Trading the SPY

ETF SPY: Markets Up Ahead of Employment

Analysis for Short Term Option Trading!

World News

Stock index futures pared gains sharply on Thursday, with traders citing talk about a possible downgrade of France's sovereign debt rating as French debt yields hit nearly 3-month highs.

Iraq's oil ministry said Thursday that the U.S. oil giant Exxon Mobil Corp. is not allowed to bid in the May energy auction because of its oil deals with the northern self-ruled Kurdish region in Iraq.

The Texas-based Exxon signed six deals with the Kurds last October to search for oil in six areas, bypassing the Baghdad government, which maintains that it must ratify all deals. Some of the deals cover areas located in a land claimed by both Kurds and Arabs.

 

US Markets

As critical bank earnings keep rolling in, there's been some confusion beneath the headlines. If a bank simply beats earnings estimates, does it warrant a pop in share prices?

This is the reaction we're seeing this morning with Bank of America's (BAC) and Morgan Stanley's (MS) earnings beats. But earlier in the week J.P. Morgan (JPM), Wells Fargo (WFC), and Goldman Sachs (GS) topped expectations, yet traded lower.

All of these big banks, including U.S. Bancorp (USB), reported higher-than-expected revenue growth, while Citigroup's (C) remained flat. While this seems positive, you need to understand what's behind the numbers. As The Wall Street Journal pointed out after JPM and WFC reports, the banks topped revenue estimates mostly because they scaled down future loan loss coverage.

Nonetheless, some degree of confidence has pushed bank stocks to lead the 2012 rally. The Financial Sector SPDR (XLF) is up 18% year-to-date versus the S&P 500's 10% rise.

Spain, the latest trouble spot in the euro zone debt crisis, sold 2.5 billion euros ($3.3 billion) of bonds, but yields rose as Madrid struggled to tame its deficit.

 

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ETF SPY; Markets Rest after Huge gain

Analysis for Short Term Option Trading!

RSI-

Yesterday’s move in the SPY was strong enough to inch the stock just above the ‘50’ level that separates bulls and bears. The indicator is following the stock on a daily basis as we see it attempt to fight its way up higher.

Bollinger Bands-

Pushing off a bottom, we are either going to see the stock bottom out or we are going to see it continue up. It is pushing sideways through the band that has a slight downward lean. It has just touched the middle band (20 day MA) will it be a resistance level?

MACD-

Still pushing up from that huge move down, it looks to continue to want to move up. And the MA’s are showing a turn and ready to continue to move up also. Appears to have a bullish desire to it.

World News

Europe's main stock markets slid on Wednesday, retreating from bumper gains the previous day, as investors fretted over a looming bond auction and fresh banking woes in Spain.

In late morning deals London's FTSE 100 index dipped 0.14 percent to 5,759.07 points, Frankfurt's DAX 30 shed 0.40 percent to 6,773.67 and in Paris the CAC 40 dropped 1.0 percent to 3,260.30 points.

US Markets

Stock index futures dipped on Wednesday after the S&P 500 tallied its biggest gain in a month and ahead of another round of corporate earnings.

The benchmark S&P on Tuesday climbed 1.55 percent, its biggest percentage gain since March 13, after Coca-Cola Co led a round of solid earnings reports and after concerns eased over the euro zone debt crisis.

"What we've seen lately is when we see one and a half percent moves here, up or down, the markets tend to take a pause the next day, as opposed to snapping back that one and a half percent the other way," said Keith Bliss, senior vice president at Cuttone & Co in New York.

Halliburton Co. says its first-quarter profit increased 22.7 percent as the oil industry aggressively searched for new oil fields in North America.

The Houston oil services firm on Wednesday reported net income of $627 million, or 68 cents per share, for the first three months of the year. That compares with $511 million, or 56 cents per share, for the same part of 2011. Revenue increased by 30 percent to $6.87 billion 

 

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ETF SPY; Mood Bullish with Brigher Spanish Hope

Analysis for Short Term Option Trading!

