Oct 122012
 

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Todays Trading Focus Updates Oct 11th 2012

Oil closed yesterday at $91.3 a barrel and has resumed its trading range between $90 and $92, hovering around its 38.2% Fibonacci line on the 1 hour chart. Oil traded yesterday at its highest since late September at $93.5 a barrel. However it then declined sharply back below $92 as it awaits news from Europe amid the continuing debt crisis. Gold closed yesterday at $1765 an ounce and is reaching closer to its resistance level of $1972. Good results following the jobless claims could strengthen this resistance level and push the price of gold to the lower end of its $1750 to $1780 range.

The duration for the Fed’s present QE is the main issue for determining the gold price, and recent economic results are certainly the best indicators for the program’s duration.

Jobless claims have just been published today and with the good news, it could appreciate the price of oil somewhat, although tensions from the Middle East are still the biggest price indicator for the present. Oil inventories will also be published later today with an expected rise of 1.3m barrels which could push the price of oil down.

Global growth concerns continued to weigh on the market sentiment yesterday, while  investors eyed on quarterly earnings reports to be published this week.

The International Monetary Fund warned yesterday that the euro zone crisis remains the  greatest threat to the global economy and warned that policymakers need to urgently  strengthen fiscal and financial ties within the Euro-zone area.

Meanwhile, concerns over whether international creditors will extend their loans to Greece  continue as the country struggles to meet deficit reduction targets.

At the close of the European session yesterday, France’s CAC 40 fell 0.50%, while Germany’s  DAX 30 edged lower by 0.41%.

The U.S. markets were also hit by the negative sentiment, the Dow Jones Industrial Average  fell 0.95%, the S&P 500 lowered by 0.62%, while the Nasdaq Composite index dropped  0.43%.

Late Wednesday, Standard & Poor’s cut Spain’s sovereign credit rating by two notches to  BBB-minus, and maintained a negative outlook for country, citing mounting economic and  political risks. This ratting is only one notch above Junk.

The ratings agency also warned that the capacity of Spanish political institutions to deal with  the challenges presented by the current fiscal and economic crisis is declining.

European stocks open today session slightly higher despite yesterday Spain’s sovereign rate  cut, although concerns over the handling of Spain’s financial woes continued to weigh on  market sentiment after Standard & Poor’s downgraded the country’s credit rating.

The Economic Calendar for today is relatively thin;

09:00 Van Rompuy-Barroso-Monti meeting

12:30 Initial Jobless Claims (Oct 6)

14:00 G7 finance ministers meeting

18:00 Monthly Budget Statement (Sep)

23:50 Tertiary Industry Index (MoM) (Aug)

Gold futures edged higher during European morning hours on Thursday, bouncing off the  previous session’s two-week low as fears over the handling of the euro zone’s financial crisis  intensify after Standard & Poor’s downgraded Spain’s sovereign-debt rating. Follow this  downgrade, market participant went looking for safety in the dollar and of course in gold’s.

USD/JPY intraday: under pressure.

Pivot: 78.35.

Our Preference: SHORT positions below 78.35 with 77.85 & 77.75 as next targets.

Alternative scenario: The upside penetration of 78.35 will call for 78.45 & 78.65.

Comment: the RSI is mixed to bearishEUR/USD intraday: under pressure.

Pivot: 1.2890.

Our Preference: SHORT positions below 1.289 with 1.282 & 1.28 as next targets.

Alternative scenario: The upside penetration of 1.289 will call for 1.291 & 1.2935.

Comment: the pair is rebounding but stands below its new resistance

AUD/USD intraday: supported by a rising trend line.

Pivot: 1.022

Our preference: Long positions above 1.022 with targets @ 1.0325 & 1.035 in extension.

Alternative scenario: Below 1.022 look for further downside with 1.018 & 1.015 as targets.

Comment: the RSI calls for a new upleg

GBP/USD intraday: under pressure.

Pivot: 1.6050.

Our Preference: SHORT positions below 1.605 with 1.5975 & 1.5955 as next targets.

Alternative scenario: The upside breakout of 1.605 will open the way to 1.608 & 1.61.

Comment: the pair stands below its new resistance and remains under pressure.

EUR/JPY intraday: key ST resistance at 100.7.

Pivot: 100.7

Our preference: Short @ 100.63 with targets @ 100.15 & 99.85 in extension.

Alternative scenario: Above 100.7 look for further upside with 101 & 101.2 as targets.

Comment: the pair stands below its resistance and remains under pressure.

