The infomercials on cable promises you a fortune if you just buy the “how to” program on buying foreclosures. Yup, no money down and no credit needed, just buy the program and you too could be RICH and, the best part is, that you are helping somebody get out of their mortgage mess. One half hour of this spiel and testimonials and we still had no clue how this was done. And the government is worried about stock brokers? Are you kidding? How about the buy gold now before it goes higher and you miss this great opportunity. Today we found an email from J&R Stero that gold buyers will be there to buy your gold for an “in store event.” These hawkers can sell anything without restriction and the financial industry can breathe without filing another document. Something is amiss here.
So where is the next bubble going to appear. We know it will we just don’t know where it will be found. Certainly not in housing! Perhaps, the next bubble will be in banking. Have you seen the spreads lately, there is no way the banks can lose on this gift from the American People, the tax payers who, can’t get a refi at a reasonable rate but funded the TARP programs that bailed the banks out of their mess. Onto health care and our elected officials, if the plans they are considering are so good for the public, they certainly should be good enough for the elected officials of this country. There is a ground swell of anger that the politicians are missing and not seeing. We see more and more “throw the bums out,” emails. We see anger and frustration which, certainly will lead to a turnaround in the next election. The problem is that there is so much corruption on both sides of the isle that we need a complete overhaul. Here is a recent email that was sent to us.
Proposed Amendment # 28 to the US Constitution
Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and/or Representatives, and Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the citizens of the United States .
These certainly are interesting times.
Tuesday: Massachusetts votes on the vacant Senate seat, and we have earnings from both Citi and IBM.
Wednesday: December PPI is released at 8:30, December housing starts are released at 10:00 and we continue to see earnings releases from Bank of America, Morgan Stanley, Bank of New York Mellon, eBay, Starbucks etc.
Thursday: December leading indicators are released at 10:00, January Philly Survey is released at 10:00 and Goldman Sachs and Google post earnings.
Friday: General Electric posts earnings.
The US Dollar index had a 9-count on Thursday and rallied in the Friday session. All the indicators that we follow herein are issuing a buy-signal on the daily chart. The 5-day moving average is at 77.433. The top of the Bollinger band is at 78.831 and the lower edge is seen at 76.883. The downtrend line is at 78.29 a level which must be removed to give this index an upside bias. The support line is at76.545 and another much shorter downtrend line is seen at 76.890. At the moment, we will give it to the bulls looking for and upside consolidation. We are above the Ichimoku Clouds for the daily time-frame but remain below the clouds for the weekly and the monthly time-frame. The indicators are issuing a sell-signal on the weekly chart and a buy signal on the monthly charts.
The S&P 500 retreated in the Friday session testing the horizontal line at 1127.50. The trend channel lines are 1128.26 to 1151.11. The 5-day moving average is at 1137.75. The top of the Bollinger band is at 1152.18 and the lower edge is seen at 1098.48. Although the downside move of the Friday decline felt horrible, we remained above the uptrend line and the horizontal line. The stochastic indicator, the RSI and our own indicator are all issuing a continued sell-signal. The Thomas DeMark Expert indicator is going sideways. We are above the Ichimoku Clouds for the daily and weekly time-frames but are below the clouds for the monthly time-frame. We have a sell-signal on the weekly chart and remain pointing higher but grossly overbought on the monthly chart. We do have a 9-count on the weekly chart. On the monthly chart, we closed the Friday session at the 50% retracement level. If the market continues to the downside, we have plenty of room to fall should we close below the uptrend line.
The NASDAQ 100 futures retreated in the Friday session leaving a huge outside day candle on the chart. All the indicators that we follow herein are issuing a continued sell-signal. The 5-day moving average is at 1879.25. The top of the Bollinger band is at 1920.04 and the lower edge is seen at 1805.09. We are above the Ichimoku Clouds for the daily and weekly time-frames but find ourselves inside the clouds for the monthly time-frame. All the indicators that we follow for the weekly and monthly time-frames are issuing a fresh sell-signal. This index is more mature on the downside than is the S&P 500. If this market closes below 1852.5 then we should see a swift move to 1807.50. This should be a very interesting week.
The Russell 2000 held above the horizontal line at 629.41. When reviewing the Market Profile chart of the Russell 2000, it is clear that should the Russell 2000 close below 629.20, it will move into the very unstable area of the chart which likely will accelerate the move to 609.40 where stability will again be found. The market could rally back to stable areas by advancing rather than retreating. All the indicators that we follow herein are issuing a sell-signal for the daily time-frame. We have a sell-signal for the weekly time-frame also but the monthly continues to point higher at overbought levels. The 5-day moving average is at 1879.25. The top of the Bollinger band is at 1920.04 and the lower edge is seen at 1805.09. We are above the Ichimoku Clouds for the daily and weekly time-frames but are in the clouds for the monthly time-frame. The point and figure chart also confirms that should this index close below 631, it will go 625.
Crude oil continues to retreat and has entered an area where, in the past, it found support. We are above the Ichimoku Clouds for the daily time-frame and the monthly time-frame but in the clouds for the weekly time-frame. All the indicators that we follow are oversold and continue to point lower. The 5-day moving average is at 81.19. The top of the Bollinger band is at 85.40 and the lower edge is seen at 72.20. We would not be surprised to see crude return to the very comfortable 77.70 area. Crude oil needs to trade above 78.45 and then 79.51 to refresh the bulls and to begin to annoy the bears.
Gold seems to be forming a pennant or a wedge. The point where one set of lines converge is at 1137.10 and is two days out and the other point of inflection is three days out and at 1129.40. All the indicators that we follow continue to issue a sell-signal. The 5-day moving average is at 1135.43. The top of the Bollinger band is at 1155.18 and the lower edge is seen at 1077.47. We are inside the Ichimoku Clouds for the daily time-frame but are above the clouds for both the weekly and monthly time-frames. The indicators for the weekly and the monthly time-frames are issuing a sell-signal. So long as we stay above the uptrend line of 1115.51 the market likely will return to the upside. The Market Profile chart really shows the consolidation of this market. Go with the trade as it breaks either to the up or the downside.