World News

A better-than-expected Spanish bill sale boosted confidence before a longer-term debt auction later in the week. Spanish debt yields have jumped recently on concerns about the nation's fiscal stability in the latest flare-up of the euro-zone debt crisis.

European stocks gained after the auction and better-than-expected consumer sentiment data from Germany. 

Asian shares fell as surging Spanish borrowing costs underscored the fading impact of the European Central Bank's bond purchases and stoked investor nervousness over euro zone debt woes, sapping their risk appetite.

Foreign direct investment in China dropped for a fifth straight month in March on a slowing economy, limited prospects for gains in the yuan and renewed concerns that Europe's debt crisis will worsen.

Inbound investment fell 6.1 percent from a year earlier to $11.76 billion, the Ministry of Commerce said today in Beijing, after a 0.9 percent decline the previous month and a 32.9 percent jump in March last year.

US Markets

Stock index futures rose on Tuesday, indicating the S&P 500 may snap a two-day drop, as investors focus on a slew of corporate earnings and Spanish bond yields dip.

Goldman Sachs Group Inc reports first-quarter results on Tuesday, and Wall Street forecasts earnings per share of $3.55, up from $1.56 per share year earlier, bolstered by write-ups of stocks and bonds in Goldman's investment portfolio and market-making book.

Coca-Cola Co , the world's largest soft drink maker, is expected to report quarterly earnings of 87 cents per share.

Yahoo Inc is also due to unveil earnings, but the report may be overshadowed by comments from its new chief executive, Scott Thompson, who is expected to lay out his vision for the struggling web pioneer.

Tech bellwethers IBM (IBM) and Intel (INTC) are due to report Q1 earnings after the close today, with IBM's EPS expected to have grown to $2.65 from $2.41 last year and revenue to have edged up 0.7% to $24.77B. Intel's EPS is seen falling to $0.50 from $0.56 and its revenue slipping 0.1% to $12.48B as the moderate growth in the PC market continues to weigh.

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ETF SPY; Its all about Earnings Stupid!

Analysis for Short Term Option Trading!

RSI-

The SPY has started to turn down on our long term chart, but it has yet to identify itself as in a bearish pattern now. Until its drops below the ‘50’ mark, we are still in a bullish move, so we will see what the weeks ahead hold. But a long term pullback could be significant if it does take place.

Bollinger Bands-

The SPY has just recently pushed off the upper band. Still, the next step is to see if the stock will stay above the middle band, or use it as its support level. A full push through to the bottom band is a sure sign of the bearish down turn. We are in the beginning stages of defining if we are turning or not.

MACD-

The SPY has steadily moved down week by week on the Histogram. Breaking through that ‘0’ line has always been significant for the weekly chart. As we get closer, this is one thing we need to watch.

World News

China's weekend reform of its currency regime nails shut the coffin on the last remains of doubt about whether the world's second biggest economy has successfully steered a course past a hard economic landing.

Investors were questioning whether the worst sequential slowdown in China's economy since the 2008-09 global financial crisis could enter a sixth quarter after data on Friday revealed the weakest three months of annual growth in three years and a run rate below the official 7.5 percent 2012 target.

Shifting the yuan trading rules is about the strongest signal Beijing could give that growth downside has diminished and potential pitfalls are manageable. Few reforms are as replete with risk as tinkering with the currency because faith in its soundness directly correlates to economic stability.

"You have to put Europe, Spain and Italy, on any 'watch list' at this point. That may even be more important than earnings," Massocca said.

US Markets

The data will also get plenty of scrutiny next week for signals on the U.S. economy's health after a weaker-than-expected payrolls report during the Good Friday holiday cast doubt on the strength of the recovery.

Economic indicators due next week include the Empire State and Philadelphia Federal Reserve's manufacturing surveys, retail sales for March, housing starts and existing home sales.

