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Time of the Year to Get Bearish? (SPX, OIL, USD) 11.26.2012

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KOTM appropriately pointed out that AAPL’s range, on that day, was 1.5 standard deviations away from the mean…indicating a powerful and unusual hammer for AAPL and subsequently the NDX…thus the SPX and the market. This move preceded a four-sigma day for AAPL.  With all this bullish action however, has this recent bo=unce lasted too long and is it time to get short? 

The US Dollar index has nice horizontal support from 11/2/12’s open. This day was a massive bull day for the USD index; the formerly mentioned day could prove to be support for the SPX bears. USD bullishness is supported by a rounded bottom and up trending 50-day moving average. Other futures chars, like crude oil, have similar patterns. Oil is also at the recent top if its trend channel, and its respective complication of moving averages are directly above it. Away from the technical prospective, there are also fundamental reasons the bears will tout about.

           

If there is one thing the mainstream media has covered and talked endlessly about, it has been the looming fiscal cliff. Fidelity cites that, “up to $600 billion of expiring tax cuts, new taxes, and automatic spending cuts are set to take effect at the end of 2012 or beginning of 2013. If they hit all at once, the impact could amount to as much as 4%-5% of GDP.” This could be a serious event for the market if the government does not deal with it appropriately.

 

History, however, is on the side of the bulls. The last week in November has been bullish historically on average, the mean being up 3.1% since 2003. This conflicts with other research KOTM has done. The average cyu.ber Monday, since 2003, has been down nearly 1% for the SPX and -0.8% for the NDX, but this is just one day and perhaps not an indicator for the whole week. Either way, the recently formed channel will be one more thing to watch.

 

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Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

 

 mark@keeneonthemarket.com

 

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Morning Rage 10.3.2012

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Metals are all gaining before the market opens. Gold futures are up two and three quarters, silver even, and platinum up a point and a third. Corn is down almost six points, but historically, October is a strong month for corn and soybeans. Soybeans start the morning even. 

Family Dollar Store will be announcing its quarterly earnings this monring. The stsock is already up a dollar-eighty in pre-market trading at $67.56. Although FDO has been missing earnings, the company has experiencing high growth in floor space by building new stores. 

The EIA Petroleum Status Report, which determies the price for petrolium products and reflects the supply and demand, will be released at 10:30am EST. ADP emoployment report that came out this morning beat estimates by 22,000 which could explain the push higher for futures this morning.

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Morning Rage 9.26.2012

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Dow futures are down twenty-two, S&P futures down three and a quarter, and Nasdaq futures are down nine and a quarter. Crude, metal and grain futures are all down as well. Crude futures are down a buck-seventeen, gold is down five and a half and silver is down twenty-two cents.

Yesterday was a bearish day in most sectors with most major tech and financial stocks down for the day. Google (GOOG) started the day off well, moved up to a new high, but lost all of its gains for the day and ended slightly lower. Apple (AAPL) continues to lose ground from its strong couple of weeks in early September as negative news continues to come out against the iPhone. I guess five million units sold is negative news for the iPhone 5. Delays for new units may be a problem as the riots at Foxxcon, where the iPhone and iPad are made, are investigated further.

I saw a couple of inside buys in oil companies last night in my own research which is leading me to considering a bullish trade in oil or at least keeping an eye on the price to see if it jumps upward at all in the near future.

New home sales report comes out today at 10:00am EST. Analysts expect a positive growth of 10,000 newly constructed homes with a committed sale, a gain of about 2.5%.

Alex Kalish has a master’s in economics from Suffolk U.

Look for the associate option pick of the day competition on the blog.

Email me if you would like a free trial into the KOTM Trading Room: alexk@keeneonthemarket.com

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Oil Remains Lower After Yesterday's Sell-off 9.18.2012

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Benchmark crude closed at $96.62 a barrel, down $2.38 or -2.4%.  Oil had its biggest intraday swing since early June, hitting a low of $94.65 a barrel, after trading at a session high of $99.52 Monday morning, failing to break through the $100 key technical level. 

The drop in U.S. crude was not as deep as the sell-off in Brent crude oil, which sank from $115.20 a barrel at 1:52 p.m. to $111.60 just 180 seconds later as trading volumes spiked despite the usually quiet Rosh Hashanah holiday.  Brent crude settled down $2.87, or -2.5%, to $113.79 a barrel.  Energy prices had spent the majority of the session trading marginally higher, with support from geopolitical tensions from around the world. 

There is speculation among traders that a potential ‘fat-finger’ trade is responsible for the selling as prices rapidly fell more than $4 in just 20 minutes.  There are also rumors of a strategic oil-reserve release.  These rumors most likely derived from a report done by Reuters on the Obama administration considering a release much larger than the 30 million barrels from last year.  However, the White House has denied these rumors with an official stating, “all options remain on the table, but we have nothing to announce at this time.”

Some analysts simply suggested the price of oil had gotten too high given continued weakness in the global economy, and it’s due for a correction.

