Computer Hardware Group..
The S&P Computer Hardware Group is on near support levels of its upward trending channel. If price movements in the underlying stocks (below) maintain these levels, we might possibly see this group head higher. Retracement lines suggest that if this occurs, the sector will move to 378.32 followed by 385.84 and 393.36. Relative Strength Index is near its support level and could point to sustained pricing action.

Names in this group and that should be monitored are:

IBM
HPQ
DELL
AAPL
SUNW
NCR
GTW  ¶ 12:43:00 PM 0 comments

  The Spiders.....
The Spiders are at support!

Hitting the multi-year support level is a key level if this bull market is ready to advance. Price movement MUST stay above these levels or else a major downtrend is in the works. RSI and Stochastic oscillators are suggesting that this recent correction has run its course.

The only factors that will have an short-term affect upon the market would be the next Fed decision or the Iranian nuclear situation. If the Fed decides to increase rates or the Iranian situation boils up, the market will take a negative tone and possibly head lower. If the Fed pauses or the Iranian situation improves, look for the market to sustain the current levels or push higher. Either way, these are the only two effects that will push the market in either direction for the rest of the summer. Also, with earnings season right around the corner, it will be interesting to see if companies are still seeing a healthy amount of profits.  ¶ 10:18:00 AM 0 comments

  NYT and Short Interest

The short interest in NYT is large. At a little over 11%, the short interest is the largest in the publishing group. Since 2004, the stock price for the New York Times has been in a significant downtrend and has not let up. As the chart above suggests, the downward move has led to over a 50% decline in the price. While fundamental numbers rule the show, I suspect that some of the short sellers would see a 50% profit as a windfall in the current market conditions and would not be surprised to see them cover. A 38.2% retacement would be $30-$32, while the 50% retracement be in the $34-35 range.  ¶ 4:22:00 PM 0 comments

  VIX and the Markets.....
The VIX is making yearly highs since the markets are pulling back. As an inverse indicator of the market (more indicative of investor's fears during uncertain times), the VIX is reacting to the decline in equities following a multi-year rally. Watch for a major support level (24.02) to be tested in the near future.  ¶ 11:42:00 AM 0 comments

  Current state of the markets...
The S&P 500 as well as the majority of other indices have seen a huge amount of selling in the recent weeks. While this has been expected, we are at a critical point in this market to determine if this is only a correction or if it is the start of a bear market. The S&P 500 chart above shows that recent price action is about to reach a major support level. Should this be only a market correction, we should touch this support area, consolidate and then move higher. If we breach this level, we should see further weakness in the financial markets and sector rotation into "safe havens" will only increase.

As ICI.org research indicates, $2.063 Trillion have been put on the sidelines on May 31st, $19 billion more than May 10th. As we move towards uncertain market conditions, it only makes sense that people start to move their money to "safe havens". If the technicals hold up, more short covering as well as money being put to work will be injected into the market. This will lead to a rally from this low, but it would require an additional test of breaking the low on April 17th.  ¶ 11:00:00 AM 0 comments

  The US is moving.... Here is a little passage from Debka.com. Very interesting... Click on the title above to see full article.

"Three weeks ago, American emissaries began quietly visiting banks and financial institutions in West Europe and Asia. They showed the heads of these institutions lists of Iranian firms, industries and private tycoons associated in one way or another with Iran’s nuclear effort. They then indicated that American banking and corporate doors would slam shut against any financial bodies continuing to do business with the blacklisted Iranians. Our sources report that the Americans were pleasantly surprised by the success of this quiet campaign.

Many of the banking and financial bodies lobbied in this way were quick to cut their ties with the named Iranians, with immediate impact: A loud outcry arose in Tehran’s central bazaar where most business with foreigners is contracted." (debka.com)  ¶ 8:52:00 PM 0 comments

  Going to WAR!!!
As I have continued saying, the international front is seeing a major policy objective being tested before the world community. While the United States and the western world continue to try and uphold the Nuclear Proliferation Treaty, Iran is trying to sink its teeth in the idea that it has a "right" to acquire nuclear weapons as "stated" in the treaty. The US made a smart move recently as US Secretary of State Condoleeza Rice suggested that the US will take part in negotiations IF Iran will discontinue and cease all uranium enrichment steps. IRAN BALKED!!! It pretty much told the world it doesn't care what they think and it will continue to seek its "gold".

As this is playing out before our eyes, we should think of what this might mean for the financial markets. The US is not going to "go-it-alone" on this one. If you don't think that we are consensus building right now, I am going to throw up! A build up is coming and this will put ALL MARKET PLAYERS ON THE DEFENSIVE! Coupled with talk that the economy is on the verge of a downtrend (again, you heard it here first), we will see more money flowing into "safe play" sectors and industries. The chart above shows the Staples sector about to rally.

To sum it up, Smart money knows that a international showdown is imminent. If Iran doesn't take the "carrots and sticks" concessions (click on title of this article to see what countries are saying) , we are heading towards a downward spiral...  ¶ 4:49:00 PM 0 comments