Saturday, April 14, 2007

Weekend Markets Comment

Equity Markets - While at this time last week I had thought the equity market would begin its intermediate term correction last week, the S&P 500 could only muster a little more than a 0.63% gain on the week. This small gain coupled with intraday volatility has helped to give more confirmation to the theory that the equity markets are in a transition short term from up to down. Weekly sentiment readings show only about 4% bearish on Friday which translates into an environment for a decline. It is important to remember that this decline will be nothing more than a correction from the March Lows.

Support Levels for the S&P 500 -
1st - 1419
2nd - 1408
Last - 1398
10 Year Note - There simply are too many conflicting signals in the credit markets. The intermediate term model is suggesting that rates will continue to go up and bond prices will go down. The Short term model is telling me that there has been a short term top in rates and they should start to work lower. No clear cut signal, so in doubt stay out!
Corn - Corn prices look like they want to continue their short term rally. This should only be a rally in a bear market for corn, but prices do look to move higher.
Cocoa - After 4 days of indecisive action, cocoa looks to move lower once again. The potential for a small crash in prices is very possible.
Sugar #11 - I have been talking for a bit about the potential of Sugar getting into a position to have a strong rally. I will be posting a chart and commentary on Sugar in the next couple of days. It is very close to a major low if not already there. Keep an eye on it.
USEC Corp. - I had been looking for USU to pullback with the market in order to add more to the core position. The stock continues to exhibit exceptional strength and Monday it should have yet another stellar day. Although I had expected a small decline I certainly am not complaining.
BDAY - Continues to look poised for a decline to the 7 1/4 to 7 1/8 area before resuming its rally.
DF - Dean Foods, after a very nice rally from the Three White Soldiers is starting to look a bit fatigued here. A pullback to 32 1/4 would not be out of the question.
DVSA - Much like BDAY and DF a pullback seems to be in the cards. Look for strong support at 7 3/8.
GM - Currently making a coil or triangle as some would call it, so the short term direction will be based upon the completion of this pattern and which way it wants to break. Intermediate term I am still very bullish on GM especially after the double bottom at $29.

Friday, April 13, 2007

Where are Stocks Headed Short Term (5-12 days)

From time to time my short term model may continue to call for a correction and the market continues to trend higher. Typically the market will struggle to move higher when the short term model has turned negative.

This is the case we have currently and although I had expected the market to continue its decline from this past Wed. This pattern that currently is developing is very reliable. So I STILL am expecting a correction of Intermediate term basis after which I anticipate perhaps the strongest rally phase of 2007.

Please take a look at the hourly chart below as it too has a story to tell.

My full update covering all markets will be made this weekend, I hope you all have time to come on by and take a look.

Equity Intra Day Health

While the equity markets have moved higher than I thought they would, the short term model continues to call for an intermediate term correction.

On an Intra-Day basis, the S&P 500 looks like it is setting itself up for a late afternoon sell-off. Time will tell of course.

Thursday, April 12, 2007

Daily Market Comment

Equity - While the equity markets snapped back nicely today, the models continue to suggest that we have entered into a corrective phase and should see lower prices over the near term.

10 Year Note - The 10 year note continues to mark time as it seems to be stuck here. I still anticipate higher bond prices and lower yields over the near term.

Corn - No Change in the outlook for corn, please take a look at yesterdays comment.

Cocoa - Still Bearish on Cocoa, as with Corn, take a look at yesterdays comment for the skinny!

Crude Oil - Appears to me that it has completed its counter-trend rally and should now continue to work lower, perhaps sharply so!!

USEC Corp - USU, much like the broad market had a very nice comeback rally today. However as is the case with stocks I continue to think that USU has entered and intermediate term corrective phase and we should see lower prices.

BDAY - Looks like it has entered its corrective phase in full force. I am still looking for the $7.50-$7.60 area to be reached before the rally continues.

Dean Foods - DF has been quite the star!! Since the Three White Soldiers Pattern that I went over in detail, the stock is up better than 10%. It requires repeating that the THREE WHITE SOLDIERS pattern is one of the most powerful and reliable and ignored as well.

