Weekend Technical Analysis Video – The Markets Hit Key Gap Fill Friday, Look For These Levels, Plays

January 31, 2010

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Market Technical Analysis – GDP Cuases Solid Gap Higher But Markets Still Cant Hold ..$108.00 Is Key

January 29, 2010

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Market Technical Analysis – Markets Move Lower Ahead Of Bernanke Confirmation Vote At 3:20pm ET.

January 28, 2010

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Market Technical Analysis – Markets Float Lower Ahead Of FOMC And State Of The Union….Bounce?

January 27, 2010

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Market Technical Analysis – Market Continues Its Bounce As InTheMoneyStocks Reveals Key Plays For $$

January 27, 2010

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Chart Ahead Of Apple Inc. (NasdaqGS: AAPL) Earnings Looks Fishy. Did They Have A Blowout Quarter?

January 26, 2010

The volatility last week was wild with earnings that just did not cut it. However, the real shock came when President Obama, due to a republican win in MA and the super majority gone in the senate, was forced to talk of tightening the noose on bank and the future risk they wish to take. Considering these banks like Goldman Sachs Grp. (NYSE: GS) made half their revenue from trading, a high risk venture, this put a major scare in Wall Street. It also sets up a possible war between Wall Street and the administration. Since President Obama took office, he has been a dear friend to the banks and in turn they have scratched his back. However, with a possible war looming, Wall Street is on edge and rightly so. This culminated with a near 600 point drop in the DOW from Wednesday through Friday last week. This week promises to be even more wild with Apple Inc. (NasdaqGS: AAPL) reporting earnings after the bell on Monday and much of the S&P later this week.

While market commentators and analyst try and figure out where the next move is going, I just turn to the charts. Apple is one of the most interesting charts to look at after the dramatic fall in the markets the last few days. The daily chart took out the 20 and 50 moving averages, yet today is getting a solid bounce ahead of earnings. The bounce on Apple is holding just below the 50 moving average. Any technician must be concerned that Apple took out key support in recent days. I know it sounds like blasphemy to question whether or not Apple will have a blowout quarter, however, here I sit wondering just that. Even if they beat earnings, which I do expect them to do solidly, based on the charts, I do not expect the stock to move higher. In fact, I look for a sell off down to a target $190.00.

In addition to all the major earnings releases this week, watch for the FOMC Policy Statement on interest rates on Wednesday afternoon and for the State of the Union Address Wednesday night. As a Chief Market Strategist and trader, this type of market is a dream come true. Learn it and master it.

RealTick graphics used with permission of Townsend Analytics, Ltd. ©1986-2009 townsend Analytics, Ltd. All Rights Reserved. RealTick is a registered trademark of Townsend Analytics, Ltd

Gareth Soloway
Chief Market Strategist

Priced for Perfection: When Good Stocks Turn Bad

January 26, 2010

As corporate earnings season is fully underway many of the shining star stocks have sold off after their earnings release. The first major stock to report two weeks ago was Alcoa(NYSE:AA). The stock had an amazing move higher trading at a high print of 17.60 prior to it’s earnings release. Once the earnings were released the stock sold off and it now currently trades at 15.25. Some recent stocks that have followed this pattern are Intel Corp(Nasdaq:INTC), International Business Machines(NYSE:IBM), and J.P. Morgan Chase(NYSE:JPM) which all had negative reactions after their earnings release.

Why did the these market leading stock sell off after their earnings announcement? The answer is simple. These stocks have simply rallied too far too fast and the premium was already built into the current stock price. It is important to remember that stocks are very similar to a pendulum. They swing to far to one side and then they swing too far to the other side. The stock market is mechanism of extremes of human emotion.

It is important to remember that everyone loves to be on a winning team. How often do people root for a sports team that is winning even when they don’t like the sport or know who is playing on the team. The same thing occurs with the institutional money. They simply jump on board a stock and drive it higher into an event such as earnings. Then when the public wants to buy the stock and be part of the team they simply pull the rug right out from under them and sell the stock as the public is buying. Really it is a genius plan when stop and think about it. Therefore, as a rule stop and look at a chart before buying a stock into an earnings release or major event. If it has traded higher in parabolic fashion before earnings stay away for while as the earnings or whatever event it may be have been priced in already.

Nicholas Santiago,
Chief Market Strategists