Dollar Falls, Stocks Up, Again

Our favorite trade showed up again today as a weak Dollar led to solid gains in the U.S. Stock market. As usual, Gold was up sharply as well. All of the major averages posted nice gains today. However, most of the gains occurred in the first 30 minutes of trading, and the market was essentially range bound there after. Nonetheless, there were plenty of opportunities for day traders today. There were plenty of gap openings, plus, with Gold up, there were obvious opportunities in the gold stocks.

One interesting divergence in the marke though... Apple was down today. After opening up with the market, it closed much lower, and formed an outside trading day, a somewhat bearish configuration. It appears now that AMZN has clearly taken over the leadership of the Nasdaq.

Scott Cole www.bestdaytradingstocks.com

Weekly Stock Market Review

Well, last week proved to be quite an interesting week for stocks. Normally, since it is a holiday week, there is seasonal favorability. The market got off to a good start on Monday, but failed to build on its gains over the next two sessions. Then, while we were enjoying the Thanksgiving holiday, turmoil erupted in the Middle East, as news out of Dubai suggested there may still be some hangover from the global real estate problems. Global stock markets were down sharply on Thursday, and opened lower on Friday. In the U.S., our markets needed to play a little catch up, and we opened down significantly, trading over 200 points to the down side on the Dow. But, it was a holiday shortened session with light volume, and the markets closed a bit off the lows.

We have a big week ahead. Early in the week we will see if there is any further fallout to the Dubai situation. Retailers will report how the official start to the holiday shopping season went. Then on Friday, there will be a new unemployment report, ahead of which President Obama is convening a jobs summit in an act of desperation to help out Democrats heading into the 2010 election cycle.

As usual, pay close attention to the Dollar. The strong correlation between Dollar weakness and stock market strength is still in place.

Scott Cole www.bestdaytradingstocks.com

Dollar Plunges, Stocks Barely Move

U.S. stocks ended the day barely to the upside, even as the Dollar was routed in Forex trading. The Dollar closed at 14 year lows against the Yen. The so called Yen carry trade has been fueling the rise in stocks since March, but they barely moved today. Commodities, on the other hand, enjoyed big gains...particularly in energies and precious metals. Gold was up $25 on the day at last check, trading at $1,191 in the cash market.

Sooner or later, stocks will start to not like such a weak dollar. It is also noted that there is tremendous correlation among most markets. As the dollar falls, stocks, bonds and gold have risen. Just imagine what will happen if there is any sort of spike in the Dollar caused by a potential geopolitical crisis, or if the Fed suddenly sees that it is time to start raising rates.

In my view, this is just another asset bubble. Even when stocks rise off of bear market lows, they never move as high, and as quickly as this market has.

Happy Thanksgiving!

Scott Cole www.bestdaytradingstocks.com

Dollar Falls, Stocks Rally, As Usual

U.S. Stocks opened strongly to the upside this morning, and held up all day, as the Dollar declined in Forex trading. Someone keeps on forgetting to turn off this broken record!

Another "as usual" though; volume was light. In fact, considering the size of the price move, volume was downright abysmal. Less money is going into these up days, and that can't be good. Volume will continue to lighten up the rest of this holiday week, and that can lead to increased volatility. As usual, pay attention to the Dollar.

The day proved to not be easy for daytraders, except very short term scalpers. Most of the big moves in individual stocks occurred in the first 30 minutes. After that, many stocks that traded nicely to the upside in the first half hour simply flattened out the rest of the day.

Scott Cole www.bestdaytradingstocks.com

Weekly Stock Market Review

As mentioned in my previous post this weekend, the U.S. stock market ended a quiet week on a quiet note on Friday. However, as we head into the holidays, we enter a pretty strong time frame for the stock market on a seasonal basis. Since we have had such as strong rally from the March lows, the market is actually significantly higher on the year. As a result, many fund managers have been left on the sidelines, missing much of this rally. You can bet that these fund managers will try to pile into stocks that have been leading the rally.

I suspect that many of the trends that have been in place during the bulk of this rally, such as a declining Dollar and rising commodity prices, will continue into the rest of the year. The leading industry groups continue to be Silver, Gold, metals/mining, and catalog businesses.

Heading into the Thanksgiving week, the market looks poised to make a move higher after a modest pullback over the last several trading days. I like the patterns I see on the major averages and many stocks in terms of setting up for a decent two or three day rally in the coming week. When you add to this that this is a seasonally favorable week, daytraders and short term swing traders should consider that the odds are likely in favor of the long side over the next several trading days.

There is one caveat to this little forecast, if you could call it that. If there is any significant weakness on Monday that carries the S&P 500 down below 1080, then I would anticipate further weakness.

Scott Cole www.bestdaytradingstocks.com

Stocks End Week With Modest Losses

U.S. Stocks closed very modestly lower on Friday in very dull trading, to end a very dull week of trading. As a result, the week ended mixed, with the Dow Industrials posting a modest gain, and most other averages posting modest losses on the week.

However, the daily trading pattern looks promising for a decent move to the upside next week, which is also a seasonally favorable week for the market.

More to come over the weekend!

Scott Cole www.bestdaytradingstocks.com

Stocks End Day Lower, Dollar Up Modestly

U.S. Stocks finished they lower, but well off session lows on Thursday, but remain up solidly on the week. Stocks opened lower on the back of Dollar strength, but that strength evaporated late in the day, and allowed the market to bounce a bit off its lows. Overall though, it was a pretty weak market. One thing I definitely did not like about the price action was the weakness in Apple. Apple was down over $5 on the day, on rising volume. The overall market volume was also higher today.

In other markets, Gold eked out a small gain, while Crude Oil was lower by over $2. Otherwise, it was a fairly quiet day.

Keep an eye on the Dollar on Friday!

Scott Cole www.bestdaytradingstocks.com