The Red Roadmaster’s Technical Report on the US Major Market Indices + ™ Featuring Crude Oil, Gold, and Forex Technical Up-dates
Vol. 042610 # 1 Copyright 26 April 2010
Date Line Hong Kong (SAR) China
The Red Roadmaster™ Paul A. Ebeling, Jnr. Editor/Compiler/Analyst/Commentator
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Spring Edition # 7 26 April 2010 600 am US EDT Dear Reader, You can read my timely Market Reports, and Up to Date International News daily and weekly on www.livetradingnews.com , www.paulebeling.com , www.aseanaffairs.com and www.pinnacledigest.com as I round up relevant global market news and technical analysis up-dated daily. + You can see many of my articles and commentary on Google News http//news.google.com/news/search? aq=f&pz=1&cf=all&ned=us&hl=en&q=paul+ebeling + now on Now Up and Running www.paulebeling.com have a look please. Also seen on ASEAN Affairs www.aseanaffairs.com
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Redâ€™s Bull Alert: Wall Street hit 19 month high Friday Re-cap of the US Stock Market Action for the Week ending 23 April 2010 For the Week: the S&P 500 was up 2.1%, the DJIA rose1.7%, and the NAS gained 2%. It was the 8th straight week of gains for the DJIA and NAS, and the S&P has gained in 7 of the past 8 weeks running. For the Day: The DJIA closed up 69.99 pts, or 0.63%, to 11,204.28, the S&P 500 gained 8.61 pts, or 0.71% to close at 1,217.28, the leading NAS tallied up + 11.08 pts, or 0.44%, to end the session at 2,530.15. Energy shares lifted the broad market after Crude Oil rose 1.7% to above US$85bbl on positive economic data. The S&P energy index rose 2.3%, as Chevron closed up 1.8% at US$82.67/shr. Merck & Co climbed 5% to US$35.46/shr, making it the top gainer on the DJIA. The drug maker said its costs related to US. Healthcare reform will be a far smaller percentage of total company sales compared with rival drug makers. That news helped the healthcare sector recover a 2 day selloff on fears over the impact from the new healthcare overhaul law. The S&P healthcare index was up 1.1% on the day, but is down 2.5% for the month. On Earnings Front: American Express Co rose 2.7% to $48.05/shr after its results beat expectations and the credit card company struck an optimistic tone about future client spending. Strong earnings have contributed to the market's gains in recent weeks, with the benchmark S&P 500 up nearly 80% from the 12-year lows of March 9, 2009. Homebuilders were up 3.3% after data showed sales of newly built single-family homes rose last month to their highest level in 8 months. The homebuilderâ€™s index racked up its biggest weekly advance since July 2009, rising 12.8%, and is on track for its 6 straight month of gains. New orders for durable manufactured goods ex. transportation posted the largest gain in over 2 yrs. The NAS's gains were limited by Qualcomm Inc and Amazon.com which both gave disappointing forecasts earlier last week. Qualcomm fell 2.8% to US$38.25/shr and Amazon was down 4.3% at US$143.63/. Microsoft Corp Inc dipped 1.3% to US$30.99/shr after it reported its Q-1 profit jumped, but the report failed to meet Wall Street's heightened expectations. Commodities had a pretty solid session Friday as the CRB Commodity Index put together a 0.7% gain, its 4th straight advance and put it 1.0% higher for the we Crude Oil prices were also strong as prices climbed 1.7% to US$85.12 bbl, a closing high on the week. Gold prices gained 0.9% to settle at US$1153.30 oz., and Silver prices advanced 1.1% to US$18.20oz. Advancing Sectors: Energy (+2.3%), Materials (+1.3%), Health Care (+1.1%), Utilities (+0.8%), Industrials (+0.7%), Consumer Discretionary (+0.5%), Tech (+0.5%), Financials (+0.4%) Declining Sectors: Telecom (-0.2%), Consumer Staples (-0.1%)
Volume and Breadth: About 9.28B/shrs traded on the NYSE, the AMEX and NAS, below last year's estimated daily average of 9.65B/shrs. Advancers outnumbered decliners on the NYSE by 2,161 to 869, and on the NAS, advancers beat decliners 1,702 to 991.
Market Indexes Technical Analysis Date
Very Bullish (0.52)
Major World Markets Shanghai
Gold and Crude Oil Focus Report (Weekend Up-date) w/Technical Outlooks Gold dipped, halting a 2day rally, as the Euro sank to a new 11 month low against the USD. However, the recovery after sliding to as low as 1132 signaled the precious Yellow metal's underlying strength. In fact, while the market has only focused on Greece's deficit issue, such problem has also rooted in other countries including the US, Japan and the UK. If worries intensify and spread to these countries, I do believe Gold will likely benefit. Crude Oil initially slumped as global stock market sank on the revision of Greece's debt deficits. Together with disappointing inventory report released last Wednesday, the front-month WTI contract sank to as low as 81.73. However, buying interests came in at that level as the price reversed, and Crude Oil ended the day flat at 83.7. Strong rebound in equities and attack of Iraqi Oil pipeline also supported Crude Oil. Specifically to the Crude Oil market, damage of an oil pipeline from Iraq to Turkey disrupted supply which will take around 3 days to resume. 3
The Overall Technicals for Gold Gold's recovery from 1124.3 continued last week, and reached 1157.9. A further rise will likely come initially this week. But, since the recovery from 1124.3 is looking corrective in nature, I expect the upside to be limited by 1170.7 resistance level, and bring one more dip to continue the whole consolidation. A move below 1135.2, the minor support, will turn the intra-day bias back to the Southside for 61.8% retracement if 1084.8 to 1170.7 at 1117.6 and below The Big Picture: the lack of impulsive structure in the rise from 1044.5 suggests that it is the 2nd leg of the whole consolidation pattern that started at 1227.5. Right now, there is no confirmation that the rise from 1044.5 is completed, and another rise might come on. However, even in that case, strong resistance should be seen above 100% projection of 1044.5 to 1145.8 from 1084.8 at 1186 to complete the rise and bring the another fall to retest 1044.5 before consolidation from 1227.5 completes. Meanwhile, a break of 1084.8, a Key support level, will indicate that the 3rd falling leg has likely started, and will then target a new low below 1044 before completing the consolidations from 1227.5. The Long Term Picture: the rise from 681 is treated as resumption of the long term up-trend from 1999 low of 253 after an interim consolidation from 1033.9 has completed in form of an expanding triangle. The next long term target is 100% projection of 253 to 1033.9 from 681 at 1462 level. So, I will hold the Bullish POV as long as 931.3 structural support holds.
The Overall Technicals on Crude Oil Crude Oil's rebound from 80.53 resumed towards the end of the session on Friday after a initial setback and closed strong at 85.12. A further rise is now expected to retest the 87.09 high; a sustained break there is needed to confirm the rallyâ€™s resumption. Otherwise, another fall will happen before the consolidation from 87.09 concludes. On the Downside: a break below 81.73, the minor support, will turn the intra-day bias back to the Southside for a 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8% retracement at 76.22. The Big Picture: the medium term rise from 33.20 is viewed as a correction to the overall correction that started in Y 2008 at 147.27. My preferred POV is that the rise from 33.2 is in form of a 3 wave structure (73.23, 65.05) and should be near to completion. Strong resistance is expected around 90 a Key level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring a reversal. Then, even though another rally cannot be ruled out in here, the upside potential will likely be limited. On the Downside: the break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. Should that be the case, I will turn Bearish on Crude Oil and expect the down-trend to target a new low below 33.2. The Long Term Picture: there is no change in the POV that the fall from 147.27 is part of the correction to the 5 wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong, and can continue, there is no solid evidence that suggest fall 147.27 is completed and I prefer the case that rebound from 33.2 is a corrective rise only. Again, having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27. Stay tunedâ€ŚPaul A. Ebeling, Jnr. www.livetradingnews.com 4
Some Stocks to Watch this Week
American Express Company (AXP), Caterpillar, Inc. (CAT), The Home Depot Inc. (HD), KB Homes (KBH), and Xerox Corp. (XRX).
