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For Monday March 4, 2013 

 

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     Dow +35.17 at 14089.66, Nasdaq +9.55 at 3169.74, S&P +3.52 at 1518.20

Automatic spending cuts. The government has to borrow about $1 trillion a year to pay its bills so to stay within budget instead of increasing debt it should cut its spending by $1 trillion a year or increase income or both. The latest sequesters is to cut spending not $1 trillion a year but over a 10-year period so it will not reduce the country's deficit. The cuts for 2013 are supposed to be about $85 billion. The government now spends about $10.4 billion a day so the spending cuts are only 8 days worth of  spending. $85 billion could be cut out of the defense budget alone in a year as it spends about $900 billion. In 2011 the government was spending about $3.8 trillion a year so even a very modest 5% cut would be $190 billion a year. This is why many think that this cut is way too small for a country owing over $16 trillion.  The markets however, so far, seem not concerned about the cuts this week as there were good gains across the board. The Dow then the S&P 500 took the lead which is not really what you want to see. It would be a stronger sign if the small caps were in the lead so there is the possibility of topping taking place. This week consumer confidence is up and home sales increasing while retail sector made gains. But there are higher taxes this year so personal income is down which cautions that this upward trend may not continue long. The charts still look pretty good but not as strong as they looked a month ago.  The market volatility has picked up and this is a cautionary sign as well.

 

Before we get to the  charts - a   video.  

 

RobertWhitworth specializes in viral time lapse videos and architectural photography. He gained his first-class honors degree in Photography from Norwich School of Art & Design, UK. Robert is currently based in Singapore and has extensive experience working in and around Asia. 

Kuala Lumpur Time Lapse: super-modern buildings juxtaposed with various cultural enclaves and with a little of Asia's chaos thrown in. My time lapse explores how the city changes from day to night highlighting how spaces dramatically alter during the course of a few hours. As summarized by Marc Lourdes on Yahoo! Malaysia: "5 months. 400 hours of solid work. 4 cameras. 40 shoots. 640 gigabytes of data. 19,997 photographs."   Explore his website  Send him a tweet and let him know what you think of his work  @kwhi02

 

 

In an upbeat sign for the job market, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits fell by much more than anticipated in the week ended February 23rd. The report said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000. Economists had expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.   graphs - RTTNews

New home sales surged in January, rising almost 16% from December in another sign of an improving housing market. Sales of new single-family homes in January came in at a seasonally adjusted annual rate of 437,000, the government said Tuesday. The results bested consensus estimates of 381,000 

The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5% last month to 105.9. That's the highest since April 2010, when a home buyer's tax credit was about to expire. 

Personal income in the U.S. fell by more than anticipated in the month of January, according to a report released by the Commerce Department, although the report also showed that personal spending rose in line with estimates. The report said personal income tumbled by 3.6 percent in January after surging up by 2.6 percent in December. Economists had been expecting income to pull back by about 2.1 percent. At the same time, the Commerce Department said personal spending edged up by 0.2 percent in January after inching up by 0.1 percent in December. The increase in spending matched economists' expectations.

While fourth quarter U.S. GDP data was revised to show economic growth compared to the previously reported contraction, the pace of growth fell well short of economist estimates. A report released by the Commerce Department on Thursday said GDP increased at an annual rate of 0.1 percent in the fourth quarter compared to the 0.1 percent drop that was originally reported. Economists had been expecting a more substantial upward revision, with the consensus estimate calling for the revised report to show 0.5 percent growth.

A measure of Chicago-area manufacturing accelerated in February to the highest level since March, ISM-Chicago reported Thursday. The Chicago PMI rose to 56.8 from 55.6 in January, beating economist expectations of 54.0. The new orders subcomponent rose to a reading of 60.2 from 58.2 in January. Readings over 50 indicate expansion. 

With orders for transportation equipment showing a substantial decrease, the Commerce Department released a report on showing that new orders for U.S. manufactured durable goods fell by more than expected in the month of January. The report said durable goods orders tumbled by 5.2 percent in January after jumping by a revised 3.7 percent in December. Economists had expected orders to fall by 4.0 percent compared to the 4.3 percent increase that had been reported for the previous month. Excluding the sharp drop in orders for transportation equipment, durable goods orders actually rose by 1.9 percent in January compared to a 1.0 percent increase in December. Ex-transportation orders had been expected to edge up by 0.2 percent. 

