Stocks Fall Hard in Heavy Trade; Homebuilders Rally

A slew of positive economic data helped bolster the case for the Federal Reserve to taper its money printing scheme. Apologies, taper the quantitative easing program. The S&P 500 blew by a key level we had been watching in heavy trade as well as the NASDAQ. Leading the market to the downside were small cap stocks with the Russell 2000 falling 1.93% on the session. On the positive side, a better than expected homebuilder sentiment drove housing stocks higher in heavy volume. Volatility jumped as the fear trade kicked into gear one day ahead of options expiry. A nasty day of selling ahead of options expiry and pushing our uptrend out of the way. It is important to obey your trend following rules. Did you have a stock break through a key moving average, channel, or ATR stop? Whatever your sell rules are you must obey them. Ignore them at your peril. No one knows whether or not today was a buy-the-dip-day or the start of something more sinister. Do not ignore your rules. The S&P 500 did drop below 1680 in heavy trade leading us to believe we are likely to see the major index to test its 50 day moving average. For the NASDAQ, to see its 50 day moving average will take a bit more effort by sellers. Over the next couple of trading session how each index reacts to its 50 day moving average will be a key indicator how we proceed forward. Keep your focus on price action and the market will guide you. Sentiment continues to favor the bull camp, but has come in week over week. Bulls did drop on the AAII survey with Bears inching up a bit. However, bulls still sit at 35% while bears sit at 28%. NAAIM sentiment saw a dip in bullishness due to more bearish bets being placed on the market. We have yet to see extreme sentiment, but perhaps this is apart of the “new normal.” Either way; price rules our actions and everything else is a cocktail conversation. Stick to your rules and with Big Wave Trading.

Another Hindenburg sighting; Europe Emerges from Recession

Its official European nations are out of recession as GDP rises above expectations. The news did very little for US stock futures and neither did Mortgage Applications which fell 4.7% week over week. Homebuilders once again were weak on the session and continue to look very weak. Buyers kept to the sidelines today with the market drifting in a range all day long. Keeping the market from pulling back further was AAPL as the stock punched through $500 or what was known earlier this year as the generational bottom. We continue to move sideways in this market digesting July’s gains and we remain patient studying price. Another Hindenburg sighting was made today making it the 6th time in 8 days (Business Insider and Zerohedge confirmed) the magical formula for predicting crashes has shown up. The omen doesn’t have a perfect track record by any stretch of the imagination, but it did show up in similar fashion in 2007 and 2000 prior to those bear markets. Can we reasonably guess the same will occur? No. We’ll simply follow price action and let it dictate our next move. Key levels on the downside are 1680 and on the upside is 1710. If we do see this market plunge through 1680 in heavy trade we may have something to the downside. Until then we are sticking with our plan. Here are the Hindenburg Omens: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08/20130814_Hind.png Homebuilding stocks continue to take a beating and today was not an exception. ITB and XHB are in downtrends and continue to act weak. Both ETFs are signaling more lows and if buyers do not step up here homebuilders are at risk of a steep decline. Probabilities say a modest decline is certainly likely. In the same boat, but further down the stream are JNK and HYG. High Yield tends to run alongside equities, but not since May. HYG and JNK continue to show weakness in the High Yield space calling into question if we are about to see some trouble in High Yield land. As the 10 year moves higher the ability for questionable borrowing will simply become more difficult to obtain. Perhaps another “omen” for this market, but we’ll need to see further evidence. Will the Hindenburg turn into something real this time around? Stay tuned.

