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StreetOne Technical Analysis, LLC Market Summary-04/08/2010

|Includes: EEM, GLD, IAU, IWM, IYR, TNA, XLB, XLE, Financial Select Sector SPDR ETF (XLF), XLK, XLV, XME

 The Market was trading little changed when an event reversal(Fed. Hoenig’s comments) moved the Market significantly lower. There was some recovery before the close to finish off the lows of the session. At the bell, the DJIA and S&P500 were off near 0.6%, and the Nasdaq100 down 0.2%. Breadth was less then 2 to 1 negative on the NYSE, however, a negative sign was the pickup in volume on the selling. Since the early Feb. lows, prior to the last session, the DJIA was up 10.7%, the S&P500 up 12.5%, and the Nasdaq100 gained 14%. A correction would not be a surprise. We mentioned some near term bearish signals last week which were somewhat nullified with Monday’s good action.  Watch the 1175 and 1975 areas for the S&P500 and Nasdaq100 for near term support.  More important short term support lies near: S&P500-1150, Nasdaq100-(1900-1920) area, DJIA-10725.  The Financials (NYSEARCA:XLF), was trading at a new high, when the Market reversed and the XLF fell to close at 16.35 off just .06.  Support remains at 16.30, 16.15, 16.00, and 15.75. Resistance at 16.50, 16.75, and 17.00. GOLD(GLD) tested and broke through the recent trading range(106.50-112.00), closing at 112.49. There is some weak resistance near 112.85-113.00 area. Break through here and it could test the Dec. 2009 highs of 119.18. It is short term over bought. The VIX bounced off its recent low to gain 2.4% to 16.62.    

 

Trading Trend

Long term, technicals remain positive as we continue to trade near recent highs.  Short term, upside bias continues. Near term, the last session event reversal, may have some more downside action. Note support levels above for near term direction. Today’s Claims Report may be a Market mover. Today’s futures(at 8:15am) are down moderately versus fair value. Economic recovery confirmation(e.g.-employment, consumer spending) and interest rates have become the key Market movers.

 

Major Economic Reports Today:

Continuing/Initial Claims-8:30am   

  

MAJOR INDICES - Short term support and resistance levels

DJIA-(close 10897)

SP500-(close 1182)

N100-(close 1977)

10887

10907

1176

1189

1975

1983

10800

11000

1175

1194

1967

1988

10795

11036

1170

1200

1964

2000

10725

11125

1165

1213

1963

2012

10606

11254

1160

1225

1950

2025

10605

11500

1150

 

1943

 

10540

 

1143

 

1940

 

10500

 

1141

 

1935

 

 

 

 

 

1920

 

 

Options/Derivative Flows(from the desk of P.Weisbruch)

In XLB (SPDR Basic Materials), in the money put buyers have surfaced in recent sessions, with the ETF challenging a new 52 week high. Specifically, the May 36 puts have been bought in size, at least 50,000 contracts. In XLF (SPDR Financials) buyers of downside protection appeared in the January 15 puts, probably hedging a long position in the sector. In XLE (SPDR Energy), which is up over 4% year to date, buyers of upside May 62 calls have been around and could be positioning for further upside, or protecting a short position. XLK (SPDR Technology), instead of option buying, there have been put sellers consistently, probably speculating that there is limited downside, or a "floor" in the sector over the next few months. Finally, in IYR (iShares REIT), closing call sellers of April 52 calls unwound that position to buy calls and sell puts simultaneously in the May 46 put / 54 call risk reversals, continuing a bullish stance in the sector for the near term.

 

Trade Ideas

GLD-(SPDR Gold Trust)-Closed 112.49, breaking out above 112. Similar trade IAU(iShares Gold Trust).

XME(SPDR S&P Metals and Mining)-Closed 59.35. Remains a buy above breakout of 58.73. Recent positive cross in MACD. Similar trade, XLB(SPDR SEL materials).

IWM(iShares Russell 2000)- Closed 69.90. Remains buy above breakout level-69.23. Similar trade TNA(Direxion Small Cap-3X leverage)

EEM(iShares Emerging Markets)-Closed at 43.36. Remains a buy above breakout level-43,20.

XLV(SPDR Health Care)- Closed 32.06. Closed just below 20D-EMA. Continues to be a buy above 32.00. Short term potential 34.00

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