Railroad Stocks Get Derailed

February 29, 2012

This afternoon, the leading railroad stocks are declining lower. Traders and investors will look to the railroad stocks and the transportation stocks as an economic barometer. When this industry group declines or trades lower it is sign that things could be slowing down in the economy. The opposite is true when this sector rallies and trades higher, it is generally a sign of economic expansion.

Leading railroad stocks such as Union Pacific Corp (NYSE:UNP), CSX Corp (NYSE:CSX), and Norfolk Southern Corp (NYSE:NSC) all trading lower today. These stocks are now trading at or below their daily chart 50 moving average and that is a sign of short term weakness. These stocks all seem to have a little further downside in the near term according to their daily charts.

Nicholas Santiago
InTheMoneyStocks.com


Amazing Market Action Yields Insights Into Next Move

February 29, 2012

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Key Google Gap Fill Level

February 29, 2012

Google Inc (NASDAQ:GOOG) has broken out of a range on the daily chart. This breakout has the stock on its way to a master gap fill of $640.00. This $640.00 is the close prior to the last quarterly earnings announcement by the company. For those of us that remember, it was a very disappointing earnings release. Should price head back into this level, it can be shorted. It is not a buy at the current price, just a short should it hit $640.00.

Gareth Soloway
InTheMoneyStocks.com


Major Cracks Emerge As The Market Downfall Begins

February 29, 2012

Gold and silver collapsed in epic fashion as the Dollar had a rare sharp spike intra-day. This was just one of the reasons for the market fall off new 52 week highs. In this article, I will show you why the markets are ready to fall and on the verge of a steep correction.

The collapse in gold and silver must be mentioned first. The SPDR Gold Trust (ETF) (NYSEARCA:GLD)  is trading at $167.10, -6.39 (-3.68%) and the iShares Silver Trust (ETF) (NYSEARCA:SLV)  is trading at $33.82, -2.01 (-5.61%). The reason for this massive drop is two pronged. First, gold and silver have been ripping higher for the last two months. The GLD bottomed on December 29th, 2011 at $148.00. Yesterday, it hit a high of $174.00. This massive move created a major overbought scenario and was due for a correction. Secondly, the Dollar had a major spike higher intra-day. This is rare but as it happened, traders ran for the exits. As they dumped, more investors sold creating a domino effect. This drop on gold is one of the biggest one day drops ever..

Next, the Dow Jones Industrial Average closed above 13,000 yesterday. This was significant on a psychological level. As the media pumped this level yesterday, the average investor reacts by getting coaxed into the markets, thinking all is safe. They also feel they are missing out on making money, a powerful emotion called greed. As amateur retail money flows in, history has shown us the top is in or near. Sure enough, early upside gave way to selling.

In addition to the 13,000 level on the Dow Jones Industrial Average, the NASDAQ hit 3,000 for the first time since the year 2000. This is another psychological barrier. Is the market really at technology bubble levels from 2000? If so, that is a scary thought when one connects the bubble dots. No sooner did the NASDAQ break 3,000, the markets dropped.

Lastly, Apple Inc. (NASDAQ:AAPL) hit the amazing market capitalization of half-a-trillion Dollars. This puts the worth of Apple on par with the 20th biggest economy in the world. Psychologically, that is a hard apple to chew and something that must make investors slightly wary.

All these factors are mixing with an overbought market. Downside is close at hand regardless of Federal Reserve and European Central Bank continued intervention. While the markets find themselves in another bubble, the pop is not far away.

Gareth Soloway
InTheMoneyStocks.com


This Chart Says It All

February 29, 2012

This morning, the U.S. Dollar Index futures (ES H2) have surged higher from the morning lows. As we all should know by now, when the dollar climbs the stock and commodity markets will deflate and trade lower. That is ecactly what we are seeing this morning as the major stock indexes such as the Powershares QQQ Trust (NASDAQ:QQQ), SPDR S&P 500 Trust (NYSEARCA:SPY), and the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) have faded from earlier highs.

Some stocks that will be adversely affected by the stronger U.S. Dollar Index is Exxon Mobil Corp (NYSE:XOM), Cliff Natural Resources Inc (NYSE:CLF), and Teck Resources Ltd (NYSE:TCK). Traders must remember that commodity stocks are usually the first to fall when the greenback gains in strength.

Nicholas Santiago
InTheMoneyStocks.com


Will High Gasoline Prices Eat Into The Restaurant Stocks?

February 29, 2012

As we all know by now, the United States Gasoline Fund (NYSEARCA:UGA) has soared higher since December 19, 2012. At that time, the UGA was trading around the $45.50 level. Earlier this week, the UGA hit a new 52 week high at $57.22 a share before pulling back slightly. This morning, the UGA is trading higher by 0.46 cents to $55.95 a share. Traders and investors have to wonder if the high energy prices will start to affect the economic spending habits of consumers. Normally, high energy prices will have a negative effect on consumers spending and the restaurant stocks can be some of the first stocks to be affected.

Yum Brands Inc (NYSE:YUM), Chipotle Mexican Grill Inc (NYSE:CMG), Panera Bread Co (NASDAQ:PNRA), and Buffalo Wild Wings Inc (NASDAQ:BWLD) have been very strong and market leaders recently. These stocks could be directly affected by the high energy prices in the near term. Other leading restaurant stocks such as McDonalds Corp (NYSE:MCD), and Wendys Co (NYSE:WEN) could benefit since they have cheaper items on their menu. It is important to note that all of the restaurant stocks are holding up well on the daily charts and have not been affected by the high energy prices yet.

Nicholas Santiago
InTheMoneyStocks.com


European LTRO, GDP, And Bailouts Equal Inflation Rally

February 29, 2012

Earlier today, the European Central Bank (ECB) issued it’s second Long Term Financing Operation (LTRO) to 800 European banks. The amount lent to the banks was $712.8 billion for three years. Many of these banks will use the money to play the carry trade, others will pay down their own debt. The first LTRO program in December 2011 had 500 banks participate. Leading European banks such as Deutsche Bank AG (NYSE:DB), and Lloyds Banking Group plc (NYSE:LYG) are trading higher this morning. The S&P 500 Index e-mini futures (ES H2) are trading higher by 1.50 points to 1373.00 per contract.