S&P 500 Hits another All-Time High

Today was a quiet day in the Market as participants ease back into trading from the summer weekend. Existing home sales disappointed where by sales dropped 1.2% month-over-month. Clearly higher rates have put pressure on the housing market. Chicago Fed Activity index show a slight drop of .13, but who really follows this index anyway. The disappointing housing figures helped push the market higher. When there are no sellers it is quite easy to push the market higher with very little volume. Volume dropped from Friday’s option expiry inflated figure, but we weren’t really expecting volume to surge. The S&P 500 hit a new all-time high on small gains, but hey it is still a new high. Distribution really isn’t hounding the market and we still no reason to call a top here. This market continues onward and upward with this uptrend despite those who continue to fight the trend. Earnings continue to be the focus and MCD delivered its results prior to the market open. Unfortunately, it missed its estimates and the market punished the stock throughout the day. Overall, those who eat less MCD tend to be a bit healthier people in general. MCD clearly weighed on the Dow Jones Industrial Average and the stock does appear to be entering into a downtrend. MCD is not a typical name we’d be involved with, but given its price action to date we’d avoid the long side. Housing stocks will begin to deliver its earning releases shortly. ITB and XHB continue to look very top h heavy. ITB looking the worse out of the two, but both clearly are struggling at the moment. Nothing in this QE/ZIRP driven market would surprise us, but it does appear the housing stocks are set to go lower. PHM reports before the bell on Thursday and it appears to be rolling over. So much of the economic recovery talk has been surrounded by the housing recovery will make this week interesting. SHW disappointed with its earnings, yet HD and LOW are near or at highs. LL reports on Wednesday too. HD and LOW do not report till the middle of next month. Keep an eye on housing stocks as well as to those who are tied into it. Gold and silver pushed off their lows nicely today. Certainly here in the short-term a bottom is in place. We have certainly seen a few cover here. Does it mean gold and silver are headed back to 2012 highs? It does not. We’ll be patient and wait for proper entries and use proper risk management before entering into any trade. Nice way to kick off the week with gains. Stick with the process and have a great week!

Stocks Resist Selling Finish near the Highs of the Day

A dose of negative economic news helped embolden sellers during the first half of the trading session. However, sellers would lose their momentum and the market would regain strength pushing well off the lows of the day’s gains. After Friday’s late day plunge the market appears to be ready to push higher just in time for Turnaround Tuesday. Volume on the day soared despite Friday’s end of the month volume kicking in. The Dow Jones Industrial average led the broader market showing blue chips are holding up this market. Commodities jumped on dollar weakness with the USDJPY dropping below par. A few leaders were hit today, but with the market finding its footing this uptrend may not be over just yet. Turnaround Tuesday is tomorrow and if we had to wager a guess we’d suspect a rally would occur. Tuesday’s have been very important to this rally and the trend has been for Tuesday’s to finish in the green. Not too mention we remain oversold given where the McClellan Oscillator resides. A run at previous highs is not out of the question with the support at May 23rd low. The market has May’s high in its sights. Gold and silver have seemingly found a bottom along with the miners. GDX has come off its lows as of late after April’s plunge. Volume has picked up on the upside more so than distribution since the end of April. GLD and SLV continue to try to pull off the lows, but volume isn’t prominent like volume on the GDX. Has gold and silver bottomed? No one can answer this question without guessing. Pick your spot and know where your exits are. Stick to your process and have a great week!

In a rare move Stocks end lower; Gold and Silver find their Footing

Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were able to find their footing and reverse to close positive. Each metal tested key points and perhaps have put in a short-term bottom. SPX briefly hit all time highs, but then were knocked off their highs of the session. Support did filter into the market helping the market to close off the lows of the session. All signs point for this market to continue higher and with Turnaround Tuesday tomorrow gains should resume. The interesting action today centered around the precious metals and one that could turn out to be a significant turning point in the struggling precious metals. GLD tested April lows today and with a bunch of volume showed tremendous amount of support. On the other hand SLV had dropped below its pivotal point only to plow through it today. Volume certainly is saying something for both precious metals. Was today a bottom for GLD and SLV? Is anyone’s guess, but we do have a clear exit in case this falls apart on us. Wednesday we’ll get a read on Existing Home Sales and the Federal Reserve meeting minutes. The focus on the language in these minutes over the “taper” of “halting” of the current money printing scheme will be nauseating. CNBC et al will have a field day with LIESman leading the charge. Price will lead the way for us. Focusing on our stocks and how they act is much more important than anything anyone can “guess” about the Federal Reserve meeting minutes. Stick with Big Wave Trading. Enjoy this week!

