It is amazing how well the younger generation treats their animals. There was always a dog in the family and none of these guardians of the homestead went to day-care, well for that matter neither did the children. Today, we take our dogs to day-care where they have live video for the owner to watch so as to make sure the dog is having fun. These doggie day care’s frequently have time out for dogs who are unruly and other humanesque things for Fido. There are people employed to play with the dogs while their owners toil to pay the day care bills. No more boarding cages for the family pet while the family is on vacation. It was always a common belief that the dog was supposed to guard the house while we were at work. Guess the insurance companies who used to give us a deduction on our home owners for having a dog will resend that perk, or have a doggie day care clause added to their home owner’s policies.
This is a somber Christmas; people seem to be a whole lot angrier today than in many of the Christmas times remembered. Even in this season of good will to man and generosity, tempers are short and tolerance is even shorter. We are angry because the world is just a difficult scrooge like place. The only problem with the attitudes is that the rich didn’t make this mess and taxing them isn’t going to help pay the bill. What if they all decide to leave for friendlier countries who would employ us and who would pay taxes? There were lessons to be learned from Ayn Rand’s Atlas Shrugged which we clearly didn’t learn. This novel which was written in 1957 illuminates the value of the human sprite and the rewards of that human industry. Who is John Galt? Better question is where is he now and how can we get there.
Two week left in this year so do not expect to see much in the way of action. However; if you are the owners of some dogs and cats in your portfolio that might be call pound puppies time to sell these loser and take the tax loss before the end of the year. You can sell this issue right up to the last day of the year. Now is the time to readjust your portfolios. Remember you can take up to $3000 of losses this year after off-setting the short term losses against ordinary income, but can carry losses in excess of the $3000 into the next year(s).
The Christmas elves tell us that 1257 is a short term ceiling defined by a downtrend line taken from a doji in July. The overview shows higher lows and lower highs. The low is from October.
What we are seeing is a contraction in the market which is beginning to form a coil or pennant. A quick look will tell you that the volume is also shrinking as people take time away from work to enjoy the winter holidays.
Tuesday: November housing starts are released at 8:30.
Wednesday: November existing home sales are released at 10:00.
Thursday: 3rd quarter GDP is released at 8:30.
Friday: November durable goods, November personal income and consumption, and November new home sales are all released at 8:30.
The US Dollar index did get a little carried away with the rally for most of last week. The Dollar has signs of exhaustion and looks as though it could back and fill. The uptrend line is all the way back in the 78.50 area. The 5-day moving average is at 80.216. The top of the Bollinger band is at 80.631 and the lower edge is seen at 77.78. We did see the market trade above the upper Bollinger band for three of last week’s trading days. We are above the Ichimoku Clouds for both the daily and the weekly time-frames but remain below the clouds for the monthly time-frame. The stochastic indicator and our own indicator have issued a continued sell signal. The RSI and Thomas DeMark Expert indicator are not issuing a signal as yet and are somewhat flattish. This index has been stair stepping higher since October. It demonstrates strong rallies and moderate to week declines and has been bullish. The market for the US Dollar is one of the lest of the evil currencies. It appears that the reserve status of the US Dollar is and will remain in tack and thus the US Dollar Index has enjoyed a rally. Some caution should be taken as the US Dollar index approaches 81.60 +/- where there seems to be resistance.
The S&P 500 opened higher at the opening of the market and continued higher but began a sell off at 10:15 that took the market to its low at about 12:45. From there, the market clawed its way a bit higher and tried to stay positive into the close but was unable to accomplish that goal. The 5-day moving average is at 1215.70. The top of the Bollinger band is at 1280.13 and the lower edge is seen at 1155.59. The stochastic indicator continues to issue a sell-signal but is standing alone with that signal. The RSI is flat slightly below neutral and our own indicator just might issue a buy-signal by the opening of trading. The Thomas DeMark Expert indicator is oversold and pointing higher. We believe that as we approach the end of the year, trading will become more and more narrow. The lion’s share of the trading is in the books for the year 2011 so unless something wild happens, and it could give all the instability in the globe, we expect the year to end pretty much where it began.
The NASDAQ 100 rallied in the Friday session closing up 9.50 on the day. The market made a higher low and a higher high on the day. The RSI and our own indicator are issuing a fresh buy-signal. The stochastic indicator continues to issue a sell-signal and has room to the downside. The Thomas DeMark Expert indicator is pointing higher at oversold levels. The 5-day moving average is 2248.50. The top of the Bollinger band is at 2362.38 and the lower edge is seen at 2151.36. This index looks very much like the S&P 500 index. Both indices are getting narrower and are losing volume as we approach the end of the year.
The Russell 2000 rallied for a second day in the Friday session. This is the index where we expect to see the best returns as we approach and begin the New Year. The Russell 2000 is the home of 2000 small capitalization stocks that likely were used for some end of year tax sales.
The 5-day moving average is at 716.00. The top of the Bollinger band is at 764.31 and the lower edge is seen at 663.64. The stochastic indicator is at neutral and the lines are on top of each other thus we have no signal just flat lines at neutral. The RSI is pointing higher and our own indicator has given a buy-signal. The Thomas DeMark Expert indicator has also given us a buy-signal.
Crude oil rejected the low of 92.52 in the Friday session and closed higher on the day. The chart looks lousy and we need to see this market stay above 91.22 or risk a ride to 87.50 and perhaps a little lower. We are above the Ichimoku Clouds for the daily time-frame. The 5-day moving average is at 96.05. The top of the Bollinger band is at 102.89 and the lower edge is seen at 93.53. Clearly we traded below the lower edge and bounce back inside the bands. The down trending channel lines are 100.19 and 92.45. Yes, they are very wide, maybe too wide. When we look at the Market Profile chart, we notice that there isn’t much overhead resistance at the 103 area. The big problem will be to get there.
Gold closed higher in the Friday session ending an absolutely awful week of trading. Both crude oil and gold had huge declines as the US Dollar rallied. Gold actually had a more difficult time of it than crude oil did. The 5-day moving average is at 1607.50. The top of the Bollinger band is at 1794.28 and the lower edge is seen at 1581.42. We saw a doji like candle in the Thursday session and a fairly weak upside candle in the Friday session. We are below the Ichimoku Clouds for all time-frames. We remain above the long-term uptrend lines for the weekly and the monthly time-frames. We closed below the lower Bollinger band and we will either trade up inside it again or, the bands will spread wider. We believe that we will trade a little bit higher. Again we are at the end of the year and most trades have been logged in the books and those books have been closed. We continue to be the source of funds for margin calls and this is reflected in the action of the trade. We view this correction as healthy and would like to purchase gold at or near these levels or a little bit lower.