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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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  • Daily Market Summary & Analysis, SEPT 28, 2010
    Today U.S. equities future indexes dropped at the open with mixed macroeconomic data. The Standard & Poor's released its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. "Home prices are improving slowly and remain stable around the recent low. 10-city S&P Case-Shiller home price index was unchanged in July," said the world's leading index provider. At 10AM EST, bearish news came from the Conference Boarb as it released consumer confidence data for the September month. SEPT consumer confidence index tanked to 48.50 versus 53.2 in August. This is very bearish as it
    is the lowest level since December 2009. "The drop was due to less favorable business condition and high unemployment rate," said the Conference Board on Tuesday. Other news came from Europe as the European central banks announced it bought Irish government debts. Analysts see this as a positive signal and good news in regard for the financial stability in Europe.

    Noticeable analysts' calls came from Goldman Sachs firm in today trading session. "We expect GDP to grow 1.5% to 2.5% in 2011, this is a downward revision from earlier forecast of 2.5 to 3.0%," said GS Investment Strategy Group. Billionaire hedge fund titan, John Paulson also predicted a lower GDP at 2% range for 2011 and 2012. However he has stated his bullish view for U.S. equities at New York's University Club. "It's time to sell bonds, buy stocks, and buy....yes, homes. It's the best time to buy homes in 50 years. Double digit inflation is coming, due to the FED's quantitative easing," said Paulson. It's important to note that last week on Friday another hedge fund titan, David Tepper also made a very bullish call for the market. "Stocks will do well, bonds will not do as well as economy improves. If the FED does more quantitative easing, everything will do well and we have added more equities to our portfolios recently. Sometimes it is just that easy and you can’t not be that negative. My animal spirit is awakened now,” said Tepper. 
    All major indexes closed at 4 months high by the closing bell, erasing early losses. The DOW closed up +0.50% to 10,865.86, the Nasdaq
    up +0.43% to 2,379.89, and the S&P 500 also closed in green, up +0.53% to 1,148.20. Technically, this market is modestly bullish as there is a "silver lining development" that both the 20d-MA and 50d-MA made a "golden cross" over the 100d-MA. Remarkably, when this golden cross took place in July-2009 and FEB-2010, the market was rallying each time. Having said that we should note the "golden cross" above the 200d-MA would be a more reliable confirmation of this bullish development. 

    Lastly, it's very critical for the S&P 500 to climb above the inflection point at 1150 in order to confirm the bull trend. Let's be patient and see how the market handle the 1150 level tomorrow. Supports for the S&P 500 now are 1130, 1117 and 1100. Resistance for the index are 1150, 1160 and 1170.
    Best regards to all, and good luck in your trading.
    Disclosure: No positions in stocks mentioned at the time of writing.
    Sep 28 4:10 PM | Link | Comment!
  • Wall Street Animal Spirits are awakened by Hedge Fund Titan, David Tepper
    "Animal spirits" were awakened in Wall Street today with all major indexes up across the board. The S&P 500 closed up +2.12% to 1,148.67; the DOW up +1.86% to 10,860.26; and NASDAQ up +2.33% to 2,381.22. The DOW and the S&P 500 posted a historical gain for the September month since 1939. One should give credits to Hedge Fund titan, David Tepper, the founder of Appaloosa Management for today amazing rally. Tepper, the legendary hedge fund manager has made a "major bullish call" for the market on Friday.

    Seldom, one can move the market, but today is the exception to the rule because Tepper is not an average hedge fund manager. He is the legendary who has made a monster-return of 133% in 2009; that is a cool  $7.5 billions in profit for the fund and $2.5 billions for himself in the same year. His track record is as impressive as it can be, a 40% average return for himself and 30% for his private clients in 17 long years. Tepper said on Friday that he is very bullish in the U.S. equities market and he will be 99-100% fully invested if the S&P takes a pull back to 1,100. "Stocks will do well, bonds will not do as well as economy improves. If the FED does more quantitative easing, everything will do well and we have added more equities to our portfolios recently. Sometimes it is just that easy and you can't not be that negative. My animal spirit is awakened now," said the hedge fund titan. Investors' sentiment was lifted after the legendary hedge fund manager's comment, sending stocks closed at four months high across the board.

    Market participants also believed that today upbeat macro economic data have helped to fuel the rally. August durable goods was encouraging; ex-transportation durable goods was up +2% versus it was down -2.8% in July. Unexpected rise in German business sentiment also has helped the European market and the U.S. market in general. The Munich-based Ifo Institute reported a reading of 106.8 from 106.7 for the September month. This is surprisingly bullish as economists' expectation was a decline to 106.5.

