Intraday Digest: Crude Oil Offering Another Buying Opportunity

Crude Oil has been selling off today after hitting $50 per barrel at 09:00 AM EST, selling force has been very strong that pulled the Crude down to $44/barrel level, I think it is another buying opportunity right now. OPEC's production cut usually don't receive much impact, its just pure market speculation.

Intraday Digest: Uncertainty Pressuring US Equity Market

Intraday Digest S&P Futures (CME, ES)

Investors have been waiting for news today, but there is not much signal sent out. Uncertainty toward Fed interest rate decision coming out tomorrow, as well as the uncertainty toward automaker bailout plan have been puressuring the market. E-Mini S&P Futures have dropped more than 3% to 858 level at 15:15PM EST. We will see if the 50% Fibbonacci level will give some support. But I do not think it will go much lower given that we are most likely to get some interest rate cut tomorrow.

Weekly Wrap: Euro Strengthen Against Dollar, Challenging $1.35 Next Week

Weekly Wrap Euro (FX: EURUSD CME: EC)

Euro Rallied more than 5.4% against US Dollar last week as demand for dollar as "safe haven" reduced, US government showed strong signal that they will do whatever they can to stablize the economy. At the same time, traders expected Fed is likely to continue lowering target rate while ECB signaled they might not lowered the rate below 2%.

The Euro currency is approching $1.35 next week, and I expect it will be facing heavy resistence.

Weekly Wrap: All Eyes On US Banks, Next Week Is Key.

Weekly Citigroup (C), Bank Of America (BAC), JP Morgan Chase (JPM), Wells Fargo(WFC)

12-13-2008, Another volatile week recorded on tape, banks are still the focus. Dow Jons Bank Index tried rallying on Monday but faced heavy resistence at 250 area, next week will be important if Bank Index break above 250, investors will be more confident.

We also pull out individual bank leaders such as Citigroup, Bank of America, JP Morgan Chase, and Wells Fargo.

Every one of them tried to rally on Monday, JPM and WFC made it above the resistence line, while C and BAC did not, they all turned lower as pressure built up from the anxiety toward auto bail out plan. If we can have Citi stay above $10, Bank of America stay above $20, JP Morgan stay above $35, and Wells Fargo stay above $30 by next a couple weeks, then I'd say we are good, for now. I won't be surprise to see them test their November low again tho.

Story: Madoff Arrested for $50 Billion Scandal

Story Bernard Madoff $50 Billion Fraud

Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC, was recently arrested for investigation by FBI, when facing law enforcement, Madoff admit that " there is no innocent explanation".

Basically, he ran a hedge fund and paid earlier investors with the money from later investors, the snow ball kept running until it accounts for well over $50 Billion right now.

Intraday Digest: S&P Futures Rallied As Treasury Considering TARP to Aid Automakers

Intraday Digest: 12-12-2008 S&P Futures (ES, CME)

S&P Futures tumbled yesterday to more than 5% as senate rejected bailout plan for automaker, this morning, we had Retail sales came out at -1.8% vs. -2.0% consenses, that was better than estimated, and the US consumer confidence unexpectedly raised from 28 mo low as gasoling price concern eased, furthermore, the good news came from the Treasury Department that they are considering using TARP to rescue automakers that stimulated the entire morning rally of the US equity market. However, there are still minor resistence ahead, one at around 884 area, and the other is the upper resistence trend line, I do expect the market to be able to sustain today's rally and break above 900 by next week.

Intraday Digest: Crude Oil Retreated After Auto Bail Out Plan Failed.

Intraday Digest: 12-12-2008 Friday Crude Oil Futures (QM, NYMEX)

As Senate rejected the US Auto Bail Out Plan yesterday, crude oil tumbled more than 7% and found support at $44.00 area. I think it was abit of over-reaction, keep in mind that consumer used crude oil from auto vehicle only accounts for 6 or 7% of the total crude oil useage, industrial use accounts for some 76% or so, I expect rally coming from crude oil next week, recently crude oil futures has been in very volatile sessions, it is not unusual to see 5%+ movements in intraday session, but given the smaller dollar amount right now, 5% movement at $40/barrel = $2, while 3% movement at $140/barrel backed to July was $4.2! you get my point.

Intraday Digest: US Dollar Index hit support

Intraday Digest 2008-12-12 Friday U.S. Dollar Index (DX)

After opening sharply gapped down on the first trading day this week, the dollar index(DX) tried to fill the gap but failed, and then tumbled all the way down to its downward price channel support. If the dollar index is not going to fill the gap next week, I expect the recent strength of dollar will not sustain.

