The Hightower Report

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!

Several market measures forged significant gap up action in the early Monday trade and that action seems to be primarily the result of the Irish bailout package. It is also possible that the markets are getting some lift from favorable employment stories, which showed job gains in the 4 biggest US states last month. It is also possible that a consistent decline in ongoing claims data is another issue that is giving the market some lift residual. With the official kick off of the holiday shopping season directly ahead and stories of good early traffic being noted, it is also possible that the hope for favorable sales is serving to lift share prices. With high risk junk bonds garnering increased interest, over safe haven government bonds recently, some might even suggest that overall investment sentiment is improving.

S&P 500: While the December S&P managed a gap up trade this morning and in turn reached the highest level since November 12th, the market has initially fallen back rather significantly from its initial highs. Therefore, the markets seem to be emboldened by the Irish bailout news and perhaps because of generally favorable US economic expectations. In addition to generally favorable economic views, the markets are also expecting to see favorable scheduled data flows. However, countervailing the mostly positive tilt this morning are indications that the SEC is poised to press forward with a large insider trading case. The Commitments of Traders Futures and Options report as of November 16th for S&P 500 Stock Index showed Non-Commercial traders were net long 30,575 contracts, a decrease of 7,885 contracts. The Commercial traders were net short 71,801 contracts, an increase of 4,990 contracts. The Non-reportable traders were net long 41,227 contracts, an increase of 12,875 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 71,802 contracts. A decline back below the bottom of the gap area at 1200 could shift sentiment from positive to negative.

DOW: The December mini Dow has managed a sharp gap up trade in the early action today and in the process the index reached the highest level since November 15th. The Mini Dow might be benefiting from a favorable response to the largest Australian IPO offering in 13 years overnight and the market is also probably drafting off the news of an Irish aid package, as well as a rise in European stocks. Some in the trade are also expecting to see somewhat supportive economic data from the US this week and that could feed into the initial positive bias that is present today. The Commitments of Traders Futures and Options report as of November 16th for Dow Jones Index $5 showed Non-Commercial traders were net long 23,276 contracts, a decrease of 8,410 contracts. The Commercial traders were net short 26,620 contracts, a decrease of 8,289 contracts. The Non-reportable traders were net long 3,344 contracts, an increase of 122 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 26,620 contracts.

NASDAQ: The December Nasdaq also managed a gap up trade but the reaction only took prices back up to last Thursday’s high. The tech sector did see some strength in Chip shares at the end of last week, but that hasn’t been enough to put the Nasdaq back into a solid leadership role. Perhaps some tech sector investors are still fearful that the debate over QE2 will surface again, especially if Fed buying of Treasuries this week is unable to lift or sustain Treasury prices in the face of auction supply from the Treasury. The Commitments of Traders Futures and Options report as of November 16th for Nasdaq Mini showed Non-Commercial traders were net long 51,327 contracts, an increase of 10,145 contracts. The Commercial traders were net short 53,352 contracts, a decrease of 2,457 contracts. The Non-reportable traders were net long 2,025 contracts, a decrease of 12,603 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 53,352 contracts. Critical support and the bottom of the gap area this morning is seen at 2139.00.

TODAY’S MARKET IDEAS: The market has set a tall hurdle with a very impressive opening gap today and that means the bulls will need to see a positive tone from US data and holiday sales dialogue just to keep the bullish vibe rolling. In conclusion, we think the market needs some break through news on the tax cut extension front or some fresh merger and buy out news to best the initial probe higher today.

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!

The US stock market seems to be giving off signs of an overbought technical condition, as prices failed to take a positive lead from Asia and it goes without saying, that the action early in the week might have left the market a little winded. With the monthly US jobs figures due out this morning and the stance of the Fed clearly poised to provide support to the economy, it will be really interesting to see the markets reaction to the numbers today. Some players think that weak numbers could be disappointing to the equity market because weak numbers aren’t thought to be capable of sparking more movement from the Fed. Therefore, the bull camp might need to see favorable US numbers to rally the market and to some that is a change of pace. In fact, with the markets recently spinning some retail sales readings into a positive and some traders even suggesting that favorable sales patterns might extend into the holiday season, it would seem that equity prices recently were embracing a pretty positive forward look on the economy. In short, it is possible that the equity markets will need something positive from the scheduled numbers this morning to extend the recent pattern of gains.

S&P 500: The December S&P this week has managed a low to high rally of 44 points. Not surprisingly the market is showing some initial back and fill action on the charts this morning and that was seen despite the generally positive action seen in Asian and European markets overnight. One would expect the S&P to get residual fundamental support from favorable retail sales expectations yesterday and also from favorable Kraft earnings news. The bull camp also thinks that the long term promise of easing from the Fed is set to be an ongoing force in the daily trade. However, given the sharp rate of gain this week and the fact that the Fed has now made its future policy stance known, that would seem to suggest that the trade will now need positive numbers to rally. Prior to the Fed move, weak numbers were thought to bring on easing, but weak numbers now might prompt investors to worry over valuations.