Spending on U.S. construction projects fell in January by the largest amount in 18 months as home construction stalled and spending on government projects fell to the lowest level in more than six years. The dip was viewed as a temporary setback with construction expected to keep moving higher this year. Construction spending fell 2.1% in January compared with December, when spending had risen 1.1%. It was the biggest one-month decline since July 2011, the Commerce Department said Friday.  

Consumer confidence surged in February as the improving job market offset concerns about higher taxes and looming federal spending cuts, according to a leading private barometer. The monthly consumer sentiment index from Thomson Reuters and the University of Michigan rose 5.1% last month from January. The new reading of 77.6 also was up 3.1% from a year earlier. “Consumer confidence continued to improve in February due to expected gains in employment," said Richard Curtin, the survey's chief economist. "These expected job gains have partially offset concerns about higher payroll taxes and the impending reduction in federal spending." 

Today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s), surged even higher during the dot-com bust (early 2000s), and spiked to extraordinary levels during the financial crisis (late 2000s). Since the early 2000s, the PE ratio has been trending lower with the very significant but relatively brief exception that was the financial crisis. More recently, the PE ratio has moved slightly higher. It is worth noting, however, that even with this recent uptick, the PE ratio still remains at a level not often seen since 1990.

 

 This past week's  sectors.

 

This past week's indices  -   

Monthly charts for the equities look  good as though we have just had a month of consolidation after the bigger move up at the start of the year. They are not overbought and have room to run to their top Bollinger bands, but there are some weakening clues that we will see later on. Oil and gold are both under their lower Bollinger bands and gold is actually only 50 points off its lower band so it may test that area. 

The 60 min. chart shows the drop on Monday taking the candles below the lower Bollinger bands and then the very quick rally up back to the top. They ended the week in the center of the bands for the most part. 

The Dnow again closed over the 127.2% Fibonacci projection at the lower of the top two parallel channel lines. They then are still resistance but if broken we have the 161.8% at 14,486. 

The weekly Dow chart shows the long candle shadow and the recovery by Friday and this pattern can also often lead to a nice rally, though the volume has been lower the last three weeks. 

The Dow futures show some nice gains to be made by watching the price levels and the RSI when it becomes oversold and overbought. The close on Friday was at the former breakout level and the chart is te showing the next two short term Fibonacci projection levels. 

The Dow Jones utility average closed slightly higher this week with the volume a bit above average so has the possibility that it will take out the highs from last autumn. 

The transportation average was also up some this week, though with RSI over 70 suggests a time to be more cautious. 

The NASDAQ was up only slightly this week while the NASDAQ summation index remains on a sell. 

The moving average of the number of new highs on the NASDAQ continued to weaken this week. 

In this pattern the NASDAQ could really break either way, up or down. If it does go up to make new highs on a closing basis then look to the higher Fibonacci projection level at 3300 as a possible target. 

The weekly NASDAQ shows the failure was at resistance so it is quite normal that it should rest a while here. 

And the closer view on a 60 min. chart as it is below the parallel channel and horizontal resistance. 

The NASDAQ 100 ETF also remains on the sell side this week. 

The NASDAQ 100 is sitting just at the 127.2% short term rejection with the higher level at 2797. 

The volatility index ended the week just over 15. 

The semiconductor index remains over the trendline, which is bullish and it may just be making some consolidation in advance of a higher movement. 

A couple of weeks ago we spoke of the original series on Netflix House of Cards as it is a quality production certainly above that of the major networks. In February they also released all eight episodes of their original production, Lilyhammer staring Steven Van Zandt known from  Bruce Springsteen's E Street Band and his role on The Sopranos. It is not such a high caliber but on par with the networks. Mentioning it as the stock continues to perform well. It had a chance to drop lower but instead moved  back up after the previous weeks drop.  

The NYSE in the top of the chart dropped a bit while the moving average of number of new highs minus new lows dropped even more this week. The markets cannot go up for long while there are fewer stocks making new highs.

In this view of new highs minus new lows - they did dropped below the lower Bollinger band which caused a small increase by the end of the week. 

