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Wednesday, April 25, 2012

Fed keeps QE3 hope alive

The day begin with US economic data MBA composite index falling into negative zone, new order was down -4.2% while previous month was 2.2% and extransportation order were down -1.1% while previous month it was 1.6%, even oil inventories were up. UK slipped back into recession shrinking -0.2%. So it was day with perfect bad news but the stock market rallied as the market is back where it takes bad news as good news in anticipation of QE3. US Free money printing Manager Mr. Ben Bernanke said the word what market was anticipating and he said they are willing to support market if things worsen while FOMC minute was just a copy of previous month.

As I said in my yesterday article, late rally in afternoon made sure today stock market was in bullish zone and a future just made sure that stock would open higher. Short term chart and 1 month chart for Dow, and S&P500 are now in bullish zone. If stock ends up flat tomorrow and friday then Bear would have any chance or else its bullish call again.

The first level to check in Dow for upside is 13135 followed by 13164 which is important break point for the upside. While for the downside, Dow needs to break 13020 followed by 12992.

The first level to check for tomorrow in S&P500 for upside is 1395 followed by 1400 which is important break point for the upside. While for the downside, S&P500 needs to break 1385 followed by 1380. Use technical indicator 20 (simple moving average) sma and 50 sma to better visualise uptrend or downtrend of this manipulated market. If 20 sma crosses 50 sma and 20 sma is up, then the stocks will go higher, if 50 sma crosses 20 sma and if 50 sma is up, then stocks will go lower. 

As expected market was in bullish zone after late rally yesterday and it continued today. Tomorrow could be a bullish day but it depends on futures as the gap between bulls and bears is very narrow. A 40 point up or down could change things dramatically. 

Dow 1 month chart shows its in bullish zone marked by blue arrow.

S&P500 is also in bullish zone but a gap up or gap down from future can change the dynamic. 

1 month chart of S&P500 is till Bullish. It would take big leg down to be bearish again.

Jobless claim of 375k is expected while previous month was 386k, higher will be bearish sign for stock market while lower will be bullish sign. Lot of revision has been happening and they can change expectation at last moment like they did it last week when data was 386k but expectation was risen to 388k. So the headline number showed 2k less then expected while initial expectation was 370k. Jobless claim is coming out at 8.30 am EST.
Pending home sales of -0.5% is expected while prior month was 1%, higher will be bullish sign, lower will be bearish sign. 10 am EST

Earning to focus before market opens: AET, ALU, PAR, AMLN, AZN, BMY, CELG, CME, DB, D, DNKN, XOM, GR, JBLU, K, LLL, PCX, MCO, MWW, REGN, PEP, RTN, TLAB, TWC, UAL. WM, UPS

Earning to focus after market close: AMZN, CHH, CSTR, DECK, DLA, EXPE, GILD, ITMN, MBLX, LEAP, KERX, MET, SWKS, SBUX, TNAV, VRSN, ZNGA 

For Long term keep SNDK, PCX, RVBD, INFY, NOK in your watchlist.
For day trading watchout BIDU, AAPL, PCLN, MA, FAS, FAZ, TZA, TNA, TVIX, XIV, SVXY, UVXY (remember volatility is not a long term investment option use it for strictly day trading).

Once again economic calendar doesn't matter anymore so just follow this market or avoid this market. 

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