It could have been the biggest rally after 5 days of sell off, but it looks like the sell off is likely to continue. First US GDP came at 2% causing initial sell off today, then IMF gave some positive news for small pull back, then FOMC didnt announce QE3 which lead to mini sell off.
After hours Fed announced bank stress test. Followed by another bad news from China, its PMI came at 48 which shows contraction. If another bad news comes out from Euro zone at 2 am EST, it could lead to very low open.
Also lots of US economic data is coming out.
At 7.00 am EST, MBA is coming out.
***At 8.30 am EST, Jobless claim of 388K or less is bullish sign, 392k or higher will be bearish sign.
***Durable goods data of 0.0% or higher is bullish sign while -0.1% or lower will be bearish sign.
***Personal income of 0.3% is bullish sign, while negative data will be very bearish sign (It could lead to big sell off)
***Core PCE price index of 0.1% is bullish sign for GOLD or GLD.
** Consumer sentiment at 9.55 am EST, 64.6 or higher is very bullish sign, 60 or lower will be bearish sign.
***EIA natural gas report is coming out at 10.30 EST and Petroleum status is coming out 11 EST any inventory built up will be negative for ERX, while decline of inventory will be bullish sign for ERX.
I think the market will open low but its likely to pull back later in the day.
Use FTSE as a reference point, http://www.google.com/finance?q=INDEXFTSE:UKX
Also its very important to keep Italian bond yield in mind, yesterday it was at 6.82 which is close to danger level of 7. http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND
"If Italian bond hit 7 or higher once again then market will be in very big trouble"
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Some Trading ideas:
After hours Fed announced bank stress test. Followed by another bad news from China, its PMI came at 48 which shows contraction. If another bad news comes out from Euro zone at 2 am EST, it could lead to very low open.
Also lots of US economic data is coming out.
At 7.00 am EST, MBA is coming out.
***At 8.30 am EST, Jobless claim of 388K or less is bullish sign, 392k or higher will be bearish sign.
***Durable goods data of 0.0% or higher is bullish sign while -0.1% or lower will be bearish sign.
***Personal income of 0.3% is bullish sign, while negative data will be very bearish sign (It could lead to big sell off)
***Core PCE price index of 0.1% is bullish sign for GOLD or GLD.
** Consumer sentiment at 9.55 am EST, 64.6 or higher is very bullish sign, 60 or lower will be bearish sign.
***EIA natural gas report is coming out at 10.30 EST and Petroleum status is coming out 11 EST any inventory built up will be negative for ERX, while decline of inventory will be bullish sign for ERX.
I think the market will open low but its likely to pull back later in the day.
Use FTSE as a reference point, http://www.google.com/finance?q=INDEXFTSE:UKX
Also its very important to keep Italian bond yield in mind, yesterday it was at 6.82 which is close to danger level of 7. http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND
"If Italian bond hit 7 or higher once again then market will be in very big trouble"
********************************************************************************
Some Trading ideas:
- As said in my yesterday article, DJI has big resistance at 11397 on the downside, if it breaks next resistance is at 11103. In S&P500, it has big resistance at 1175, 1164 followed by 1155.
- If tomorrow DJI bounce back above 11397 and S&P bounce back above 1175 and hold the position with Nasdaq positive, then its time to be bullish and buy any stocks.
- Stocks announcing earning before market opens: DE, SFL, PTNR
- Stocks likely to open low are DMND, FRO and mostly all the stocks.
- At this level, some bargain hunting will take place.
- Sarkozy, Merkel and Italy PM are meeting on Thrusday. Any effort to save Italy will be bullish sign.
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