At the close on Friday 66% of stocks on the NYSE are now trading over their 50 day moving average. 

The S&P 500 bullish percent indicator had given a cautionary warning two weeks ago and a sell last week and has not switched back to buy at the moment. In the lower half of the chart it suggested a buy as it moved back over the 20 day EMA. 

Of course  the lazy chart is much slower to respond and remains on a buy. 

The S&P 500 had a larger trading range this week but then ended still below the recent highs and at the 127.2% projection and trendline. It does have a parallel trendline higher up towards the 161.8% projection.  RSI dropped under 70.

This S&P 500 has a projection based on a longer-term chart and also shows the measured move which is under the 1560 level 

The weekly chart shows it just needs to break above this recent range to move to test that 1531 area once again. 

And here the 60 min. chart with dual parallel channels. 

On this 15 min. chart the big drop at the start of the week and then the smaller one, dipped down towards 1500. This  could have some thinking about an inverted head and shoulders which could lead to a very nice rally if it breaks out. 

The mechanical short term chart showing the buys and sells for the last couple of weeks. This chart is live on our stockcharts public page

And here the short term S&P 500 futures chart with a projection off the more recent high to low leg giving a good chance to make a new high on a close over 1524. 

The Russell 2000 in this three-day-per-bar chart still looks pretty bullish and perhaps poised to reach for the 943 level which is the 127.2% projection from the time period shown. Do note, however that the RSI has gone under 70 and that is cautionary as is the price movement which we will see in other charts below. 

On this daily chart even though it is a similar and may look bullish in the last week, note that it  has broken below the up trend line and would really have to break back above it. and the $932 level to be convincing. 

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Here just a tighter view and as we saw with the S&P 500 the bullish look on this is that it could be a short term inverted head and shoulders. The fact that the small caps have been underperforming is not encouraging for the market in general. The other fact is that since it reached its 161.8% projection it suggests that it might be a bit of a longer-term top. 

In this 15 min. view we see the moving averages crossed over for the sell and by the close on Friday they were very close to crossing back over for a possible short term buy. 

The 3X ETF for the Russell 2000 had run above the short term 161.8% projection and pulled back to the 127.2% this week and gave a bounce. RSI had dropped below 70 and closed under 60. 

The 30 year treasury bond prices continued a bit higher closing back over the 50 day EMA and may try to test the 200 day EMA which is also that horizontal pink line resistance.

The banking index is slightly back over the broken trendline but still under its 20 day moving average at $54.61.

There looks to be nothing wrong with the retail sector as the ETF made a new weekly closing high.

The London Financial Times index closed at a new closing high this week as well and does have  technical room to go higher.

The Dow Jones world stock index dropped down to the lower level of support but bounced from there to end flat for the week.

The Shanghai stock exchange, having dropped to the 50 day EMA bounced back up close to the 20 day moving average.

The commodity tracking ETF dropped over 2% this week after last week dropping below horizontal support. Slow stochastics had a crossover near the highs as it often has in indicating these selloffs.

Oil lost over 2% this week as it had recently run into the top triangle trendline resistance and may test the 200 week EMA one more time at the bottom trendline.

The oil futures chart shows a possible bounce point at that lower trendline and if broken perhaps the next Fibonacci level near $88.

Here another weekly view of oil spot price where the lower support line is near this 200 week EMA.

Natural gas was up 4.8% this week as it gapped and closed right at the 20 week moving average. Note that the histogram is still negative and the MACD has not crossed over as yet.

This natural gas futures shows the movement from mid February and it closed at the 50% retracement of the move from the later January high to the mid-February low.

Gold started  the month down very slightly after the previous month it dropped under the 20 month moving average. It would certainly be likely to see a test of the 50 months EMA and trendline shown if that former low at 1526 is breached.

The daily gold chart shows the rally off the lows and the drop back down near them on increased volume.

As this GLD longer term up trendline was breached note that they generally do not recover rapidly to move back inside when these triangles get broken. At the moment there are possibilities that this 50% retracement level will hold but it would be more favorable longer-term if first we saw RSI get oversold below the 30 level.

And on this view we see that 2012 support level just below. Seems to be just asking for a test.

The gold miners ETF also continued lower this week losing 2% on increased volume. Do note, however that RSI is now below 30 and the Williams indicator is also oversold so a bounce will be coming so worth watching for it.

