In recent times, you could be forgiven for thinking that the American economy was about to embark on a long and glorious recovery. As property prices [Read more…] about The U.S. Stock Market: Suffering in the Wake of Growing Risk Aversion
Happy Halloween everyone! I don’t want to scare you or anything but it seems that there could be another blood bath in the US market at least from a technical perspective. Let’s now take a look at the Dow Jones Industrial Average (DJIA). [Read more…] about A Technical Look On The Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average has been a major disappointment for investors worldwide as it virtually erased its gains for the whole year and more in a span of just 4 weeks. Many are now scared that index could once again fall into a bear market but will it? [Read more…] about DOWn Jones: Where To Now?
Chart-wise, Hewlett-Packard Company or HPQ in the New York Stock Exchange could be on the verge of [Read more…] about More Downside Seen In Hewlett-Packard Company (HPQ)
The Dow Jones Industrial Average (^DJI) broke down from its [Read more…] about Dow Jones Industrial Average (^DJI) Technical Outlook
The US stock market dropped sharply last Friday as violent clashes in Egypt rocked the global financial markets. [Read more…] about Violent Clashes In Egypt Rocked The Dow And The Euro
Happy New Year everyone!!! The Santa Clause Rally gave the Dow Jones Industrial Average (^DJI) a decent rise for the final month of 2010. From 11,007.30 on December 1st, the ^DJI ended the month up by 570.20 points to [Read more…] about The January Effect On The Dow Jones Industrial Average
Hello financial market friends! I have here the update on my analysis on the Dow Jones Industrial Average (^DJI). This index is looking good, well at least based on its chart. The last time I mentioned about this was last October 11 during the Columbus day, kindly check this post. Also, if you want to check the one last September 22, it’s in this post. Earlier, the Fed planned to pump $600 billion into the financial system to stimulate the economy in large part by lowering mortgage and other interest rates. This could be good for the US stocks and bonds. However, it won’t be favorable for the US currency as US Dollars could turn out flooding the market. The report prompted different currencies to strengthen against the weakening US Dollar (here’s the analysis). For example, 1.00 Australian Dollar is now equal to 1.008 US Dollar when they were just at parity the other day (kindly see this post). On a side not, the Federal Funds rate was decided to be held at 0.25% which they have been doing lately and will be continuing to do until it’s sure that the US economy is growing. Although, this raises inflation concerns to other analysts. The market turned out to be extremely volatile during the Fed rate decision and the FOMC statement.
Chart-wise, my outlook on the Dow Jones Industrial Average, which is one of the US market benchmarks, could be bullish. As for my technical analysis, I spotted this 2-year cup and handle formation. By the way, a cup and handle formation is naturally bullish, it could be a reversal or a continuation pattern as well. The only way to find out if the pattern is indeed a cup and handle if the index moves past above the neckline. If it does, it could rise and find some selling pressure at the next resistance around the 12,000.00 psychological level. Furthermore, if that marker gets cleared out, the next resistance it could aim for is around the 13,000.00 area. On the opposite note, in case the ^DJI fails to resume its ascend, the significant support could be the 11,000.00 psychological level. If that fails to hold the index from further declining, the next support could be the 19-month uptrend.
Good day stock market lads! Here’s a technical update on the shares of Hewlett-Packard Company (HP). HP’s shares or HPQ as they are traded in the New York Stock Exchange appear to be bound for a move north after declining to a low of just below $38.00 during the last week of August. After finding some support at the $38.00 level, it then rallied and moved on to form whats appears to be a cup and handle pattern. As some of you might know, such formation usually indicates a likely bullish reversal. Therefore, if and when HPQ is able to make a move past the neckline around $43.00, HP’s shares would more likely hit $48.00 or even $49.00. A failure to break the neckline, on the other hand, could send the company’s stocks back to its low at $48.00.
