Gary Dean, on Time to Be Concerned When No One Else Is (MarketsPath.com)
The bulls decided to blast right through the 993 pivot Monday and take the tape up to the 2nd resistance zone. There was a quick head fake, but that only lasted about 10 minutes, which has been about the shelf life of any pullback from the July blast off.
There is no use going over any technical indicators as they mean nothing at this stage. There was an index divergence between the NDX and the Dow/SPX. The Dow/SPX made new rally highs Monday as the NDX failed to confirm. Now that could change Tuesday, being the NDX is right below the recent highs.
I believe picking a top is now a thing of the past and that is usually when a pullback hits the tape. I am not willing to say that is what's going to play out, but the spx has some major resistance at the 1013 area. With the plethora of bullishness running wild throughout the airwaves, this is a possible area they would turn the tape.
Equities and Treasuries, can they run in tandem? From what I have seen in the past, the answer is not for long. Treasuries and the dollar have been getting hammered at the expense of the equity rally over the last 4 months. There are some important auctions looming in the not so distant future and something has to give.
We will either see a compete meltdown of the dollar, gold and commodities will scream higher and the inflation driven rally will blast forward. But here is an interesting piece of information that has just crossed the wires.
"Primary dealers are banks and securities broker-dealers that trade in U.S. Government securities with the Federal Reserve Bank of New York. Below, find the current list of primary dealers and an archive of list revisions. Nomura Securities International, Inc. has been added to the list of primary dealers, effective July 27, 2009."
Nomura used to be a Primary dealer, but failed when Lehman went under. They are re-entering the game again and at a most crucial time for the auctions that are set for next week. A question that was brought up in an article I read; Would Nomura re-enter the arena if they thought treasuries were about to free fall and equities were about to soar?
Bottom line: There are zero concerns or even a thought of a pullback. The numbers have been raised by the talking heads and now there is no sleep until 1100. We are 2 points above your 1000 guys, take a breather. When there is little concern, it is time to be concerned. The foundation of the rally has been at the expense of the treasuries. That foundation has some cracks in it and next week the auctions are set for the Fed.
Jack Steiman, on Watching the Dollar (SwingTradeOnline.com)
This market has its head down. There is just no denying this reality. Extreme levels of overbought everywhere, except those monthly charts, but the daily and sixty minute time frame charts are really in need of a break and the market just doesn't care. On a day like Monday, with the markets up strong, lots of leaders acted tired and lagged badly yet the market shot up. Even when the leaders don't rock higher, the market is finding a home for the money that's pouring in. This is classic bullish action. In the face of seemingly anything, the market wants higher. We saw lots of breakouts Monday.
The transports, many commodity stocks, financials and more. At the same time, we saw a continued breakdown in the dollar, thus the reason for the good action in those other sectors, especially the commodity world.
One of our charts shows the PowerShares DB US Dollar Index Bullish (NYSE: UUP). Take your time please and study it closely. The clear and clean breakdown is relevant for this market. The market has been doing well when the dollar falls and poorly when it rises. The breakdown must be respected and when that happens, you usually see money fly into commodity stocks. Financials also do particularly well and generally, like I said, the market but again, you have to follow the money where it's most thrown about. We'll be looking to add plays in that general area on pullbacks. Our SPDR S&P Metals & Mining (NYSE: XME) play is a stock in that area, but there'll be more.
It's so interesting to watch the behavior of a market and what moves up and what doesn't and why. How you can get different signals at different times. For instance, oil is rocking as are all commodities, yet truckers are rocking higher on the prospects of higher costs. Make sense? Not really but for now the market is treating the market in one basket of bullishness. Months back we would have seen transports die on a day like today yet they exploded. Everything is going up in unison no matter where you go. Again, some better than others but it's so interesting to transports flying at the same time oil is blasting higher. The crazy game continues to baffle them all. Today we treat higher oil as a good sign that business around the world is picking up thus transports rock. You have to laugh the logic, and sometimes lack thereof.