New Educational Module will be forthcoming this weekend.

Wednesday, April 11, 2007

Daily Market Comment

EQUITY - It appears that the intermediate term decline has commenced. Support levels for this decline should be 1416, 1406 and 1396, with 1406 the most logical level for support.

10 Year Note - While I continue to expect the 10 year note to rally as the equity markets go through their intermediate term decline, today the credit markets were spooked by the petroleum inventory numbers. However, they reacted much more extreme that the petrol markets themselves so I do expect this little increase in rates not to hold. Look for rates to move lower over the near term.

CORN - It is very possible that the small short counter-trend rally we had in Corn is all the market could muster up. Thursday is going to be a good indication as to the short term health of Corn. If it continues to move lower then look for the intermediate term downtrend to continue in earnest. Corn still has a long way to go on the downside before it gets even close to an all clear area.

COCOA - Another rally attempt in Cocoa today that was met with failure. Much like Corn, Thursday is going to be a key day to indicate the future short term price movement for Cocoa. I am expecting sharply lower prices to continue.

CRUDE OIL - The last 2 days has seen Crude attempt to stabilize after its hard 5 day decline. I do not think Crude will be able to fend off the sellers in here and I continue to look for sharply lower oil prices.

USU - The intermediate term decline in USEC Corp. looks like it started today with a sharply lower day. However, after a stock such as this has accumulated so much support over its most recent rally, we need to expect some type of snap back before the stock begins its decline in earnest. This may be as simple as an intraday move or it might take a day or two. Personally I see it taking place on an intraday basis.

DVSA, BDAY and DF - No real change in the condition of these stocks. Although Dean Foods had a very impressive rally today it continues to produce a pattern that foretells of a sharp sell off. Of course all three of these stocks appear to have put in a major trend shift with the formation of the Three White Soldiers I am merely looking for them to pull back to their respective levels associated with the pattern. If you cannot remember where that price level is take a look back at the educational module on the candlestick pattern.

Tuesday, April 10, 2007

USEC Corp Looks Like it Made a LAST GASP Rally Today!

USU has had a great run, but it is exhibiting signs that it is very tired after its climb, so to lighten up on the position might be prudent.

Of course none of this changes the super bullish potential long term for this stock, but a pullback $13-$14 area is a real possibility.

DVSA, BDAY and DF appear to be about in the same position they have been in over the last few days. I anticipate a pullback in all of them before moving higher again. Dean Foods (DF) especially has the potential to decline sharply. We will watch and see.

Daily Market Comment

Really No Changes in the Condition of the Markets, so Please Refer to Yesterdays Comments.

I do have one daily chart of the S&P 500 that you might find interesting. Living on borrowed time, short term.

I will address the stocks in a separate post and a new Educational Module is on the way too, so check back soon!!

Monday, April 9, 2007

Daily Market Comment

Equity - Short term it appears the market has turned and should move lower from here. I am expecting this to be an intermediate term decline that may cause some concern among most investors, thus setting up an environment to launch a very strong upside move.

10 Year Note - Continues to act as if it wants to rally strongly.

Corn - Quite the volatile day in the grains today. The intermediate term trend is clearly down. On the short term it looks like it needs to move a bit lower before completing its counter trend rally.

Cocoa - Resumed its decline today and should continue to move sharply lower over the next 4-7 trading days. Has some potential to really collapse here.

Crude Oil - Did some major technical damage today. Please refer to my weekend comment on Crude to see the intermediate term potential.

USU - Very impressive rally today. Although I do expect USU to pull back, it will only be used to add to a long term position. The extended term condition of USU remains very strong!

DVSA - Has rolled over and should find strong support in the 7 1/8 - 7 1/4 area before it continues its uptrend.

BDAY - Has completed what appears to be the first up leg in the start of a long term uptrend. I am looking for the stock to move towards 9 1/8 before moving higher once again. This is one of our real time candlestick examples.

Sugar - Starting to develop into a potential explosion on the upside, but still has some work to do.

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