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For Monday December 17, 2012

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Dow -35.71 at 13135.01, Nasdaq -20.83 at 2971.33, S&P -5.87 at 1413.58

 

Winter solstice  is on Friday this week.  Will it be the last week of the world? The sun will be at its most southerly declination and this is the day of the year with the least hours of daylight. The daylight hours then start being longer and the date has been important because of this for thousands of years. Christmas is celebrated at this time and the current New Year is close by. In the time when the Mayan civilization was active they had a long-count calendar that ran in cycles of 5126 years and according to the count of many people that cycle ends on Dec 21, 2012. The end of a cycle does not mean an end of the world however,  it means a new beginning if you will, as our current New Year does. This new Mayan cycle will end again in thousands of years so I imagine that the end of the world crowd will be back again at that time. 

We have two more weeks of trading in 2012 and although the market remains bullish, the fiscal cliff non resolution has made for a rather difficult time when we are not getting big moves either way that usually help set up reversal trades. There is perhaps some movement on the cliff talks as it seems that Speaker John Boehner may accept the ending of the temporary Bush tax reductions on those who make over $3,846 per day ($1 million a year) . He still thinks that the poor folks who earn less that than should continue to get the tax reductions. If some agreement is made at least we will have one less unknown for the market to worry about.  We are in a typically good time of the year and the week after this at least should be up more due to seasonality than to charts as there has been no large increase in new highs that you would want to see to confirm an ongoing bull run. 

 

Before we get to the charts - time for a good laugh.  

 

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First-time claims for U.S. unemployment benefits unexpectedly showed a notable decrease in the week ended December 8th, according to a report released by the Labor Department. The report showed that initial jobless claims fell to 343,000, a decrease of 29,000 from the previous week's revised figure of 372,000. Economists had expected jobless claims to come in unchanged compared to the 370,000 originally reported for the previous week.

The U.S. October 2012 monthly trade deficit increased by 4.9%, $1.963 billion to $42.24 billion. The trade deficit with China hit an all time monthly record of -$29.466 billion. The year to date trade deficit with China is -$261.647 billion, which means the United States-China trade deficit will exceed the record 2011 annual trade deficit with China and be greater than 2011's 3.7% of GDP.

Import prices in the U.S. fell by much more than anticipated in the month of November, according to a report released by the Labor Department, with the decrease largely due to a drop by fuel import prices. The report said import prices fell by 0.9 percent in November after edging up by a revised 0.3 percent in October. Economists had expected prices to decrease by about 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

The Labor Department said its producer price index fell by 0.8 percent in November following a 0.2 percent drop in October. Economists had been expecting prices to fall by about 0.5 percent. Excluding the sharp drop in energy prices as well as an increase in food prices, the core producer price index edged up by 0.1 percent in November after dipping by 0.2 percent in October. Core prices had been expected to rise by 0.2 percent.

Retail sales in the U.S. rose by less than expected in the month of November, according to a report released by the Commerce Department, with a sharp drop in sales by gas stations partly offsetting strength in other sectors. The report showed that retail sales increased by 0.3 percent in November following a 0.3 percent decrease in October. Economists had been expecting retail sales to increase by about 0.6 percent. Excluding an increase in sales by motor vehicle and parts dealers, retail sales were unchanged for the second consecutive month, matching economist estimates.

Inventories in the U.S. climbed at a slower pace in October as sales dropped, indicating companies are trying to keep a tight rein on stockpiles heading into possible fiscal policy changes. The 0.4 percent increase in goods on hand followed a 0.7 percent gain in September, the Commerce Department reported today in Washington. Sales at factories, wholesalers and retailers fell 0.4 percent, the first decrease since June, after advancing 1.2 percent. Companies are keeping inventories lean out of concern that the economic recovery could stall if the U.S. fails to avert a package of government spending cuts and tax increases set to take effect next year.

Consumer prices in the U.S. fell by a little more than expected in the month of November, according to a report released by the Labor Department, with the decrease in prices largely due to a sharp drop in energy prices. The Labor Department said its consumer price index fell by 0.3 percent in November following a 0.1 percent increase in October. Economists had been expecting prices to edge down by 0.2 percent. Excluding the steep drop in energy prices as well as a modest increase in food prices, the core consumer price index inched up 0.1 percent in November after rising by 0.2 percent in October. Core prices had been expected to increase by 0.2 percent.

Industrial production jumped in November by the most in two years as U.S. manufacturers began to rebound from the damage inflicted by superstorm Sandy. Output at factories, mines and utilities increased 1.1 percent last month, the most since December 2010, after a 0.7 percent drop in October that was larger than previously estimated, the Federal Reserve reported today in Washington.

Today's chart illustrates the overall trend of the increasingly important Chinese stock market as measured by the Shanghai Composite Index. Today's chart illustrates how the Chinese stock market went parabolic from mid-2005 until late 2007. China's boom was immediately followed by a financial crisis induced bust with the Shanghai Composite Index plunging 72% in a little more than one year. Unlike what occurred stateside, China's post-financial crisis rally was relatively short-lived (only nine months). Over the past two years, the Shanghai Composite Index has traded within the confines of a relatively steep downward sloping trend channel. Over the past week, the Shanghai Composite has worked its way higher as Chinese stock market investors anticipate the introduction/extension of stimulative government policies after this week's Central Economic Work Conference. This recent rally, has brought Chinese stock prices right back up to resistance (red line).

