Financial Stocks Look Like Zombies Today

October 31, 2011

Last week, every talking head in the financial media was falling in love with the leading financial stocks again, however, today these institutions look more like a zombie institution.

Morgan Stanley (NYSE:MS) was last week’s big winner. Today MS stock is declining lower by $1.34 to $17.98 a share. This is a 7.0 percent decline for the financial giant. Many traders and investors believe that MS has a decent amount of exposure to the European debt market. MS stock will have intra-day support around the $17.40, and $17.00 levels.

Other leading financial giants that are trading lower today include Goldman Sachs Group Inc (NYSE:GS), Bank of America Corp (NYSE:BAC), and Deutsche Bank AG (NYSE:DB). These financial stocks have lead the markets higher since the October 4, 2011 pivot low, however, these same stocks are leading the declines this afternoon.

Nicholas Santiago

Stock Market Videos: Markets Lower On Yen, All Eyes On Fed

October 31, 2011

The markets are lower today after Japan intervened in the currency market on behalf of the Yen. This spiked the U.S. Dollar which in turned caused the markets to drop. Aside from an initial gap lower, the markets have gone sideways and are asleep. This is because all eyes are on the Federal Reserve policy statement on Wednesday. Financial stocks are leading the market decline on the back of MF Global’s bankruptcy filing. Apple is one of the bright spots today, the stock is higher by half a percent. Short swing trades are paying off nicely with already half the profit taken on the FXE short.


Selling Unlikely To Escalate Until Wednesday

October 31, 2011

The markets are lower across the board. Japanese intervention in the currency market, coupled with worries over Italy have sparked some profit taking. The SPDR Dow Jones Industrial Average ETF (AMEX:DIA)  is trading at $120.54, -1.50 (-1.23%)  while the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)  is trading at $58.37, -0.57 (-0.97%).

While the markets are nicely lower, it is unlikely the sell off will continue in the coming days. A neutral market is much more probable from here until Wednesday.  The reason for this is simple, all eyes are now on the Federal Reserve policy statement on Wednesday. In addition, Friday the market will hear about job creation. The Non Farm Payrolls report will be released at 8:30am ET.

Into Wednesday, the markets will most likely hold this range, hoping for some sort of QE3 Federal Reserve talk. After that report, the markets will most likely move sharply. Talk of QE3 would be bullish, while no talk of QE3 would be very bearish.

The markets continue to be overbought short term. A 20% rally from the S&P lows in the last month could see a solid retrace if the Federal Reserve disappoints.

Gareth Soloway

Investors Put On Their Bear Costume For The Day

October 31, 2011

This morning, all of the major stock indexes are trading sharply lower. The problems in the European Union and the possible bankruptcy of MF Global Holdings Ltd (NYSE:MF) seems to be too much for investors. The real catalyst for today’s decline is the strength in the U.S. Dollar Index futures (DX Z1), which are trading higher by 0.94 cents to $76.15 per contract. When the U.S. Dollar Index rallies the major stock indexes deflate and trade lower. Since October 4, 2011 the U.S. Dollar Index has declined sharply lower helping to inflate everything under the sun. If the U.S. Dollar Index declines intra-day it would be prudent to expect an intra-day bounce of the lows for the major stock indexes.

Everything that is metal related is trading lower this morning. Leading stocks such as Freeport McMoRan Copper & Gold Inc (NYSE:FCX), iPath Dow Jones-UBS Copper Subindex Total Return ETN (AMEX:JJC), Southern Copper Corp (NYSE:SCCO), and U.S. Steel Corp (NYSE:X) are all under sharp selling pressure today. These stocks will usually be the first stocks to be effected by the stronger U.S. Dollar Index. If the U.S. Dollar Index fades throughout the trading session these stocks are likely to bounce off the morning lows.

Nicholas Santiago

Cloud Stocks Report: Profits In The Sky

October 31, 2011

Since October 4, 2011 the major stock market indexes have soared sharply higher. This October rally has been one for the record books. Obviously, short covering from the European bailout news has helped this stock market trade higher over the past four weeks. The leading technology stocks have benefited greatly from this stock market surge. This week we shall look at three leading stocks in the cloud computing sector that have soared to overbought levels. As we all know, overbought stocks can certainly remain overbought for extended time periods. However, in this report we will reveal the levels where pullbacks are likely to occur, and trading opportunities will be presented.

F5 Networks Inc (NASDAQ:FFIV) is a leading computer networking company that uses cloud technology. This stock has soared sharply higher since October 4, 2011 when the stock traded as low as $70.21 a share. Last week, the FFIV stock closed at $107.63 a share. It is safe to say that this tech leader is very extended and overbought at this time. The stock is coming into an important gap window resistance around the $110.00 area. The next major resistance areas will be around the $112.25, $117.00, and $122.50 levels. Should this stock pullback and consolidate before moving higher traders should watch for near term support around the $98.50, $93.40, and $89.00 levels. Take these levels, place them on your charts and look for the stock to react at each level.

Riverbed Technology Inc (NASDAQ:RVBD) is another leading networking and cloud computing stock. On October 4, 2011 the stock was trading as low as $18.33 a share. Last week, the stock closed at $29.04 a share. This stock is extremely overbought and extended at the moment. Therefore, a pullback or consolidation can occur at any time now. Should RVBD stock trade higher from its current price traders should watch for important resistance around the $29.25, $33.00, and $35.50 levels. If the stock does pullback from its current level traders should watch for near term support around the $26.40, $25.00, and $23.50 levels.

Rackspace Hosting Inc (NYSE:RAX) is a leading internet hosting company that utilizes the leading cloud technology. This stock traded as low as $30.34 a share on October 4, 2011. Since that time the stock has surged higher, closing at $42.47 a share on October 28, 2011. What a rally! The stock broke out of a sloppy one week base on October 26, 2011. Traders should watch for near term resistance around the $45.75, $48.00, 52.00, and $56.25 levels. Should the stock pullback from current levels there will be near term support around the $39.50, $37.90, and $36.40 areas.

Markets Start Lower, Is This A Trick Or A Treat?

October 31, 2011
This morning, the S&P 500 Index e-mini futures (ES Z1) are trading lower by $15.75 points to 1265.25 per contract. The catalyst for the decline is once again a problematic European Union. Yields on Italian and Portuguese debt are beginning to spike higher again. It still amazes me that central banks and governments believe that a debt crisis can be solved by borrowing more debt. Over the weekend there was also very little progress in bringing the Chinese on board for a European bailout. This European bailout reminds me of the health care bill that was passed in the United States, you will find out the details later after the bill is passed. This is simply insanity.

Stock Market Videos: Here Is The Trade Off The Hangover

October 28, 2011

The markets are pausing this Friday. After an insane week of news out of Europe and earnings, traders are taking it easy. The SPY has run into major resistance points and all eyes will be turning away from Greece towards Italy, Spain, Portugal and Ireland. They will all need bailouts as well. In addition, start watching for talk about the Super Committee in the United States. Will they make the cuts necessary? While the euphoric market rally has lasted almost a month, reality will set back in.