Some heavyweights on the earnings front this week Caterpillar and 3M Co. highlight this week along with US Steel Corp (X); chipmaker Texas Instruments (TXN); chemical maker DuPont (DD) and credit and debit payments network Visa Inc (V). Energy heavyweights reporting include: Exxon Mobil Corp (XOM) and Chevron Corp (CVX) are also on For a full earnings list see: http://biz.yahoo.com/research/earncal/20100426.html
This Week on the Earnings Front On the Earnings Front this Week: Caterpillar (CAT) on Monday morning, Ford Motor (F), Lexmark (LXK), Taiwan Semiconductor (TSM) and US Steel (X) on Tuesday before the Bell with Broadcom (BRCM), Norfolk Southern (NSC) and JDA Software (JDAS) in the afternoon. Wednesday morning, Comcast (CMCSA), Goodyear Tire (GT) and General Dynamics (GD) post results. After the Bell, OwensIllinois (NYSE: OI) and Xilinx (NASDAQ: XLNX) report results. On Thursday morning, Aetna (AET), ConocoPhillips (COP), ExxonMobil (XOM) and Motorola (MOT) release results. After the Bell, KLATencor (KLAC) reports. For a full earnings list see: http://biz.yahoo.com/research/earncal/20100426.html
On the Economic Front
April 27th Tuesday Case-Shiller 20-city, February (09:00): 1.1% expected, -0.7% past Consumer Confidence, April (10:00): 53.7 expected, 52.5 past April 28th Wednesday Crude Oil Inventories, 04/24 (10:30): 1.89M past FOMC Rate Decision, 4/28 (14:15): 0.25% expected, 0.25% past 5
April 29th Thursday Continuing Claims, 04/17 (08:30): 4625K expected, 4646K past Initial Claims, 04/24 (08:30): 440K expected, 456K past April 30th Friday GDP-Adv., Q1 (08:30): 3.2% expected, 5.6% past Chain Deflator-Adv., Q1 (08:30): 0.9% expected, 0.5% past Employment Cost Index, Q1 (08:30): 0.5% expected, 0.5% past Chicago PMI, April (09:45): 59.8 expected, 58.8 past Michigan Sentiment, April (09:55): 71.5 expected, 69.5 past
The Most Asked Question Last Week The Big Q: What is your take on FINREG? The Big A: Below is an excerpt article that I wrote for the May issue of ASEAN Affairs Magazine, it is my POV along with related stories: The Summary of the proposed Bill: A Council of Regulators ____________________________________________________________________________________
US President Obama sides with The State and attacks The Street There are dozens of ways, and hundreds ideas on how to Stop the abuses in the US banks, US President Barrack Obama has chosen three, many believe, including me, that he is all wrong: 1. No proprietary trading 2. No owning or sponsoring (backing) hedge funds or private equity 3. A artificial limit on size for banks that take public deposits Since Y 1999, some very wrong decisions have flowed out of the US Congress and the Greenspan Federal Reserve, and taken by a greedy public with a appetite for cheap debt that lead to Americaâ€™s over consumption. There is no question that some banking reformation is called for in the USA now. The US President's announcements (attacks) do not get to the root of the problem IMO. The US and other Western banks acted like any other borrower when presented with cheap debt: they borrowed what they could, that often got them at astonishing 60+ times geared, and then they found ways to use it to make large money.
The lenders to the those banks exercised no control, because they correctly assumed that they would be bailed out if and when the banks failed, frankly because this activity appears to have been sanctioned by the US Congress, the Administration/s and the US Federal Reserve during the time between 1999 and 2007. The best way to fix this problem is to allow the bad banks to fail. When this is put in place, the market will then control the banks, by increasing their cost of borrowing when they take bigger risks. If investors fail to control the banks they invest in, the Big Bad Bank can go bankrupt, as smaller banks do. Bondholders then would lose the bulk of their money, as their bonds convert into equity, either by making all bonds convertible, or through laws requiring conversion of the bonds if a bank fails. In such a case investors will demand more return to buy these now riskier bonds, and that means the banks will be paying their true cost of capital, something that will lead to lower profits and lower bonuses, and probably a return to a smaller finance sector, where savvy people may choose to work in places other than on Wall Street or the City in London. But Mr. Obama has taken a different path: instead of forcing the market to take control of the banks, he wants the State to do it, through limits on what the banks can do. Most of the folks that I know call this action the â€œSocializedâ€? route (the opposition), but whatever you call it will surely be less successful than the market solution, since it assumes that banks are too big to fail and always will be. The current crisis was not caused by proprietary trading, was not caused by hedge funds, and was not caused exclusively by deposit-taking banks: Goldman Sachs and Morgan Stanley converted into commercial banks, after all, in order to be bailed out, while Bear Stearns was not allowed to fail in spite of being a relatively small investment bank with no deposits. There might just be some merit in Mr. Obamaâ€™s plan, if his earlier US$90B 10 yr bank levy was made permanent, as an alternative to the market solution: if you accept banks are always going to be too big to fail, the risk to the taxpayer needs to be reduced too, but of course this is not the "best" solution, and reliance on federal regulation has a very spotty history indeed as most of us realize (and likely they do too, but they are out to appease their constituencies first aren't they? I believe that US President Obama will eventually realize that both the Wall Street Journal and the FT of London dislike the plan, although the WSJ notes that it shows President Obama at least understands the problem of moral hazard. There are virtually no indications, however, that the ideas are properly understood in the UK and that is a must considering that the link between Wall Street and The City is tight. If the US Treasury had a clear understanding of moral hazard, the relatively small Northern Rock should have been allowed to fail in the 1st place, along with other underwater mortgage banks, which eventually had to be rescued in spite of the Northern Rock action, and there is no way a minor Scottish building society with no systemic implications would have been bailed out in the UK. This then is the State vs. the Markets debate again, and I believe that the political parties have not woken up to that yet or if they have they are making a very strategic play. If you saw the televised White House meeting on Friday the Dems were licking their chops and seeing a popular response from their voters in the November elections.
The Big Q is this: Where with US Republicans and the British Conservatives line up, on the side of The State or the side of The Street? US Senators Christopher Dodd and Richard Shelby, who are negotiating a US Senate bi-partisan compromise on the financial reform bill, said Sunday while they do not have a deal yet they are “getting there” on resolving some of their differences. “We’re conceptually very, very close,” Shelby of Alabama, the top Republican on the Senate Banking Committee, said Sunday in an interview on NBC’s “Meet The Press.” Senator Shelby said that while he and Senator Dodd, who brought the Bill up, will continue to work on it today, However, he doubts they will reach agreement by tomorrow, when the US Senate is scheduled to hold a test vote that will determine whether lawmakers can begin considering the Bill on the Senate floor. Both Senators Dodd and Shelby have been working on and off since last year to try to bring about a compromise on the legislation, which is based on a proposal released last year by President Obama and is a top legislative priority. The US Senate Democrats, who control the Senate with a 59-41 majority, would need the support of at least one Republican to get the 60 votes needed to proceed. Senator Dodd said that he hopes that tomorrow we can get those votes; we may not, but I hope we do because we need to move forward and they are Key. If there’s no deal by tomorrow, the US Republicans will stand united in voting against proceeding to the Dodd proposal. Republicans say blocking the vote would give them leverage to force Dodd to make concessions. Democrats may use the vote to say Republicans are obstructing reform of Wall Street. The Senate Banking Committee led by Senator Dodd approved the Bill on a partisan vote in March and the House approved its version of the Bill in December.
The Summary of the proposed Bill: A Council of Regulators Senator Dodd’s Bill would create a Council of Regulators to monitor the financial system for systemic risk, create a Consumer Protection Bureau (CPB) at the Federal Reserve, and create a manner for dissolving the biggest financial institutions when their failure would disrupt the economy. Republicans have targeted their criticism on a proposed industry supported US$50B fund to cover the government’s cost of taking apart a failing company, saying it would constitute a permanent bailout of Wall Street. Senator Dodd said he is willing to consider alternatives. Republican Senator Bob Corker (TENN), a ranking member of the US Senate Banking Committee who helped write this section of the Bill, said he plans to offer an amendment to the measure that would penalize executives of the liquidated firms. “Everything that the executive team and the board members have earned through this company over the last 5 years needs to be clawed back,” Corker said Sunday in an interview on ABC’s “This Week” program. “I’m going to be doing that on the floor if it doesn’t make it into the base Bill.”