DOW: After the aggressive pulse up move yesterday and a gain of 278 points in the December Mini Dow it would certainly seem like the bulls have factored in a positive progression in the economy. In fact, with the headlines this morning trumpeting that the Dow has now returned to pre-crisis levels in the wake of the Fed move, it is possible that the market now needs to see positive numbers to extend the rally. It should be noted that there are some estimates for 6 digit gains in the US payroll report this morning and that could be seen as a positive surprise. For the month of November (thus far) the Mini Dow has forged a low to high rally of roughly 386 points!

NASDAQ: The Nasdaq has forged a very impressive range up move this week, with the low to high move this week coming in at a lofty 75 points. Favorable retail sales readings from the US seemed to give the Nasdaq an added lift yesterday and that in turn probably means that analysts might be poised to predict strong game sales in the coming holiday season. The bear camp thinks the market is short term overbought and vulnerable to a disappointing US payroll report, while the bull camp thinks that anything even slightly positive from payrolls will combine with residual QE2 optimism for a resumption of the November rally. The Nasdaq seems to be short term overbought, but unless there is a noted fresh fundamental negative headline development, the bulls probably have more ammunition in their court.

TODAY’S MARKET IDEAS: The market remains in a bull trend but the market is also short term overbought. With the markets yesterday seeing somewhat mixed retail sales news in the US and then managing to spin that news into a positive and some players even taking that data as a sign that the upcoming holiday season will be solid, the trade seems to be rushing to factor in fairly good conditions ahead. Therefore, we think that any number below +60,000 jobs this morning could be temporarily discouraging. We say temporarily discouraging because this market remains in a bullish posture and the promise of the Fed is still a fresh force to respect.

Below is a sample of our 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!

The early US equity market action shows noted strength that seems to be the result of generally favorable corporate earnings news and perhaps to a degree, the expectation of coming QE2. At times, the stock market seems to think that the US economy is close to regaining some positive motion and therefore the looming promise of additional easing is apparently enough to pull some fresh investors into stocks. Favorable international equity market action overnight and the hope for some positive US existing home sales readings this morning seems to give the bull camp some confidence to start the week. However, the market continues to see some warning signs from the mortgage foreclosure mess, as Bank of America and Citi saw some potentially negative developments in the press over the weekend. With the US Fed Chairman scheduled to give a speech on the housing sector this morning and the foreclosure news still hanging in the headlines, the subject of housing could be a key force for the trade this morning. At least in the early trade, the positive corporate headlines seem to be winning over the negatives that surfaced late last week.

S&P 500: With a third of the S&P reporting earnings this week, the trade can expect to see a moderate amount of guidance from the earnings front and so far the impact from the earnings news has generally been positive. However, the S&P continues to lag behind the Mini Dow and the Nasdaq on the weekly charts, as the S&P has yet to return to the early 2010 weekly highs. The Commitments of Traders Futures and Options report as of October 19th for S&P 500 Stock Index showed Non-Commercial traders were net long 28,763 contracts, an increase of 2,865 contracts. The Commercial traders were net short 45,738 contracts, an increase of 8,217 contracts. The Non-reportable traders were net long 16,976 contracts, an increase of 5,352 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 45,739 contracts. This represents an increase of 8,217 contracts in the net long position held by these traders. Some traders think that the market is garnering early support from merger and acquisition news, while others think that the prospect of QE2 continues to fuel the upside action.

DOW: The December Mini Dow was able to manage a fresh new high for the move overnight and in the process it also reached the highest level since April on the weekly charts. The Commitments of Traders Futures and Options report as of October 19th for Dow Jones Index $5 showed Non-Commercial traders were net long 25,133 contracts, a decrease of 10 contracts. The Commercial traders were net short 27,920 contracts, a decrease of 206 contracts. The Non-reportable traders were net long 2,786 contracts, a decrease of 197 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 27,919 contracts. The ability to embrace the positives like favorable activity at US industrial companies, instead of embracing the potential negatives like mortgage foreclosures, seems to suggest that the market has re-embraced a positive tilt in the early Monday trade action.

