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.