This past week's   sectors.

 

This past week's indices  -   

The monthly candle for the NASDAQ. At the moment is a bearish engulfing and it is the weakest of the stock indexes here. The Dow ran this month about 10 points shy of the former breakout level and pulled back a bit while the S&P 500 and Russell remained relatively flat for the month. Oil is the most bearish as it is possible it will resolve the sideways movement to the downside, which could take it back to the lower Bollinger band near $79. Gold has continued to pullback though remains above its Ctr., Bollinger band.

On the major indices 60 minute chart  we see the drop from the top Bollinger bands to the bottom then a little move sideways to get the candles back inside the bands for a continued drop towards the end of the week. The RSI on the chart is for the Dow and you can see it signaled  the decline on a move under 70 and it closed on Friday at 38 so we could see some further decline.

The candle on the Dow weekly chart is a typical reversal candle just like the one we saw on the Dow daily chart earlier in the week. The odds with this type of candle is for continued move lower and as it was unable to close above the 20 week moving average, it may have to retest that trendline or even the 50 week EMA.

This weekly view shows that the move this week was right into the resistance we show with the top line. Seasonally the next two or three weeks can typically be stronger but we would favor some additional retreat or consolidation before a move higher.

On the Dow futures we had shown this bearish wedge for a few days as it had also reached some Fibonacci projections at its high and it did pullback from there and dropped out of a steep parallel channel and dropped below this wedge, bounced back up into it and then fell further on Friday. It almost reached the 38.2% retracement from the late November lows. If it loses this 38.2% level look to the support shown at the 50% or 12,977. If it does drop their we would expect that RSI will also be oversold and under 30.

The Dow Jones transportation average gain an additional 1% this week and intra week moved over this little trendline and closed back at it on Friday.

The market has been relatively bullish but here the moving average of number of new highs on the NASDAQ is not increasing much as the NASDAQ has been the weakest index.

The NASDAQ summation index along with its EMA  remained on a buy from late November.

For the week the NASDAQ was quite flat and it held above last week's low.

The NASDAQ 60 min. chart shows it did close back under this former 61.8% Fibonacci level but above the December lows.

In this view of a two-day per bar chart we see the close was back near the 50% retracement level of the range shown.

As there was much not much change this week our mechanical NASDAQ 100 chart remained on a buy.

A look at the NASDAQ 100 futures closing very near possible support though now we will shift to the March futures dates.

BIDU had a good week as it had reached the 50% retracement level last week and fell below its 200 week EMA so became oversold enough that it rallied back up to, and a bit over that 200 day EMA.

Amazon had run to the 78.6% Fibonacci level which is often a time for a correction and has a pulled back to consolidate between two Fibonacci levels.

This Apple chart starting with the low in early 2009 shows a dotted trendline which would roughly intersect the price if the price pulls back near the 38.2% retracement level. Depending on when this may touch this could be under $500 and this trendline will be widely watched for possible entry points.

Previously we had shown this parallel channel chart and retracement levels from the $307 lows and the bounce ran up about 90 points running into the 50 day EMA. From there it  pulled back and closed on Friday back at the lower channel trendline. Note that on this time frame the 61.8% is closer to $460 so also a possible target if it continues to decline. We would favor however the trendline in the former chart.

In the short term here is a possible projection to the 127.2% level of $481.

Google  had run back up above the 50% retracement of the decline from its high in October, and closed back under that level on Friday. This is still bullish.

The volatility index, which has been quite bland for many months closed right at 17 on Friday.

The semiconductor index moved back over the 50 week EMA this week, though closed back under it. However the close is above the 200 week EMA which is moderately bullish.

The new highs minus new lows line of the NYSE closed about mid stream this week which is not terribly bearish but it is also not very bullish as it demonstrates the broad market is not making many new highs.

In general however it is bullish that 58% of stocks on the NYSE are still trading over their 50 day moving average.

Our S&P 500 bullish percent indicator came close in December to shifting to a sell but remains on a buy.

The lazy traders S&P 500 chart is prone it to some whipsaws neari these inflection points and again it closed under the 20 week moving average by six points.

On the decline this week. The S&P 500 did test the 50 day EMA and it closed back up over it. Below it lies the 20 day moving average at 1407. Note that the volume during the decline this week was lower than the volume of the advance.

The 60 min. chart shows the high reached was above that of November and the decline so far is very moderate.

Last week we showed this 15 min. chart and the trendline to watch for the wider range stop and it did  drop below it this week. There were additional sell signals earlier with both the Williams indicator and the RSI.

This is also the 15 min. chart using the 13 and 34 EMA  as triggers and here they went short near 1430.

Like the Dow the S$P 500 did move above our resistance shown with the longer line and has  only pulled back a little since then.

