Financial Stocks Look Like Zombies Today

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
InTheMoneyStocks.com

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

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

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
InTheMoneyStocks.com

Investors Put On Their Bear Costume For The Day

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
InTheMoneyStocks.com

Cloud Stocks Report: Profits In The Sky

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?

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

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.

 

Can The U.S. Consumer Handle High Oil Prices?

While the cheerleaders on the cable financial news networks are shaking their pom-poms and jumping out of their seats about the recent stock market rally oil prices have surged higher over the past month. The price of WTI crude futures (CL) has soared higher by nearly $20.00 since the October 4, 2011 low when oil was trading at $74.95 a barrel. Can the U.S. consumer afford high energy prices ahead of the winter heating season?

It is important to note that the U.S. consumer accounts for 70.0 percent of the gross domestic product (GDP) in the United States. Therefore, if the U.S. consumer cuts back on spending the economy should slow down. High gasoline and energy prices are a direct tax on the consumer. Then when you add in a very weak U.S. Dollar it becomes a double tax on the consumer as other goods will become more expensive to buy. The weak U.S. Dollar is very good news for the energy stocks such as Exxon Mobil Corp (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron Corp (NYSE:CVX), however, it is not so good for the people that are trying to just get by.

If you look at the oil rallies in 2011 you will see that the stock markets seem to run out of steam anytime oil trades above $90.00 a barrel. Just look at a daily chart of crude and you will see that that the economy starts to stall out about a month or two after the price of WTI oil crosses above $90.00. The winter heating season is also coming upon us and the U.S. consumer will not only have to fill up their gas tanks in their cars, but they will also have to heat their homes. This is certainly going to be problematic for the U.S. consumer. It is good for GDP that the U.S. consumer will be spending a lot of money on energy this year because they will likely be cutting back on spending elsewhere.

Nicholas Santiago
InTheMoneyStocks.com

After Yesterday, What Can The Markets Do For An Encore?

As we all saw yesterday, the major stock indexes soared sharply higher. The catalyst for the mega rally was the $1.4 trillion European Bank bailout. While the stock market investors perceived that news as good the U.S. Dollar Index plummeted. The U.S. Dollar Index futures (DX Z1) have declined by over $5.00 since October 4, 2011 and that is the real catalyst for the stock market rally. The details for where the European bailout money is going to come from is still very foggy. In other words, who is paying for this bailout? There are a lot of agreements in place, however, show me the money. The last time we checked the French were still begging the China for some cash. Let me let everyone in on a little secret, the Chinese are not dumb when it comes to money and they do not make poor investments. There will certainly be more to this story in the next few months.

 

Stock Market Videos: Super Rally Gets Little Investor Bullish

The markets are staging a monumental move higher. Three-percent gains across the board as the markets continue to power up. While most small investors are jumping in the market, smart investors are taking profits and starting to look for a pull back. Major technical levels have been achieved on this market. The euphoric nature of the market may be a sign of a short term top. GDP reported in at a solid level this morning, adding the hype as TV commentators are now placings the odds of a recession at 10%. Just weeks ago it was upwards of 75%. The games have begun and the swing trading is where the money is being made.