"It will be interesting to see if this is the beginning of a soft patch, if this unemployment number is a harbinger of more," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

The March nonfarm payrolls report, which was released on Good Friday when the cash U.S. stock market was closed, showed just 120,000 jobs added last month. That figure fell far short of the forecast for 203,000 new jobs and raised questions about whether the recovery in the U.S. labor market was stalling.

Sasaki of PineBridge Investments pointed out that "employment's been under everybody's watch since last Friday. We still continue to see improvement. We believe it was a hiccup but in aggregate, we think the economic recovery is still continuing to improve."

But even if earnings are solid and data shows improvement, markets could be susceptible to further losses if more signs of fiscal distress in the euro zone emerge.

 

ETF SPY; Weak Economic Report from China Lowers Stock

Analysis for Short Term Option Trading!

RSI-

The SPY has rebounded to the 50 level after two days of battling. Okay, now we want to know if it can climb above that level and stay bullish again. It may be very hard to do. This dip was the largest it had this year. It will take a lot to climb back up to the 142 level again and stay there.  

Bollinger Bands-

The SPY pushed through and spread the band, but not that much. This push up will start bringing the bands together. If it moved sideway, we might see an extended move down. Watching the move of the stock now will tell us the longer term direction it will go.

MACD-

The SPY looks like it needs more time to turn up. Iif we look at the MA’s, we can see that there is stil la need to turn bullish it does not look like it has reached bottom yet. The MCAD Histogram on the other hand looks like it has reached bottom, just is not moving up.

World News

Stock index futures were under pressure on Friday, weighed by bearish concern over Spain's rising borrowing costs and Chinese economic data.

Speculation that China's weakest quarter of annual economic growth since the global financial crisis will trigger a flood of policy support to fight the downturn misses a crucial point - the taps are already turned on.

The annual rate of GDP growth in the first quarter slowed to 8.1 percent from 8.9 percent in the previous three months, the National Bureau of Statistics said on Friday, below the 8.3 percent consensus forecast of economists polled by Reuters.

China's stock market rallied despite the disappointing data, on the hope that the poor first-quarter showing would be enough to spur more assistance from Beijing, perhaps easier lending terms or more government spending.

US Markets

Stock index futures pared losses on Friday after JPMorgan (NYS:JPM - News) reported higher earnings per share as the company bought back stock.

Oil prices fell to near $103 a barrel Friday after data showed economic growth slowed more than expected in China, the world's second-largest crude consumer.

By early afternoon in Europe, benchmark oil for May delivery was down 37 cents to $103.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 94 cents to settle at $103.64 in New York on Thursday.

 

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ETF SPY: Alcao Soars on Earnings Markets Up

Analysis for Short Term Option Trading!

US Markets

Natural gas slid 2.3% yesterday to close at $1.984 per 1M British thermal units on the NYMEX, the first time it had fallen below $2 in over ten years. Prices are about as low as they're going to get, oil and gas mogul T. Boone Pickens told CNBC. A key marker to watch is rig counts, because as they go down it causes supply to shorten up. Ten rigs closed just last week, and more will be shuttered this week as well.

 Stock index futures edged higher on Thursday ahead of data on the jobs market and producer prices, while a rise in Italian borrowing costs could cap gains in equities and pressure other risk assets lower.

S&P 500 futures hit a session high just below their 50-day moving average, a level that also provided resistance Wednesday in the cash market and could become a key technical hurdle.

U.S. economic activity kept growing moderately in the late winter months but rising energy prices were beginning to worry manufacturers and retailers across the country, the Federal Reserve said on Wednesday.

"Reports from the 12 Federal Reserve districts indicated that the economy continued to expand at a modest to moderate pace from mid-February through late March," the central bank said in its latest "Beige Book" summary of national activity.

Positive signs, it said, included stronger manufacturing activity, steady hiring and improved retail business in much of the country. But overlying that was a sense of concern that costlier energy and rising gasoline prices were a threat.

The U.S. economy kept growing moderately in the late winter months, although rising gas prices were beginning to worry producers and consumers across the country, the Federal Reserve said in its latest "Beige Book" summary of national activity. This assessment had little impact on equities.