GBP/JPY intraday: target 124.35.

Pivot: 125.6

Our preference: Short @ 125.45 with targets @ 124.75 & 124.35 in extension.

Alternative scenario: Above 125.6 look for further upside with 125.85 & 126.4 as targets.

Comment: as long as 125.6 is resistance, look for choppy price action with a bearish bias.

Dax (Dec 12) intraday: rebound expected.

Pivot: 7145

Our Preference: LONG positions above 7145 with 7245 & 7320 in sight.

Alternative scenario: The downside penetration of 7145 will call for 7100 & 7015.

Comment: the RSI is mixed to bullish.

 

Oct 092012
 

TradeRush

Follow These Top Movers – Big Name Stocks On A Roll

As the Dow Jones Industrial Average (DJI – 13,473.53) dove roughly 110.3 points just minutes before the closing bell, the index finished slightly higher than its session low. On the day, the Dow lost 110.1 points, or 0.8%, finishing below its 10- and 20-day moving averages for the first time since September 5. All but three of the 30 blue chips ended in negative territory, as Intel Corporation’s (NASDAQ:INTC)analysts-related dip of 2.7% paced the losing issues. On the other hand, McDonald’s Corporation (NYSE:MCD) led the winners with a 0.6% rise.

The S&P 500 Index (SPX – 1,441.48) ripped back 14.4 points, or nearly 1%, closing below its 20-day moving average for the first time in a nearly a week. The broad-market barometer also notched a close below its 10-week trendline for the first time since June 22.

The Nasdaq Composite (COMP – 3,065.02) turned in the worst performance of its fellow benchmarks, sawing off 47.3 points, or 1.5%, finding its lowest daily settlement since August 30. The tech-rich COMP also notched a close below its 10-week trendline for the first time since June 22.

The CBOE Market Volatility Index (VIX – 16.37) gained 1.3 points, or 8.3%, to find a foothold at its loftiest price since September 26, though the 80-day moving average hovers above.

Today’s highlight: “Today, everyone’s eyes were on third-quarter earnings, as they get started with Alcoa Inc. (NYSE:AA),” noted Bell. “Earnings are expected to decline for the first time since the third quarter in 2009, which makes it all the more heavily anticipated.”

Not only did AA grab notable attention on Wall Street today, but so did tech behemoth Apple Inc. (NASDAQ:AAPL) … Click here for more.

Turning to today’s major market stories…

      Put players waxed pessimistic on the

SPDR S&P Homebuilders (ETF) (NYSEARCA:XHB)

    .

  • Option bulls strengthen their positions on Starbucks Corporation (NASDAQ:SBUX) while beleaguered RadioShack Corporation (NYSE:RSH) saw an unusual uptick in call buying.
  • Pharmaceutical concern Eli Lilly & Co. (NYSE:LLY) jumped to an brokerage-induced new high.
  • Research In Motion Limited (NASDAQ:RIMM) extended its run atop a formerly supportive trendline, enticing weekly call buyers.
  • Near-term put writing popped up on Nokia Corporation (ADR) (NYSE).
  • January-dated puts were popular with Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR) bears.
  • Downbeat analysts weighed in on Dow heavyweight Hewlett-Packard Company (NYSE:HPQ), while casino operator Las Vegas Sands Corp. (NYSE:LVS) was met with a price-target hike.
  • Be sure to check out these four high-flying stocks with contrarian potential

Though mired in the red for the majority of the session, the Dow Jones Industrial Average (DJI) didn’t retreat to its intra-day worst of 13,473.31 until the last moments of trading. “It was another relatively quiet day for the market, although technology stocks continued to lag,” remarked Schaeffer’s Senior Equities Analyst Joe Bell. “Intel Corporation (NASDAQ:INTC) was hit with a downgrade, which sent the shares surging lower. The trend of cutting guidance for this group continues and we are seeing a lot of underperformance.  Energy and coal stocks really stepped up, though, and performed well.”
Click through to see what else was on our radar today:

  • 4 big-name stocks at all-time peaks that could enjoy contrarian tailwinds.
  • Option bears continue to rail against the outperforming homebuilding sector.
  • Plus, Joe Bell examined two “A” stocks on the move: Alcoa Inc. (NYSE:AA) and Apple Inc. (NASDAQ:AAPL).
What’s Buzzing on the Daily Option Blog
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Option Volume Briefs: Bears Still Betting Against the Homebuilders
RadioShack Rebound Spurs Bulls Into Action