There are now good gains from this short of the gold miners from our mechanical chart and knowing the short term oversold nature of this ETF do protect your gains.

Silver was only down slightly this week but no signs of recovery.

On this shorter-term chart we see a trendline underneath which may give further support if it drops again.


The mechanical chart for SLV is still on the short side with some gains from the last position change.

Copper did not bounce with the markets this week which is not encouraging but it is at support and  may have another chance to do so.

Palladium also continued lower though less volume was in the selling then from the previous week. It may recover but pay attention to that 705 level. as that should now be support.

The euro in the previous week had dropped below the trendline, which of course is bearish and this week it gave up 1.3% and closed under both the 20 week moving average and the 50 week EMA.

The euro futures may find support at the 50% retracement level which could take the RSI back under 30 once again.

Looking at the monthly chart for the US dollar you would think it reasonable that it at least tests the top triangle trendline.

Here on the weekly view we see that trendline not far overhead.

And the daily shows the close is now over that resistance dotted line.

 

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Check the updated Earnings Calendar on all overnight holds.

 

This week's economic calendar for the USA. 

Volatility mean opportunity for futures trading and it is free to try it out.

Global Futures has many platforms available for trading futures and Forex but a very popular one is Global Zen Trader as it is very customizable with  exceled built in  charting that can be used free floating.  We made a short video about it giving a very general overview, and we have links on that page to several other videos about this platform. You can try it for free using live streaming data in order to see if future's trading is right for you..  link here so give it a watch and try it out.

zen tradeer

 

Futures and  Forex trading

Global Futures continues to offer excellent service and a variety of trading platforms such as the new Global Zen Trader which includes charts. They have a special offer  for StockTiger readers - 20 commission free contracts.

To try futures trading you may sign up for a free simulated account that uses live streaming data. Several platforms to chose from. Futures can be volatile so great opportunities  for wide swings. If you call them ask for Trenton and mention StockTiger. Click on the Demo image below to sign up.

Or for more information fill in form - click below/p>

 

If you trade ETFs our large list of them is here http://stocktiger.net/etf/etf.php  A list of the standard, 2X and 3X ETFs from Proshares.  

Want to find some buried treasure?  Forrest Fenn flew 328 missions and was shot down twice in the Vietnam War.  After the war he started an art-and-antiques business in Santa Fe, N.M. He learned he had cancer years ago but finding he may not have a long time to live, a couple of years ago filled a bronze chest with what he says is millions of dollars’ worth of gold and jewels and hid the treasure “somewhere in the mountains north of Santa Fe.” A poem in his memoir, The Thrill of the Chase—his latest of eight books—offers clues to the location of the cache, which Fenn is challenging treasure hunters to find. “If I can’t take it with me,” he says, “you can have as much fun chasing it as I’ve had for the last 70 years.”  His website page Thrill of the Chase .

 

Margie Goldsmith's Interview on KPAM Radio



 

Here are the clues to help you out 

 

When any of you sign up for a new stockcharts.com accounts there is a space to put in a referral name on that form. If you enter stocktiger@stocktiger.net they give us credit. Thanks!

 

This weekend's transmission of Hearts of Space is named  Cosmic Traveler  - an interstellar flight on electronic wings. You have until 3AM EST today to listen for free on their site or check your local PBS radio station for their schedule.  

 

New additions to our watch list we add new ones each day.   There are too many so pick the ones you like the best and set alerts. We also show the list and current prices and level to watch on our live page each day during market hours so it is very easy to follow,   You can also check progress on our Public Stockcharts pages.

Z    Continuation

VVR   Over $5.66

TXI  Continuation

TWX    Over $54.00

NXST    Over $15.50

MPC   Over $85.01

JCOM    Over $36.61

DK   Over $

 

For your eyes and mind  - 

Photograph by Jakub Malicki

 

Photograph by Byacherslav 

 

 

Photograph by Bobus

 

That's a full lid for today - have a great week.

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Check the Earnings Calendar on all overnight holds.

 

One characteristic of ones that fit the general theme is that at the very end the last second is almost in slow motion. Something a bit insane about almost 50,000 of these being made in the last weeks.

 

 

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