Senator Sherrod Brown, an Ohio Democrat and another member of the banking panel, said he planned to offer an amendment to limit bank size. Senate Republican Leader Mitch McConnell predicted that there will eventually be compromise on a Financial Regulatory Bill (FINREG). “We don’t have a bi-partisan compromise yet, but I think there’s a good chance we can get it,” McConnell said Sunday on FOX News.” “It’s my expectation that we will Not go forward with this partisan Bill tomorrow.” The effort in Congress to redesign the architecture of Wall Street regulation is aimed at preventing a repeat of the 2008 financial crisis and the US$700B in taxpayer-funded aid extended to companies including Bank of America Corp. and American International Group Inc. It should be noted that the US Treasury has profited from the so called “Bailout”.
Shanghai Bund Bull charges NYC's Wall Street As all savvy players know, capital is mobile and Shanghai is signaling the World that capital can and is being raised there in a big way, and to make it very clear it has replicated the Bronze Bull near Wall Street. Last year, Shanghai commissioned a Beast of Bowling Green from its sculptor, Arturo DiModica, who will be the guest of honor when it is installed on the newly renovated Bund just before next week’s opening of the Shanghai World Expo, the largest world expo ever on the planet. The Bund, the stretch of Art Deco riverside which has branded Shanghai for generations, has been redesigned as part of a makeover of the city for Expo, which at US$58.5B is more than two times as much as the Y 2008 Beijing Olympics. This is the sincerest form of rivalry, as Shanghai has announced plans to equal New York as a global financial center by Y 2020, and so, of course, it needs its own Bull. Shanghai’s leaders originally said their Bull would be twice the size of New York’s Bull, but truth is that Bund Bull has turned out almost exactly the same size the original, but with a more muscle, the Chinese are not subtle. The Shanghai Bull is Redder than the original, suitable for a country where all good things come Red, and he weighs the same 2,260kg, the sculptor says, the cost has not been announced publically. Looking across from the Bund, the symbol of European colonial capitalism in China, the Bull will stare across the Huangpu River at the financial Centre in Pudong, which has a 21st Century skyline. Banks and Securities Houses in Pudong have begun recently to trade stock index futures, agreements to buy or sell an index at a pre-set value on a future date, but only if they pass a tough exam, deposit Y500,000, put up funds equal to a 15 to 18% margin and hurdle other barriers designed to keep out most players, China says, Professionals only. Stay tuned.... Paul A. Ebeling, Jnr. www.livetradingnews.com ___________________________________________________________________________________
Red’s Edge and in the Trenches 9
This week let's again look at what a Stop loss order is and what it does in a Trade. A sell Stop loss order is an order to the broker to sell shares of stock when a specific price is hit. And it work to protect the trader from a larger lost when a stock falls (but not always) A buy Stop order is an order to the broker to buy shares of the stock once the Stop price is hit. With a buy Stop, once the price is hit, the order goes to the floor as a buy at the market order so we could pay less or even much more than the price at which the Stop is set. For that reason, explains a savvy trader I know he never sets simple buy Stop orders, but uses the buy Stop limit order. That adds another element to the order. Once the buy Stop is hit, the order then goes as a limit order so that I will not pay any more than whatever limit I set. With that basic understanding of Stops, the question becomes where one is going to place the Stop. Today I will only discuss only the Stop loss order ordinarily placed when one already owns the stock and wants to protect the downside. Where to place Stops is one of the most difficult tasks of the trader. It involves some art to achieve superior results. The difficulty arises from some subjectivity that is necessary in placing what I consider to be good Stops. You all know I always preach the necessity of discipline in trading and much of the discipline can be achieved by lines on charts like price support or resistance or trend support or a moving average. The problem with the use of these great tools with setting Stops is that savvy traders have a clear idea of where the great bulk of Stops are placed and, in any event, Stops are visible to the market. And so the traders searching for clusters of Stops have little difficulty identifying the price to which they want to drive the stock to set off the Stops. Under current rules there is nothing anyone can do about the visibility issue, but even if they were not visible, it is often easy to guess where they are. The art for the trader placing the Stop is to be just outside the range where most of the Stops are placed. That approach adds to the risk because the Stop will be lower than those of the crowd, but it will also avoid some whipsaws. The best advice that I have studied is that setting good Stops comes with experience. So practice paper trading Stops to see how close the dips come to your Stop and whether you are getting whipsawed out or whether the share price turns just above your Stop. With some practice, you may find the price coming within pennies of your Stop and then turning back up. That is the art and it gets better with experience. Knowledge of Yourself -Your Plan is very helpful, and is used by professional traders to help them Win in a game where most lose. Knowledge is Power! Again the Reminder on Risk Risk is everywhere including trading the markets; you must learn to manage risk.
When you seek profits in trading markets there is a certain factor that creeps; it is the "Greed" factor; then comes the Risk factor that gives rise to the Fear factor in trading. Likely, many bad trades are the results of a misunderstanding of/or an initial failure to pay attention to risk. Once that risk becomes real for many folks, it can turn into fear and panic. Risk means we can lose something we have, and often traders fail to realize just how much is at risk until it is too late for them One of the most compelling facts regarding risk of loss in the market is that if a position loses 50%, it must then double, i.e. move up 100% to get back to even. It is important to note that risk in the buying of stock in the market is one of the riskiest things on the planet. When buying a stock, the total investment is at risk. And as we have seen recently, formerly great companies can fall to Zero. You ask, Red Are there ways to reduce the risk of losing my entire investment when buying stocks? Sure, we have discussed them in previous articles. One is employ Stop loss orders in place or trailing Stop loss orders. In most situations, these orders can work to prevent losing everything. It is unlikely that a stock will drop from USUS$50 to US$ Zero overnight, and most stocks that fail often post warning signs; and while they often fall fast, they usually take a bit of time to hit Zero bottom. In such circumstances, the Stop loss may work to preserve capital. Here is another way to protect an asset (some of us call it Insurance) That is to buy a protective Put. A Put option is a contract whereby the buyer of the Put has the right, but not the obligation, to force someone to buy his stock at a pre-determined price called the strike price any time before the option expires. To obtain that right, the buyer of a Put pays a premium. The situation is at least analogous to an insurance policy where the insured (stock owner) pays a premium in order to assure that a loss is limited to the premium, plus any deductible. You can learn about managing risk with options but the major risk in options strategies is that options expire, so your puts and calls only have value until expiration; and assuming no change in the price of the stock, the call becomes less and less valuable as time passes, until there is no time left. Insuranceâ€Ś Another thought that is often espoused is to diversify. There are differing schools of thought regarding diversification and there are many ways to diversify. The above discussion lists some of the ways traders reduce and manage risk in a stock purchase transaction. All of the above is intended to motivate you to seek a greater understanding of Risk and in doing so help you Win. Again, think Education First.
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Some ask, Red what is the reason for writing Red's Edge? Simple; I wish to help people succeed in the business of trading markets. And the proof is that I do not sell books or subscriptions to my markets reports or newsletters; it is all Free. This business is fun, challenging and rewarding in more ways than making money. My mates know that I do "my thing" to keep be sharp in my own endeavors. The Key is that a person can choose to believe or not believe, trust or not. The fact is that it is all just common sense and when applied diligently the risk is managed and lessened. The rest is up to you!