Hewlett-Packard Company, by the way, is a US-based multinational IT corporation. The company specializes in both hardware and software computer development and manufacturing. Its line of products include personal computers and notebooks. In August 6, its CEO, Mark Hurd, resigned from his office amid claim of sexual harassment by actress Jodie Fisher. While he was not found guilty of the said claim, several expense-irregularities were found during the company’s investigation. His resignation then led to a broad-based selling of the stock (represented by the long red candle on August 6).
Happy weekend stock market enthusiasts! The US market or at least the NASDAQ ended this week with a bang after a magnificent performance by Google. In case you missed it, the shares of Google (GOOG) soared by 11.19% following a jump in the company’s net income. Net profit expanded by 32% to $2.17 billion, which translates to $6.72 per share, from $1.64 billion during the previous year. Given this figure, the web search giant is proved to be benefiting very well from its advertising channels which now includes display and mobile. Internet advertising, by the way, has risen by $6.15 billion or 11.8% in the US alone from a year earlier.
Technically, GOOG made a bullish gap soon after the company’s third quarter income result hit the news. In the process, the stock broke above its previous high near $600.00, converting this level to support. But given its present overbought condition, it may move sideways for awhile before resuming its journey towards its next target around $630.00. If it ranges, the support at $600.00 should keep it from falling. A break below, however, could send it back to the bottom of the gap. Nonetheless, the momentum in a breakaway gap is usually strong that the stock will most likely continue its move north.
Welcome to another week of stock trading my friends! Last week I noted the possibility of a breakdown in the Dow Jones Industrial Average (please see it here). Well, guess what. The broader S&P 500 appears to confirm where the Dow and the US economy are heading. As you can see from the $SPX’s weekly chart, the index has been forming a head and shoulders pattern. Remember that a couple of month’s ago it already attempted to breakdown but failed. Of course, it was a good thing that that did not happen. The question is, will it be able to avoid a breakdown this time around? Well, the S&P 500 rebounded very well last Friday with a gain 1.66% to close at 1064.59. It, however, would need to print a lot more than that to be completely out of the woods. You see, a a break below the formation’s neckline around the 1,000.00 region could send the broader index just below 850.00. Notice also that both the RSI, which is already below 50, and the MACD, which is in the negative region, are now indicating that the index’s downside move is starting to pick up speed. Let’s just just hope that the index is able to rebound and move past the peeks of the two shoulders and the head to resume its uptrend.
Existing home sales sunk by 27.2% to a 3.83 million seasonally adjusted annual rate which was below the market forecast of 4.72 million in July. This marks the accounts lowest tally since 1999! New home sales also weakened significantly to 276,000 from 315,000. Last year, sales were supported by the government’s tax credits. Sales, however, became subdued when this program expired. As I’ve mentioned in my previous post, perhaps the government could support the industry by re-introducing the same program to encourage home buyers.
Last Friday, Fed Chairman Bernanke’s said that he foresees a rebound in the US economy in 2011. He added that the Fed is prepared to use another set of “unconventional measures” if the economy does not pick up as desired in the near term. Do I hear quantitative easing? Well, the Fed’s benchmark interest rate is already at 0.00-0.25% so the next thing that the Fed can do is to do another set of QE and/or reduce the financial institution’s reserve ratio to provide more liquidity in the market.
In my opinion, both the Congress and the central bank should work hand in hand in order to prevent the economy from collapsing again. Because if it does collapse, the average Joes would find themselves in worse shoes. Unemployment would almost certainly pick up with a deterioration in market confidence. This would not only affect the US but would also send shockwaves across the globe. There is no such thing as a perfect decoupling because of globalization and trade. Hence, if the US sinks, other economies, even the emerging ones would find themselves in a very difficult situation.