The longer we continue to trade above Sp 956 the more bullish the scenario. Bulls get braver on all pullbacks but beyond that, technically we're strengthening and that's because as we put more distance away from Sp 956, we are doing so with many gap ups. Very powerful action. if the market were truly weak, the market makers wouldn't be creating these new strong support areas by gapping the market higher over 956. In addition, as I mentioned last week, the 20 day exponential is about to play catch up with Sp 956 thus making it just that more powerful support, even if those gap ups get taken out we just created and we test down that low. we are on breakout above Sp 956 and that's all you need to understand. If we forcefully clear 2000 Nas we can see 2150-2200 in time. One step at a time along the way but please respect the signal in place.
Mike Paulenoff, on Oil's Upmove (MPTrader.com)
Crude oil might be rocketing for some fundamental reason, but more than likely it is the beneficiary of a portfolio adjustments (investor demand). Be that as it may, oil prices have impacted positively the entire energy and commodity complex -- including lowly natural gas, which participated to tune of a 9% upmove Monday in the U.S. Natural Gas Fund ETF (NYSE: UNG).
Last Thursday we noted for our subscribers that the powerful morning upmove recovered two-thirds of the previous session's plunge, and that upside continuation above $67.01 would put into motion a key upside reversal sesson, on the way to test $68.99, and beyond that, if violated, possibly revisit the June highs above $73.00.
The $10/bbl crude oil upmove since last Thursday certainly looks like it is heading for a retest of the June double high at $73.23/38, which my work argues will be hurled, and if so should propel nearby futures into the $78-$80 target zone. Such a scenario likely will pull natural gas prices with it, especially if the warm weather in the East continues and if the dollar continues to press lower.
Harry Boxer, on Top Charts to Watch (TheTechTrader.com)
The following stocks look extremely powerful with potential imminent moves.
Acadia Pharmaceuticals, Inc. (ACAD) broke out of a base in May, formed a beautiful coil, broke out of that coil and spiked up to from 2 to over 5 and formed a beautiful flag for about five days. Monday it popped 60 cents and may be emerging out of that flag. If it takes out 4.85 and then through 5 on Tuesday, it could spike up on heavy volume.
Affymetrix, Inc. (AFFX) is a stock that has tremendous momentum, but look at the position of the technicals. The Balance of Power is full green and it has been for eight days. The Money Stream and OBV are at the top of the window. This indicates strong accumulation. The stock was up 66 cents Monday, 7 1/2%, and has momentum. Although it is reaching near the top of the channel, it could spike up through it and explode up toward the 11-12 range short term.
Converted Organics, Inc (COIN) is one we added back to our model portfolio after trading it a couple of times. It did get stopped out near the first of June, did nothing for six weeks, then got very very quiet. The declining tops line and moving averages - 10, 21 and 40 day - all were pierced Monday, as the stock soared on nearly 6 million shares, gaining nearly 50% in one day. I'm looking for a follow though. There is resistance up around 1.75-1.80 in that range, then beyond that we can expect a test in the May highs up around 2.5. That's my short term trading target.
Human Genome Sciences, Inc. (HGSI) is in a high-level bull flag that been going on for two weeks now. It's really getting quiet. The technicals have not deteriorated whatsoever. If it starts to move and takes out the 15-15.25, 15.5-15/75 range we could see a spike up take it substantially higher. May need news, but we'll see.
Other stocks highlight in our Chart of the Day video are: Infosonics (IFON), Jazz Pharmaceuticals, Inc. (JAZZ), Novavax (NVAX0, OncoGenex Pharmaceuticals, (OGXI) Oncothyeon, Inc. (ONTY), Orexigen Therapeutics, Inc. (OREX) Rino International Corp (RINO), Spectrum Pharmaceuticals, Inc. (SPPS), Orthovita (VITA), Lockheed Martin Corp (LMT), and Schnitzer Steel Industries, Inc. (SCHN).