Intraday Digest: S&P Futures Tumbled After US Auto Bail Out Plan Failed

December 11th, 2008. Equity market failed to break out the 900 level this morning as investors concerned tomorrow's retail sales number, market quickly retreated and broke intraday 884 support, headed south to welcome the US auto bail out plan rejected in the Asia-Pacific session, S&P futures tumbled more than 4.5% pre-market. However, as all the negative news came out already, I expect 816 area to be relatively strong support.

S&P Might Extend Its Gain

Confirmed by the double leg daily chart pattern, the intraday chart of S&P futures is showing a developing upward channel, I expect it to hit the upper band by the end of this week, or early next week. Even though I'm pretty confident at this level, I will still turn to be cautious if the price dip below the red line.

Japanese Yen To Pare Its Earlier Gains

Japanese Yen to pare its earlier gains as US stock market rally, the chart parttern is showing a classic "head & shouder" pattern, it looks like the Yen is going to further decline to test its 0.9750 support again shortly.

S&P Formed Double Leg Pattern, Firmly Bottomed

After an volatile intraday struggling on October 16th 2008, S&P 500 index managed to bottomed firmly with 2 legs, standing firm this time, I expect some rally in the coming session, looking toward 1050 area.

30 Yr Bond's Down Side Momentum Eased

US 30 year Treasury Bonds's recent downside momentum seems eased after hitting the long term support at 114.00, might bounce back as demand for "safe haven" increases.

Wheat and Corn Futures To Accelerate Down Side Movement

Drag by the global demand slow down concern and the rising US Dollar, agricultural commodities have been going south and they are to accelerate as suggested by technical chart, I expect Wheat to head south until $505 level as momentum picking up, same story for Corn, its looking toward $360 area before support kicks in.

Euro To Free Fall Another 200 Point

Euro's intraday chart is breaking down its support, in a down trend price channel, Euro is looking south toward 1.3200 level.

Gold Getting Attention On Media

After the extremly volatile period during the last few weeks, Gold once again getting attention on media as safe haven play.
Technical chart of Gold is forming a widening range as you can see from the picture above, I think a good entry point to long gold is at $857. might hit the upper range soon.

Crude Oil To Accelerate Its Decline to $65

Rising US Dollar and global recession have been the main force driving the crude oil lower, I can't think of any thing right now that can save the crude oil movement, looking at the chart, we are seeing a clear down trend price channel, more over, its breaking down, crude inventory report is coming out tomorrow, unless it can suprise the up side, the chart is suggesting an acceleration of plunge until it hits $65 area where the main support will kick in.

Intel: "Told You My CPU Will Sell Like Hot Pan Cake."

Intel (NASDAQ: INTC) announcing 3Q EPS 35 cent, beating estimate. Aftermarket trading up 6%.

Along with others, Intel has been selling off from $24 in mid July all the way down to $14.28 last Friday. However, Money Flow indicating a possible bottom just like previous 2 bottoms. Fundamentally, Intel's competitor Advance Micro Device (NYSE: AMD) has not been come up with competitive product, that further ensure Intel's dominant market position. The upcoming Core i7 line also receiving much hype. I think above $17.5 will be a good entry point, and looking toward $20 level.

British Pound Showing Strength.

British Pound showed its strength yesterday over the Euro, chart suggest a possible extended rally toward 1.7650 Area.

Canadian Dollar Rallied Back To Downward Channel.

Canadian Dollar has been showing little strength and managed tl rallied back to its downward channel, I'm looking for a short opportunity at $0.8800 area.

Morgan Stanley Surged 82.85%, Leading Financial Sector.

Boosted by the $9 Billion capital injection from Mitsubishi UFJ, Morgan Stanley (NYSE: MS) surged more than 82% or $8.07 to $17.75. Along with Goldman Sache's 25% gain leading the entire Financial Sector to become the major force or today's stock market soar.

The chart is showing short term momentum, however, $24 area will show significant resistance, traders can still ride the momentum for a few quick bucks from now.

US Stock Market Soared, All 3 Index Up More Than11%

Stimulated by the European bailout plan announced over the weekend, US stock market soared more than 8% for each of the 3 major index, S&P 500 up more than 104 points or 11.58% to 1003, Dow Jones up more than 936 points, or 11.08% to 9387.61, Nasdaq Composite Index up more than 200 points, or 12.16% at 1844.25 . However, investors should be cautious at this level as S&P approaching its resistence level at 1000 area , Nasdaq Composite resistence at 1900 area, investors should start taking profit if you had bought on last Friday, or start taking smaller loss if you had bought during early last week or before.