Download “Knowledge is Power,” Red’s Road to Riches, It is Free. The difference between winners and losers is that the winners take it seriously and they always add to their knowledge. They read, study, learn nuances, attend seminars, and sometimes use a coach or a mentor. Successful traders are not those who say coaching or seminars are too expensive. They understand that they can recoup such costs in a single trade. The unsuccessful folks have the opposite POV, shying away from and ignoring the benefits of a trading education because of the minimal cost. Remember, Knowledge is Power; it will change your life for the better. Red
My pal Wally Stein’s Words of Wisdom Buy Low, Sell High or at least in the Middle, Wally’s Lullaby Sooner or later, those who win are those who believe they can! Red’s Quote of the Week : "There are no limitations to the self except those you believe in." -- Seth
_________________________________________________________ This Week’s In View G-20 Nations Disagree over IMF bank taxes
The World’s leading economies Friday disagreed on contentious plans to tax banks to fund future financial rescues. The proposal for a levy on banks’ balance sheets and profits was high on the agenda of the G-20 nations after recommendations in a feasibility report by the International Monetary Fund, released earlier this week. But after strong objections led by Canada, which regards the proposals as Misguided and an Affront to its sovereignty, Friday’s G-20 meeting merely asked for more study. The G-20 release said: “We call on the IMF for further work on options to ensure domestic financial institutions bear the burden of any extraordinary government interventions where they occur, address their excessive risk taking and help promote a level playing field, taking into consideration individual country’s circumstances”. The G-20 referenced another dispute, i.e., the need for tougher capital standards as a shock absorber to protect banks against future disruption. “Reform is multi-faceted but at its core must be stronger capital standards, complemented by clear incentives to mitigate excessive risk-taking practices,” the release said. Although the US, UK and continental European governments broadly agree on the need for a bank levy, such a levy is strongly opposed by Canada, whose banks remained healthy during the crisis and which is currently chairing the G-7 and hosting a G-20 summit in June. Japan is also not aboard. Ottawa has maintained that opposition through this week’s meetings. The IMF’s ministerial steering committee meets on Sunday and is likely to follow the G-20 in postponing a decision. Jim Flaherty, Canada’s finance minister, reiterated his view that a tax would deplete banks of capital and make them more vulnerable to crises. “We are a sovereign country,” he said. “We can regulate our
____________________________________________________________ Chartists Plot Your Points US Key Indices Support and Resistance DJIA: Close 11,204.28 Resistance: 11,734 the November 98 high Support: 11,100 the July 2008 low The 18 day EMA: 11,024 10,963 the July 2008 low
The 50 day EMA: 10,789 10,730 the January 2010 high 10,609 the Mid-September 2008 interim low 10,496 the November 2009 high 10,365 the late September 2008 low 10,285 the late December 2009 consolidation high 10,120 the October 2009 high The 200 day SMA:10,075
S&P 500: Close 1217.28 Resistance: 1240 the Key July 2008 interim low. 1293 a March 2008 low 1298 the November 2008 high Support: 1200 the July 2008 low The 18 day EMA: 1195 1185 the late September 2008 1170 the March 2010 high The 50 day EMA: 1165 1156 the Sept 2008 low 1151 the January 2010 high 1133 a September 2008 intra-day low 1136 the January 2010 low 1119 the early December intra-day high 1114 the November 2009 high 1106 the September 2008 low 1101 the October 2009 high 14
1084 the September 2009 high The 200 day SMA: 1083 NAS: Close 2530.15 Resistance: 2546 a mark from July 2007 Support: The 18 day EMA: 2469 2453 the August 2008 high 2412-2415 marks in 2007, 2008 2382-2395 marks from 2008 The 50 day EMA: 2389 2320 the January 2010 high 2319 the September 2008 high 2292 a low from January 2008 2273 the bottom of January 2010 lateral high 2275 the February 2008 low 2245 from July 2008 2212 the July 2009 closing low 2205 the November 2009 high 2191 is the October 2009 high 2177 a low from March 2008 The 200 day SMA: 2176
_________________________________________________________________ Hot Topics for this Week Existing home sales in the USA are up 6.8% in March Existing home sales in the United States rose by 6.8% in March to a seasonally adjusted annual rate of 5.35M units, the National Association of Realtors (NAR) reported Thursday.
Lawrence Yun, NAR chief economist, said it is encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends. "Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running," said Yun. "The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps 1 trillion dollars in largely middle class housing wealth that may have been wiped out without the housing stimulus measure." Total housing inventory at the end of March rose 1.5% to 3.58M existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.5- month supply in February. Raw unsold inventory is 1.8% below a year ago, and is 21. 7% below the record of 4.58 million in July 2008. "Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," Yun said. "In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers." A parallel NAR practitioner survey shows first-time buyers purchased 44% of homes in March, up from 42% in February. Investors accounted for 19% of transactions in March, unchanged from February; the remaining sales were to repeat buyers. All-cash sales remain elevated at 27% in March, the same as in February. The national median existing-home price for all housing types was US$170,700 in March, up 0.4% from March 2009. Distressed homes, typically sold at a 15%t discount, accounted for 35% of sales last month, unchanged from February. "With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears," Yun said. According to Freddie Mac, the national average commitment rate for a 30-yr, conventional, fixed-rate mortgage dipped to 4.97% in March from 4.99% in February; the rate was 5.00% in March 2009.---Paul A. Ebeling, Jnr. www.livetradingnews.com
The World's Top Automakers Show & Go Green at Beijing Motor Show The major auto manufacturers displayed their confidence in the development of Green cars in the World's biggest auto market by exhibiting 95 alternative-energy autos among the 990 models at the Beijing Motor Show, which opened Friday. Europe's largest automaker Volkswagen launched an electric vehicle strategically aimed at the China market at the Show. VW said it will start local production of electric vehicles in China between Y's 2013 and 2014. "As China becomes Volkswagen's most important market around the world, achievement in the electric vehicle segment in China is key to the success of our global electric vehicle strategic vision which we kicked off this March," said Martin Winterkorn, CEO of Volkswagen.
"The China electric vehicle strategy is the first our group tailor made for a certain country. We plan to equip our BlueMotion Technologies with locally produced products in our two Chinese joint ventures soon," added Winfried Vahland, president and CEO of Volkswagen Group China. According to Vahland, the German company plans to provide "affordable" electric vehicles with innovative technologies to Chinese consumers through local research and development, sourcing and production. The company debuted an electric version of its Lavida model, developed by its joint venture with SAIC Group at the show, while its luxury brand Audi exhibited the new hybrid Audi A8, a four-wheel drive etron electric sports car and the A1 e-tron electric cars. Japan's Nissan Motor Co said that it will start selling its Leaf electric compact car in China early next year. The # 3 Japanese automaker, in alliance with Renault SA, teamed up in March with the local government in Wuhan to promote zero-emission vehicles following a similar agreement with Guangzhou municipal government late last year. Its US rival General Motors also said that it will bring its Chevrolet Volt plug-in hybrid electric vehicles to China later this year, the 1st country outside the US, joining the race for green vehicles in the world's largest auto market. Dieter Zetsche, chairman of Daimler AG and head of Mercedes-Benz Cars, said that China is a "promising market" for electric vehicles, and that the company would strive to develop a new brand for the China market in cooperation with local partner BYD. There are many ways to achieve emission-free mobility, but "electric cars are most feasible in the current stage", he said. According to a survey released by consulting firm Ernst & Young on Thursday, 60% of the 1,000 respondents it interviewed in China said that they will consider purchasing plug-in hybrid and electric cars in the near future, a figure nearly five times greater than in similar surveys conducted in Japan and the US. ---Paul A. Ebeling, Jnr. www.livetradingnews.com
The World's economy now in rebuilding phase according to the IMF Boss The head of the International Monetary Fund (IMF) said Saturday that the World economy is now in the phase of rebuilding and all countries should implement financial reform in a coordinated way. IMF Managing Director Dominique Strauss-Kahn made the remarks at a press conference held after the meeting of the International Monetary and Financial Committee, the policy-setting body of IMF. He said the world economy has experienced the phase of panic, the phase of action and the phase of relief. "And now, I think, we are entering the 4th phase ... is clearly the phase of rebuilding," said Strauss-Kahn, voicing optimism toward the global economy. But he also noted that the global economic recovery is unbalanced, in which Asia grows faster while Europe and Japan lag behind.
Strauss-Kahn said advanced economies are facing challenges of high unemployment and burden of debt, and capital inflows pose risks for emerging economies. He called on every country to cope with these challenge in a cooperative and coordinative way. Strauss-Kahn said IMF will focus on reform in the global financial sector and reform on quotas and other governance in itself. ---Paul A. Ebeling, Jnr. www.livetradingnews.com
G-20 on different economic stimulus exit strategies
The G-20 finance ministers and central bank governors on Friday called for different policies for different countries concerning on exit strategies from stimulus measures as recovery has taken different speeds in the various countries and regions. "In economies where growth is still highly dependent on policy support and consistent with sustainable public finances, it should be maintained until the recovery is firmly driven by the private sector and becomes more entrenched," the officials said in a report issued after their meeting on the sideline of the World Bank/International Monetary Fund (IMF) Spring meetings in Washington, D.C. Noting that some countries are already exiting, the report said: "We should all elaborate credible exit strategies from extraordinary macroeconomic and financial support measures that are tailored to individual country circumstances while taking into account any spillovers." The report said the global recovery has progressed better than previously anticipated largely due to the G-20's unprecedented and concerted policy effort. However, it said the recovery is proceeding at different speeds within and across regions and unemployment is still high in many economies. "We recognize that in such circumstances different policy responses are required," the communiquĂŠ said. The ministers and central bank governors stressed the need for G-20 countries to pursue well coordinated economic policies that are consistent with sound public finances; price stability; stable efficient and resilient finance systems; employment creation; and poverty reduction. "Countries who have the capacity should expand domestic sources of growth. This would help cushion a decline in demand from countries that should boost savings and reduce fiscal deficit," the communiquĂŠ said. Created in Y 1999 in response to the finance crisis of the late 1990s, the G-20 is aimed at bringing together systematically important industrialized and developing economies to discuss key issues in the global economy. ---Paul A. Ebeling, Jnr. www.livetradingnews.com
G-20 Nations Disagree over IMF bank taxes 18
The World’s leading economies Friday disagreed on contentious plans to tax banks to fund future financial rescues. The proposal for a levy on banks’ balance sheets and profits was high on the agenda of the G-20 nations after recommendations in a feasibility report by the International Monetary Fund, released earlier this week. But after strong objections led by Canada, which regards the proposals as Misguided and an Affront to its sovereignty, Friday’s G-20 meeting merely asked for more study. The G-20 release said: “We call on the IMF for further work on options to ensure domestic financial institutions bear the burden of any extraordinary government interventions where they occur, address their excessive risk taking and help promote a level playing field, taking into consideration individual country’s circumstances”. The G-20 referenced another dispute, i.e., the need for tougher capital standards as a shock absorber to protect banks against future disruption. “Reform is multi-faceted but at its core must be stronger capital standards, complemented by clear incentives to mitigate excessive risk-taking practices,” the release said. Although the US, UK and continental European governments broadly agree on the need for a bank levy, such a levy is strongly opposed by Canada, whose banks remained healthy during the crisis and which is currently chairing the G-7 and hosting a G-20 summit in June. Japan is also not aboard. Ottawa has maintained that opposition through this week’s meetings. The IMF’s ministerial steering committee meets on Sunday and is likely to follow the G-20 in postponing a decision. Jim Flaherty, Canada’s finance minister, reiterated his view that a tax would deplete banks of capital and make them more vulnerable to crises. “We are a sovereign country,” he said. “We can regulate our banks and our other financial institutions as we see fit”. ---Paul A. Ebeling, Jnr. www.livetradingnews.com
Thai Premier to retake Red Shirt protest site Thailand Prime Minister Abhisit Vejjajiva warned opposition "Red Shirt" protesters that armed forces will retake the central Bangkok encampment occupied by the anti-government movement, by force if necessary Sunday in a television address made with the Army Chief, though he did not say just when. The "Red Shirts" encampment has for 3 weeks occupied the Ratchaprasong intersection in the heart of Bangkok's retail district. The protesters now fear a crackdown is looming. "There will be a retaking of Ratchaprasong but the process, the measures, how and when it will be done we cannot disclose because it depends on several things," Abhisit said. "We are not going to say that we will take it tomorrow at 7:00 am." Army chief General Anupong Paojinda appeared alongside the premier in gesture of unity, after Anupong earlier this week indicated he was extremely reluctant to launch a crackdown. "We are an army for the nation, for the monarchy and for the people. We will do our job without taking sides. We will follow government policy," Anupong said. He also addressed rumors of rifts in the army, which has been sending out mixed signals on how it 19
intends to handle the demonstrators, after April 10 clashes that left 25 dead and more than 800 injured. "As for a rift in the army, it is possible there will be rifts in a big organization but the number of people who have different ideas are not many and this will not cause problems," he said. General Anupong admitted that some serving troops fought alongside the Red Shirts in the April 10 clashes. "We have information that a group of armed people has been set up. Some of them are in the Army but have no (senior) position, the rest are not, but may be retired or former members," he said. Abhisit emphasized that the action against the protesters was only part of a crisis that must be resolved in its entirety, saying there was no point quelling a flash point in one area only to have another emerge elsewhere. "The main point now is not just on dispersing or not dispersing, the main point now is to solve all the problems," he said. "The focus is not just on returning Ratchaprasong to normalcy, but on solving the problem for the whole country." The highly anticipated address, which came after Abhisit Saturday, rejected a compromise offer from the Reds, who had softened their demands for snap elections. His TV address went blank for several minutes at one point."Someone has interrupted the satellite signal," government minister Sathit Wongnongtoey told reporters. Abhisit downplayed the Reds' offer to call off their protest movement if parliament is dissolved in 30 days, saying that would not end the crisis. "The point is not the number of (days until a ballot). We should think about reconciliation," he said, adding that the
priority was for eventual elections to be peaceful, free and fair. ---Paul A. Ebeling, Jnr. www.livetradingnews.com
BRIC: Russian Gas exports increase 120% in Q-1 Russia's Natural Gas exports in Q-1 of this year reached 52.1 billion cubic meters, a 120% increase year-on-year, the Energy Ministry said Friday. Russia exported 15.15 billion cubic meters of Natural Gas in March, a 110% growth over last March. Hit by the economic crisis, Russia's Natural Gas exports dropped 13.5% to 15 billion cubic meters in Y 2009, with export income falling 41% to US$9.4B. Russia's Crude Oil exports declined 0.9% in the Q-1 this year to 59.9 million tonnes, the ministry said. ---Paul A. Ebeling, Jnr www.livetradingnews.com
At the Movies with The Hollywood Reporter (THR)
'Dragon' reclaims # 1 Spot 'Back-Up Plan' comes in at # 2; newcomer 'Losers' is # 4
Cue the fire-breathing motion picture. DreamWorks Animation's 3D adventure "How to Train Your Dragon" has yet to flame out in movie theaters, offering an upbeat storyline to an otherwise ho-hum box-office session. The Paramount-distributed pic topped domestic rankings with an estimated $15 million in its fifth weekend for $178 million in cumulative coin. Two wide-openers offered slight competition, as CBS Films' Jennifer Lopez starrer "The Back-Up Plan" proved a mere runner-up, and Warner Bros.' action pic "The Losers" lost by more than expected. "Plan" -- about a couple who meet after the woman's artificial insemination -- procreated $12.3 million in second place; "Losers," based on a comics series about a fictional World War II fighting force, fired blanks with $9.6 million in fourth. Disneynature's "Oceans" hauled in $6 million from a modestly wide launch in 1,206 locations. That was good for eighth place on the frame, with the documentary toting an $8.5 million cume since unspooling Thursday on Earth Day. Fox's leggy comedy "Date Night" rung up $10.6 million to grab the weekend's bronze medal position and shape a $63.5 million cume through three frames. Lionsgate's action comedy "Kick-Ass" fell 52% in its sophomore session to fetch $9.5 million in fifth place with a $34.9 million cume, while Sony Screen Gems' comedy "Death at a Funeral" dropped 51% to $8 million in seventh with a 10-day cume of $28.4 million. Industry wide, the limp $95 million weekend marked a 12% downtick from the same frame a year earlier. Among notable expansions, Sony Pictures Classics' Argentine crime thriller "The Secret in Their Eyes" added 23 locations for a total 33 to gross $372,214, or an impressive $11,279 per site. Cume for Oscar's best foreign-language pic climbed to $605,022. Anchor Bay's dramedy "City Island" added 20 theaters for a total 77 and grossed $285,000, or a sturdy $3,701 per venue. Cume for the Andy Garcia starrer hit $1.2 million. Apparition added eight play dates for a total 18 for dramatic thriller "The Square" and grossed $41,133. That represented a thin $2,285 per engagement, as cume reached $117,116. DreamWorks Animation marketing boss Anne Globe said "Dragon" has been bolstered in the marketplace by positive word of mouth following favorable critical reaction as well as the continuing strength of its 3D venues, which contributed 67% of its weekend box-office. "We're seeing the audience broaden somewhat, with teen girls checking it out," Globe added. "But for the most part, it's been families with kids. Imax specialty venues -- whose 3D up charges make for the priciest "Dragon" tickets -- contributed more than 11% of the pic's weekend haul. Directed by TV helmer Alan Poul ("Big Love"), "Plan" co-stars Alex O'Loughlin ("White Out"). The PG-13 pic drew opening audiences skewing 71% female, with 57% of patrons aged 30 or older. "The opening was exactly where expectations were," CBS Films distribution topper Steven Friedlander said. "The picture is going to be profitable." Produced for a cost in the "mid-30s," "Plan" should hold up well in the marketplace, like most romantic comedies,
Friedlander said. Directed by Sylvain White ("Stomp the Yard"), "Losers" boasts an ensemble cast featuring Idris Elba, Jeffrey Dean Morgan ("Taking Woodstock"), Chris Evans, Jason Patric and Zoe Saldana. Co-produced by DC Entertainment's Weed Road label and Joel Silver's Dark Castle for an estimated $32 million, the PG-13 movie attracted audiences comprised 60% of males, with 65% of patrons aged 25 or older. Warnerâ€™s exec vp distribution Jeff Goldstein said patrons reacted positively to the pic in exit surveys, boding well for playability despite the soft opening. "We think we'll get people in over the next couple of weeks and should be fine," Goldstein said. "It should have a good life in home video, too." "Oceans" is the second film released from Disneynature. The pic played 58% female, with 47% of support coming from family moviegoers. "Our little documentary did fine," Disney distribution boss Chuck Viane said. Disney pledged to use a portion of first-week "Oceans" coin to help safeguard portions of the Bahamas' marine protected area. Based on four days of receipts, those efforts will support the oceanic equivalent of more than 30 Disneyland theme parks, the studio said. Looking ahead, two wide-openers are set for the final spring box-office session. Summit Entertainment will bow the family comedy "Furry Vengeance" on Friday, while Warnerâ€™s debuts its remake of "A Nightmare on Elm Street."
Current US Stock Market Sentiment + Bulls vs. Bears MARKET SENTIMENT Are you watching the VIX? The VIX found support at the support line that it hit in Y 2008, and held that level. This a level that has, in the past, shown market pullbacks or corrections, but nothing major. There could a consolidation in here after this 8 week run to new highs on the indices. Remember the VIX gives us idea what up, but does not cause market action. 1. VIX: 16.62; +0.15 2. VXN: 16.6; -0.23 3. VXO: 15.54; +0.09 4. Put/Call Ratio (CBOE): 0.71; -0.05 NB: Are you watching the VIX? It always tells us when we are moving back to a more rational market. *The Market Volatility Index (VIX) measures the volatility of the market. A recent news story described it as "the options market's gauge of investor fear." Traders use VIX as a general inverse indicator of market 22
volatility and sentiment. High numbers mean that there's excess bearishness, and low numbers indicate excess bullishness. The VIX is updated intra-day by the Chicago Board Options Exchange (CBOE), using Standard & Poorâ€™s 500 Index (SPX) bid/ask quotes. It was created in 1993. **The CBOE NAS Volatility Index (VXN) employs the same formula used to calculate US$VIX, which is based on the implied volatility of S&P 500 index options. This formula is derived from a basket of put and call options. Some are out of the money, some in the money, and some at the money. The resulting US$VXN represents the implied volatility of a hypothetical 30-day option that is at the money. ***The VXO is the ticker created to track the "original VIX" that was calculated using the prices of S&P 100 options. The new VIX uses the ticker US$VIX and is calculated using the prices of S&P 500 options. The fundamental nature of the VXO is the same as the VIX, but it is less robust and not as simple as the VIX. Bulls vs. Bears This is a reading of the number of Bullish investment advisors vs. Bearish advisors. This indicator gives us a look at Bullish investors too bullish then everyone is in, and a Top is shaping up and visa-a-versa. Bulls are at 53.3%, and are charging they are up from 51.1%. Even with this move in the market the Bulls are off the 60% to 65% considered Bearish. There are now more Bulls than in February, and they are not running away with the market, so the market continues to rally in here. For your reference The Bulls are over the 35% level that is the Key level for a Bullish climate. Bears are at 17.4%, a steep decline in Bear sightings, and down from 18.9% last week, they are off the 27.8% level on the high of this leg in February and heading toward the 15% level that is Bearish for the market. Over 35% is considered bullish for the market at the lower end of the scale. So, it looks like the Bears are heading back toward to the lows of the leg where it held for several weeks; the 16 level. For you reference a break through the 35% threshold is considered Bullish, and the Bears hit a high on this run of 47.2%. Bearishness hit a 5 yr high at 54.4% the last week of October 2008.
What to expect this week and down the lineâ€Ś There are a lot of heavyweight earnings out the week, along with some big economic stories too, including interest rates, initial jobless claims, and whether the manufacturing reports from the various regions continue to improve. On Friday he market broke to a new rally high. Often when there is a run into a Friday close the action reverses on Monday. No worries, just opportunity in here. A healthy market shows rotation as money moves from one area to another. Watch were the money is going and follow it. The liquidity is on and this week could be Key, a time when the market could give back some gains as it looks to see if the Fed will start to raise interest rates, and that can mean suspense, as it will have a lot to do with US interest rates and the money supply. 23
Nothing has changes from my POV. The market looks overbought in here, but continues to run North. and it always runs further than most forks think it will, and when they turn they turn fast. Last week you witnessed that kind of action. The sellers jumped in and the buyers jumped in too. That will not always happen, and the Bears will take over for a time. So as long as the Bulls are charging and the Bears are hiding play it, but always be ready for it will stop and reverse. That means have protection and play a bit for the Southside action, when it happens it happens fast. So, if there is a reversal, it can happen very quickly and you will want to get in and make some fast gainers and get out if it does. When we are in a Bull Market the Trend is you Friend that means always look for plays that can make you money on the Northside moves the upside on the turn off of a correction low. From my POV I am looking North, but ready to be nimble. The Rule always take what the market gives. Have a great week! All the best,
PS Savvy market observers say, "play the wrong side of an Obama Administration initiative (Jobs and Mortgages now) and you are likely to lose."
