StockTiger Stalking Stocks for Monday April 4, 2011 The leading stock market newsletter.

A top Well here we see just a child's toy - nothing else so far. At the end of February we mentioned that March is typically up in the 3rd year of the presidential cycle and some wrote to tell us that the top was in place and we could only look forward to a long slide in the markets. They had not, we guess, been looking at many charts. Some people prefer to be short instead of long though you make more money on the long side in general. When a stock goes up from $10 to say $20 you made a 100% gain and this has happened so many times since the bottom last summer. If you were to short that stock at $20 and it dropped back to $10 you only have a 50% gain. So shorting is less profitable for the same point move. Regardless if shorts are not watching charts they are often way to early though eventually right as the market is not a one-way street. We are over resistance in some charts but very close to it in others and often we have seen small break outs with not sufficient volume and they can turn into tops so it could develop again also but it is not yet showing. This is a weekly chart of the S&P 500 in black and the accumulations/distribution line in blue. In the 3 market pull backs highlighted here, we see that the A/D line flattened out before the correction came. Today though we see the A/D line making new highs.

The small caps have done very well and have been stronger than the large caps and when that reverses and the Dow is stronger than the Russell 2000 it is time for caution as when money moves out of what some consider more speculative into "safer" stocks it is a sign that things are changing. We will watch for the signs.

Employment in the U.S. increased by a little more than economists had been expecting in the month of March, according to a report released by the Labor Department, with the increase reflecting job growth in a variety of sectors. The report said non-farm payroll employment increased by 216,000 jobs in March following an upwardly revised increase of 194,000 jobs in February. Economists had expected employment to increase by about 200,000 jobs compared to the addition of 192,000 jobs originally reported for the previous month. charts

The Labor Department said that the unemployment rate edged down to 8.8 percent in March from 8.9 percent in February. The modest decrease surprised economists, who had expected the unemployment rate to remain at 8.9 percent.

First time claims for unemployment benefits in the U.S. showed a modest decrease in the week ended March 26th, according to a report released by the Labor Department, although the report also showed a substantial upward revision to jobless claims in the previous week.

The Chicago Purchasing Managers reported the Chicago Business Barometer retreated slightly, but still indicated expanding economic activity for the eighteenth consecutive month. Production for March slipped down to 74.2 after an exceptionally high February reading of 78.2. Although, the reading is above 50 and shows growth, the growth has slowed down this month. New orders also slipped, but just slightly by 1.4 points to 74.5. Even as new orders fell for the first time in months, order backlogs were the highest in 37 years (since February 1974) at 69.6, up a whopping 7.8 points.

We are now half way through what historically is one of the best periods of gains in a presidential cycle. While the first half of this is up, in all instances shown,the second half has mixed results.

This is a monthly chart of the major indices all pressing on or near the top Bollinger band and that is bullish but there could also be some consolidation or pullbacks from this level - trendlines show longer-term support.

The Dow is very close to closing at a multiyear high and while there was some small uptick in volume toward the end of the week, it remains below the 60 day average. The RSI is not overbought, so in that regard there is plenty of room to move higher.

This 5 min Dow chart shows the dips this week to this trendline, which can now be used as support so trading below may start a correction. It seems the fib lines moved in saving this chart so ignore them at the moment.

This Dow daily futures charts plots a Fibonacci projection from the pullback low to the 100% retracement line at 12,316. A close over this level will give it more than a 50% chance of reaching the 127% projection at 12,550, which basically corresponds to the top channel line shown above on the cash chart.

The transports have now moved up eight consecutive days and are pushing above the top Bollinger band so should make some consolidation in here. Other than that not terribly over bought so can move higher. Volume, however, was decreasing the last couple of days.

Utilities have also continued to move higher and closed seven points under the recent high.

The NASDAQ weekly chart shows the bounce from the 38% Fibonacci line and a test of the recent high not too far overhead, though it did close at some resistance.

This 60 min NASDAQ chart shows that resistance and the gap above this resistance line. A push on good volume could move past filling the gap and to test the February high. There is also a gap below that could be filled on a move back to the 61.8% line

The NASDAQ summation chart had given a buy signal and there is nothing negative about this chart.

The number of new highs on the NASDAQ has picked up and the moving average of that number is nearing what may be some resistance and may delay an increasing number of new highs. This would mean consolidation, or some retracement in the NASDAQ.

On the close the semiconductor index was able to hold above the 430 line which has been significant in the past.

On this 60 min S&P 500 chart. Both green lines are of equal length and if the second move which would be a wave five (or a major 3) is the same length as the first move we see it could run over 1,350.

It is interesting on this 60 min S&P 500 chart that when we place Fibonacci lines from the high of the day to the March low, you note particularly how the 61.8 and 38.2% line up perfectly with former support. This could then start a minor pullback, but we will see how the opening is on Monday. We see some support at the small dotted line and further at the 50-period EMA at about 1320.

This 15 min S&P 500 chart shows the same dotted line from above is also at trendline support. So a break below will bring in some short sellers.

If the S&P does pullback, one way to trade this is with the double ETF SDS. It closed not far below its trendline and then it's red EMA at 20.97.

This daily S&P 500 futures chart shows a projection at 127% of 1364 on a closing over 1338.

The S&P 400 mid-cap closed this week at an all time high. ITs RSI is lower that the privious hihg suggesting caution at the moment.

The Russell 2000 small caps closed within 10 points of making a multiyear high so you would think that high needs to be tested just to see what might happen on a break.

This weekly chart shows some more detail and the apex of this triangle, which falls in the next month or so and may mark a significant movement. Though direction unknown.

The general Russell 2000 daily chart as it pushes on the top Bollinger band, though the RSI is not in overbought territory.