Another Late Day Rally Lifts Stocks near the Highs of the Session

The S&P 500 continued its yo-yo action finishing in the green today as volume fell across the board ahead of the Non-Farm Payroll figures. Once again in the last 15 minutes buyers stepped up and pushed stocks higher into the close. It has become clock work at the end of the day buyers are appearing supporting the market. Jobless claim figures jumped more than expected just as momentum had been to the upside. Small caps were able to jump into the lead after lagging the broader market this week. Major market averages remain above their respective 50 day moving averages and we remain in an uptrend. Commodities fell again today even as the dollar rose on the day. Natural gas still is in an uptrend completely ignoring what is going on with other commodities. SLV and GLD continued to slide lower confusing many inflationist. Remember, GLD and SLV represent paper and are not replacements for actual coinage. There is a reason gold and silver coins are in high demand and is not translating over to the paper representation of the metals. The entire commodity complex is not saying to the market the global economy is healthy. Interesting to see the number of Bulls remain in the mid-30s from the AAII survey respondents. Bears remained in the 20s. II Bears continue to come in under 20% and bulls above 50%. QE certainly has kept many bullish expecting the money printing to keep prices high. This may be true, but we are in unchartered waters and with the Bank of Japan jumping the shark anything is possible. Tomorrow Non-Farm Payroll figure will dominate CNBC for majority of the morning. The Federal Reserve has now put the Unemployment rate in big bright neon lights. Given our PMI figures released earlier this week it wouldn’t surprise me if the jobs number comes in slightly under expectations. This is just a guess and I wouldn’t even bet my worse enemy’s money on what I think may happen. We are in an uptrend and while we are seeing signs of it weakening we aren’t going to guess when this uptrend will end. We’ll stay disciplined. Cut your losses and have a great weekend!

Stocks Close Lower on increase Trade as Stocks Close out a Big January

A bigger drop in initial jobless claims did very little holding buyers back in the early going. Stocks would hit their high for the day just after the opening bell. Volume ran higher throughout the day even before the end of the month rebalancing took place. QCOM initial breakout looked strong, but sellers took over pushing the stock lower. Other leading stocks like AMZN have suffered similar patterns after earnings releases. FB was able to find its footing despite not closing at the highs. The Dow and S&P 500 both notched distribution with the NASDAQ avoiding back to back distribution days. Distribution still hasn’t added up to cause concern just yet. January was a good month for stocks and our uptrend still remains. There is plenty of talk of a correction and many are trying to be the one who calls “it.” We aren’t going to call it or not, but the probability of one has certainly crept up. Distribution days have yet to build up to say we need to be vigilant yet. However, sentiment has been running hot all month long. AAII Bulls fell week over week to 48% from 53%. 53% is not overly extreme, but elevated and even 48% is high. II Bulls rose to 54.3%, but it was the NAAIM sentiment that has given an extreme reading of 104.25. The only reading above 100 came on 3/1/2007 when the index posted 100.05. Money managers are levered long here and quite possibly signaling at the very least a short-term top. We aren’t about to bet on this and will wait for our signals. It doesn’t hurt to see where we could have a possible turn. Unfortunately the Federal Reserve has turned the Non-Farm Payroll (NFP) figure even more important. Unemployment is set to come in at 7.8% with roughly 155,000 jobs to be added. Any guess would be as good as the expectations, but the reaction to the number will be important. If the trend continues with the labor participation rate we should see it continue to fall helping lower the unemployment rate. It is almost hard to believe any number would be taken negatively by the market with the Fed pumping $85 billion into the market. We had a heck of a month and January proved staying with leaders and price action is the best course of action. Have a great weekend and enjoy the Super Bowl! TICKER ST TREND CHANGE? DATE CLOSE % SPY UPTREND NO CHANGE 1/31/2013 149.70 -0.25% IWM UPTREND NO CHANGE 1/31/2013 89.58 0.69% QQQ UPTREND NO CHANGE 1/31/2013 66.87 -0.22% USO UPTREND NO CHANGE 1/31/2013 35.28 -0.59% UNG UPTREND NO CHANGE 1/31/2013 18.76 -0.05% GLD UPTREND NO CHANGE 1/31/2013 161.20 -0.61% SLV UPTREND NO CHANGE 1/31/2013 30.44 -1.55% DBC UPTREND NO CHANGE 1/31/2013 28.47 -0.04% FXY DOWNTREND NO CHANGE 1/31/2013 107.18 -0.39% FXE UPTREND NO CHANGE 1/31/2013 134.72 0.10% TLT DOWNTREND NO CHANGE 1/31/2013 116.75 0.49%

