U.S. Stocks are set to open significantly lower Tuesday morning after China reported slower economic growth than previously estimated. Dow Jones Industrial futures are lower by over 110 points as of 8:45 ET, while S&P 500 futures are lower by 14. This equates to 1% losses across the board.
China has been one of the bright spots in the global economy in the last year, but its stock market has plunged sharply, suggesting that the Chinese economy is set for a more significant slowdown. This would put a big dent in the global economic recovery prospects.
For daytraders, this lower open will signify a breakout from the trading range of the last two trading days. This could imply a significant move to the downside, so the easier money should be made on short positions.
Scott Cole
www.bestdaytradingstocks.com
Tuesday, June 29, 2010
Tuesday, June 22, 2010
Bad Day for Stocks
U.S. Stocks closed sharply lower today after a modest open to the upside. The culprit? Likely the existing home sales data that came out this morning, showing a 2.2% drop in sales in May. This was a bad number because there should have been a surge in sales from the contracts signed in March and April as the tax credit was set to expire. So, an actual drop in sales suggests that the real estate market is still soft. What a surprise! With no jobs being created, how would we expect a significant bounce in the market? The fact is, more declines are likely until this economy really starts to turn around.
Anyhow, the major averages lost anywhere from 0.8% in the case of the Nasdaq 100 to nearly 4% for the Dow Transports. Another culprit again was the Euro, which declined again, but not nearly as much as yesterday.
One big concern among technical analysts is that there is a big head and shoulders top forming on all of the major averages. Some technicians will try to forecast the move if the neck line is broken to the downside as the distance between the neck line and the top of the head. For the S&P 500, this would take the market down under 900. For the Dow Industrials, down to about 8,000.
You can bet that a decline of that magnitude will be forecasting higher unemployment and a double dip recession ahead. However, I am not convinced that we will see that kind of a drop in the market. While I remain cautious, if not bearish, I think the Democrats will do everything in their power to try and fend off a double dip recession to save their asses in November.
On another note, I mentioned yesterday that I did not generally like the overall action in Apple yesterday. Today, however, it bucked the overall market trend and closed higher, although it has formed an inside day on its chart. Keep an eye on Apple...if it fails up here, you can bet the overall market is in trouble.
Scott Cole
www.bestdaytradingstocks.com
Anyhow, the major averages lost anywhere from 0.8% in the case of the Nasdaq 100 to nearly 4% for the Dow Transports. Another culprit again was the Euro, which declined again, but not nearly as much as yesterday.
One big concern among technical analysts is that there is a big head and shoulders top forming on all of the major averages. Some technicians will try to forecast the move if the neck line is broken to the downside as the distance between the neck line and the top of the head. For the S&P 500, this would take the market down under 900. For the Dow Industrials, down to about 8,000.
You can bet that a decline of that magnitude will be forecasting higher unemployment and a double dip recession ahead. However, I am not convinced that we will see that kind of a drop in the market. While I remain cautious, if not bearish, I think the Democrats will do everything in their power to try and fend off a double dip recession to save their asses in November.
On another note, I mentioned yesterday that I did not generally like the overall action in Apple yesterday. Today, however, it bucked the overall market trend and closed higher, although it has formed an inside day on its chart. Keep an eye on Apple...if it fails up here, you can bet the overall market is in trouble.
Scott Cole
www.bestdaytradingstocks.com
Monday, June 21, 2010
So Goes the Euro, So Goes The Stock Market
Stocks opened strongly this morning on the back of news over the weekend that China was going to finally start letting the Yuan float a bit in the currency markets. This suggested that the Chinese government was confident about the global economy going forward. The Dow Industrials traded as high as up 150 points in early trading, but after noon, the Euro began its descent, and stocks followed. Financials lead the way down.
The chart pattern resulting from today's action is an outside day, and I would consider calling it a key reversal if the volume was higher. But, volume was actually very light compared to Friday. This suggests that the selling pressure was not all that significant.
Now, what I really did not like about the market today was how Apple traded. It made a new all time high over $279, but ended up making a three day low before closing at about $270. Again, the volume was a little bit light, but it looks like Apple may need to consolidate after a $30+ move in the last week or so. Since Apple is a leader of this market, it is worth paying attention to.
The bottom line is that stocks are still being held hostage by the movement in the Euro.
Scott Cole
www.bestdaytradingstocks.com
The chart pattern resulting from today's action is an outside day, and I would consider calling it a key reversal if the volume was higher. But, volume was actually very light compared to Friday. This suggests that the selling pressure was not all that significant.
Now, what I really did not like about the market today was how Apple traded. It made a new all time high over $279, but ended up making a three day low before closing at about $270. Again, the volume was a little bit light, but it looks like Apple may need to consolidate after a $30+ move in the last week or so. Since Apple is a leader of this market, it is worth paying attention to.
The bottom line is that stocks are still being held hostage by the movement in the Euro.
Scott Cole
www.bestdaytradingstocks.com
Sunday, June 20, 2010
Weekly Stock Market Review
U.S. stocks closed modestly higher on Friday, but up nicely for the week overall. The major averages posted gains on the week ranging from about 2.3% to over 3% for the Nasdaq Composite. This was in spite of some weak economic data, particulary in housing. It is clear though that stocks are trading in line with the performance of the Euro, which was higher on the week. The Euro futures ended the week just under 1.24, after trading last week under 1.20. For now, the correlation is very strong, so be aware of any major weakness in the Euro.
