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Monday, June 25, 2012

Get ready for roller coaster ride with Eu summit and GDP

It'll be 18th Eu summit in last 2 year on June 28- 29th and so far Euro zone countries haven't done much to save euro. Stock market have rallied on the false promises made on the last day of summit. On Thursday, US, UK, Germany, France, and other Eurozone countries will announce weak GDP. Now the question remains, whether the market will sell off on bad data or will it rally on the hope of easing. Next, FOMC meeting is on August 1st, so if Euro zone minister doesn't announce easing or bond buying program, there could be sell off. At the same time, there are huge shorts position in Euro. If any false promises is made at the end of summit, there could be huge short squeeze in euro and this market could take off to new highs.

Trading Strategies For June 26th:
ECB will be carrying out fine tuning operation tomorrow and because of this, 90% of the time Dow and S&P500 have opened higher or rallied. It also provided cushion for any negative news. 
Based on the chart, market should open low, and it should sell off unless there is rumor out of Europe.  

For Bullish sentiment to continue: Dow needs to break 12525, while S&P500 needs to break 1318. 

For Bearish sentiment to continue:  Dow needs to break 12469, while S&P500 needs to break 1312 followed by 1308

SPX chart 
In the chart below Red circle and arrow represent Bearish sentiment, Blue Circle and arrow represent Bullish sentiment.

Dow Jones Industrial Average is expected to open higher as  ECB is carrying fine tuning operation or else based on the chart. it should have opened low.

Dow at key resistance level 12,509
In Forex Currency trading, Eur/Usd is at 1.2518 (+0.14%), Usd/Cad is at 1.0274 (-0.17%) and Aud/Usd is at 1.0031 (+0.26%).  US dollar Currency Index is at 82.36(-0.13%)

CBOE Volatility Index VIX up 12.53% at 20.38

GOLD is at 1585 (-3.80)

SILVER is at 27.41 (-0.11)

Earning Before Market openLDK ($1.14 eps estimate, prev year eps $0.95)
RBN ( prev year eps $0.53), WH

Earnings After market Close:AVAV($0.72 eps estimate, prev year eps $0.79), HRB ($2.05 eps estimate, prev year eps $2.14), KEQU, ZZ, TIGR, ZZ ($0 eps estimate, prev year eps $0.01)

After hours big gainerPOZN, APOL, STX, ARAY, HMA, FOE, MNI

After hours big loser: CADX, CSTR, TSLA, SPPI, HRG, BPZ


Stocks for Option Trading: CAT, XOM, SPY, QQQ, IBM, PCLN, AAPl, WLT, PCX, GOOG, MT.
Upcoming FDA approval  : QRX on June 25th and ARNA on June 27th.

Economic calendar:


9 amCase-Shiller home price indexApril--0.0% nsa
10 amConsumer confidenceJune63.064.9

Forex Currency event:
US CB Consumer Confidence: Tuesday, 14:00. U.S. consumer confidence declined unexpectedly in May to 64.9 from 68.7 in April while analysts expected the index reach 70.0. The current economic conditions and the short-term outlook were the main cause for this drop. A small decline to 64.0 is forecasted.

Washington Event:

President Barack Obama attends fundraisers in Florida.
10 a.m.: Hearing on empowering and protecting current members of the military and veterans in the consumer financial marketplace, at the Senate Banking Committee.

Euro Zone Debt Crisis Event:

June 28/29 - Summit of EU heads of state and government in Brussels: leaders to consider plans for greater euro zone integration jointly drawn up by EU Commission President Jose
Manuel Barroso, ECB President Mario Draghi, Eurogroup Chairman Jean-Claude Juncker and EU Council President Herman Van Rompuy.To be followed by meeting of euro zone leaders.

Other Charts to watch:



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