S&P 500 Hits another High as Crude Oil Nears $100

Once again buyers support the market at the lows. It has been the trend as of late to find buyers as the market appears to be in free fall. Positive data from Case-Shiller did help the mood. Volume rose on the day across the board showing institutions were quite active in the market. Technology stocks, despite AAPL finishing in the green had a tough day with the likes of VMW, WDC, and STX had tough days. This market continues to hit new highs despite “overbought” conditions. The market now turns its attention to tomorrow’s release of fourth quarter GDP and the FOMC meeting minutes. Tomorrow will be a big day for the market with GDP and the Fed. Fed days are always fun with wild intraday swings. GDP estimates range between 1.1-1.5%, but even if GDP prints at 1.5% is still very pathetic. Despite all the Fed’s interventions the economy can only grow at 1.5% is really pathetic. The market may continue its trend tomorrow regardless of the GDP print. Knowing what the GDP figure will be won’t help you in tomorrow’s market. We could guess if the Federal Reserve does not change its language in its policy statement the market will continue higher. If the Fed hints at winding down its massive asset purchase program may be a reason for a decline, but it is anyone’s guess. We continue to be in an uptrend and until we get our sell signals we’ll stay on the long side of the market. We still have a few minor hiccups in the market right now. VMW, WDC, and STX were sore spots on the day and even with good earnings from F the stock couldn’t find buyers supporting higher prices. YHOO posted good results, but the stock gapped to the upside only to find itself lower on the day. Perhaps we are seeing some exhaustion, but not nearly enough to trigger a sell signal. Stay disciplined and keep your emotions in check! Short-term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/29/2013 150.66 0.39% IWM UPTREND NO CHANGE 1/29/2013 90.05 0.06% QQQ UPTREND NO CHANGE 1/29/2013 67.16 0.01% USO UPTREND NO CHANGE 1/29/2013 35.29 1.00% UNG UPTREND NO CHANGE 1/29/2013 18.36 -1.02% GLD UPTREND NO CHANGE 1/29/2013 160.99 0.44% SLV UPTREND NO CHANGE 1/29/2013 30.32 1.57% DBC UPTREND NO CHANGE 1/29/2013 28.16 0.57% FXY DOWNTREND NO CHANGE 1/29/2013 108.05 0.07% FXE UPTREND NO CHANGE 1/29/2013 133.86 0.27% TLT UPTREND NO CHANGE 1/29/2013 117.6 -0.55% Crude oil – USO saw a big jump today along with SLV. Rising commodity prices will certainly squeeze the American consumer. Stay tuned.

S&P 500 Ends Win Streak as VIX Rises; Some Leaders Stumble

Small losses on the S&P 500 and Dow ended their win streaks as AAPL boosts the NASDAQ to close in the green. Durable goods orders were boosted by BA orders coming in better than expected. Disappointing pending home sales were blamed on low supply, but nonetheless there weren’t as many pending home sales as expected. The VIX was able to hold its mid-point despite the market getting support at the lows. There were a few troubling signs with 3D printers facing heavy volume selling. Recent long signals haven’t been working as well suggesting we may be in for the market to take a rest. Our uptrend is still intact, but we do have a few warning signs of a possible pause in the market rally. DDD and SSYS faced big losses today as these stocks have moved quite a bit from the 11/16 low in the market. It doesn’t matter if these stocks are the way of the future, for now the heavy volume selling suggests these stocks have further to correct. Today’s action is why we have our exit rules with our stocks. Outside of these stocks we don’t see too many trouble signs other than a few new longs not working immediately. KORS another leading stock had trouble today, but LNKD had no issues breaking out. It is very possible we are rotating into new names and this market will resume closing at highs by week’s end. Stay disciplined. Tomorrow we’ll get the Case-Shiller index regarding the housing market. The index has shown much improvement since the utter disaster back in 2008 and 2009. However, it will be Wednesday when we get a reading on fourth quarter GDP growth as well as the FOMC rate decision. Federal Reserve days tend to be positive for stocks and Wednesday shouldn’t be any different. Of course we’ll allow our signals guide us via price, but the reaction to the comments by the Fed should be entertaining. We aren’t about to call a market top or even a correction, but given the extreme sentiment readings last week and a few leaders getting hit the probability of a correction is greater. Stick to your game plan and execute. Short-Term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/28/2013 150.07 -0.12% IWM UPTREND NO CHANGE 1/28/2013 90.00 0.07% QQQ UPTREND NO CHANGE 1/28/2013 67.15 0.22% USO UPTREND NO CHANGE 1/28/2013 34.94 0.46% UNG UPTREND NO CHANGE 1/28/2013 18.55 -4.97% GLD UPTREND NO CHANGE 1/28/2013 160.29 -0.22% SLV UPTREND NO CHANGE 1/28/2013 29.85 -1.19% DBC UPTREND NO CHANGE 1/28/2013 28.00 -0.04% FXY DOWNTREND NO CHANGE 1/28/2013 107.97 0.14% FXE UPTREND NO CHANGE 1/28/2013 133.5 -0.03% TLT UPTREND NO CHANGE 1/28/2013 118.03 -0.36%

AAPL weighs on the NASDAQ as the S&P 500 Closes in the Green for the 6th day in a Row

AAPL was the talk of the street as the stock took a plunge on fourth quarter earnings. Initial jobless claims came in better than expected helping out on the job front (we’ll forget the surging number of people receiving food stamps and long-term disability). The market appeared poised to continue much higher with the market shaking off AAPL’s move. Just before noon time the NASDAQ had almost erased all of the day’s losses but sellers took over. Sellers dominated into the 2:00 pm EST hour when so when the VIX began to fall back helping the market come off the lows. NYSE and NASDAQ volume were higher giving the NASDAQ a day of distribution and a stall day for the S&P 500. We still have our uptrend and a rest here would make sense. However if this were to turn more sinister we have our exit plan. Gold and silver took a big hit today while other commodities were able to hold up. Gold and silver have yet to push higher despite the Federal’s Reserve’s desire to print $85 billion a month without an expiration date. Perhaps the medals know something about next week’s Fed meeting that the other market don’t. For now, both remain in their short-term uptrends despite their action today. Sentiment is at extremes with many surveys at multi-year highs. The AAII survey showed bulls at 53% highest since last February. Hulbert’s Financial Digest reading is at a level not seen since 2000. While this may be an indication upside may be limited we simply cannot trade off of it. The market may very well turn over here and head lower, but it is anyone’s guess and why we have sell rules in place. Stick to your game plan and execute. Short-term ETF Trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/24/2013 149.41 0.03% IWM UPTREND NO CHANGE 1/24/2013 66.66 -1.38% USO UPTREND NO CHANGE 1/24/2013 34.76 0.43% UNG UPTREND NO CHANGE 1/24/2013 19.53 -2.35% GLD UPTREND NO CHANGE 1/24/2013 161.42 -1.10% SLV UPTREND NO CHANGE 1/24/2013 30.65 -1.73% DBC UPTREND NO CHANGE 1/24/2013 28.07 -0.07% FXY DOWNTREND NO CHANGE 1/24/2013 108.66 -1.69% FXE UPTREND NO CHANGE 1/24/2013 132.7 0.41% TLT UPTREND CHANGE 1/24/2013 120.09 -0.35% TLT signals a change in trend from downtrend to uptrend. Have a great weekend.

S&P 500 trades higher for the 6th Consecutive Day as Volume Eases

Attention on the day was aimed at earning’s releases at the close of the day. Stocks were dealt a blow with the IMF cutting its global forecast to 3.5% from 3.6%. While not a big blow to a forecast, but the IMF pointed to Europe and its inability to grow as a primary concern. IBM and GOOG helped boost the tech sector on the day. IBM added 66 points to the Dow accounting for majority of the index gains. GOOG broke out during the session, but was unable to hold its pivot at the close. Volume was lower across the board as the market moved higher, but this has been a growing theme as price continues to be the primary indicator. One negative on the session was the inability for Small Caps to lead the session, but one day does not make a trend. Our uptrend continues to remain in place and we’ll continue to look for higher prices. During the after-hours session NFLX blew the doors off its earnings report. More importantly the company guided higher than its dismal estimates. The stock jumped another 30% in the after-hours session making any entry almost impossible. The stock has been beaten up, but has been trying to make its way back to the spotlight. A jump of 30% seems a bit extreme and will offer an exit for those who are long to book some gains. Will it go higher is anyone’s guess, but a 28% gap to the upside is a gift worth taking. AAPL earnings disappointed the market as revenues were light and guidance was below expectations. The stock printed a 480 handle during the after-hours session but has spent most of its time down 5%. AAPL has been the black eye for the market, but many tend to forget it accounted for 50% of NASDAQ’s gain early last year. The stock simply has run into the law of large numbers and the stock is simply over owned. Plenty of people will be in the stock looking to catch a bottom, but for now we’ll stay away unless we see a buy signal. For now the stock is dead to us on the long side. As of last night the companies reporting earnings 70% of them have lowered first quarter outlooks. Looking at profits for the fourth quarter stands at 3% against expectations of 11% which will certainly weigh on those relying on fundamental models. AAPL and banks accounted for the majority of earnings growth during the past 12 months and with only 3% growth in place with banks reporting should hint at what is to come for the first quarter of this year. It is anyone’s best guess what multiple the market will trade at, but if growth continues to slow in the names that have been the engine of profits the market will reprice. AAPL will certainly put a lot of pressure on the NASDAQ tomorrow. Stick to your trading plan and let the noise from Wall Street fall on deaf ears. Short term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/23/2013 149.37 0.16% IWM UPTREND NO CHANGE 1/23/2013 89.00 -0.24% QQQ UPTREND NO CHANGE 1/23/2013 67.59 0.61% USO UPTREND NO CHANGE 1/23/2013 34.61 -1.14% UNG UPTREND NO CHANGE 1/23/2013 20.00 0.15% GLD UPTREND NO CHANGE 1/23/2013 163.21 -0.28% SLV UPTREND NO CHANGE 1/23/2013 31.19 0.22% DBC UPTREND NO CHANGE 1/23/2013 28.09 0.11% FXY DOWNTRENDNO CHANGE 1/23/2013 110.53 0.04% FXE UPTREND NO CHANGE 1/23/2013 132.16 0.01% TLT DOWNTRENDNO CHANGE 1/23/2013 120.27 -0.15%