The S&P 500 futures dropped below horizontal support at 1424 then the short term dotted up trendline and finally on Friday the bit longer term up trendline, though it did close back up to it on Friday. In this timeframe chart. RSI closed at 38.

The ultra short for the S&P 500 on the 60 min. chart went to buy on November 19 and with briefwhipsaw at the start of December went back to a crossover sell on Friday though note the close is right at this possible trendline support.

Meanwhile the ultra long for the S&P 500 did move to a buy near the close on Friday but it is also at trendline resistance. So in both cases look for some conformation on Monday.

The Russell 2000 had 2 recent  gaps  but so far has filled the uppermost one and if the decline continues could drop briefly below the 50 day EMA to fill the second one. The MACD however has not crossed over as yet.

The 60 min. chart of the Russell 2000 shows some retracement levels from this recent run from late November. If it does reach the $809 level of 38.2% it will have filled that second gap mentioned above.

It was a big move up from the retracement low and the RSI buy so a breather here is understandable for the Russell 2000

The 3-X ETF for the Russell 2000 ran up to its 61.8% retracement level closed down a bit from there but is still above the 50% retrace level.

The 30 year treasury bond prices fell below this pink trendline this week and we would expect it to  eventually reach the 200 day EMA at 146.

The banking index which had broken above this trendline moved up into Wednesday's high forming a reversal candle and has pulled back Thursday and Friday. The normal typical situation would be for it to test that trendline from above and perhaps this blue 50 day EMA and thene turn back up.

One of the many charts on our stockcharts public pages is this very short term 5 min. ultra short financials chart. It can be handy for some quick  financial trades and here it went long near $35 on Thursday and closed at $35.70 on Friday.

The retail sector ETF lost 1% this week after running into resistance in the previous week. The volume did increase some and perhaps many are also booking some games now instead of after the new year..

On the daily chart the close was just above the 20 week moving average.

The emerging markets continued strongly this week adding an additional 1% after the breakout in the previous week. The Williams indicator again is back over the  20 line, which is quite bullish and volume has been increasing.

The Dow Jones world stock index came very close to its summer high and pulled back a little.

The FTSE ended up very flat for the week as it has been holding right at the resistance shown.

Two weeks ago the Shanghai stock exchange index put in a strong rally and with some thinking the lows are now in, the rally continued as it added an additional 4% this week and went back over the minor resistance line shown. The next target will be again to reached the 50 week EMA at 2227.

The commodity index did not do much gaining only three cents this week and it was on quite low volume.

Oil did a bit better gaining 0.85% but it still closed under its 200 week EMA and the volume was under the 60 day average.

On the daily chart we see the flat tops it has formed the last three days is a bit more bullish as  generally this suggests the  possibility of a bear flag is less so it favors a move higher.

On the gold futures chart we see the close has to be back above the 61.8% retracement with some additional volume to push it towards the 50% level.

Gold futures now have a pretty clear lower trendline so many will watch this for a possible bounce entry if touched.

The gold miners ETF gained 1% this week but after last week's decline the main significance is that it at least did not drop further.

The mechanical chart fo rGDX had shifted to a buy and remains that way.

Silver shown here with its ETF closed at its 20 day moving average near its 50 day week EMA.

On this 60 min. timeframe chart we see the rally above the top parallel channel and then the gap under it at the last part of the week.

With that drop in silver the mechanical SLV chart did shift to a sell this week.

Copper was flat for the week and just consolidating though a bit of caution for a reversal candle but the wick was pretty short. So if it holds above the 50 week EMA it is still bullish.


Palladium had its seventh week of gains, though this week was the smallest one as it sits just slightly above this resistance area.

The euro index gained 1.84% this week and it looks headed to test the first blue line resistance overhead.

The euro futures had pulled back to test the 38.2% level and drop back under the triangle, but as it still had time it then rallied back out of the triangle before its apex in back up to horizontal resistance. A breakout there would likely take it back up to the 61.8% level near 1.33.

With the euro rising the US dollar lost 1% this week and here is shown some pretty strong support near $78.60.

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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.

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


Two weeks ago  Dave Brubeck  died and this week Ravi Shankar died at 92. Many in the USA first heard of the sitar  from Ravi Shankar or form its use on a few Beatles songs after they visited with Ravi Shankar.  Others remember the remarkable performances and album from 1966 that  Ravi Shankar made with renowned violinist Yehudi Menuhin. That album is named West Meets East.  On November 23, 1971 Ravi Shankar & Ustad Alla Rakha appeared on the Dick Cavett Show. George Harrison and Gary Wright were on the show as well.

This is just a clip of him - such a master - from a year ago in Californian still performing at age 91.Ravi Shankar - Tenth Decade in Concert

 

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  Waiting for Emmanuel  - seasonal sounds of longing and remembrance. 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.

AKS    Over $4.55

AMD    Over $2.48

BID    Over $33.00 or $33.28

CSCO    Over $20.00

EXPR   Over $15.00

KKD    Over $9.40

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For your eyes and mind 

Photographs from an Electron Microscope

Guitar string

 

Velcro

 

 

The eye of a needle, threaded with red cotton.

 

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

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