10/24/2012 Market Update

The SPX (S&P 500 Index) has finally crossed my important level 1313 and has now settled around 1408, about a 5 point difference. I have a feeling that the the earnings season will not improve and continue to to decelerate because of global economic conditions. Other than that the markets have needed to correct, but market sentiment has continued to push the market upward. Finally the market is starting to realize the trouble we are in. Now I would also like to make clear the market still could have room to go up, but we are due for at least a short-term correction. I do still believe that stocks may rise in the mid-term. Especially if we get some better earnings.

Technology Stocks (AAPL, GOOG, IBM,FB)

I lately have seen some bearish action in many technology stocks. Most of this action has occured because have terrible earnings reports. If stock markets due rally I will buy this sector on a hope that the market will fill some of the gap left over. The market does a good job of pricing things and if anything is seen has over or underpriced the market will correct the price gap. That is likley to happen if stock markets go up, I will do the opposite if they go down.  My best choice is FB because of its wonderful earnings report.

October Video Review

Major Support Level

Above is a possible breech of support in the SPX. Despite this I still believe stock markets we continue to rally.

10-22-2012 Update

Into the coming week I am planing to be long the S&P  and short the bond markets. Stocks are likely to rise along with other risk assets including oil and at some point gold. Into the coming week I would also expect the dollar to move down as commodities are likely to rise. This week I will also closely be watching JNJ, MCD,  JPM, BAC, GOOG, MSFT, INTC, IBM. So far I have a upside bias in financials and a downside bias in technology. Technology stocks have had some really bad earnings but, we might see some sort of recovery to fill some of the gap left behind. Financials have so far had a good earnings season and, I expect more gains out of this sector.

Stock/Bond Pairs Trade

The /ES-/ZB spread trade to me is starting to look very attractive. Stocks are likley to be boosted by the less than expected jobless claims, while bonds are likely to fall because continued capital flow into stocks. It is also true that interest rates are likely to rise.

Macro Outlook: Asia, United States, Euro Futures

Asian Growth
Eastern Asian growth numbers have come in lower than expected again. This news report allows for continuing bearish momentum in the Asian stock market. The bearish momentum is especially found in the Chinese stock market, due to the current economic slowdown. Now we have seen a little rally in Asia on hopes, dreams, and value seekers. This upside momentum looks like it may dry up because of the growth report. Due to this report, I am going to buy puts on FXI or buy a short China ETF. So far I continue to expect more downside movement in Asian stocks.

US Job Numbers
By my standards us job numbers were absolutely amazing. My only worry is that markets did not have a very big reaction to the numbers. This tells me these numbers were already expected and the report had little significance.

Euro Futures

I am once again short the Euro due to continuing problems in the Euro Zone. Like I said before the euro has very serious financial problems that are still very real  and very dangerous. The Euro will be likely to continue to fall until these problems are solved. I have also noticed short positions of the euro on CNBC and Bloomberg are very scarce now. This scarcity on the news channels prove this trade to likely be correctly timed. When trade ideas are talked about in the media it is to late make the trade.