NASDAQ: The December Nasdaq also managed to carve out a fresh new high for the move overnight, but initially the market was unable to hold all of those gains. Nonetheless, the Nasdaq continues to draw some favorable corporate news flow and it also saw some positive international tech sector price action overnight and that might have emboldened the US trade early this morning. The Commitments of Traders Futures and Options report as of October 19th for Nasdaq Mini showed Non-Commercial traders were net long 52,589 contracts, a decrease of 9,097 contracts. The Commercial traders were net short 80,007 contracts, a decrease of 3,111 contracts. The Non-reportable traders were net long 27,417 contracts, an increase of 5,984 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 80,006 contracts. With the fresh new high for the move today putting the Nasdaq at the highest level since December 31st 2007, on the weekly charts, some traders might suggest that the market is attempting to move beyond the sub-prime crisis.

TODAY’S MARKET IDEAS: No reason to take control away from the bull camp, as the trade is likely to see mostly positive news today from scheduled US data, US Fed dialogue and corporate earnings news. In fact, one could see the way to a noted follow through rally today, as the market could fashion a nearly perfect tide of developments. With a large amount of earnings reports due out and four Fed speeches scheduled for today, the bull camp would seem to have many more headlines in its court than the bear camp. While the market could have fretted over the prospect of downgrades for some major US financial companies and it could also fret over the foreclosure flap at the state and local level, the market seems to be capable of discounting the negatives and embracing the positive today. The S&P might see little in the way of resistance in the S&P this week until the even number 1200 level, while the Mini Dow might see little in the way of resistance until the 11,206 level.

Below is a sample of our 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!

The stock market has started the Wednesday session out on a weaker footing and in some measures that has resulted in a fresh new low for the move. The US Treasury market continues to price in moderate concern of deflationary slowing and at times the trade is openly tossing around the double dip recession moniker. While the stock market has the capacity to benefit from talk of an extension of quantitative easing, that revelation also seems to have coincided with this weeks high and reversal from the highs. The market did see evidence of a successful “static kill” on the Gulf spill overnight and the market also saw a slight rise in UK regional house price measures, but that news hardly looks to erase the fear of slowing that continues to dominate the US landscape. While the magnitude of US monthly job losses don’t appear to be significant, the equity market has recently been in the vicinity of three month highs and therefore the market appears to be “expensive”.

S&P 500: The bear camp will suggest the S&P is presenting a pattern of lower highs and lower lows, while the bull camp will claim that the market recently became short term overbought and that recent losses were merely technical balancing. However, there doesn’t appear to be much in the way of panic in the current market, as the fears of slowing aren’t fostering high levels of anxiety. Near term downside targeting is seen at 1110.90 and perhaps not until 1109.50.

DOW: While the September Mini Dow didn’t seem to be under noted and aggressive early pressure, prices were hovering around the prior session’s lows in the early going. Given the big range up action seen on the first trading day of August and the temporary high forged last week, the September Mini Dow seems to be facing a decision on holding recent levels, or moving back down to levels that were seen into the end of July. Fortunately for the bull camp, the global equity markets saw record profits at a Pacific based airline, favorable UK House price readings and a rise in Euro zone private sector growth readings. Therefore there are countervailing issues capable of distracting the trade away from the evidence of slowing in the US economy. However, recent action in the market suggests that some longs are banking profits and others are reducing holdings because of the slack economic outlook. Near term downside targeting is seen at 10,527 but a further erosion in prices could be expected into the US Non Farm payroll release later this week.

NASDAQ: The September Nasdaq is showing some initial weakness today but prices have yet to return to the prior session’s lows. Since the Nasdaq appeared to lag behind the rest of the market on the July and August rally, that action might serve to cushion the Nasdaq against broad based profit taking selling. The Indian stock market managed to reach the highest level since February of 2008 overnight but yet that type of optimism looks to be lost on the US market today because of its current track of slowing fears. Near term downside targeting in the September Nasdaq is seen at 1878.00 and perhaps not until 1869.25.

TODAY’S MARKET IDEAS: A lack of optimism toward the economy seems to be providing the bear camp with control over prices. Expect a consistent downside track in prices without much anxiety.

Below is a sample of our 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!

The stock market enters the Tuesday trade somewhat weak and poised for a move below the prior session’s lows. With the market also managing another new low for the move in the prior trading session, it is clear that the flow of earnings reports is not fully countervailing investor’s fears of slowing in the US economy. We think the market was hopeful that some form of fresh stimulus might be forth coming from Washington but instead the focus is on extending unemployment benefits. In an election year, votes apparently dominate over constructive thinking and therefore the only thing expected from Washington is more inefficient deficit spending. With IBM earnings failing to inspire the bull camp overnight and the trade already bracing for negative news from a US Housing starts and permits report the bear camp should be fairly confident. The bulls really need to see something positive from Goldman earnings or the erosion on the charts will continue to unfold. While upcoming earnings reports could prompt periodic support to stock prices, we seriously doubt the fears of a double dip recession are going to be put down until the Chairman of the Fed attempts some positive cheerleading on Wednesday. Fortunately for the bull camp, we still don’t detect a high level of anxiety in the marketplace, but we also don’t detect much in the way of optimism and that should allow the trend to remain down.

