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 rallied during the early morning hours, supported by more Japan quantitative easing and by better than expected German Sentiment readings. The market overcame a ratings downgrade overnight from Moody’s on Italy, Spain and Portuguese debt and warned of a potential downgrade for the UK. This pressured global indices during the Asian trade but that news was partially offset by the Bank of Japan increasing the size of their asset purchase program by another 10 trillion yen ($130 billion). The added QE boosted shares in export and real estate companies and pushed the Nikkei to a new 3-month closing high. Risk-sentiment received another boost following German ZEW sentiment readings that came in better than expected and climbed to their best level in 10-months. The data provided evidence that the German economy was showing a level of resilience in the face of the European debt crisis. Positive economic data and a favorable result with this morning’s Italian debt auctions injected added confidence into the market. The latest operations by the ECB appear to be working, and have helped reduce borrowing costs for Italy, with their 2-year government debt costs falling by 140 basis points from the January auction. US markets continue to work through President Obama’s 2013 budget proposal that boosts revenues by $1.3 trillion by raising taxes on the wealthy, such as taxing dividend proceeds as ordinary income. The US economic calendar picks up this morning, with January retail sales expected to show an increase on the month from a boost in small vehicle sales.
S&P 500: March S&P 500 continues to coil inside of a tight 10-point closing range over the last 7-sessions. The coiling action in the index suggests a near-term expansion in volatility which in turn may have an upward bias. The early morning tone in the March S&P 500 also supports the bull case following better than expected confidence readings in Germany and expectations for a boost in January US retail sales. Gains during Monday’s session came from strength in large-cap tech shares, such as Apple’s advance above $500.00 to a new record high. With a little more than 71.0% of S&P 500 companies reporting earnings this quarter, 64% of them have beaten estimates, which is slightly below the recent quarterly average. The price action in the March S&P 500 has stiff overhead resistance coming in at 1352.30 as that level limit recent upside tests last Thursday and again yesterday. Next resistance comes in at the July high of 1354.50.
DOW: The March E-mini Dow is on a higher track this morning, helped in part by better than expected German sentiment readings. Shares of Boeing were higher during the early morning hours and could get some added play in today’s session after it signed a $22 billion deal with Indonesia’s Lion Air. Additionally, shares of Cisco saw active call option activity (April 22 calls) during yesterday’s trade, and that reflects a level of optimism that the Dow component could make a push to its February 2011 high. The short-term trend in the March E-mini Dow turned negative during Friday’s decline. That bias remains intact until the index can overtake swing high resistance up at 12,894. Swing low support in the March E-mini Dow comes in at 12,704.
NASDAQ: The March NASDAQ climbed into another new contract high this morning and extended its 2012 gain to 13.2%. In addition to expectations for a positive January retail sales report this morning, the index has also garnered support from a rally in the shares of Apple into new all-time highs and early morning gains in Google. However, there does seem to be some nonbelievers in Apple’s gains, highlighted by an active put option trade in weekly $500, $495, $490 and $485 strikes. European and US regulators approved Google’s $12.5 billion purchase of Motorola Mobility, and that lifted the company’s shares by 0.7% in early morning action. The trend in the March NASDAQ continues to support the bull camp, with support at 2551.75. Upside targeting today stands at 2578.00.
TODAY’S MARKET IDEAS: Global equity markets are on a higher track this morning, supported by more central bank intervention, favorable sentiment readings in Germany and hopes for a positive sweep in this morning’s US economic data. It is worth pointing out that trading volume on the New York Stock Exchange yesterday was the lowest for 2012. It is becoming more important that the volume improves as prices break out into new ground or face a downside correction from extremely overbought territory. A potential sticking point for the bull camp comes as EU leaders work on the Greek bailout and debt restructuring package ahead of Wednesday’s meeting. The short term trends in the March E-mini Dow and S&P 500 turned negative with Friday’s downdraft, with resistance coming in at last week’s high. Aggressive bears might consider fading early strength in the March S&P 500 to 1354.30, playing for a quick drop back to 1342.00. Risk 12 points from entry.