European Central Bank Executive Board member Benoit Coeure, calming fears about the euro zone, said on Wednesday the central bank still had the Securities Market Programme (SMP) in place allowing it to purchase the debt of euro-zone nations, should the need arise.

 

ETF SPY: Markets Turn after 5 Days Down

RSI-

The SPY dropped like a rock the last 5 days of trading and we see it in the RSI as it has dipped into bearish country. Clear down to the 37 level because of the huge hit it took yesterday when it dropped almost 200 points.

Bollinger Bands-

The SPY pushed through the middle band, and for that matter way through the lower band. I have not seen a push through the band in such a radical manner in months. When this happens one knows that it is unexpected to move this much. It should increase volatility.

MACD-

The bearishness of the SPY is very easy to see. We are not sure if the bottom has been reached yet or not. We would like to watch the MACD Histogram to see if it is going to carry through to a lower position. If it does we may see the MA’s move through the ‘0’ point intt bearish territory also.

 

World News

After more than a century ripping out its insides to supply coal to the rest of the country, the heavily mined and polluted province of Shanxi in northern China is in the midst of a gas boom.

Gas output from the coal seams is rising fast and is set to hit 8 billion cubic metres (bcm) this year, up a half from 2011 - emerging from nowhere just six years ago to provide China with a cleaner, home-grown alternative fuel for the future.

China is investing 100 billion yuan ($16 billion) to double output again by 2015. Beijing wants coal seam gas output as high as 30 bcm by 2020, which would be 15 percent of China's total gas production, up from 5 percent of the total last year.

 US Markets

Stock futures pointed to a higher opening for equities on Wall Street on Wednesday, with futures for the S&P 500, theDow Jones and the Nasdaq 100 rising 0.1 to 0.3 percent.

The rise would be a turnaround from Tuesday's more than 1.5-percent slide, the fifth day of losses running and the S&P 500's worst performance since early December.

 

ETF SPY: Opening Lower...Earnings may bring us Down

Analysis for Short Term Option Trading!

Outside Market Influences-

RSI-

We have been waiting to see how far the RSI would drop with that little move down but we did not go far. It is still healthy at 54.41. It continues to show us slight weakness in the move of the SPY.

Bollinger Bands-

The bands are contracting as the SPY moved down last week. It is just below the middle band and looks like it might have found base for itself. This is not as low as the last fall and we wonder if the SPY could lower itself more today.

MACD-

The bearishness of the SPY can be seen here more than anywhere. Because the move is slow, we have the MA’s still high. But they are bearish and the MACD Histogram is also bearish. Looks like mild bearish signals for the SPY today.

World News

Sony (SNE) is preparing to cut 10,000 jobs, or around 6% of its workforce, the Nikkei reports. The reductions look like they're part of the "painful" steps new CEO Kazuo Hirai has said he'll take to turn around the ailing consumer electronics giant, which is expecting its fourth consecutive annual loss, although one analyst reckons they're just a temporary fix.

China's March CPI rose 3.6% on year vs. expectations of 3.3% and 3.2% previously. The faster-than-expected increase could cause policy makers to be cautious in adding stimulus to boost growth.

US Markets

Earnings season is due to kick off tomorrow when Alcoa (AA) reports its results, with analysts forecasting that average results will be flat to slightly lower, although growth is expected to pick up later this year and in 2013. Just three of the S&P's 10 major sectors - industrials, financials and technology - are expected to show expansion. Not good for the markets this quarter.

In Dallas, officials have enough funds left for jobless training to support only 43 people, while 23,500 have lost their jobs in the last ten weeks alone. The same story is playing out all over the U.S. as federal funding for training dries up.

U.S. stock futures point lower in front of the first day of trading following a weak nonfarm payrolls report. S&P -1.1%, Dow -0.9%.

 

ETF SPY: Spanish Bonds Sell Bad bring Markets Down Early

Analysis for Short Term Option Trading!