Anyway, the week will kick off for the US with the release of the Conference Board sentiment index on tomorrow (August 31). The CB consumer sentiment is forecasted to rise slightly to 50.9 from 50.4. Though the market’s confidence as of late has been obviously dampened due to the disappointing home sales figures. ADP employment change results and the ISM manufacturing index are also due on Wednesday (September 1). The ISM index is seen to have softened a bit to 53.3 from 55.5. Remember, however, that the latest tally of the Philadelphia Fed Manufacturing index showed a drastic drop to -7.7 from 5.1. Such could also reflect in the ISM’s number. On Thursday, pending home sales, which are anticipated to have dipped again by -1.5% after already losing by 2.6%, will be reported. still, a worse-than-projected count could happen given the previous results of the new and existing home sales. The spotlight, of this week though will be the NFP report of Friday. Firms are seen to have slashed another 101,000 jobs which could push the economy’s unemployment rate to 9.6% from 9.5%.
Given the recent data and the present market forecast, worse-than-expected results are very much likely in at least one of the accounts. Such could send the market back to risk aversion mode which then could send the major indices into critical levels. Still, anything is possible. Let’s just hope for the best and prepare for the worse. But given the uncertainties, I suggest that you at least lighten your positions in equities.
Hiyo stock friends! It’s good to be back in the market again! Anyway, on today’s post is the daily canvas of the S&P 500. Like the Dow Jones in my friend’s post during the past weekend (kindly see it here), the broader index of the US, which for me, is more representative of the US’s economy, has also risen back to life after making a false break down. As you can see, the index had already broken below the neckline of a head and shoulders pattern. Luckily, investor confidence resumed and the index was able to keep itself back above the neckline again. Should the break down continued, the US’s equities could have been on a bear market again, probably leading to a double dip recession in the country’s economy.
Technically speaking, the S&P 500, however, is not yet out of the woods. It wood be on a better ground if it is able to move above both the 50-day and the 200-day average. A couple of indicators, though, show some bullish signs. One is the RSI which recently went above 50. In case you do not know, an RSI reading of above 50 indicates that the upward momentum is gaining speed. Notice also that the MACD had just made a bullish crossover as well with its histogram turning positive. In any case, if it is able to move past 1,150, then its next target would be its previous high just above 1,200.
Fundamentally, the market would be looking for some catalyst from the second quarter earnings report of the big firms in the US. Tech-giant Google and and financial holding company, JPMorgan Chase & Co., are set to release their earnings tomorrow (July 15). Bank of America and Citigroup will also publish theirs on July 16. Several market moving data from the US (PPI, Philadelphia Fed manufacturing index, CPI, and University of Michigan sentiment survey) will likewise be reported. Upside surprises from any of these reports could spur some buying while the opposite could cause some selling. Watch out for these reports!
In addition to the posts of my colleague regarding his analysis on the NASDAQ Composite (kindly click here to see it) and Dow Jones Industrial Average (kindly click here to see it), I also want to point out something on the S&P 500/.INX/^GSPC. After months of monitoring the movement of the S&P (my previous posts about it: 1 and 2), the index has finally broken below the neckline of its head and shoulders formation yesterday. It could now be on its way to the 1,000.00 psychological level. Moreover, if it breaches the 1,000.00 psychological support, the its next downside target could be the 950.00 price mark. But if luck strikes and the index returns above the neckline, it could once again ascend and reach the 1,131.23 level.
On the side, it is important to remember that the S&P 500 is a broader measure of the US’s economy since as its name suggests, it takes into account the 500 biggest companies in the Us from different sectors. Therefore, a downturn in the index could very well lead the US’s economy itself to another bear market.
My last post on the S&P 500 explained that its chart could possibly be setting up the right shoulder of the head and shoulders formation (click here to see it). Now, the pattern looks clearer and if the price breaks below the neckline, the formation would be confirmed. Once the breakdown occurs, the value could slide all the way to the next support at the 1,000.00 psychological level. However, if the index changes direction and starts heading north, the immediate resistance it could encounter is 1,131.23. If that resistance gets cleared out, 1,219.80 could be the next.