Due to the strong performance of stocks over the last two weeks, many stocks have broken out to new highs. In fact, my list of high momentum stocks, based upon my current filters, has expanded quite a bit. This is an indication of a market that has some strength.
In the week ahead, we'll see some more important economic data, but the bottom line is that stocks will be most impacted by issues in Europe and the performance of the Euro.
As the market has generally been to the upside for a few days, the best daytrading opportunities are likely to the short side over the next couple of days.
Scott Cole
www.bestdaytradingstocks.com
Due to the strong performance of stocks over the last two weeks, many stocks have broken out to new highs. In fact, my list of high momentum stocks, based upon my current filters, has expanded quite a bit. This is an indication of a market that has some strength.
In the week ahead, we'll see some more important economic data, but the bottom line is that stocks will be most impacted by issues in Europe and the performance of the Euro.
As the market has generally been to the upside for a few days, the best daytrading opportunities are likely to the short side over the next couple of days.
Scott Cole
www.bestdaytradingstocks.com
Monday, June 14, 2010
Stocks end Monday Mixed
U.S. stocks closed mixed on Monday after trading higher early in the morning. The S&P 500 ran into resistance at about 1105, and subsequently pulled back to close modestly lower. Financial stocks apparently started heading lower midway through the trading day, and they ultimately lead the market off of its highs. While Dow Industrials and S&P 500 closed modestly lower, the Russell 2000 and Dow Transports managed decent gains on the session. The Nasdaq brothers were essentially flat on the session.
One issue affecting financials may have been another downgrade for Greek debt, which is now viewed as junk status.
Today's top industry groups included consumer services, textiles, sporting goods stores, music and video stores and recreational vehicles. I would say those are primarily economically sensitive groups, so more money is being bet on a recovery.
Important economic data such as new home sales, PPI and CPI are due out this week, and this is options and futures expiration this week, so watch for volatility.
Scott Cole
www.bestdaytradingstocks.com
One issue affecting financials may have been another downgrade for Greek debt, which is now viewed as junk status.
Today's top industry groups included consumer services, textiles, sporting goods stores, music and video stores and recreational vehicles. I would say those are primarily economically sensitive groups, so more money is being bet on a recovery.
Important economic data such as new home sales, PPI and CPI are due out this week, and this is options and futures expiration this week, so watch for volatility.
Scott Cole
www.bestdaytradingstocks.com
Sunday, June 13, 2010
Weekly Market Review
U.S. Stocks managed to close with modest gains on Friday, which allowed the market to have a positive close for the week. Among the major averages, the Dow Transports lead the way with a weekly gain of almost 4%. This compares to a gain of only 1.1% for the Nasdaq Composite. The Dow Industrials and S&P 500 were both up over 2% for the week.
Among the best performing industry groups for the week were the REITs as well as copper and silver mining stocks. All of these groups are a pure bet on economic recovery. With that in mind, it is a good idea to pay attention to these groups going forward.
This week we have a few important economic reports such as new home sales and the inflation data. This is also options and futures expiration week, so be aware of the potential for volatility.
Scott Cole
www.bestdaytradingstocks.com
Among the best performing industry groups for the week were the REITs as well as copper and silver mining stocks. All of these groups are a pure bet on economic recovery. With that in mind, it is a good idea to pay attention to these groups going forward.
This week we have a few important economic reports such as new home sales and the inflation data. This is also options and futures expiration week, so be aware of the potential for volatility.
Scott Cole
www.bestdaytradingstocks.com
Tuesday, June 1, 2010
Stock Market Commentary
U.S. Stocks closed lower on Tuesday after a volatile session that involved a 200 point range in the Dow. In actuality, the Dow Jones was the best performer of the major averages, which is not usually a good sign. While the Dow Jones sold off by a mere 1.1%, the Russell 2000 was down over 3%. Tech stocks helped the bigger averages, as Apple closed higher by $3.95 per share.
Energy stocks were the big losers of the day, especially the oil and gas drillers. Anything to do with energy that is pulled from the earth took it on the chin today, due to the news that BP's top kill strategy failed to slow the oil leak in the Gulf over the weekend. As a result, the oil and gas drillers as well as mining stocks were taken out to the woodshed. Many of these stocks have lost nearly 50% of their value since the oil rig explosion over a month ago. For day traders that look for short selling opportunities, these stocks and related ETFs have provided big gains in recent days.
Based upon today's action, it looks like the market will likely test the May 25 lows. This may take another week, but a less than stellar employment report on Friday could be the catalyst.
I noted on CNBC today that Art Cashin indicated that mutual fund cash levels are extremely low. As such, any mutual fund redemptions by investors will result in more stock selling.
Scott Cole
www.bestdaytradingstocks.com
Energy stocks were the big losers of the day, especially the oil and gas drillers. Anything to do with energy that is pulled from the earth took it on the chin today, due to the news that BP's top kill strategy failed to slow the oil leak in the Gulf over the weekend. As a result, the oil and gas drillers as well as mining stocks were taken out to the woodshed. Many of these stocks have lost nearly 50% of their value since the oil rig explosion over a month ago. For day traders that look for short selling opportunities, these stocks and related ETFs have provided big gains in recent days.
Based upon today's action, it looks like the market will likely test the May 25 lows. This may take another week, but a less than stellar employment report on Friday could be the catalyst.
I noted on CNBC today that Art Cashin indicated that mutual fund cash levels are extremely low. As such, any mutual fund redemptions by investors will result in more stock selling.
Scott Cole
www.bestdaytradingstocks.com
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