Stocks fluctuated Monday as investors did a little buying after four days of heavy selling. The Dow Jones industrial average erased its early losses and was up 27 points. Other major stock indexes rose slightly. Interest rates dropped as investors looking for safe investments bought U.S. Treasury notes and bonds. The market initially pulled back after a regional manufacturing report fell short of forecasts and Japan became the latest country to show signs of slowing growth. Both reports raised investors’ concerns about the pace of the global economic recovery. Analysts said Monday’s trading was just a pause following four days of losses that sent the Dow down almost 400 points.

“The market is really being controlled by (short-term) traders,” said Mike Rubino, CEO at Rubino Financial Group in Troy, Mich. “The long-term investor doesn’t appear to be anywhere in sight.” Without those long-term investors, trading is expected to remain erratic for the foreseeable future. In midday trading, the Dow rose 26.72, or 0.3 percent, to 10,329.87. The Standard & Poor’s 500 index rose 3.05, or 0.3 percent, to 1,082.30, while the Nasdaq composite index rose 19.67, or 0.9 percent, to 2,193.15. About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 329.6 million shares. Investors continued buying Treasurys Monday, driving interest rates lower. U.S. government bonds are looking more and more appealing to investors wanting to find a safe place for their money as the economy cools and stocks drop. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.60 percent from 2.68 percent late Monday. Its yield is often used to help set interest rates on mortgages and consumer loans. The yield on the 10-year note is near the level it last hit in March 2009 when stocks fell to a 12-year low. “It’s a sign of pessimism that investors accept that low a yield,” said Joe Heider, principal at Rehmann Financial in Cleveland. Investors who are concerned about the U.S. economy got some bad news from overseas Monday. Japan said its economy grew just 0.1 percent in the second quarter, well below the 1.2 percent growth in the first quarter and short of expectations. The report follows signs last week that both the U.S. and Chinese economies are not growing as fast as earlier in the year. Meanwhile, the Federal Reserve Bank of New York said manufacturing activity in the state rebounded slightly this month after falling sharply in July. Despite the modest gain, activity did not expand as much as had been forecast, which indicates that economic growth remains tepid.

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July ended with the same uncertainty it brought in 2010, and I think mist are happy to move into August trading.  Markets were unusually slow and volume posthumously light as portfolio managers too the laptops to the beach or the back deck of the house and prepped for a summer BBQ. 

(AP) — News that economic growth slowed during the spring gave the stock market a fitting end to a choppy July — yet another back-and-forth day. The Dow Jones industrial average, down almost 120 points in the first minutes of trading, recovered and seesawed throughout the session. The Dow was up 17 in late afternoon. The other major indexes also rose modestly. Traders opted for the safety of Treasury bonds, and that sent interest rates lower. But stocks were on track for their strongest month in a year. The Dow was up 7.1 percent going into Friday’s trading. The Commerce Department said the gross domestic product, the broadest measure of the economy, grew at an annual pace of 2.4 percent from April to June. That’s less than the 2.5 percent economists polled by Thomson Reuters had forecast. At first the report confirmed investors’ belief that the recovery is weakening as unemployment remains high and government stimulus programs end. Consumers cut back on their spending because of job worries and companies spent less to rebuild inventories. But analysts said that as investors read deeper into the report, it didn’t look as bad as they initially thought. They found some good news in consumers’ savings rate. “The consumer actually decided to save more,” Jason Pride, director of investment strategy at Glenmeade, an investment management company. “Consumers have done more to repair their balance sheets than thought.” Pride said that means that those extra savings will eventually be spent, giving the economy a lift. Consumer spending accounts for the bulk of economic activity. Business spending on equipment and software jumped in the second quarter by the biggest amount in 13 years. That was encouraging, analysts said, because it means companies are eventually going to start adding jobs. “Companies are spending and eventually it will turn into employment,” said Ron Weiner, president and CEO at RDM Financial Group. It wasn’t surprising that stocks gave up their gains and turned lower. Trading has been erratic as weak economic numbers have conflicted with companies’ generally good second-quarter earnings and forecasts for the rest of the year. Investors have been quick to cash in their gains because they don’t have a sense of where the market is headed. In afternoon trading, the Dow Jones industrial average rose 17.48, or 0.2 percent, to 10,484.64. The Standard & Poor’s 500 index rose 3.34, or 0.3 percent, to 1,104.87, while the Nasdaq composite index rose 9.09, or 0.4 percent, to 2,260.78. Rising stocks outpaced losers by about 2 to 1 on the New York Stock Exchange where volume came to 745 million shares. Volume was extremely light even for a summer day. That continued a trend that has been seen for much of July. Analysts say many investors, uncertain about the where the market is heading, are staying on the sidelines or moving money into safer alternatives. That strategy sent Treasurys higher Friday. The yield on the 10-year Treasury note, which moves opposite its prices, fell to 2.91 percent from 2.99 percent. Its yield is often used as a benchmark for interest rates on mortgages and other consumer loans. A yield below 3 percent suggests investors are worried about long-term growth and don’t fear inflation will be a problem anytime soon. Inflation is a threat to the long-term value of bonds. Investors got some mildly good news from two other economic reports. The University of Michigan/Reuters consumer sentiment index for July rose slightly more than expected to 67.8 from a preliminary reading of 66.5. Economists expected it to rise to 67. And the Chicago Purchasing Managers Index, which measures manufacturing activity in the Midwest, rose unexpectedly to 62.3 this month from 59.1 in June. Economists were expecting a drop to 56.5. The report is seen as an indicator of how the Institute for Supply Management’s nationwide index is likely to come in when it’s released on Monday. Traders were also being cautious because they’re waiting for a series of key reports next week that will give a first look at how the economy is doing in the current quarter. The Institute for Supply Management releases its reports on the manufacturing and services sectors during July and the Labor Department issues its report on employment for this month. Economists predict the two ISM reports will show manufacturing and the services industry expanded in July but at a slower pace than in June. Meanwhile, the unemployment rate likely inched higher to 9.6 percent in July from 9.5 percent in June as the government laid off more temporary census workers. Private employers likely added 90,000 jobs during the month, slightly better than in June. Overseas markets mostly fell Friday after reports that Spain’s credit rating is likely to be cut by Moody’s Investors Service. The potential downgrade comes as the country’s unemployment rate jumped to a 13-year high of 20.09 percent and the government continues to grapple with rising debt problems. Spain’s IBEX 35 fell 1.2 percent. Britain’s FTSE 100 fell 1.1 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 fell 0.2 percent. Japan’s Nikkei stock average fell 1.6 percent.

