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For Monday December 31, 2012 

 

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Dow
 
Nasdaq
     
Dow -158.20 at 12938.11, Nasdaq -25.60 at 2960.31, S&P -15.67 at 1402.42

 

No dice.  At this moment members of congress are trying to come up with some answer to the cliff situation but so far nothing as they are known and the least productive congress in history.  This indecision was reflected in the market this week with an across the board drop. -- well except for the gain in oil. The country spends too much compared to how much it takes in so it is pretty clear that spending has to drop and income rise. Sure individuals will not like to pay more and maybe receive less but those are pretty understandable consequences of years worth of over borrowing and over spending. A floor trader was commenting that maybe they could help congress with a decision. Every day the market has to open and many stocks have wide gaps between bid and ask yet they, by the open, have negotiated a common ground  price as they have to when the bell is about to ring. Maybe congress needs a loud bell to get them going.  It is expected that instead of a full plan agreed upon that only a shorter term stop gap will be voted on so this issue may be with us for even longer. After that there will be the debt celling issue so it could be a tough market in the coming weeks.

This past week was a bit damaging to the market and mood of participants and increased the possibility that we could enter into a bear market. The charts show some damage but are not broken yet and we still have about 5 new buys last week. Taking more profits on the fist day of a buy helps protect your gains and skipping trades with low volume can help as well. We still have longs mostly on the watch list with one new short today but will be watching for any signals of a longer tern shift in market direction.  Happy New Year to all of you.

Before we get to the charts - a  music video.  

 

Mairi Campbell is a Scottish singer and musician and  is also the musical director of Sangstream, a folk song choir based in Edinburgh. The best-known recording of Campbell's voice is probably the cast's rendition  of "Auld Lang Syne", which is featured on the soundtrack of 2008 hit film Sex and the City. The song is an extremely old Scottish song that was first written down in the 1700s.  Robert Burns is the person whose transcription in 1788 got the most attention, so the song is associated with him and it is set to the tune of a traditional folk song. The song's Scots title may be translated into English literally as "old long since", or more idiomatically, "long long ago", "days gone by" or "old times". Consequently "For auld lang syne", as it appears in the first line of the chorus, might be loosely translated as "for (the sake of) old times". There are are several variation of the lyrics. The version here is shown in the video.  This is really a fine presentation of the song with David Francis on guitar. You may wish Mairi a Happy New Year  via  twitter  @mairimusic

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First-time claims for U.S. unemployment benefits showed an unexpected decrease in the week ended December 22nd, according to a report released by the Labor Department. The report said initial jobless claims fell to 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000.The drop came as a surprise to economists, who had expected jobless claims to edge up to 365,000 from the 361,000 originally reported for the previous week.                       Graphs - RTTNews

New-home sales rose in November, recording their strongest pace in more than 2 years, another sign of improvement in the housing market. The Census Bureau reported Thursday that sales of new homes rose to an annual rate of 377,000 in the month, up 4.4% from October, and up 15% from year-earlier levels. It was the highest rate of new-home sales since April 2010, when sales were inflated by a temporary $8,000 tax credit for home buyers.

There was a 1.7% increase in pending home sales during the month of November. While the pending sales data does not have a direct impact on homebuilders, strong sales of existing homes bode well for new construction projects.

The consumer confidence index rose to 73.7 in November from 73.1 in October, reaching the best level since February 2008. The present situation index remained almost flat at 56.6, while the expectations index rose 1.1 points to 85.1.

The December Chicago PMI reading of 51.6 surprised to the upside as economists  had generally expected a reading of 51.0 to follow the prior month's 50.4.

Crude oil stockpiles fell by 1 million barrels to 371.6 million barrels in the week ended December 14th. Despite the drop, inventories remained well above the upper limit of the average range for this time of the year. Distillate inventories declined by 1.1 million barrels and remained well below the lower limit of the average range. Meanwhile, gasoline stockpiles rose by 2.2 million barrels and were above the upper limit of the average range. Refinery capacity utilization averaged 90.3 percent over the four weeks ended December 14th compared to 89.2 percent over the four weeks ended December 7th.

For what amounts to a touch of good news in what is otherwise a challenging economic environment, home prices have worked their way generally higher over the past year. For some perspective on the single-family home market, today's chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes a relatively low 105 ounces of gold to buy the median single-family home. This is dramatically less than the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down over 80% from its 2001 peak. However, the recent uptick has home prices once again testing resistance of a steep seven-year downtrend channel.

 

This past week's  sectors.