Earnings Reports Today
07/20 Apple, Inc. (AAPL)
07/20 Gilead Sciences, Inc. (GILD)
07/20 Linear Technology (LLTC)
07/20 Allscripts-Misys Healthcare Solutions Inc (MDRX) after close
07/20 Altera Corp. (ALTR) after close
07/20 Seagate Technology (STX) after close
07/20 Yahoo, Inc. (YHOO) after close
07/20 Biogen Idec, Inc. (BIIB) before open
07/20 Goldman Sachs Group, Inc. (GS) before open
07/20 Johnson and Johnson (JNJ) before open
07/20 PepsiCo, Inc. (PEP) before open
07/20 TD Ameritrade Holding Corporation (AMTD) before open

S&P 500: The September S&P in the early action managed to forge another new low for the move and that would seem to suggest that the bear camp saw the earnings reports released after Monday’s close as bearish. Failing to get a lift off IBM earnings has to disappoint a large portion of the market as that company is usually a key bellwether issue. Technically the S&P appears to be poised for a slide to 1040.00 and perhaps even down to 1037.50. Somewhat surprisingly, the markets have continued to shake off potentially unnerving Euro zone events and that suggests that classic slowing fears in the US are the main focal point of many traders.

DOW: Seeing the IBM earnings come and go without a definitive lift in equities prices probably emboldens the bear camp. In fact, with another new low for the move seen overnight in the September Mini Dow, we have to give the bear camp a distinct edge, especially into the US scheduled data flows later this morning. Ultimately we see a downside target in the September Mini Dow down at 9,800 but a higher low around 9,930 could be seen if the housing numbers are mixed or countervailing later this morning. Until the Fed Chairman takes the stand in his semi annual testimony to Congress tomorrow, the headlines are likely to favor the bear camp.

NASDAQ: The Nasdaq appears to have found some value on the charts as it managed to reject a fresh new low for the move in the prior trading session. While IBM earnings didn’t seem to help the broad market overnight, it is possible that some tech sector shares found some supportive information in that earnings report. However, the inability to hold above the 1800 level early this morning could be a key bearish technical signal for many traders. News of slack sales from Texas instruments overnight would seem to give the bear camp an added fundamental edge this morning, especially since general expectations are calling for some type of decline in US housing numbers later this morning. Ultimately we see a downside target in the September Nasdaq down at 1772.00.

TODAY’S MARKET IDEAS: We don’t expect to see aggressive downside action but we do expect prices to consistently work lower again today.

Below is a sample of our 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!

All things considered, the US equity market has held up extremely well this week. In fact, for the September S&P to be sitting within striking distance of this week’s highs, in the wake of some very disappointing US data is very surprising. With Housing Starts and permits down aggressively and claims showing a rise yesterday, one gets the sense that the early May market debacle did serve to trip up the economy somewhat. On a positive note, the stock market looks set to get through a full week without seeing a patently fresh concerning Euro zone debt problem and that in turn has probably served to provide a measure of short covering buying throughout this week. While we don’t see the resolve to send stock prices sharply higher today, we aren’t sure that the market will see a catalyst to send stock prices into a corrective mode. On the other hand, the markets appear to be sitting just above a series of lows forged early in the week and a trade back below those levels this morning, could give the bear camp a slight technical edge.

S&P 500: The S&P enters the last trading session of the week within close proximity to the recent highs and seemingly in a bullish posture. However, a series of closes earlier this week, just below the current market at 1084.20 in the September S&P contract might be considered a critical inflection point for the trade. In other words, we see relatively tight trading ranges today, but the failure to hold above 1084.20 could prompt a small measure of stop loss selling and perhaps a track back toward the even number 1100.00 level.

DOW: The Mini Dow comes into the Friday trade sitting right on the prior close and just below the recent high. In the wake of mostly disappointing economic data this week we just don’t see the market clawing out another day of strong gains, but with somewhat positive economic readings out of the Euro zone seen overnight and no US scheduled data this morning, the bear camp might not have the resolve to take control away from the bull camp. We see critical close-in support in the September Mini Dow down at 10,352, with even closer support pegged at 10,373.

NASDAQ: The September Nasdaq comes into the action this morning sitting just below the recent highs and seemingly leaning toward the upside. The bull camp will point out that some of the gains earlier this week, came on increased volume and that would seem to give some additional credence to the bull case. Without scheduled data flow today from the US, it is possible that the market will generally waffle around both sides of unchanged.

TODAY’S MARKET IDEAS: A quiet session expected as the US report slate is empty and overnight international economic news was mixed to slightly upbeat. The biggest feature of today’s action might be the fact that the US equity market is partially overbought technically.