Energy traders have enjoyed solid gains in the month of August with Crude-oil prices on the NYMEX up 8.7% from Aug. 1, and Brent crude gaining 7.7% over that period.  Oil recently traded to a high above $100 on Friday partly on concerns that the tension in roiling parts of the Middle East and North Africa could trigger supply disruptions.  Enthusiasm in the oil markets may soon fade however, due to an increasing negative outlook on global demand and high inventory levels.

Perhaps the euphoria over the Fed has worn off.

Crude spent much of the European session in the red, with the October contract off 52 cents, or -0.5%, to $96.10 a barrel. 

Ciro J. Lama is currently an undergraduate studying Finance at the Zicklin School of Business – Baruch College

Twitter: @TraderCantalino

Website: CantalinoAssetManagement.com

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Halftime Report 9.13.2012

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Oil and Gold are both up 6.00 and 0.68, to 1,778 and 98.99 respectively. Platinum futures are up 31.80 and are quickly catching gold. The EUR/USD exchange rate gained 1.13% up a penny and a half to 1.3136 euros per dollar.  Strangely, the US dollar is gaining value against the Japanese Yen, up about $0.77.

Analogic Corporation (ALOG + 13.67%) is a technology company that designs and manufactures advanced medical imaging and security systems. ALOG hit a new high today of 78.73, up about 9.50 points. Shares exploded today after its quarterly results and guidance topped expectations. Analysts expected a EPS of $0.71, a surprised of $0.25 per share as earnings were $0.96.

Bank of America (BAC | + 1.60%) had a second day of huge volume. The stock has been downgraded by at least 5 analysts, yet it continues to creep higher. 226.6 million shares were traded today already.

Google Inc. (GOOG| +$6.16) jumped up almost 6 points in the first half to 712.20. Google has been extremely volatile this week. On Wednesday it was down around 685.00 and gained almost 18.00 points yesterday.

Apple Inc. (AAPL | 1.99%) is up an astounding 13.61 points. Sitting at 696.56, AAPL has hit a new high, again. The iPhone 5 pre-orders were sold out within an hour this morning which may have drove all of the bears away from the stock, after some questioned the value of upgrading.

US economic news released today includes the CPI, retail sales, and industrial production. All reports are released on a monthly basis. Production is down 1.2% overall, with manufacturing losing 0.7%. Retail sales grew 0.9% beating last months 0.8% growth. Finally, CPI grew by 0.6%. Food and Energy prices accounted for 0.5% of this months change, however, year-over-year change in CPI were all energy and food at 1.7%.

Alex Kalish has a master’s degree in economics from Suffolk University.

Questions, comments, and suggestions are welcome: alexk@keeneonthemarket.com.

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Crude Declines Despite Tropical Storm and Refinery Explosion 8.28.2012

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The main reason for the fall in prices is the shutdown of refineries along the Gulf Coast.  The storm is expected to halt production at 12 of the nation’s largest refineries along the Gulf Coast, lowering their demand for crude in the short term.  The thought that the storm may lead to the United States opening their strategic reserves to make up production also contributed to the decline in crude today.

Despite the fall in crude, gasoline and heating oil did not see the same decline.  With refineries shut down and no reserves of refined products to be released the supply of heating oil and gasoline will be disrupted far more than crude supply.  The spread blew out in trading today but closed off of highs.   

With the concern over production in the Gulf fading markets now look to Venezuela and try to evaluate how much the explosion at the Amuay refinery will impact the price of crude.  The explosion occurred early on Saturday morning with a confirmed death toll of 41 people.  The fires are still burning but Venezuelan officials say that the situation is completely under control.  The refinery is capable of producing as much as 645,000 barrels per day, and officials claim that the refinery will be fully operational within 2 days of the all clear.  The shutdown of this refinery doesn’t appear to be having a large effect on prices in the short term, but medium term effects will depend on whether or not the Venezuelans can stick to their time table for reopening the refinery.  

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Morning Rage 8.22.2012

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The Hang Seng underperformed today labeling itself as the worst performer in Asia as shares dropped
to their lowest in 3 weeks, losing 1.1%. Belle international, a Chinese footwear retailer was among those
dragging down the index, losing 4.6%, its worst in 7 months as the CEO said he expects pressure from
discounts of rival firms as they reduce inventory. Li Ning shed 4.3% ahead of earnings today, down 28%
this year. Oil giant CNOOC is down again today showing a 1.7% loss.

The FTSEurofirst is currently down .7% led by cyclical stocks and weak data from Japan exports. Miners
are down 1.7% hurt by poor results from global player BHP, who projects a 35% fall in second half
profits. Other cyclical stocks; autos and construction, fell 1% and 1.2% respectively. Banks are also down
0.6% today. Around Europe the Dax is -.72%, the CAC -.61% and the Madrid General -.83%.

MBA applications show worse this week down 7.4%.

Amazon launched the India Kindle store on its website, with over 1M titles offered in rupees.

In commodities crude is beginning down today while gold, silver and natural gas are looking to have big
gains.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu