1. Good day everyone and welcome to the video newsletter for Friday June 7, 2013. There’s lot’s to get to so let’s start with the fundamentals. 2. The Nikkei was up last night, one of the first positive closing for the index in a very long time. The U.S. stock market has been following the Nikkei during the last several trading sessions and continues to do so with great accuracy. 3. Yesterday investors were speculating that this morning’s unemployment numbers were going to be in line with the economy and the market rallied towards the closing bell. This morning the report beat expectations after the government reported that employers added 175,000 jobs last month, slightly more than expected. More people also started looking for work. Today’s rally in the stock market shows that Investors still expect the Federal Reserve to continue its stimulus.
4. Looking at market internals on average 2 stocks rose for each declining stock during today’s trading session. I mentioned a few days ago when markets were dropping hard that the internals are still very much bullish and what looks like a major correction is just a hiccup or beginning of a consolidation period. I do not believe that this market is going much lower. The reaction from hitting the 1598 support level was a strong jump and we will see if this is a dead cat bounce or a meaningful leg back up to take out the high price. 5. Looking at the intraday view of the stock market you can see the index is up a few points above the expected resistance area. I’m planning on selling the Spider ticker symbol spy if in fact the stock market breaks the resistance level to the downside. I believe the market is going to come back down as I previously thought and continue a trading range with a upwards bias. I sent out an intraday sell signal on the spy to alert everyone that we were approaching the resistance level. I would wait till we trade once again below just to confirm. I wouldn’t be surprised if we started Monday a bit higher and dropped back below the resistance level once again. 6. Looking at the daily chart view of the index you can see how the upper daily price high hits the down sloping resistance area. I anticipate this to continue unless some unforeseeable news comes out. While the market makes traders feel very emotional when there’s a 200 point rally moving upwards, you have to consider the big picture and the fact that the stock market only trends about 25 percent on average. These 200 point rallies are not everyday occurrences and I think we will correct on Monday. 7. One market that looks ready for another decline is the gold market. The futures market broke the low today and stocks are following in the futures footsteps. Beginning of next week I will outline some more gold relative strength setups so we can once again sell the weakest position and buy the strongest position in the sector. Stay tuned for that next week. I may also do the same for the housing market as many of our readers have been asking about that as well. 8. Looking at our existing positions, MGA is doing terrific; the stock hit a new high price. There was finally some institutional buying coming into the market today. I’m going to hold this position till about $70.00 and hopefully will get there within the next few trading days. 9. The other position we are holding is Pfizer pharmaceuticals ticker symbol PFE. The stock rallied very little in light of the fact the market rallied 200 points. I still holding the position short and encourage you to do the same. We should start seeing some fund selling if the position doesn’t rally within the next few days. My profit target is $27.00 and we were almost there a few days ago. We have to be patient with profits and this is what we are doing. 10. There are no set ups today, so enjoy your weekend and get lots of rest. Next week is going be very volatile, I suggest you watch the resistance level on an intraday chart for possible day trading opportunities once we break below the resistance level again. Have a great weekend everyone and I will update you late Sunday or early Monday.
Published on Jun 20, 2013
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