    Technically, the S&P 500 showed a confirmed "Triple Top Break Out", above June high, July high and September high. Next key resistance is 1,150; if this level is taken out, we would see program buying and more institutional participants. Next probable targets for the S&P 500 are 1,160 and May high at 1,170. Fund managers are likely to chase this rally into Q4-2010 for so many reasons. Midterm election historically is a positive catalyst for the market, with an average return of 17% for the S&P. Earning season is coming in October. In the last earning season, 75% of the S&P 500 reported a higher-than-expected numbers. Lastly, performance pressure would likely accelerate, causing the "sitting on the side-line money" to move into the equities market. We might experience another highly volatile market, but a year end rally is very probable. Supports for the S&P are 1,130, the 200d-MA at 1,107.54, and the psychological level at 1,100.
    Best regards to all, and good luck in your trading.   

    Disclosure: No positions in stocks mentioned at the time of writing.
    Sep 24 8:09 PM | Link | 1 Comment
  • Daily Market Summary & Analysis, SEPT 23, 2010
    Today the Asian markets closed mixed, with major markets such as China, Hong Kong, Japan and South Korea closed for holiday. Taiwanese market TWSE up +0.07% to 8,202.54; Singapore STI down -0.42% to 3,083.13; Australia (the S&P/ASX 200) up +0.18% to 4,633.65; and India market, the S&P/CNX 500 down -0.36% to 4,891.55. Traders kept their positions light, awaiting a summit meeting between President Obama and Japanese Prime Minister Naoto Kan in New York on Thrusday. Obviously this meeting would determine how much Japan government would take action to currency intervention.

    At 8:30 AM EST, the US Department of Labor reported U.S. weekly jobless claims, up +12,000 to 465,000 (week ended 9/18). This is bearish as Wall Street economists' expectation was 450,000 and today data showed an increase for the first time since 5 weeks. Four week-moving average reported to fall -3,250 to 463,325. According to a private research group, the Conference Board, August index of leading economic indicatiors rose +0.3% versus an up of +0.1% in July. Analysts expected a rise of +0.2% thus August data was modestly positive. A more bullish data came from the National Association of Realtors; August Existing home sales rose  +7.6%. This is "a relief" since July existing home sales were down by -27.2%. Housing analysts commented Thrusday that the worst was behind us but inventories are still very high. This supply will overpower the market and we will stay in a flat-line in regard to home sales for years to come. Other positive factors for home sales are that affordability is the best in 40 years. Conditions for morgage are improved, as July showed money easing. 
    Other important development in today trading session is that Warren Buffet said Thrusday he believes the U.S is still in recession. Even though he sees zero chances of a double-dip recession,  "we are still in recession and this would last for a while," said Buffett. It is important to remember that the National Bureau of Economic Research (NBER) reported Monday that the 18-month recession has ended in June 2009 of last year. The Great Buffett  clearly disagreed with the NBER's statement; his reason is to use "his common sense". Howard Eisen, managing director and co-founder of Fletcher Bennett, believed that everyone is waited at the sideline and not investing in the U.S. equities market. Brian Stutland, president at Stutland Equities, however made a very positive comment Thrusday in regard to the market. He believed lower earnings are already baked into the recent sell-off.  "Technically, however, we need to see the S&P 500 to break above 1150 to get institutional participation," said Stutland. 
    The market was selling off into the closing bell. The S&P 500 closed near the low of the day, down -0.83% to 1,124.83; the DOW down -0.72% to 10,662.42; and Nasdaq down -0.32% to 2,337.08. The Financial Select Sector SPDR Index is below 200d-MA ($14.78), down -1.93% to $14.23 as many Wall Street analysts slashed estimates for major banks this week. Deutsche Bank analyst lowered estimates for both Goldman Sachs and Morgan Stanley. In addition to that, Ireland reported a weaker than expected Q2-GDP, fell hard to -1.8% y/y versus economists' expectation of -0.4%. This bearish data from Europe stirred fear on global recovery and risks for the financial sector. Goldman Sachs Group Inc. (NYSE:GS) down -2.13% to 144.91, JP Morgan Chase & Co. (NYSE:JPM) down -2.10% to $39.10, Bank of America Cor. (NYSE:BAC) down -1.86% to $13.17, Citigroup Inc. (NYSE:C) down -2.06% to $3.80, and Morgan Stanley (NYSE:MS) down -0.80% to $24.74. 

    Critical supports for the S&P 500 now are the 200d-MA at 1116.77 range, the psychological level 1,100, the 20d-MA 1,102.47, and the 50d-MA at 1097.59. Resistance now are the June high 1130, 1140,  the September high at 1148.59 level, and MAY high at 1170.
    Best regards to all, and good luck in your trading.
    Disclosure: No positions in stocks mentioned at the time of writing.
    Tags: XLF, GS, C, BAC, JPM, DOW, Warren Buffett
    Sep 23 4:28 PM | Link | Comment!
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