| | "Magnet Economics" | | |  Now that we know that polarity reigns supreme in the markets with ‘bad’ economic news attracting ‘good’ equity prices, we can view the world through our lens of magnetic economics. Nothing like downright dismal economic news to propel the markets higher to recover over half of Friday’s losses! As the Manufacturing ISM came out Monday printing at a contractionary 49.0, this was a drop from 50.7, well below expectations of 51.0 (and far below the 53.0 forecast), we knew that meant one thing for the markets, especially since this was the worst ISM headline print since June 2009. In addition, it was the first sub-50 print since November 2012, and the New Orders of 48.8, was the worst since July 2012. Both Production and Backlogs tumbled by -4.9 and -5.0 to 48.6, and 48.0 respectively. To sum it up, of the 11 series tracked by the ISM, only 3 posted a reading over 50 in May. This compares to just 2 out of 11 that were below 50 in April. We can all take a deep breath and realize that things are back to “normal” and that today, like most days this year, is a really bad news is a really good news day, and stocks have soared as according to the laws of magnet economics. Onward and upward, as today is Tuesday – the designated rally day, and from China to Japan there will be more bad news on the horizon. Plus the second quarter earnings picture that we can piece together from S&P 500 guidance is a negative one indeed. Over the past five years, an average of 62 percent of S&P companies that have issued earnings-per-share guidance have given projections below the mean EPS estimate. But research company Fact Set reports that for the second quarter, 86 of the 106 S&P companies have projected below the mean, meaning that 81 percent of the guidance has been negative. In the materials sector, a whopping 88 percent of guiding companies have issued negative guidance. Definitely fuel for new record highs! Trade well and follow the trend, not the perma-bull OR perma-bear “experts.” | | ---Larry Levin |
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In conjunction with TheStreet.com and Bar Chart, Trading Advantage Senior Market Analyst Alan Knuckman provides a daily morning update on the global action in stock futures, gold, oil and interest rates. |
| | | | | | | | | Congratulations to Celeste Leme Congratulations to the Student of the day Celeste Leme. Celeste, like many other students had a successful day trading the equities markets. Our head educator Dan O"Brien had 6 winning signals. I looks to be an active and exciting June.
Celest Leme + $212.50 es + $230 nq
| | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. |
| | | | | OPTIONS: Volatility Commentary | ---Steven Lee / Michael Shorr | A ray of hope out of the eurozone this trading day. the Manufacturing PMI rose to 48.3 in May from 46.7 in April which was a 15-month high. A particular bright spot was, from of all places Spain, whose PMI jumped to its best level in two years with an increase to 48.1 from 44.7. The Nikkei took another hit in today's trade, dropping 3.7% which puts its overall losses since May 23 at about 17%. HSBC's PMI for China fell a bit more than expected from 50.4 to 49.2. The downward revision "suggests a marginal weakening of activities towards the end of last month, thanks to deteriorating domestic demand conditions," says HSBC. Here in the U.S. the May ISM Manufacturing Index missed pretty significantly coming at at 49.0 versus a consensus of 51.0. Last month, the index was 50.7. We have a very busy economic calendar this week. Tuesday, we have ICSC-Goldman Store Sales and Redbook. Wednesday, we have MBA Purchase Applications, ADP's employment report, Productivity and Costs, Factory Orders and ISM non-Manufacturing Index along with the weekly EIA Petroleum reports. Thursday, initial jobless claims, Bloomberg Consumer Comfort Index, the weekly Natural Gas report and the U.S. Treasury announces their funding schedule. Friday, we have Consumer Credit and the Employment Situation. Of particular importance of all these reports will be Friday's Employment Situation. Two of the major engines for getting out of our present financial predicament are Housing and Jobs. As highlighted numerous times over the past few weeks, U.S. Housing is on shaky ground. This Employment Report could very well set the tone for this summer's trade as well as for the rest of the year. There will be a lot of posturing and position squaring going into Friday. |
| | | | | FOREX: Currency Spotlight | ---Ed Moya | | | Traders used up a lot of leverage over last month increasing their U.S. dollar bets and yesterday’s ISM PMI index took the air out of that trade. Falling into contraction for the first time since 2009, the weakness brought back life to all the high-beta currencies. The easy logic was that market participants can’t imagine the accelerated path towards the anticipated “taper” of QE. Earlier in London, it appeared that the dollar was stable, but the backdrop for risk off was firmly in place as the night before concerns that the Chinese small business is hurting. The HSBC PMI printed below the critical 50-level. Today, we will see trade balance figures, but the key moves will once again fall onto labor situation. A solid ADP report could alleviate some of the dollar’s weakness, but the key result will come Friday. Technically speaking, the dollar index is poised for a rout. If at the end of the week, it is trading comfortably below 82.00, downward pressure may target 81.45. |
| | | | | STOCKS: Watch List | ---Charles Moon | | | | The markets finished in positive territory for the day, as an aggressive push late helped propel both the Composite and the S&P 500 into the green. The Dow finished up 138 points as it held its gains throughout the day. This bucked the trend of finishing in negative territory on Monday's as the market recovered from Friday's sell off. This came off weak economic data that triggered a slide, but nevee threatened to push the Dow into negative territory. We saw stocks take big swings in the Financial Sector. After an initial push higher early on, the slide came in to slam these stocks to their lows. Once the lows of the day was set, there was a slow but steady grind higher to try and regain some of the losses. Goldman Sachs(GS) and Prudential Financial(PRU] were the most volatile, as these stocks were the ones to endure the biggest swings. Look for the sector to continue higher, but to face some hurdles along the way. With the unease in the markets, the upside play looks to be limited at the moment. With Tuesday's coming in with a record of continuous positive days, the trend should continue although not without struggles. The markets are.increasingly showing fear and uncertainty, hence the big slides we have been facing these days. Keep looking short term, and play those profits close to your chest. Yesterday was an example of how steep the.pullbacks can get. Losing profits due to one-sided thinking will be devastating in these trading conditions. Open Position: TSL Stocks to Watch: NTC AAPL GOOG IBM AMZN PCLN BBRY FB LVLT CHKP CTXS CSCO BAC C PRU WFC GS JPM MS CMI CAT NFLX WDC GE AIG LULU LNKD DIS KORS COH FOSL CROX STZ NKE UA CHKP JNPR POT GMCR HLF HOG YUM LOW HD LEN TOL V MA AXP DFS LVS MGM TSL FSLR JASO |
| | | | | FUTURES: Technical Data | | | | | ES 1634.25 / 1624.75 POC… 1631.00 YM 15192 / 15139 NQ 2982.00 / 2959.00 | |
| | | | | COMMODITIES: Play of the Day | ---Patrick Assalone | | | | Crude oil analysts have said slow demand growth with robust supplies could cap gains in oil prices. Record high U.S. supplies and a weak global economic outlook has kept a lid on prices.Brent crude was rising off of three previous sessions of losses, but was still only able to touch the 10-day moving average on the high end of the session. Brent has fallen for four straight months from a high of $119.17 in February. Based on our educational methodology, we are still looking for short signals with entries at 93.60, 93.01, 92.11 or below the contract low at 91.64. |
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