Outside Market Influences-

RSI-

With the drop the last couple days, the SPY has slipped into the low 50’s. It will be interesting to see if it drops past the ‘50’ level. This will signify more weakness than in the last dip it had. It appears that slight negative divergence did warn us of a move down.

Bollinger Bands-

This dip has dropped us below the middle Bollinger Band already. Will the SPY touch the bottom band? This is what we are waiting to look for.

MACD-

As with the RSI, the MACD Histogram has confirmed that the negative divergence is the short term warning we have been looking for. Observing the length of the dip will be our next project.

World News

Greece on Thursday extended to April 20 the deadline for a last batch of private investors who own some €8 billion ($10.5 billion) worth of its bonds to voluntarily join a massive swap deal and accept a deep cut in the value of their holdings.

World stock markets fell Thursday after a weak Spanish bond auction inflamed concerns about the European debt crisis and hopes faded for more help for the U.S. economy from the Federal Reserve. Benchmark oil rose above $102 per barrel while the dollar rose against the euro but ebbed against the yen.

The debt crisis in Europe flared anew after a disappointing auction Wednesday of government debt in Spain signaled investor confidence in the country's finances is weakening. That compounded worries that arose Tuesday, when minutes released from the March meeting of the U.S. Federal Reserve's Open Market Committee gave no hint of a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy.

The impact of the downgrade has been limited, but a poor Spanish debt auction Wednesday renewed worries that European economies aren't growing fast enough to keep their deficits in check.

US Markets

The number of people seeking U.S. unemployment benefits likely stayed near a four-year low last week, as layoffs slow and the job market strengthens. Economists forecast that weekly applications were essentially unchanged, at a seasonally adjusted 360,000, according to a survey by FactSet. That compares to 359,000 two weeks ago, the lowest number of applicants since April 2008.

The Labor Department will release the report at 8:30 a.m. Eastern time on Thursday. The four-week average, a less volatile measure, dipped to 365,000 two weeks ago, the lowest since May 2008. The average has fallen about 12 percent in the past six months.

Stock index futures fell on Thursday as a rise in Spanish bond yields renewed concerns about the euro zone's financial health, and as investors awaited a closely watched report on jobless claims.

 

ETF SPY; no more Money so Markets are Crying!

Analysis for Short Term Option Trading!

Outside Market Influences-

World News

Stocks and the euro fell on Wednesday after policymakers in the United States dimmed hopes of fresh asset-buying, underlining its divergence from a Europe facing recession and firmly back in crisis-fighting mode after a weak Spanish bond sale.

Spain, firmly at the sharp end of the euro zone crisis, raised less debt than hoped at rising yields, focusing market attention on a European Central Bank certain to hold the region's borrowing costs at record lows later in the day.

Sagging orders kept euro zone businesses in the doldrums in March, probably pushing the region into a mild recession, Market data suggested on Wednesday, while euro zone retail sales data also weakened.

US Markets

After so many false dawns, long-term investors face the growing problem of how to recognize a genuine, sustainable recovery in global markets - whenever it eventually shows up.

In the wake of one of the steepest first-quarter rallies in world equities in more than a decade, it's been tempting to hail the return of more "normal" times, where the cyclical ebb and flow of the economy dictates predictable investment patterns.

But skepticism remains sky high, and it still doesn't feel right to many investors.

This stock market rally, like so many others over the past three years, is a by-product of central bank money splurges - most recently this year from the European Central Bank and Bank of Japan, following two separate bond-buying programs by the Federal Reserve and Bank of England since 2008.

 

The unemployment rate has fallen dramatically over the last six months, but just how low can it go?

The answer is being debated among two camps of prominent economic thinkers. One school of thought says that unemployment will return to around 5% as the economy eventually recovers. But an opposing view states that permanent changes in the labor market mean higher unemployment is here to stay.

Among those who believe the first, more optimistic scenario is Federal Reserve Chairman Ben Bernanke. He thinks that unemployment will fall as part of the regular business cycle, and stimulative