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Overnight Developments

• Global stocks are mixed with the European Euro Stoxx 50 Index down -0.04% and Sep S&Ps down -3.50 points. The dollar and Treasuries are stronger and most commodities are weaker. European stocks fluctuated between slight gains and losses ahead of Q2 earnings season, which officially begins when Alcoa reports its earnings results after the close of today’s trading. European bank stocks are weak, led by a 3.2% decline in Allied Irish Banks Plc, as European finance ministers meeting in Brussels today are under pressure to disclose more about the stress tests being conducted on banks to see whether they could withstand losses if the region’s debt crisis worsens. Limiting losses is the 6.7% jump in BP Plc after the Sunday Times reported that Exxon Mobile may bid for the company along with reports that BP is selling assets in Alaska, while Volkswagen AG climbed 1.9% after the biggest foreign carmaker in China boosted sales +46% y/y in the first half of this year in the world’s largest vehicle market after introducing new models to attract customers.
• The Asian markets today closed mixed with Japan down -0.37%, Hong Kong +0.44%, China +1.10%, Taiwan -0.10%, Australia +0.31%, Singapore +0.28%, South Korea +0.63%, India +0.58%. Japanese banks closed lower and led losses in stock prices after the Democratic Part of Japan won only 44 seats in the upper house, 12 short of majority, making it unlikely Prime Minister Kan will be able to reduce the world’s largest public debt. The yen weakened to a 2-week low against the dollar after Standard & Poor’s said Kan’s defeat is "potentially negative" for Japan’s debt rating because of legislative gridlock. The yen’s weakness provided a boost to Japan’s exporters, helping to limit declines. China’s Shanghai Stock Index closed higher, led by gains in property developers, on speculation the government will relax curbs on mortgage lending amid a slowdown in property prices. China’s June property prices declined -0.1% m/m, snapping 15 straight months of increases, whi le Chinese new lending in June was 603 billion yuan ($89 billion), the least in 3 months. Morgan Stanley predicts that the Chinese government may loosen this year’s 7.5 trillion yuan new-lending quota for banks in Q4, when a slowdown in inflation will be "well established." Rounding out the bullish factors for Chinese stocks was the more-than-forecast 44% y/y increase in June China exports to $137 billion, which signals that global demand has withstood Europe’s sovereign-debt crisis so far.