Stocks: While On Upward Track, Volume Needs to Improve
by Dave Hightower on February 14, 2012
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 rallied during the early morning hours, supported by more Japan quantitative easing and by better than expected German Sentiment readings. The market overcame a ratings downgrade overnight from Moody’s on Italy, Spain and Portuguese debt and warned of a potential downgrade for the UK. This pressured global indices during the Asian trade but that news was partially offset by the Bank of Japan increasing the size of their asset purchase program by another 10 trillion yen ($130 billion). The added QE boosted shares in export and real estate companies and pushed the Nikkei to a new 3-month closing high. Risk-sentiment received another boost following German ZEW sentiment readings that came in better than expected and climbed to their best level in 10-months. The data provided evidence that the German economy was showing a level of resilience in the face of the European debt crisis. Positive economic data and a favorable result with this morning’s Italian debt auctions injected added confidence into the market. The latest operations by the ECB appear to be working, and have helped reduce borrowing costs for Italy, with their 2-year government debt costs falling by 140 basis points from the January auction. US markets continue to work through President Obama’s 2013 budget proposal that boosts revenues by $1.3 trillion by raising taxes on the wealthy, such as taxing dividend proceeds as ordinary income. The US economic calendar picks up this morning, with January retail sales expected to show an increase on the month from a boost in small vehicle sales.
S&P 500: March S&P 500 continues to coil inside of a tight 10-point closing range over the last 7-sessions. The coiling action in the index suggests a near-term expansion in volatility which in turn may have an upward bias. The early morning tone in the March S&P 500 also supports the bull case following better than expected confidence readings in Germany and expectations for a boost in January US retail sales. Gains during Monday’s session came from strength in large-cap tech shares, such as Apple’s advance above $500.00 to a new record high. With a little more than 71.0% of S&P 500 companies reporting earnings this quarter, 64% of them have beaten estimates, which is slightly below the recent quarterly average. The price action in the March S&P 500 has stiff overhead resistance coming in at 1352.30 as that level limit recent upside tests last Thursday and again yesterday. Next resistance comes in at the July high of 1354.50.
DOW: The March E-mini Dow is on a higher track this morning, helped in part by better than expected German sentiment readings. Shares of Boeing were higher during the early morning hours and could get some added play in today’s session after it signed a $22 billion deal with Indonesia’s Lion Air. Additionally, shares of Cisco saw active call option activity (April 22 calls) during yesterday’s trade, and that reflects a level of optimism that the Dow component could make a push to its February 2011 high. The short-term trend in the March E-mini Dow turned negative during Friday’s decline. That bias remains intact until the index can overtake swing high resistance up at 12,894. Swing low support in the March E-mini Dow comes in at 12,704.
NASDAQ: The March NASDAQ climbed into another new contract high this morning and extended its 2012 gain to 13.2%. In addition to expectations for a positive January retail sales report this morning, the index has also garnered support from a rally in the shares of Apple into new all-time highs and early morning gains in Google. However, there does seem to be some nonbelievers in Apple’s gains, highlighted by an active put option trade in weekly $500, $495, $490 and $485 strikes. European and US regulators approved Google’s $12.5 billion purchase of Motorola Mobility, and that lifted the company’s shares by 0.7% in early morning action. The trend in the March NASDAQ continues to support the bull camp, with support at 2551.75. Upside targeting today stands at 2578.00.
TODAY’S MARKET IDEAS: Global equity markets are on a higher track this morning, supported by more central bank intervention, favorable sentiment readings in Germany and hopes for a positive sweep in this morning’s US economic data. It is worth pointing out that trading volume on the New York Stock Exchange yesterday was the lowest for 2012. It is becoming more important that the volume improves as prices break out into new ground or face a downside correction from extremely overbought territory. A potential sticking point for the bull camp comes as EU leaders work on the Greek bailout and debt restructuring package ahead of Wednesday’s meeting. The short term trends in the March E-mini Dow and S&P 500 turned negative with Friday’s downdraft, with resistance coming in at last week’s high. Aggressive bears might consider fading early strength in the March S&P 500 to 1354.30, playing for a quick drop back to 1342.00. Risk 12 points from entry.
Tags: DOW, Financials, NASDAQ, S&P500, Stocks
About Dave Hightower