Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
Global equity markets sold-off in reaction to developments out of Japan over the weekend, with more aftershocks, more lives claimed and three nuclear plants at risk of overheating the situation remains tense. The Bank of Japan came in overnight and boosted the amount of their bond buying program, as well as increasing liquidity, and that has helped to relieve pressures that Japanese insurers would be forced to liquidate US assets. The Japanese Nikkei took a nosedive overnight, falling over 6% to its lowest level since November 5th, 2010. European indices also came under pressure during the initial morning hours but not quite as severe as in Asia. It seems that talk of a near doubling of the EMU rescue package to 440 billion Euros has helped to relieve negative pressures in the Euro zone. The North Africa and Middle East situation seems to be ebbing, as “Day of Rage” protests last Friday were somewhat of a non-event. While Libyan pro-government supporters continue to push rebel forces back east, the fear premium within the crude oil market seems to have receded. Weakness in crude oil, with a focus shifting back toward ample supplies could be a supportive feature toward equity markets this morning. However, the developing situation in Japan appears to be the more dominant factor for US equity markets early today.
S&P 500: The June S&P 500 began the Sunday evening trade with a weak start but currently sits about 20 points above the Friday morning low of 1278.50. There was also positive press in a major news publication over the weekend suggesting that shares of Hewlett-Packard could benefit from higher-margin software sales in the coming year, and that could be lending some support this morning. Still, there are concerns over the extent of damages in Japan, with some of the latest estimates ranging from $35 to $175 billion. Perhaps some of those effects were offset by a Bank of Japan liquidity boost of nearly $185 billion. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net short 37,251 contracts, an increase of 8,580. Non-commercial and non-reportable traders combined held a net long position of 15,414 contracts, down 5,400 on the week. It is also possible that the selling trend of the speculators increased further late last week, as the S&P 500 slipped nearly 37 points to last Friday’s low, after the report was conducted.
DOW: The June E-mini Dow has formed an inside day range during the early morning trade, and has showed some measure of resilience with its inability to challenge Friday’s early morning lows. Perhaps ideas of a weaker US dollar and ideas that the major Japanese insures will not be forced liquidate US Treasury holdings to free-up capital are factors providing some measure of support to the large cap companies within the Dow. Additionally, ideas that Bank of America could see its share price increase as its loan portfolio improves is also seen as a supportive factor. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net long 16,085 contracts, an increase of 3,615. Non-commercial and non-reportable traders combined held a net long position of 18,855 contracts, an increase of 1,038 in their net long positioning. While the modest buying trend is seen as a supportive factor for the E-mini Dow, the 170 point drop since the report window closed, paints a somewhat different perspective.
NASDAQ: The June NASDAQ traded lower during the early morning hours and continues to stay below 2,300.00 resistance. It is possible that some of the components in the NASDAQ will react to plant closures and significant weakness within a number Japanese related companies, like Sony, that have been forced to temporary close operations due to earthquake damages. Meanwhile, the delicate balance by Chinese Central Bankers between job growth and reining in inflation remains a concern for high growth related stocks within the NASDAQ. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net long 77,212 contracts, an increase of 16,117. Non-commercial and non-reportable traders combined held a net long position of 96,174 contracts, which represents an increase of 13,031 in their net long positioning. However, it is possible that these figures maybe overstated after last week’s weak closing action.
TODAY’S MARKET IDEAS: US equity markets showed some strength during the initial morning hours with their ability to hold above Friday’s low in the face of devastating developments out of Japan. The large cash infusion from the Bank of Japan has helped to offset some of those concerns and so far seems to have prevented a wave of liquidation in US assets. It is also possible that a boost in the European Union rescue package and weakness in crude oil pricing could be further factors that support the stock market this morning. Friday’s positive price reversal and this morning’s early rebound provide the bulls with hope of more upside follow through ahead. The next upside hurdle for the June S&P 500 comes in at 1303.70 and 12030 for the June Dow. The short term trend in the June S&P 500 continues to point down until prices can overtake the 1308.00 level.
