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The Red Roadmaster’s Technical Report on the US Major Market Indices + ™
Vol. 061410 # 1 Copyright 14 June 2010
Date Line Hong Kong (SAR) China
The Red Roadmaster™
Paul A. Ebeling, Jnr. Editor/Compiler/Analyst/Commentator
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Spring Edition # 14
June 14, 2010 6:00 am US EDT
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Today’s Stock Talk Features Crocs, Inc (CROX)
Listen to "The Red Roadmaster" AKA Paul A. Ebeling, Jnr., on the Big Biz Show with Bob "Sully" Sullivan every Thursday at 140p PST on the CBS/Business Talk Radio Network. Go to www.bigbizshow.com for your local listing and or go to www.livetradingnews.com to tune in Live.
Re-cap of the US Stock Market Action for the Week ending 11 June 2010
Wall St climbs in late advance, chip makers lead
US stocks rose in a late rally Friday as a strong forecast from a chip maker lifted tech shares, and helped alleviate concerns about the economy's health after a drop in retail sales.
National Semiconductor Corp rose 5% to US$14.21/shr a day after it forecast margins and revenues above estimates after a weak 2009. The Philadelphia Semiconductor index rose 1.4%.
On the Day: The DJIA gained 38.54 pts, or 0.38%, to close the week at 10,211.07, the S&P 500 rose 4.76 pts, or 0.44%, to close at 1,091.60, and the leading NAS tallied up a + 24.89 pts, or 1.12%, to end the week at 2,243.60.
On the Week: the DJIA rose 2.8%, the S&P gained 2.5% and the NAS was + 1.1%.
US retail sales were off in May for the 1st time in 8 months, the US Commerce Department reported. But a rise in a consumer sentiment index to a near 2-1/2-year high in a preliminary reading for June tempered fears of a slowing economic recovery. The consumer sentiment reading came from the Thomson Reuters/University of Michigan Surveys of Consumers.
In another Bullish sign, the S&P 500 found technical support around the 1,077 level that marks its 14-day simple moving average. The benchmark index posted its 1st back-to-back close above its 14-day SMA since late April. Commodity related companies gave support to stocks, with the S&P materials sector .GSPM up 1.2%. US Steel Corp rose 3.8% to US$44.82/shr.
Are you watching the VIX? The CBOE Volatility Index .VIX, a gauge of investor anxiety, fell 5.8% to settle at 28.79, its lowest level since May 13.
Big-cap pharma companies' shares advanced after Barclays Capital upgraded the sector to "positive" from "neutral," citing the revenue potential of new products. Pfizer Inc was the DJIA's top percentage gainer, + 3.7% at US$15.46/shr. The US-listed shares of BP Plc rose 3.6% to US$33.97 as UK officials made supportive comments about the company, even as scientists doubled estimates of the Gulf of Mexico's oil spill.
Soft commodities (+2.1%) led the CRB Commodities Index higher today. Coffee futures were the largest contributor to that move; they closed 5.3% higher. Energy futures finished lower by 0.2%, as a Group. Individually, July Crude Oil fell 2.2% to US$73.78 bbl. July Nat Bas prices gained 2.2% to close at US$4.78 per MMBtu. Reports cited forecasts for warm weather across the Midwest and East as sources of strength. This was the 1st session in 4 that natural gas gained. Precious metals: Gold prices closed higher by 0.6% to US$1230.20 oz. and July Silver lost 0.6% to finish the week at US$18.23 oz.
Advancing Sectors: Materials (+1.2%), Tech (+1.1%), Health Care (+0.8%), Industrials (+0.5%), Energy (+0.4%), Financials (+0.4%), Telecom (+0.2%), Consumer Discretionary (+0.2%)
Declining Sectors: Consumer Staples (-0.8%)
Volume and Breadth: About 7.31B/shrs traded on the NYSE, the AMEX and NAS, the lowest volume in more than 2 months and sharply below last year's estimated daily average of 9.65b/shrs. Advancing stocks beat declining ones on the NYSE by 11 to 4, and on the NAS, about 5 stocks rose for each 2 that fell.