Gold and Crude Oil Focus Report (Weekend Up-date) w/Technical Outlooks Gold dipped, halting a 2day rally, as the Euro sank to a new 11 month low against the USD. However, the recovery after sliding to as low as 1132 signaled the precious Yellow metal's underlying strength. In fact, while the market has only focused on Greece's deficit issue, such problem has also rooted in other countries including the US, Japan and the UK. If worries intensify and spread to these countries, I do believe Gold will likely benefit. Crude Oil initially slumped as global stock market sank on the revision of Greece's debt deficits. Together with disappointing inventory report released last Wednesday, the front-month WTI contract sank to as low as 81.73. However, buying interests came in at that level as the price reversed, and Crude Oil ended the day flat at 83.7. Strong rebound in equities and attack of Iraqi Oil pipeline also supported Crude Oil. Specifically to the Crude Oil market, damage of an oil pipeline from Iraq to Turkey disrupted supply which will take around 3 days to resume. The Overall Technicals for Gold Gold's recovery from 1124.3 continued last week, and reached 1157.9. A further rise will likely come initially this week. But, since the recovery from 1124.3 is looking corrective in nature, I expect the upside to be limited by 1170.7 resistance level, and bring one more dip to continue the whole consolidation. A move below 1135.2, the minor support, will turn the intra-day bias back to the Southside for 61.8% retracement if 1084.8 to 1170.7 at 1117.6 and below The Big Picture: the lack of impulsive structure in the rise from 1044.5 suggests that it is the 2nd leg of the whole consolidation pattern that started at 1227.5. Right now, there is no confirmation that rise from 1044.5 is completed, and another rise might come on. However, even in that case, strong resistance
should be seen above 100% projection of 1044.5 to 1145.8 from 1084.8 at 1186 to complete the rise and bring the another fall to retest 1044.5 before consolidation from 1227.5 completes. Meanwhile, a break of 1084.8, a Key support level, will indicate that the 3rd falling leg has likely started, and will then target a new low below 1044 before completing the consolidations from 1227.5. The Long Term Picture: the rise from 681 is treated as resumption of the long term up-trend from 1999 low of 253 after a interim consolidation from 1033.9 has completed in form of an expanding triangle. The next long term target is 100% projection of 253 to 1033.9 from 681 at 1462 level. So, I will hold the Bullish POV as long as 931.3 structural support holds. The Overall Technicals on Crude Oil Crude Oil's rebound from 80.53 resumed towards the end of the session on Friday after a initial setback and closed strong at 85.12. A further rise is now expected to retest the 87.09 high, a sustained break there is needed to confirm the rallyâ€™s resumption. Otherwise, another fall will happen before the consolidation from 87.09 concludes. On the Downside: a break below 81.73, the minor support, will turn the intra-day bias back to the Southside for a 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8% retracement at 76.22. The Big Picture: the medium term rise from 33.20 is viewed as a correction to the overall correction that started in Y 2008 at 147.27. My preferred POV is that the rise from 33.2 is in form of a 3 wave structure (73.23, 65.05) and should be near to completion. Strong resistance is expected around 90 a Key level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring a reversal. Then, even though another rally cannot be ruled out in here, the upside potential will likely be limited. On the Downside: the break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. Should that be the case, I will turn Bearish on Crude Oil and expect the down-trend to target a new low below 33.2. The Long Term Picture: there is no change in the POV that the fall from 147.27 is part of the correction to the 5 wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong, and can continue, there is no solid evidence that suggest fall 147.27 is completed and I am preferring the case that rebound from 33.2 is a corrective rise only. Again, having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27. Stay tunedâ€ŚPaul A. Ebeling, Jnr. www.livetradingnews.com
FOREX Currency Trading This Weekâ€™s Technical Analysis for the EUR/USD EURUSD: Broader Weakness Yet To Be Over EURUSD: While the pair retains its overall medium term Bearishness and looks to weakness further, we are however suspicious of a hammer candle formation following its Friday sharp recovery. Having said that, a follow through higher is needed to confirm the Hammer pattern. If that does occur, I will expect some price recovery targeting the 1.3415 level, its April 19, 2010 low and then the 1.3537 level, its April 5, 2010 high. A violation of the latter will open the door for more recovery towards its April 12, 2010 high at 1.3691 with a cut through there resuming its recovery
started from the 1.3200 level towards the 1.3816 level, its March 2010 high., but a move below the 1.3200 level will resume its broader weakness towards its Key support level at 1.3000 or even lower towards its April 19, 2009 low.
Disclaimer This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report.
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Small Cap Stocks to Watch this Week Archer Entertainment Media Corporation (AEMC) Archer Entertainment co-presented the Miss Thailand World Pageant in Bangkok, Thailand, in October, where it announced at a press conference it was outlining plans for construction of a US$250 million USD state-of-the-art film studio-theme park 30 minutes from Bangkok, with hotels, restaurants and its own airstrip. Archer is building a strong brand emanating from Asia to Worldwide. Beginning as a builder of digital cinemas converted from analog, in china, it is emerging as an internet-focused entertainmentmedia hub, with the unusual addition of its own production and distribution activities. Several Asian and European film funds are being raised, aimed at a total of USUS$500M to begin filming its slate. Archer cosponsored the 1st Worldwide Comedy Film Festival, in Phuket, Thailand, this past June. The company has 9 feature films in development, as well as a number of TV series, to be cast with American, Canadian, British, Australian and Asian stars and other support actors, international directors, and below-the-line staff. It is introducing getonline.com, a global database of actors, writers, directors, designers, and other personnel, initially from Asia, introducing thousands of new talent to the worldwide employment market. Preparations are well advanced for a large-budget motion picture, “Kings of the Seas,” a high-adventure comedy- drama about the 16th century meeting of East and West in the China Seas, to star actors like Hugh Jackman and Jet Li, The global entertainment market is set to explode with the growing wealth of countries like China and India, whose own films and television projects are becoming more international, if not westernized. The success of recent Chinese films, like “Crouching Tiger,” “Hero,” and others, and the huge recent hit from Danny Boyle set in Mumbai, India, “Slum Dog Millionaire,” presage success for Archer Entertainment Worldwide. www.archeremc.com Trading at US$0.23/shr. -.08 Support .18. Resistance .24 The 50 Day EMA is .29 Technicals are overall Neutral. There is an Inverted Hammer on April 22, and one Gap open up on April 23 at .12/.22. The recent Candle Stick analysis is Very Bullish Latest News and Opinion: N/A Hythiam, Inc. (HYTM) This Company is doing good work and closing in on the answer to addiction of drugs and alcohol through its patented Prometa® therapy, a protocol that is designed to reset dysfunctional receptors in the brain to a pre-substance abuse state while integrating medical, behavioral, and nutritional components. Hythiam has 21 patents issued or allowed and 95 applications pending. Q-1 Y 2008 revenues grew to USUS$11.3 million, with 60% increase in contributions from anti-addiction services. Hythiam recently signed an Agreement with Ford Motor Corp. to offer its services to Ford’s employees worldwide. Hythiam provides comprehensive behavioral health management services to health plans, employers, and criminal justice and government agencies. In May 2008, Hythiam announced reimbursement agreement with CIGNA HealthCare for Prometa based treatment program. Its CATASYS™ Integrated Substance Dependence Solution is the only program of its kind dedicated exclusively to chemical dependence. The company also researches, develops, licenses and commercializes innovative and proprietary physiological, nutritional, and behavioral treatment programs. This market represents 180 million lives, and over 22 million Americans suffer from dependence on illicit drugs or alcohol, with only 18% seeking treatment. Direct medical costs in the US are over USUS$42B. Cocaine/stimulant addiction therapy is a multi-billion dollar market opportunity that was previously without effective treatment. www.hythiam.com Currently trading at .27 +.04 on the week. Support .24 Resistance .28. The 50-Day EMA is .28. There is Bearish Doji Star on April 21, Technicals are overall Neutral. The recent Candle Stick analysis is Very Bearish
Latest News and Opinion: Hythiam Inc. Financial http://finance.yahoo.com/q/is?s=hytm.ob Form 8-K for HYTHIAM INC http//biz.yahoo.com/e/100329/hytm.ob8-k.html PSYS Up 21%; Confirms Offers http//blogs.barrons.com/stockstowatchtoday/2010/03/10/psys-halted-after-18-jump-bain-takeout/? mod=yahoobarrons Hythiam Announces Peer-Reviewed Publication of Randomized, Double-Blind, Placebo-Controlled Study Study of the Medical Component of PROMETA ® Treatment Program Demonstrated Statistically Significant Result on Cravings of Methamphetamine Dependent Subjects