Stocks: Postitive Signs; News From Japan Primary Influence
by Dave Hightower on March 14, 2011
Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
Global equity markets sold-off in reaction to developments out of Japan over the weekend, with more aftershocks, more lives claimed and three nuclear plants at risk of overheating the situation remains tense. The Bank of Japan came in overnight and boosted the amount of their bond buying program, as well as increasing liquidity, and that has helped to relieve pressures that Japanese insurers would be forced to liquidate US assets. The Japanese Nikkei took a nosedive overnight, falling over 6% to its lowest level since November 5th, 2010. European indices also came under pressure during the initial morning hours but not quite as severe as in Asia. It seems that talk of a near doubling of the EMU rescue package to 440 billion Euros has helped to relieve negative pressures in the Euro zone. The North Africa and Middle East situation seems to be ebbing, as “Day of Rage” protests last Friday were somewhat of a non-event. While Libyan pro-government supporters continue to push rebel forces back east, the fear premium within the crude oil market seems to have receded. Weakness in crude oil, with a focus shifting back toward ample supplies could be a supportive feature toward equity markets this morning. However, the developing situation in Japan appears to be the more dominant factor for US equity markets early today.
S&P 500: The June S&P 500 began the Sunday evening trade with a weak start but currently sits about 20 points above the Friday morning low of 1278.50. There was also positive press in a major news publication over the weekend suggesting that shares of Hewlett-Packard could benefit from higher-margin software sales in the coming year, and that could be lending some support this morning. Still, there are concerns over the extent of damages in Japan, with some of the latest estimates ranging from $35 to $175 billion. Perhaps some of those effects were offset by a Bank of Japan liquidity boost of nearly $185 billion. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net short 37,251 contracts, an increase of 8,580. Non-commercial and non-reportable traders combined held a net long position of 15,414 contracts, down 5,400 on the week. It is also possible that the selling trend of the speculators increased further late last week, as the S&P 500 slipped nearly 37 points to last Friday’s low, after the report was conducted.
DOW: The June E-mini Dow has formed an inside day range during the early morning trade, and has showed some measure of resilience with its inability to challenge Friday’s early morning lows. Perhaps ideas of a weaker US dollar and ideas that the major Japanese insures will not be forced liquidate US Treasury holdings to free-up capital are factors providing some measure of support to the large cap companies within the Dow. Additionally, ideas that Bank of America could see its share price increase as its loan portfolio improves is also seen as a supportive factor. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net long 16,085 contracts, an increase of 3,615. Non-commercial and non-reportable traders combined held a net long position of 18,855 contracts, an increase of 1,038 in their net long positioning. While the modest buying trend is seen as a supportive factor for the E-mini Dow, the 170 point drop since the report window closed, paints a somewhat different perspective.
NASDAQ: The June NASDAQ traded lower during the early morning hours and continues to stay below 2,300.00 resistance. It is possible that some of the components in the NASDAQ will react to plant closures and significant weakness within a number Japanese related companies, like Sony, that have been forced to temporary close operations due to earthquake damages. Meanwhile, the delicate balance by Chinese Central Bankers between job growth and reining in inflation remains a concern for high growth related stocks within the NASDAQ. The Commitments of Traders Futures and Options report as of March 8th showed non-commercial traders were net long 77,212 contracts, an increase of 16,117. Non-commercial and non-reportable traders combined held a net long position of 96,174 contracts, which represents an increase of 13,031 in their net long positioning. However, it is possible that these figures maybe overstated after last week’s weak closing action.
TODAY’S MARKET IDEAS: US equity markets showed some strength during the initial morning hours with their ability to hold above Friday’s low in the face of devastating developments out of Japan. The large cash infusion from the Bank of Japan has helped to offset some of those concerns and so far seems to have prevented a wave of liquidation in US assets. It is also possible that a boost in the European Union rescue package and weakness in crude oil pricing could be further factors that support the stock market this morning. Friday’s positive price reversal and this morning’s early rebound provide the bulls with hope of more upside follow through ahead. The next upside hurdle for the June S&P 500 comes in at 1303.70 and 12030 for the June Dow. The short term trend in the June S&P 500 continues to point down until prices can overtake the 1308.00 level.
Tags: Financials, NASDAQ, S&P500, Stocks
About Dave Hightower