Japanese Yen Breaking Down, Heading South

Hit by the European Bailout news, US equity markets soared more than 8% on the major 3 index, Japanese Yen as a risk averse investment alternative tumbled 100 point or as much as 1%, trading below 1.0000 against the greenback, technical pattern indicating a further tumble toward 0.9700 area before support kicks in.

Tyson Foods (TSN): " I Want Chinese People to Eat One More Chicken Per Year"

Tyson Foods (NYSE: TSN) Has been brought up recently as they are one of the few companies with good liquidity. John Tyson, Tyson Foods's Chairman indicated during an interview with Bloomberg that they have been selling some stocks and issuing debts to raise as much as $1.5 billion dollar in cash sitting in the bank and waiting for acquisition opportunity. China's market seem to be attractive in John's eyes as the huge 1.3 billion and growing population might consume more. Tyson Foods is in the defensive sector that usually will survive during economy downturn, frozen foods from Tyson have been selling well in the US market. However Tyson Foods's stock has been tumbling along with others, TSN felt for as much as 50% during 2008, I won't be aggressive to this stock yet until it goes above $14.

Euro Gap Up Sharply, But Don't Rush In.

Stimulated by the European Government's new agreement over the weekend that guarantees bank refinance and prevent banks from failure, Euro Gapped Up more than 200 point or as much as 1.50% on early Asia trading hour, however, traders should remain cautious as it is at the range on resistence and might very likely to pullback and filled the gap first within a few days.

Crude Oil Found Support At $77.5 Area

After tumbling for more than 9% on Friday's trading session, Crude Oil seemd to found its support at $77.5 area, that was the bottom trend line of its downward price channel. Fundamentally, we had European governments agreed to support their banks from going out of businesses, as well as OPEC's production cut announcement, that might boost certain demand for crude, but still, all eyes on the banks and US equity market, if we can see US stock market holds well in the coming week , crude is likely to get an oversold rally, might be testing the upper trend line at around $87 area.

Japanese Yen Retreated From Earlier Gain

Same thing as Gold, Japanese Yen futures retreated from earlier gain as US equity market rallied, It was traded up to 1.0288 and quickly retreated to 1.0025, down 0.73%. If US equity market can follow up today's rally, Yen is likely to test its 0.9750 support.

Gold Plunged $62.3 or 6.80% As US Stock Market Rallied.

Futures traders won't forget today, as I mentioned earlier, the only thing can stop gold rising is the US equity right now, and that is today. We had a late afternoon dip for the S&P futures yesterday that dropped another 2.5% that pushed gold futures up to $936, however, as the strong rally today for the US equity market, gold quickly felled below the $900 intraday support and just falling like a rock, it dipped to as low as $824.70, that's another $100 swing. Once again, all eyes on US equity market currently, if we can see a follow up next week, gold is likely to fall back to $800 area quickly.

What A Roller Coaster Day for US Stock Market!

What a day, what a swing on Friday October 10th, US stock market was freaking everybody out,

S&P 500 futures plunged 40 points to as low as 838.80 in 7 minutes right after the opening bell, that was triggered by panic selling, margin call liquidation and short sellings, remember we just opened for short selling after the 10 day ban? It then quickly come back and made a intraday high to as much as 920 at 10:08am EST, when every body thought it was the long waited monster rally and rushed in, the S&P slowly fell back as we can see from the intraday 1 min chart, it had made clear lower low and lower highs until it once again tested the 850 support at around 12:00 pm est, it tested the 850 support 5 times during the course of the trading day when the last batch of bulls got stopped out or lost their confidence, the short covering rally triggered at 3:00pm EST, short sellers panic, they covered shorts at all cost, and we have Goldman Sache came in and bought 7000 contracts in 3 mins, everybody rushed in and pushed S&P from 844 all the way to 940, that's 96 points or 11.37% rally in 30 mins! Even though the S&P still closed lower at 899.22, down 10.70 points, or 1.18%, the daily chart is a relief, I expect the S&P to come back to 1000 area within next week.

Recession That We Can See And Feel

No doubt we are in recession, I've been paying a little attention to the surrounding, I've been seeing more and more businesses closed down, more and more "For Lease" signs on the busy blvds, busy restraunts during dinner time no longer needed to wait in line for hours in order to get a seat, friends around me (including myself) are cutting their spendings, etc. Analysts on TV are saying its going to take some 700 to 1000 days for retail sector to recover, at the cost of 5000 to 10000 retail businesses inevitably closed down in the next few years. Bottom takes time and process, I'm not expecting a "V" shape recover either, just like last time when the internet bubble burst, it took a whole year for S&P 500 to go out of the bottom range.