 

This past week's indices  -   

 

For the week, the major indices lost about 2%. but for the month the Dow at least is only down 0.67%. It does have rather a nasty looking candle but we have one more trading day in the month. The NASDAQ has been the weakest and has a bearish engulfing candle while the Russell is actually up for the month. Gold remains just slightly under its Ctr., Bollinger band while oil is in its second month of advance. The equity indices are all above the center Bollinger band so still uptrending.

On the 60 min. chart you see that the Ctr., Bollinger band has continued to be resistance since December 20. Each time there's been a rise it has been unable to break over and then just falls back down to the lower band. On this timeframe chart the Dow and the S&P 500 closed at the most oversold condition though RSI shown here for the Dow on this timeframe is still above 30. If we do see you one more day of decline we will  likely see a relief rally this week. 

In this weekly view of the Dow the situation does not look so bad as it still closed above this earlier broken trendline though very clearly seen is the possible head and shoulders that has been forming. To make it a asymmetrical formation we would get an additional rally back up towards the 13,400 area and then fail to break higher. 

This is also a weekly format showing the low volume due to the short trading week and holiday. It is slightly below this trendline shown but still above the 50 week EMA. 

On a daily basis the Dow closed under the 200 day EMA by 10 points and is right at the 61.8% Fibonacci retrace level. This could be a bounce point right here, though it greatly depends on what we hear from Congress by the opening on Monday. 

The Dow futures also reaching oversold conditions with the close on this timeframe RSI under 30, though it was a bit lower at the last bounce low at the middle of November.

On Wednesday the utility average had a solid down day dropping it below the 20 day moving average. Thursday it dropped the same amount but recovered by the end of the day and on Friday dropped again to Thursday's low. The chart is nearing oversold levels on the indicators but not quite there yet. 

The transportation average, which last week had a very nice rally lost much of that this week but is staying above the previously broken trendline. 

Are NASDAQ summation index indicator and shifted to buy for the NASDAQ. My the third week of November and switch to sell this week. If we have whipsaws with this indicator it most often happens during the first week of the crossover. Once the lines separate often this leads to a multi-week or month change in direction. 

The moving average of number of new highs in the NASDAQ shown on the dark blue lines did drop but not yet threatening levels. 

The NASDAQ lost 2% this week, about what it gained the week before, but remains above the 50 week EMA. 

On the 60 min. chart you see for all of the month it is held this basic low at the 61.8% retracement level. So this could turn out to be a bounce point. 

The NASDAQ 100 futures closed below the low for the month and is now just above the 61.8% retracement as shown. Meanwhile RSI is hovering just over the 30 line. 

The NASDAQ 100 ETF, which has been long for a month has also gone back to sell. 

The volatility index, ran up over 16% on Friday for a close of 22.72. The move is notable as the VIX has held below 20.00 since late July. At its lowest point, the VIX had been as low as   the 13.30 level however, a steady rise has taken place all week with the uncertainty of a  budget deal.

The semiconductor index which had finally in the previous week closed over the 50 week EMA has now again closed back under the 200 week EMA. It was a little bit of wishful thinking perhaps that the semi conductors would start moving again which would be very bullish for the market. 

Google after the drop from the autumn highs had bounced back up above the 61.8% retracement and has now pulled back from there and you would really want to hold the $688  level 

We have been showing these Apple charts and each week the trendline gets closer to the 38.2% retracement level. 

Here is another view and this one is two weeks per bar so in just a few more weeks even just going sideways the price would meet the trendline. 

In the lower half of are bullish percent chart you see as the S&P dropped below the 20 day EMA and presented a sell. At the same time the moving average on the top portion of the chart is still $.10 under the bullish percent closing level -so it is not gone to sell mode. 

The lazy chart reflecting the 20 day moving average is also on a sell. 

This weekly S&P also shows the proximity of the trendline below. 

And another weekly chart showing the low volume trading this past week and the 50 week EM a at 1376. 

The 60 minutes chart broke below this bearish rising channel, but so far has held above the dotted support line just below. 

Here is another 15 min. variant of the above chart and the current overhead trendline. 

This 15 min. view shows the parallel channel it is now in. 

The S&P 500 futures have the RSI in this time frame just over 31, but nearing the level where we had the bounce in mid-November. The 61.8% retracement level is also where we saw a one-day bounce low in the third week of November. 

56% of stocks on the S&P 500 are now trading over their 50 day moving average 

As seen on our live stockcharts.com public page this short term S&P 500 mechanical had some whipsaws this week but most trading was down. 