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S&P 500

The S&P 500 index is currently trading between these natural support and resistance levels: 1050, 1075, and the 1100. We are also trading above the 200 day moving average on the 5 minute chart at 1073. Do not expect a break below the 1075 level on Friday due to the support levels provided by both the 144 and 200 day moving averages. The markets will most likely trade sideways going into Friday’s trading.

On Thursday the S&P 500 ended the trade just above the 1085 200 day moving average on the daily chart. Expect sideways trading as we push into Friday because we are still below the 144 day Fibonacci moving average of 1111. Until we break above this level do expect a confirmed rally or recovering especially throughout these low-volume trading summer months. We still believe that any positive news is considered a temporary rally as move into August which is considered the slowest trading month.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The volatility index is just above 30.00 as of today so traders and investors may rethink their short positions or continue retreat to safer assets.

However due to the low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the ‘flash crash,’ European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1111: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1090: Important Pivot Level

1085: 200 Day Fibonacci Moving Average on Daily Chart

1075: Natural Resistance Level

1074: 144, 200 Day Fibonacci Moving Average on 5 Minute Chart

1073: 200 Day Fibonacci Moving Average on 5 Minute Chart

1050: Natural Support Level

Friday Economic Calendar

Retail Sales / 8.30 EST

Consumer Sentiment / 9.55 EST

Business Inventories / 10.00 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Fear overseas is playing apart during today’s trading. Greece debt and the bailout offered are presenting questionable actions on whether the play will help the euro. China’s real estate bubble and the falling price of copper are indicating fears of deflation rising throughout the global economy.

The S&P 500 index finished just below the natural support level of 1175. The index met resistance due to Monday’s previous high as well as the convergence of the 144 and 200 day moving averages on the 5 minute chart. The S&P 500 index should be trading below the 1190 Monday’s resistance. An upward breakout could possible push the towards the 1110 area.

Looking at the daily chart of the S&P 500 index, its still trading below January 2010 resistance level as well as the 144 day moving average of 1117. Expect the market to be range bound between 1175 and 1110 as we head towards the slow summer months.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off as traders seek protection for their assets.

A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. Traders and investors are retreating from the markets and finding safety and protection within the dollar. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1117: 144 Day Fibonacci Moving Average on Daily Chart

1110: Natural Resistance Level

1190: Monday’s Previous High

1086: 144 Day Fibonacci Moving Average on 5 Minute Chart

1084: 200 Day Fibonacci Moving Average on 5 Minute Chart

1085: 200 Day Fibonacci Moving Average on Daily Chart

1175: Natural Support Level

Tuesday Economic Calendar

Consumer Confidence / 10.00 EST

Ben Bernanke Speaks / 20.30 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead you to profitable trades. Keep up with our live news feed and the trend with Tradermongers.com!

S&P 500 Pivots

On Thursday the US equity indexes continued it’s May sell off philosophy. All the major indexes were down for the day amplified by the European debt crisis, the oil-spill in the Gulf, and the recent 1000 point crash in the Dow Industrials. After a three day sell off there could be a possible rally due to options expirations tomorrow as well as traders and investors getting out of their short positions prior to the weekend.

The S&P 500 index on the 5 minute chart fell for the third straight session trading below the 144 and 200 day moving averages. The 200 day moving average converge with Wednesday’s previous low at 1101 so expect resistance between 1100 and 1101 going into Friday’s trading day. Commodities are weaker due to the events listed above as well as a possible slowdown in China will drain global growth. Today jobless claims were released and a jump from 25k to 471k didn’t encourage the US equity markets.

Currently the index is below the 200 day moving average on the daily chart. We have told our readers before the S&P 500 is currently undergoing a correction. On the daily chart of the index is currently trading below the January 2010 resistance level of 1121. The first resistance level is 1100 and 1101. Expect the S&P 500 to find resistance breaking the second resistance level between 1117 and 1120 area as it is below the January 2010 pivot level of 1121. We had a three day sell off in equities as we approach Friday’s trading day. Tomorrow expect a mini rally due to options expiration.

The market volatility index (VIX) measures option activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off as traders and investors are seeking protection for their assets instead of risks.

A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the dollar. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels:

1219: S&P 500 52 Week High

1101: 200 day Fibonacci moving average on 5 minute chart

1100: Natural Resistance Level

1096: 144 day Fibonacci moving average on 5 minute chart

1127 – 1141: Major resistance level for the S&P for January 2010

1117: 144 day Fibonacci moving average on daily chart

1085: 200 day Fibonacci moving average on daily chart

Friday Economic Calendar:

No Economic Numbers Scheduled

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice, and nothing in this material should be construed as such. There is a risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all advice and all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

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