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Hello everyone, thank you for viewing my profile. I am an Equities Portfolio Trader and Research Analyst. My philosophy to the market is that one must understand market conditions through research analysis. Technical analysis and sentimental analysis must be combined with fundamental analysis... More
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  • The FED is the BULL, November 04-2010 Report
    The U.S. equities market today was officially in the bull-market territory with all indices at new high due to one main reason, QE2 or the second round of quantitative easing. Yesterday at 2:15PM EST the Federal Reserve announced that it will put $600 billions into long term treasury. The FED will be on a buying-spree of government bonds; US $75 billion per month until June, 2011. FED Chairman Ben Bernanke's language was clear; he wants the bond market to dive, the dollar to dip, and the equities market to fly.



    The S&P 500 closed at new high since September 2008, up +1.93% to 1,221.06; Nasdaq up +1.46% to 2,577.34 and the DOW up +1.96% to 11,434.84. News that the FED might allow major banks to increase dividends also helped the financial index to break out. The Financial Select Sector SPDR (NYSEARCA:XLF), closed up +3.19% to %15.21. Bank of America and JP Morgan Chae & Co. surprisingly led the financial to the upside in today trading. BAC shares closed up +5.30% to $12.13 and JPM shares up +5.51% to $39.80 by the closing bell.

    On September 25, hedge fund titan David Tepper stated that Wall Street "animal spirit" would be awakened and that the market would go up with more quantitative easing. "Stocks will do well, bonds will not do as well if the FED does more quantitative easing," said Tepper.  A powerful rally today proved that Tepper was "right on the money" with his bullish call. Julian Robertson, Tiger Management Chairman, however seemed to disagreed with the FED's move. Today on a CNBC exclusive interview, he said that "long term ramifications of printing money may not always be great," citing reasons such as inflation.  

    As traders, one should not go against the trend nor fight the FED. We would look for opportunities to re-enter the long trades at healthy pull back. Commodities ETFs and commodities-related stocks and stocks with great earning stories would be good candidates. The S&P 500 next targets are 1230 and 1250.  Supports now are 1200 and 1180.



    Best regards to all, and good luck in your trading.
    Disclosure: No positions at the time of writing
    Nov 04 5:25 PM | Link | Comment!
  • CDO mess sent market on a roller coaster ride, NOV 01, 2010 Report
    The U.S. market had another roller coaster ride in today trading. All major indices had a positive opening due to positive macroeconomic data. The Manufacturing ISM report was surprisingly bullish, ISM's Employment Index climbed to 57.7% in October which is higher than September data at 56.5%. October Purchasing Managers Index went up to 56.9%; this is very bullish as Wall Street economists were expecting a dip to 54.

    The S&P 500 index high of the day was 1,195.81 shortly after the open. However, market participants were profit taking all day long, sending it to the low at 1,177.65. What was the cause of the "reversal of fortune"? Traders blamed today sell-off on several reasons, all of which came from the financial. Weakness in this troubling sector was due to news of the SEC investigation over a sub prime deal, and lingering fear of foreclosure mess saga. The Financial Select Sector SPDR Fund (NYSEARCA:XLF) went into negative territory as selling accelerating right after open. XLF, however, closed at $14.56, up +0.01% when investors were bargain buying in the last hour of trading. 



    As one might recall, there is an endless string of negative headlines for the financial recently. Today we had more unwelcomed news for the already-troubling sector. The SEC is investigating J.P. Morgan Chase & Co. over the sub prime mortgages and CDO mess called "Squared,"  a collateralized debt obligations made up of other forms of CDOs. ProPulica stated on Monday that Magnetar Capital, a hedge fund firm based in Illinois, invested in the riskiest CDO from JPM in 2007. The SEC is investing whether or not the investment bank JPM disclosed adequate information to investors about "Squared" and Magnetar's role in the deal. JPM shares closed at $37.42, down -0.56%.

    Foreclosure crisis also caused weakness in other banks. Last few weeks, prominent banking analyst at Rochdale Securities, Richard Bove, has predicted a heavy price tag for the foreclosure crisis at $80 billions. Bank of America faced a mounting pressure, a $47 billions worth of foreclosure mess and investors' lawsuits. BAC shares tanked almost -0.50% at 3PM EST time but buyers suddenly stepping in the last hour. Bank of America shares surprisingly closed up +0.45% to $11.50.

    Today market action is surely causing some confusion. Market participants are trying to understand major factors such as midterm election, which will starting tomorrow. Then on Wednesday, there is the Federal Reserve decision on the second round of quantitative easing, known as Q2. Other factors such as positive earning seasons and inspiring macro data also played a major role. Weakness of the financial with headlines risks like the SEC investigation on CDO mess and foreclosure crisis, however, surely put a lid on the recent rally.

    The S&P 500 has strong supports at its 20d-MA at 1175.22 and 1150. The next resistance are 1196.14 and the psychological level of 1200. We believe the market have a good reason to rally above the 1200, giving positive catalysts such as midterm election and positive earning season. Quantitative easing is also another bullish factor for the market. Having said that, it's important to wait for the market to consolidate at the time being. A break out above 1200 with heavy volumes or institutional buying would be a signal to go long. Only stocks with strong earing stories are good candidates for a long trade. 



    Best regards to all, and good luck in your trading.
    Disclosure: No positions at the time of writing.
    Nov 01 6:32 PM | Link | Comment!
  • Consumer Confidence lifted and luxury sales booming, OCT 26, 2010 Midday-Report

    U.S. equities market looked weak at opening as the dollar got strengthened. In addition to that housing data did not give investors any reasons to cheer on Tuesday. The Standard & Poor/Case-Shiller reported a rise of +1.7% for the average price of a single home for the month of August. A Bloomberg survey said that Wall Street economists were expecting the data to be up +2.1%.

    GOOD NEWS FOR THE BULLS, at 10 AM EST, the Conference Board lightened up investors' mood with a rosier report. Consumer confidence for the month of October rose to 50.2; this showed a great improvement from September data at 48.6. Economists expected a 50 reading on the average, in according to Market-Watch Research.



    Ken Goldstein, an economist at the Conference Board stated that consumers are still worrying about the high unemployment rate. Brent Wilsey, President of  Wilsey Asset Management believed the consumer spending is a better indicator of economy recovery than consumer confidence index. Both Goldstein and Wilsey said the consumer spending data after the Christmas holidays and midterm election might be a little troublesome. These data will be watched closely by economists to determine the true health of economy.  

    While economists continue with their usual cautious tones, consumers are on a shopping spree with luxury goods. Coach Inc. reported a better-than-expected earning report on Tuesday; COH shares up +10.41% to a new 52 weeks high at $49.33 by 11:23AM EST. Tiffany & Co shares also went to a fresh new 52 weeks high at $52.50, up %1.28.  According to The Street.com, there is a report by Bain & Co., a global consulting firm, predicting a phenomenon growth of  +10% for luxury sector for 2010. This is an inspiring news since there was a decline of -9% for luxury products sale in 2009.

    For the short term, the S&P 500 has strong supports at EMA(8)= 1176.58 and EMA(21)=1165.69. With good earning season upon us, there is a very likely chance that the market would take out the recent high at 1196.14 and hit the psychological level at 1200. We would trade long ONLY stocks that have a better-than-expected earning data.




    Best regards to all, and good luck in your trading.
    Disclosure: No positions at the time of writing.
    Oct 26 11:51 AM | Link | Comment!
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