The pro-shares ultra short had a crossover sell near the 21st and then a trendline sell by the 26th. 

As the S&P went down then the ultra short went up with its crossover buy with the green arrow and then the breakout above the trendline as well. 

The small caps Russell 2000 have been the leaders you can see the big rally of almost 90 points from mid November. There is some pretty good support near the 38.2% level. 

The horizontal line on this chart is at 830. So only two points below the close from Friday. The negative features of this chart are that the Williams indicator has dropped below the 20 line, the RSI below 70, the histogram is negative and the MACD is just crossing over. All those things could change on a decent bounce but it does make one very cautious. 

Since just after mid-November the Russell is been heading up and that broke below this trendline this week, though it has remained above the first Fibonacci retracement level. 

The banking index had topped out near the same area it did in September and October and this pullback remains over the 20 day moving average so there is still hope of recovery. 

The 30 year treasury bond prices continued higher after their bounce from horizontal support. 

The retail sector ETF closed near its low of the week down almost 2%, which sets up a possible test of that 50 day horizontal line. Once again the Williams indicator has still refused to drop under 20. 

Meanwhile the rest of the world without daily rumors of their own fiscal cliff us did well this week gaining 1% and this ETF closed only $.40 under the high of the year. 

The Dow Jones world index declined .7% but that was rather expected as it was at year-high  resistance. 

The FTSE was almost flat for the week with an indecisive candle. 

The Canadian Venture exchange, which has been quite the weak for a couple of years is trying to build support though the movement up this week was on lower volume did gain 2%. Some mining stocks have been doing okay and it might be worth watching this index that contains many mining stocks has improved. 

The Shanghai exchange continued its four week charge higher closing up 3.7% and over the 50 week EMA for the first time since the spring of 2011. It is now very close to the overhead resistance shown with the horizontal line. 

Our commodity ETF was up just under have to percent on low volume this week but remains below the 50 week EMA. 

The long term view of oil inside its triangle, which is running out of room. 

Here is another triangle for oil on a weekly chart as it touched its 50 week EMA and closed just under its 20 week moving average resistance now just under $95. 

This daily oil view with the rally on Wednesday with consolidation into a small flag on Thursday and Friday. This may have another leg higher. 

The oil futures still shows much congestion and resistance just to the left and near that 38.2% Fibonacci level. 

For the week natural gas futures stayed flat rising only one cent. 

During the week however there were some decent advances as it tested one more time that lower trendline and moved higher. 

Here the natural gas futures again made a higher low bouncing from the lower support line and on Friday moving up to the upper trendline. 

Gold was also flat for the week staying under its 50 week EMA 

This daily chart is just a reminder that this could be a bear flag s forming in which case it would mean an additional leg lower. 

And on the gold ETF we see that blip of consolidation which can go in either direction but it is leaning on it going lower side. 

For the week the gold miners ETF was up half a percent almost unnoticeable on the chart. 

Our mechanical GDX chart unchanged remains on a sell. 

Silver which  lost a lot in the previous week also was almost unchanged this week. 

On this 60 min. chart we see it hovering right at the 61.8% Fibonacci retracement level. 

The SLV mechanical chart also remains on a sell. 

Copper in its move since the October low made a lower high and pulled back from there though this past week did move back up 1%. closing just under the 50 week EMA. 

Palladium after it's very nice move from the October lows had dropped last week on a bit higher volume  but recovered most of that this week. In fact intra week it rose to   a  new multi-month high. 

The euro was up a little   as it consolidates just under resistance and looks like it could breakout here but  the 200 day EMA is just overhead at the redline. 

And here Euro futures with the flag type pattern consolidating under that 127.2% Fibonacci projection level. 

The US dollar with just two weeks of consolidation also hints to a possible mini bear flag in which case it would drop again to test that level at the lower green 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.

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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.  


NBC news compiled this video to highlight some of the well known people who died in 2012 - seems like way too many.

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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  Kontinuum  - infinitely extended electronic soundscapes. 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.

AXL      Over $11.00

CATY On break of flag on good volume - around $19.30 ish

EMR     On break of flag on good volume - around $53.00

IRDM    Over $6.45

SANM    Short under $10.20

XIDE   Over $3.46

TECS    Just pointing out this Technology 3-X bear ETF in case the decline continues

For your eyes and mind 

Photograph by Andrey Trifonov

 

Photograph by Mariuszbrcz

 

 

Photograph by Sergei

 

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

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