colleges relied on State funds. Lingering unemployment lessens government tax inflows. Multiple U.S. cities now experiencing pro and con union busting protests. There simply is no money in Federal, State or Local coffers to handle years of promises. Meredith Whitney continues to receive a lot of heat from her 60 Minutes projections concerning Muni’s but this story will not play out until the second half of 2011.
7. Europe Crisis Continues: Portugal, Ireland, Italy, Greece and Spain, the PIIGS. Italy’s close ties with Libya are strained which may expose Italy’s bad paper. Portugal on the redemption path now but Spain is next and a lot larger concern. Greece is a lost cause now. Weaker euro=stronger dollar index=weaker U.S. equities.
8. ECB Rate Hikes: Trichet raised rates 25 bips on 4/7/11. ECB expects additional measured hikes to occur moving forward but was quick to say no firm plan is in place. Trichet raised rates in July 2008—exactly at the wrong time—when the commodities bubble popped. Is Trichet unknowingly calling a top again in commodities? Euro rate hikes=stronger euro=weaker dollar=stronger US equities, but, if euro down=dollar index up=US equities down.
9. China Property Bubble and China Contagion: When it pops, anytime now, it will be extremely negative on global markets causing contagion in Asia and elsewhere. China has built uninhabited cities to fuel their explosive growth during this century. Some evidence of Chinese now using hoarded copper supplies as collateral to continue the building. This is going to end very badly. China bubble pops=global markets down.
10. PBOC, China Rate Hikes: First hike 10/19/10, 25 bips; second hike Christmas 12/25/10, 25 bips; third hike at end of China New Years on 2/8/11; fourth hike 4/5/11. China said in 2010 that it will project about five hikes into June 2011 so projection for next hike is June. Hikes have occurred October, December, February, April so the pattern reinforces the June hike next. Bank reserve requirements are now ratcheting up continuously to slow down inflation. Rate hikes cause commodities, gold, silver, PM’s and copper to sell off although the 4/5/11 effect was muted. Chairman Bernanke’s hot easy QE2 money is more powerful. Typically, rising rates reflect a countries currency, economic and market strength, but, China growth is slowing now, not increasing, which is a different twist to the equation. China raising rates, or reserve requirements, and hawkish policy=lower commodities=lower US equities.
11. India, Brazil, Taiwan and other Emerging Market Rate Hikes: Same effects as China rate hikes; commodities will sell off. China, India and Brazil hikes are most important to global markets.
12. Congress: Market bullish when not in session, market bearish when in session. The debt ceiling is the next crisis to play out by mid May. Congress on break until 5/2/11, which is market bullish.
13. Strategic Oil Reserve: The talk of using the reserve is moot since about 7 million bbls over next few months will be drained for SOR renovations anyway; say one million bbls per month oil supply will hit the market now into the Fall. Higher oil supply=lower oil price. Oil, gold and silver experiencing uber speculation currently; this always has a cliff ending.
14. Wiki Leaks: Embarrassing bank information rumored to affect BAC most of all. This may be partially the blame, as well as lackluster earnings, for the financial sector languishing now. Weak financials places a cap on broad market upside. Technology and financials move together so one of them is wrong.
15. 4/25/11: Earnings; JCI, KMB, NFLX. Data; New Home Sales
16. 4/26/11: Earnings, MMM, AMZN, KO, F, UPS, X. Data; Case-Shiller 9 AM, Consumer Confidence 10 AM, FOMC meeting begins, 2-year Note 1 PM.
17. 4/26/11 and 4/27/11: FOMC two-day meeting, QE3 announcement? 4/27/11 is the first press conference style meeting with Q&A that Chairman Bernanke will conduct. FOMC meeting days are typically flat to up for equities. Expect a question on a strong versus weak dollar policy. Weak dollar=strong commodities=strong equities, and visa versa. What will Bernanke say?
18. 4/27/11: Earnings, BA, COP, EBAY, NSC, NOC, SBUX, WHR. Data; FOMC Rate Announcement 12:30 PM, 5-year Note 1 PM, Bernanke Q&A 2:15 PM.
19. 4/28/11: Earnings, AET, CL, CNX, XOM, MSFT, PEP, PG, S. Data; GDP, Fed Speak
20. 4/29/11: Earnings; CAT, MRK. Data; Consumer Sentiment 10 AM, Chairman Bernanke 12:30 PM.
21. 5/1/11 and on: California financial decisions. Will these decisions spook the country? Perhaps this time period sets the wheels in motion for the Muni/State crises a la Meredith Whitney?
22. 5/15/11: Eclipse Sell-off Technique targets this time frame as a potential large market selloff area.
23. 5/16/11 and on: Congress to Raise Debt Ceiling. This may be another down-to-the-wire fight like the budget crisis was. Interesting that this deadline coincides with the eclipse sell-off projection. Geithner says May 16th deadline but drop dead date to raise ceiling is July 8th.
24. June 2011: PBOC (China) Rate Hike. Probably 25 bips again but perhaps 50 bips which would shock markets.
25. June 2011: EU Bank Stress Test Results.
26. June 2011: QE2 Ends. See the POMO information above.
27. 6/15/11: Bradley Turn date.
28. 6/22/11: Bradley Turn date.
29. 7/15/11: Eclipse Sell-off Technique targets this time frame as a potential large market selloff area.
30. 7/29/11 and 7/30/11: Major Bradley Turn date.
31. 2012: China chooses a new Premier, smooth transition?