US Market Indexes Technical Analysis
Today’s Stock Talk Features Crocs, Inc (CROX) Last Look: April 15, 2010
This is Crocs, Inc. (CROX), the company that is bringing you colorful slip-on shoes have gained popularity in the water sports arena and in mainstream fashion. Its shoes, branded as Crocs, are made of proprietary closed-cell resin and designed for men, women, and children; Jibbitz are their decorative add-on charms. The firm operates manufacturing facilities in Mexico and China and boasts distribution centers worldwide. Crocs sells through retailers such as Dillard's, Nordstrom, and The Sports Authority, as well as through about 280 of its own stores and kiosks worldwide. Crocs has expanded on both domestic and international fronts and through acquisitions.
This Week on the Economic Front
June 15th Tuesday
Export Prices ex-ag., May (08:30): 1.4% past
Import Prices ex-oil, May (08:30): 0.5% past
Empire Manufacturing, June (08:30): 20.0 expected, 19.11 past
Net Long-Term TIC Fl, April (09:00): $140.5B pastJune 16th Wednesday
Housing Starts, May (08:30): 653K expected, 672K past
Building Permits, May (08:30): 631K expected, 610K past
PPI, May (08:30): -0.5% expected, -0.1% past
Core PPI, May (08:30): 0.1% expected, 0.2% past
Capacity Utilization, May (09:15): 74.4% expected, 73.7% past
Industrial Production, May (09:15): 0.8% expected, 0.8% past
Crude Oil Inventories, 06/12 (10:30): -1.83M pastJune 17th Thursday
Initial Claims, 06/12 (08:30): 450K expected, 452K past
Continuing Claims, 06/5 (08:30): 4475K expected, 4462K past
CPI, May (08:30): -0.2% expected, -0.1% past
Core CPI, May (08:30): 0.1% expected, 0.0% past
Current Account Bala, Q1 (08:30): -$123.0B expected, -$115.6B past
Leading Indicators, May (10:00): 0.4% expected, -0.1% past
Philadelphia Fed, June (10:00): 18.8 expected, 21.4 past
This Week on the Earnings FrontOnce again there are no company earning’s reports that can move the markets this week.
The complete list for this week: http://biz.yahoo.com/research/earncal/20100517.html
The Most Asked Question Last Week:
The Big Q: Red, Are we in a Bear market?
The Big A: No, not the way I read the charts.
Investopedia explains Bear Market
A Bear Market should not be confused with a correction, which is a short-term trend that has a duration of less than 2 months. While corrections are often a great place for a value investor to find an entry point, Bear Markets rarely provide great entry points, as timing the bottom is very difficult to do. Fighting back can be extremely dangerous because it is quite difficult for an investor to make stellar gains during a Bear Market unless he or she is a Short Seller.
A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows.
Although figures can vary, for many analysts a downturn of 20% or more in multiple broad market indexes, such as the DJIA or S&P 500, over at least a 2 month period, is considered an entry into a Bear Market.
Red’s Edge and in the Trenches
When the US markets are uncertain, do not buy them; there are opportunities outside the USA. We are in a Global market now. Knowledge is Power!
Again, there are many ways to make and lose money in the markets. It is clearly worthwhile to learn how to make money and how to reduce or avoid losses if one is going to venture into this game.
For if you are not armed with Knowledge it is better to forget the possibility of financial gain in the markets and simply live life on the sidelines. The risks for the ignorant are huge, and in this action, Ignorance is not bliss.
Safety is an illusion. You have all heard and experienced that, ask yourself, Is it safe to walk down steps, take a walk, cross the street, drive your car, sail your boat, swim in the ocean, fly your plane, ski and scuba dive, etc, etc, etc. So it is fair to say that it is not likely to have complete safety in life.
In the investment world, highly rated bonds were considered safe in the past, but that has been proved not necessarily so.
In the world of stock trading safety is established with the exit strategy, and like most safety it is imperfect, at best, but it does work pretty well if you have established a good plan. And as a player/trader you must begin with a clear understanding what is adequate safety for you. This column talks about the “Plan” throughout the year, Plan your work and work your Plan is a reoccurring theme here. It is your money so for sure it is your responsibility.
Knowledge of Yourself -Your Plan is very helpful, and is used by professional traders to help them Win in a game where most lose. Knowledge is Power!