http//finance.yahoo.com/news/Hythiam-Announces-bw-2983188793.html?x=0&.v=1 Neah Power Systems, Inc. (NPWZ) NEAH has developed and successfully tested a patented, siliconbased, micro fuel cell, which recently passed 2000 hours of continuous energy production. The Company claims it will eventually replace batteries. It recently successfully completed a second round of tests for U.S. Navy Office of Naval Research, which has invested US$3 million into the Company, which expects to offer its products to the entire range of the US and global military. The self-contained fuel cell also has a large market in police, and fire departments, and other first responders, including ambulance, paramedic and emergency room personnel, as well as power solutions for notebook PCs PDAs, mobile phones, camcorders, digital cameras and other portable electronic devices. NEAH’s fuel cell fits within a notebook PC’s internal battery cavity instead of outside the computer, and uses methanol, a renewable resource, which delivers continuous untethered power. NEAH recently received a cash infusion from Agile Opportunity Fund, and also acquired SolCool One, LLC, and a leader in the solar air conditioning industry. NEAH recently announced a joint venture with Hobie Cat boats to develop a fuel cell propelled craft, and also revealed another with EKO Vehicles of Bangalore, India, to develop a fuel cell charger for their line of motorcycles and scooters sold around the world. http//www.neahpower.com The iHubbers are also talking about Neah. Currently trading at .23 - .02 Support .17. Resistance .25 The 50 Day EMA is .35. Technicals overall are Bearish The recent Candle Stick analysis is Bearish Latest News and Opinion: Neah CEO to Present at SEMI Silicon Valley Lunch Forum on April 21, 2010 http://finance.yahoo.com/news/Neah-CEO-to-Present-at-SEMI-pz-159271490.html?x=0&.v=1 Form 8-K for NEAH POWER SYSTEMS, INC. http//biz.yahoo.com/e/100409/npwz.ob8-k.html Zacks Investment Research Rates Neah Power Systems as Outperform, Sees $1.75 Price Target Over Next 12 Months
TOMI Environmental Solutions, Inc. (TOMZ). “TOMI” is an infectious disease control company, which uses one of the most powerful disinfectants known to man ozone. The Ministry of Health, in Thailand, has invited TOMI to demonstrate its prowess in eliminating pathogens in a military hospital, similar to its success in September, in a Baltimore hospital operating room, in which it killed 99.999% of all viruses, bacteria, mold spores, and pathogens. TOMI’s technology can be used against all forms of pathogens, including Swine Flu. Hospitals can be a significant hazard to sick people, and TOMI may come to be the only answer to a real problem in healthcare. TOMI remediated a high school in Brooklyn, NY after a flu outbreak, and outperformed any other known treatment method, killing 99.999 percent of all bacteria, viruses, and mold spores, using TOMI’s Ultraviolet Ozone Generators. The EPA reports that indoor air pollution is in the top five risks to public health. The American Medical Association (AMA) says that indoor levels of pollutants are between 25 and 200 times higher than outdoors. TOMI-ES has an exclusive distribution agreement with Advanced Disinfection Technologies, LLC to market their MRA Technology to over 300 Hospitals with its alliance partners. Magnetic Resolution Activation (MRA™) is a revolutionary breakthrough disinfection process that effectively kill microorganisms, is not harmful to people or animals, is non-allergic, inexpensive and convenient to use. 2.4 million people each year require additional hospital care. Hospital-acquired infections (HAIs) account for more than 120,000 deaths annually in the US. ADTec's research and development company and TOMI’s complete air remediation for all forms of disinfection for many industries, solves this problem with the ability to kill 99.99% of harmful bacteria, viruses and spores in a hospital room in 15 minutes at a very economic price. Unlike harmful chemicals, the Reactive Oxygen Species fog (ROS) does no damage to any known material. www.tomiesinc.com Currently trading at .50 -.45 Support .NIL Resistance .68 The 50-Day EMA is 90. The overall technical indicators are Bearish. The recent Candle Stick analysis is Very Bullish Latest News and Opinion: TOMI Environmental Solutions Announces CEO Interview http://finance.yahoo.com/news/TOMI-Environmental-Solutions-iw-2760833986.html?x=0&.v=1 TOMI Environmental Solutions Demonstrates New Technology to Industry Experts http//finance.yahoo.com/news/TOMI-Environmental-Solutions-pz-2952286412.html?x=0&.v=1 TOMI Environmental Solutions Offers 100% Financing to Its Customers http//finance.yahoo.com/news/TOMI-Environmental-Solutions-pz-1216684858.html?x=0&.v=1 TOMI Environmental Solutions Helps Reduce a 32 Billion Dollar Healthcare Issue http//finance.yahoo.com/news/TOMI-Environmental-Solutions-pz-1955419846.html?x=0&.v=1
On The Watch List “On the Watch List” contains potential investment opportunities for suitable small, mini and micro cap portfolios.
___________________________________________________________ Red’s Rules to Always Play by… Do what they do on Wall St. and not what they say; that means tune out the “Noise”. Some folks like to buy stocks because they are upgraded, or sell stocks because they are downgraded; that’s the wrong approach. Learn how to evaluate stocks for yourself. It is not a difficult process; the steps are 1) check the volume for a buying or selling patterns, 2) recognize support and resistance levels and utilizing key charting patterns. I use www.stockta.com for my data. Knowledge is Power (and Money) Over my 30+ yrs playing the stock market in earnest, I have learned that there are winning stocks that most traders and investors completely ignore and abhor. And when played right, these overly unappreciated issues often lead to huge gains, but it is all about timing. There is no mystery here; you all know and/or have heard about “penny stocks” i.e. those that trade under USUS$5.00/shr on US markets (10’s of thousands of stocks trade on other world markets under USUS$5.00/shr and are not referred to in the same pejorative manner). This is just a label (designed to diminish their value and keep you away, IMO). The fact is that there are many, many studies made over the years that prove that these stocks outperform the overall market, and when there is a steady new Bull Market, the little stocks (small caps, micro and mini caps) lead the Charge. As a class, they are the most undiscovered and underappreciated sector of stocks and the sector where the biggest chance ends up big winners on a consistent basis. I call them Little Gems; they are indeed Wall Street's buried treasure for those who wish to go treasure hunting. Here, in the RedRoadmaster, I work to uncover solid, moneymaking companies whose shares are grossly undervalued and virtually undiscovered, and they sell for USUS$5 or less a share. And do not forget to always include some small, mini and micro cap (pennies and juniors) sues in your sights; they can give you explosive percentage returns like no others. Savvy traders do not wait for the stock market to hit bottom, recover or get toppy; they do not double down or resort to tricky, desperation moves. They make simple moves on good data and bank some gains. Do not think get rich - think get rich slowly; it works. Even if you know absolutely nothing about how to start making a living in the stock market, and want to learn how to do it, the first step is to learn from someone who knows how to do it successfully. The stock market is about success, and the lifestyle that comes with it, but it must be done carefully, both by picking the issues and in the trading of them, because one wants to make money doing it independently and without stress. You can’t reverse your “bad plays”. Breathe through your nose, count to 10 and move ahead. Go forward, and only focus on what the opportunities are in front of you to win in the stock market game. You do not live in the scrapbook, and always take what the market gives. A journey of a thousand miles begins with the first step (Confucius); Download and read and study “Knowledge is Power,” my e-Book, its Free.
Always remember that we look at the risk first and decide how to manage it before ever entering a position. Yes, losses will be incurred; it is part of this and any business, and not a bad thing if they are controlled. Again, think “get rich steady" and not "get rich quick" and think Education! The Bull is charging, and this perhaps this the best investing scenario since the early 80's. It is happening now and savvy traders and investors are positioned and in the action. Remember to always be nimble and take what the market gives. Have a great week, and stay tuned. All the best as the leaves turn…
Red PS Some of you know that I am the founder and non-Executive Chairman of Archer Entertainment Media Communications, Inc., www.archeremc.com, also that I am the Co-Founder of www.livetradingnews.com also check out www.paulebeling.com and follow me on Google News Paul Ebeling. Check it out please, let me know your thoughts. Please reply to Redroadmaster@aol.com Disclaimer The foregoing is commentary for informational purposes only. It is designed to help the reader learn the fine art of technical analysis. Links are provided to articles and stories referenced in this Report. Some statements and expressions are the points of view and/or opinions of Red Roadmaster™, aka Paul A. Ebeling, Jr. and the contributors. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. I am not licensed or registered in the securities industry. 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Paul Ebeling on American Express Company (AXP), Caterpillar, Inc. (CAT), The Home Depot Inc. (HD), KB Homes (KBH), and Xerox Corp. (XRX).
Published on Apr 26, 2010
Paul Ebeling on American Express Company (AXP), Caterpillar, Inc. (CAT), The Home Depot Inc. (HD), KB Homes (KBH), and Xerox Corp. (XRX).