Stocks Climb off the lows of the Session and Closed in the Green ahead of GOOG Earnings

The market was able to push higher despite disappointing news from existing home sales as well as data from the Richmond Fed manufacturing index. Existing home sales were expected to rise 1.2% but fell 1% and last month’s big number was revised from 5.9% to 4.8%. Richmond Fed manufacturing index fell to -12 while the market expected a reading of +5. Despite the disappointing economic headlines the market was able to push higher. Volume could not match Friday’s option expiry inflated figures. GOOG kicked off big tech earnings season with AAPL set to report tomorrow. The trend continues for stocks and until we have price action suggesting otherwise we’ll stay on this wave. Key ETFs and their short term trends: TICKER ST TREND DATE CLOSE % SPY UPTREND 1/22/2013 149.13 0.54% IWM UPTREND 1/22/2013 89.21 0.72% QQQ UPTREND 1/22/2013 67.18 0.16% USO UPTREND 1/22/2013 35.01 0.69% GLD UPTREND 1/22/2013 163.67 0.36% SLV UPTREND 1/22/2013 31.12 1.01% DBC UPTREND 1/22/2013 28.06 0.29% FXY DOWNTREND 1/22/2013 110.49 1.48% FXE UPTREND 1/22/2013 132.15 -0.03% TLT DOWNTREND 1/22/2013 120.04 0.19% IBM, GOOG, CREE, and ISRG catapulted higher in the after-hour session as Traders cheered their earnings report. TXN did not fare well as the stock is currently lower by 72bps, but completely overshadowed by other reports. The QQQs were trading 45 basis points higher while SPYs were trading 9 basis points higher. GOOG has yet to trigger a buy signal, but if it can break above its pivot would be a breakout candidate. Given the earnings and volume following earnings releases volume should be well above average tomorrow. Last night in our Gold forums we posted regarding the sentiment situation. Sentiment across the board is bullish, but not at extremes just yet. Perhaps with today’s move we’ll see a change in sentiment, but for now we aren’t at extremes. On the other hand, the number of stocks above their 50 day moving average is at highs suggesting there is a higher probability we’ll see stocks take a breather, after all the Dow is up 8 days out of 9 and the S&P 500 up 5 days in a row. Know one knows when this party will end or if it will ever end, but we have our exit plan and when we get our exit signals we’ll take them. There have been very few stocks showing sell signals suggesting we can go higher. Commodities continue to be very interesting with USO and DBC inching higher. Crude oil ended the day with a 96 handle and is poised to continue its recent uptrend. No doubt will higher crude prices continue to put upward pressure on prices. The endless QE the Federal Reserve has embarked on will likely impact prices of every day goods and services. Pain at the pump will soon rise as a concern again, but for now prices are headed higher. Have a great week.