How to invest in stock market during recession? Maybe defensive stocks are the better play, such as Procter & Gamble (PG) and International Business Machine (IBM).

Certainly if you've got the guts to play, financials and automobile such as Wachovia(WB), Morgan Stanley(MS), Ford(F), General Motors(GM), these stocks have been tumbling to a price that is dirt cheap, if you apply a dollar cost averaging strategy over the next few month, you should be seeing a pretty nice return after 2 years.

Technically Speaking... We Are Waaaaay Over Sold...

After today's panic sell off, I think we basically are out of good news expectation after the announcement of commercial paper buy back, global central banks half point rate cut, today's treasury injection to bank, etc. We really have not much left to announce. While bad news are there everyday, banks gone bankrupt every week in September, LIBOR rate kept raising depite the rate cut, retailers panic, GM downgrade, etc. I don't know, but the weekly chart of S&P 500 is just not making sense, I really doubt we will close this weekly bar at low, it is in the range where the internet bubble burst was.

Falling Like A Rock: Australian Dollar

Classic pattern that once again defines what does "Falling Like A Rock" mean, take a look at the aussie dollar, falling from record high of $0.9685 in mid July to as low as $0.6448 yesterday, the falling accelerated 4 days ago after Australia Central Bank cut interet rate a full 1%, Aussie is expected to be trading within a volatile range in the next few weeks.

Crude Oil Plunged another $4.275 Dollars

Crude Oil plunged another $4.275 , or 4.81% during the last few trading hours along with the panic selling of S&P, despite the announcement that OPEC will most likely cut production, the next support is at around $80 area.

Fly To Safe Haven - Gold Climbed for 4th Consecutive Day

Fly to Safe Haven was the tone during the last few hours of the trading day, after the panic selling in US equity market, Gold futures broken out the upside and erased earlier loss from $886 to as much as $928.40, a 4th consecutive day as investors seek a safer place to hide, without significant event coming out soon, the Gold is likely to hit $950 area soon.

Another Leg Down for S&P, Another Panic Selling

October/09/2008, after trapping the bulls in during the openning session around 10AM EST, S&P quickly retreated back to range, soon after the treasury announced the plan to inject capital directly into banks, another bull trapped in, when everybody is hoping for the long-waited killer rally, S&P managed to disappoint everyone and broken down, the selling was panic along with the downgrade for General Motors. S&P futures closed at 912.75 , down 68.25, or a whopping -6.96%. Most likely we'll be seeing another leg down tomorrow unless something significant come up from Fed or the Government.

IBM - Safe Play Now If You Have To

Chart looks scary? Not at all, IBM is one of the better performer though out the 2008 financial crisis, strong fundamental and it just beat the analyst's estimate on EPS today, will be a good play if S&P managed to close green today, IBM might head back to $115 area quickly.

Interesting Gold Price

Gold has always been a safe haven, and the top hedge toward greenback and US fundamental, recently, the gold has been rising for $150 from its September low as the worsening US fundamental situation outweight the strong dollar rally (BTW, dollar is also the haven when things got terribly wrong, like right now)

All eyes are on US equity market now, the direction of S&P will lead to significant reponse from other commodities, our view on gold? toward the down side with tight stop.

Crude Oil Testing Support

Clear down channel of Crude Oil initiated in mid July after Crude Oil peaked at its record high, crashing global equity market led to slow down in demand for energy and the strong greenback has also been weighing on the crude, it had been in a period that has almost perfect negative correlation to the greenback in 2008 as it march steady higher through out the first half of 2008, recently it is testing the $89 support in the down channel, it can go either way, just like going to casino.

However we tend to think toward the upside at least for short term if the US market can rebound today.

Japanese Yen Is Showing Panic for US Equity Market

Despite the strong rally of the greenback, Japanese Yen managed to climb approach toward its one year high as investors seek alternative haven to escape from the crashing US equity market. Japan's central bank did not participate the rate cut yesterday which gave the extended rally for Yen. From 0.9600 to 1.0200, that is 600 point spike in just 3 days! Even Jim Rogers said he had been buying foreign currencies such as Yen and Swiss Franc, Yen looks like is due for pull back as soon as the US equity market reliefes.

S&P is struggling to bottom

After yesterday's global coordinated rate cut across 6 major central banks, equity market had struggled the whole day, take a look at the intraday 60 min chart of S&P futures, extremely volatile. At least we are temporarily reliefed from the panic selling we had experienced during the past week.

However we should still remain cautious unless the upper resistence line is clearly broken, we should see an revenge rally. Until then we might see another leg down as investors did not buy into the half point cut yesterday, it was not as bullish as many analysts thought.

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