The 30 min Russell 2000 trading chart having made significant profits, if using it for a guide in futures trading

Showing the trading channel on this 5 min Russell 2000 chart note the retracement lines during pullbacks.

The upper portion is the NYSE and in the lower section we see the moving average of the number of new highs minus the new lows and it is back at its top trendline, which is bullish for the market and if they break over it will be more so.

The percentage of stocks trading on the NYSE currently over their 50 day moving average has risen to 74%, which is bullish without being overly so.

The banking sector did not really break above the trendline, it just moved over so appears that way. It basically needs to close above about 53 on decent volume to bring some further movement in the banks. This is an important sector if the market wants to move higher. We need to see some more buy interest here.

The FTSE had gains this week and may run up to test that top trendline from underneath which is also just over the top Bollinger band. You would expect there to be some profit taking their and perhaps some shorts giving it a try at this typical area for shorting.

The Canadian venture index lost some ground this week, but did manage to close over the 50 day moving average.

The emerging market ETF also closed at a multiyear high with a breakout this week.

BRF is an ETF for the Brazilian small cap market and we put it on the watch list this week, as it looked like a good base closing and retesting the 50 day EMA. The trade worked well, though now it has moved up 4 days in a row and is totally over the top Bollinger band so we would look for some retracement.

Last week, we thought there may be a possibility of a bear flag forming on this commodity ETF, but the strong volume this week suggest that it will a least try and probably succeed in breaking above last month's high.

Oil closed higher this week with a short term breakout as well and we see the 78.6 Fibonacci level above 120 but by looking left you see, there is at least a three week resistance at about 110. The president spoke this week about some ideas to reduce dependence on foreign oil, but they are only typical things repeated often and far out into the future instead of doing something simple such as using the country's plentiful natural gas to power vehicles. There are over 100,000 gas stations in America and many jobs would be created in the manufacture and installation of storage tanks and pumps in these locations as well as distribution pipelines. It seems though that with oil companies making such huge profits, there is no political upside to making any real efforts to correct the countries solid dependency on oil. With an election to come, campaign contributions are just too important.

Natural gas consolidated this week, losing 2% and we would be more bullish on a move over the top trendline.

Gold was down and then up this week, closing in the same range it has been though over the 20 day moving average. It is at the same price as the high in November, and despite the huge efforts to try and convince people to buy gold, we see mainly only functions related to how the dollar moves.

Our mechanical GDX renko chart had one red bar this week so did not trigger a sell and ended flat for the week. Over the four years of using this it has given yearly gains of 80 to 110%, but it depends on range movement more than short term volatility. Even though it is mechanical, when you have some nice gains you can always take some profits if you like, though the figures we show are using the system generated trades.

There is a lot of talk and articles about increased demand for silver and while this may be all true, it in itself idoes not mean that silver prices should go higher. The cost of mining varies, but one company was talking about their total cost being $12 so they were doubling their money so to speak, even at $25. At the moment the price moves more from speculators, but the chart shows some shorter-term trading boundaries.

Copper had made a little 2-week bear flag and drop down out of it this week, and the usual expectation of this set up would be for it again to drop under the 20 day moving average and at a minimum test its recent low.

And platinum bouncing at this trendline only moved up less than 1%. This chart looks a bit precarious at the moment, though the RSI is above 50, and it is of course still above the trendline

The Euro index weekly chart shows the proximity to the top trendline and the possible upcoming crossover of the 50 and 200 day EMA. If they do cross cross it could mean a breakout of this level, which could trigger the dollar to make newer short term lows. However, a touch of the trendline and reversal could lead to these moving averages just bouncing off each other and result in a down turn in the Euro and the start of a what could be a good rally in the dollar. Many think the dollar is going to keep going lower because of the Fed and because of the desire to pay back debt with lower valued dollars. However, a resurgence in the dollar would show that the world still desires it above many other stores of value and we could see a longer term reversal.

This weekly dollar chart with its possible support year 74 if it dips there. Even longer-term support at the blue line. If 74 is reached, we would expect at least a trading rally.

The daily dollar shows it failed to close over the center Bollinger band on the last bounce though it has remained over the former blue line support.

We have talked of Wound Management Technologies, and their focus currently on the distribution of their unique, patented collagen product, CellerateRX®. The stock WNDM has been pulling back this past week as we expected as it needs to find its true base price, as the current volume is light, once the company announces its quarterly and year end results in the next couple of weeks last year that was about April 15. A CellerateRX® infomercial has now started in test markets and there are online sales as well. The company started a YouTube page and the first video is from a television news program with a focus on treatment for wounds and the long term benefits, including speed of healing and cost savings of collagen treatment using CellerateRX®. They have added many short videos for the consumer, talking about the use of CellerateRX® Check the Youtube page to learn about this wound care treatment. An the online Product Page for another video and on how order.

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Companies reporting earnings on Monday - Check the updated Earnings Calendar on all overnight holds.

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.

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.

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If you trade ETFs our large list of them is here http://stocktiger.net/etf/etf.php

This weekend's transmission of Hearts of Space is named Raining ambient hydrology for early spring. You have until 3AM EST 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 many stocks to it each trading day

RXII Over $1.65

TVL Over $6.40

FULT Over $11.50

PRGS Over $30.10

DUK Over $18.50

WNR Over $18.20 - $18.28

STEI Over $7.92

PETS Over about $16.10 on good volume

For your eyes and mind

Denis Smith - site at http://www.denissmith.com.au/ creates balls of light by swinging a light around and photographs them. Here are some examples and on his site is a documentary about this exploration.

Photograph by Denis Smith

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

Check the Earnings Calendar on all overnight holds.

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