Red Monday’s Continue as AAPL hits the $700 Mark

The market stages a very nice day of consolidation as volume dropped well below Friday’s level. For most of the day’s session stocks traded in negative territory as last week’s gains were being digested by the market. Nearing the close it appeared stocks were set to close near the lows on the day, but buyers stepped up and pushed stocks well off the lows at the close. Buyers are lurking and the end of the day action certainly highlighted the case. A great day for an uptrend as days like these help work off overbought conditions the market may be in. We continue to operate in an uptrend and continue to look for this market to push higher. It is clear stocks love further monetary easing by the Federal Reserve. The unintended and intended consequences are pretty significant, but the unintended consequences will only hurt those who cannot keep up with inflation. Just to think in four years after gas prices plunged to well below $2 a gallon they have risen back to near $4 again. In many places, gas is well above the $4 mark and this hurts those whose income levels do not keep up with this type of inflation. I just do not see how buying more mortgage securities is going to help the poor rise up or create more jobs. As for our trading it appears it will be a positive, but then again we just follow price. A big positive was the fact that volume was running well below Friday’s level throughout the session. Running mostly 30% behind Friday’s level and remained that way at the close. NYSE volume ran 34% below Friday’s level and the NASDAQ 26%. Expect volume to move higher tomorrow and we’ll see if buyers step up and avoid distribution. We have not seen too many bad distribution days and at this point we only have two distribution days on the books. The key is to pay attention to see if we have a clump of distribution days together and leading stocks falling hard. Your stocks will tell the tale of the market if you are in the right ones. A good start to the week and now we’ll need to build upon it. Remember, it is very important you need to have a game plan and execute!

Stocks Slide as Volume Slips

Jobless claims and New Home sales disappointed setting a negative tone for the entire trading day. Federal Reserve President Bullard did not confirm a new quantitative easing program, but gold and silver still jumped higher. The two precious metals are certainly trading like there will be another easing program. Buyers did try to get the market higher before the lunch hour, but they did not have enough ammo to push the market back into positive territory. Tuesday’s high remains a road block for this market we have moved lower on lighter volume. Today was a consolidation day, but it is time for institutions to step up and support this market. The continued move in the precious metals has been quite impressive. What it all means is really anyone’s guess. An educated guess would be the metals are moving because of a new easing program. What about a lack of confidence in the US Dollar? ECB bond buying? We can certainly make up plenty of different reasons for the move. However, are you busy worried about the why rather than just getting aboard and taking advantage of the run? The “why” always comes, but we aren’t about to wait and waste an opportunity for gains. Sentiment has shifted to be in the bulls camp. AAII survey showed the amount of bulls jump to 42% the highest for this recent uptrend. Bears slipped to 26%, but many remain on the sidelines. 42% is not at an extreme level and anything above 48% would be considered extreme. 26% is low, but for bears anything around 20% would be too considered extreme. Current sentiment really only highlights the neutral nature of the survey respondents. This weekend will be the last weekend before the office end of the summer season. Make sure you get out there and enjoy the last of summer. Remember, know your entries, position size, and your exits.

New Seeking Alpha Article: 4 Gold Stocks For A Bear Market

4 Gold Stocks For A Bear Market

Small caps lead the market lower; Volume slips again

Another quiet day on Wall Street where stocks close near the lows of the session, but volume falling below yesterday’s level avoiding a day of distribution. We did receive downbeat news from the housing sector sending homebuilders lower. Gold (GLD) and silver (SLV) continued to add to their gains today showing the precious metals believe in continued expansion of central banks’ balance sheets. The close was somewhat disappointing not being able to lift off the lows of the session, but with volume really light institutions weren’t selling stock in droves. We continue to consolidate the most recent gains, but we would like to see a bigger push by leaders to emerge from this consolidation.

Existing home sales did disappoint today, not badly, but enough to send home builders much lower today. XHB – the homebuilder ETF was down 1.46% today after the news. It is important to note the homebuilding stocks have been what have led this most recent rally. To see the group struggle certainly signals a possible rotation by the market or worse a top. While we can’t predict tops, or rotation it is best to stock to a sound trading discipline to avoid confusion. Stick with the rules.

Outside the XHB, GLD and SLV took center stage moving higher. Yesterday, the precious metals performed very well and today the group continued yesterday’s strength. Continued strength in precious metals certainly hints at continued expansion, better yet money printing by central banks. Typically, when precious metals rise in the case of balance sheet expansion stocks rise along side the precious metals. Central banks do not have any more ammo other than to print money and they will do so until the system breaks or they are successful. Either way, easy money translates to higher asset prices.

Remember to always cut your losses short.