Monday, April 29, 2013

Nasdaq Analysis

Recent 20-week cycle trough
A 40-week dominant cycle
Both of these show a 40 week trough at the end of June. We should see a strong move down into that cycle trough.

S&P 500 Analysis

A recent 20-week cycle trough
Syncopated beats
A major low is anticipated leading into June.

Market LookBeck II

(Reuters) - The euro rose against the dollar and yen on Monday after Italy finally formed a government, ending two months of political uncertainty, but further gains may be limited given expectations the European Central Bank will cut interest rates this week.

Italy's new prime minister, center-left politician Enrico Letta, named a coalition government on Saturday, a move that drove Italian stocks higher and benchmark borrowing costs to their lowest level since October 2010 at an auction on Monday.

Some analysts say the euro could weaken should the ECB cut its main interest rate by 25 basis points from 0.75 percent currently when it meets on Thursday; a rate cut would erode the euro's interest rate advantage over the dollar and yen.

"The euro would likely weaken somewhat on that, but the overall move will be muted," said John Doyle, currency strategist at Tempus Consulting in Washington, D.C. "The expectation is starting to get priced in."

Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York, said the euro could even rally after a knee-jerk move lower as some investors see a rate cut by the ECB as another effort to stimulate the euro zone economy.

"It's clear that the euro zone economy is really in a quagmire and it needs some kind of jumpstart," Schlossberg said. "There's almost nothing else available. A rate cut is better than nothing."

"Even though the market initially perceives the rate cut as a negative thing, it will actually be disappointed if they don't see the rate cut and that can drive the euro down."

Signs are growing that weakness in peripheral euro zone economies is spreading to the region's core, such as Germany, its biggest economy. Confidence in the euro zone economy fell more than expected in April, data showed on Monday, highlighting the souring mood among companies and consumers since March. . A drop in German inflation also contributed to the ECB rate cut argument, although the impact on the euro will likely be limited.

The euro was up 0.51 percent at $1.3093, with hedge funds cited among key buyers. It peaked at $1.3115, the highest since April 19, midway through the London session.

The U.S. economy grew more slowly than expected in the first quarter, and with inflation anchored, expectations are fading that the Federal Reserve could cut back its quantitative easing program anytime soon.

"That is weighing on the dollar," said Ian Gunner, portfolio manager at Altana Hard Currency Fund In London.

Gunner said only a cut in the ECB's zero percent deposit rate, which he did not expect, would cause the euro to fall sharply.

A two-day Federal Reserve policy meeting beginning on Tuesday will be watched for whether the Fed indicates any fresh risks to growth. If it does, there could be some trimming of long dollar positions put in place in recent months.

Against the yen, the dollar was flat at 98.01 yen, erasing losses after stronger-than-expected data on sales contracts for previously owned U.S. homes.

The dollar set a four-year high of 99.94 yen earlier in April after the Bank of Japan unveiled a major stimulus program.

The dollar has faced stiff resistance at 100 yen, but many expect it to firm against the yen as Japanese investors such as insurance companies and pension funds allocate some of their portfolios to overseas assets in coming months.

Japan on Tuesday will report March economic data on unemployment, industrial production and retail sales.

"The long-term trend of yen selling is likely to be intact. We are seeing a reversal today based on the fact that Japanese investors have not responded so far to moving money abroad," said Eric Viloria, senior currency strategist at Forex.com.

"If the data are positive or stronger than expected, the yen could get a boost from that," he said, noting the 97.75 dollar/yen level as proven support

Market LookBeck

Dow Jones Industrial Average 14818.75 106.20 0.72%
S&P 500 Index 1593.61 11.37 0.72%
Nasdaq Composite 3307.01 27.75 0.85%
Nasdaq 100 2866.94 26.39 0.93%
Russell 2000 942.43 7.17 0.77%
Spot Gold 1474.10 12.18 0.83%
Crude Oil 94.73 1.73 1.86%
NYSE Overall Volume 2,837,870K n/a -9.36%
Nasdaq Overall Volume 1,511,658K n/a -7.79%
NYSE Breadth 3.61 : 1 positive  
Nasdaq Breadth 2.31 : 1 positive  
NYSE Breadth Ratio 78.31    
Nasdaq Breadth Ratio 69.77    
NYSE Advancers/Decliners 1426    
Nasdaq Advancers/Decliners 901    
NYSE Trin 0.78    
Nasdaq Trin 0.96    
$VIX 13.71 0.10

MONTHLY - Bullish - Large body candle with expansion of range. Targeting all time high of 1576.09 now.

WEEKLY - Bullish - Range approximately equal to prior week's bearish candle.

DAILY - Bullish - Attempt at prior all-time high.

                                      ES
                        NQ
Value Area High 1591.25 2870.25
Point of Control 1588.50 2860.75
Value Area Low 1586.00 2859.75
R3 1606.58 2902.75
R2 1599.42 2887.25
R1 1593.83 2873.00
Pivot 1586.67 2857.50
S1 1581.08 2843.25
S2 1573.92 2827.75
S3 1568.33 2813.50

ShadowTrader Sector Trend Scores



Yesterday's bullish ShadowTrader Sector breadth is the sixth bullish breadth day in the last seven trading days. Twenty one of twenty five sectors closed green. Three sectors are in overbought territory including XOI which has closed higehr eight consecutive days, along with UTY and TOB which have both closed higher five consecutive days.

dWbShadowTrader Quad


Advance Decline Breadth began the day positive and the MA's supported it all day. Up/Down Volume was similarly carried by the moving averages. In the premarket price bounce off of yesterday's Value Area High, and once the bears failed to take it any lower, it continued to new intraday highs, approaching the All-Time High. On the five minute interval the Ergodic Oscillator only approached the zero line on consolidations and the Double Stochastics showed two perfect examples of the rubber band effect, where the Fast Stochastic pulls back from the Slow Stochastic that is extremely positive, only to ultimately rejoin it and take prices higher.

Fibonacci Ticks 144-6765



Once price was able to regain support from the MA's it carried price all afternoon. The Double Stochastics went into extremely positive territory all the way out to the 6765 Tick Interval. On TTM Squeeze the alert fired to the upside and TTM Wave A failed to completely breach the zero line, instead launching upwards. Williams Alligator carried price as well with strong support from the jaw line. Woodies CCI climbed with a positive trend on all longer term tick intervals. 



Gann Emblem


Economic Calendar


Economic Calendar

FORECASTER OF THE MONTH | ECONOMIC PREVIEW | MARKETS | ECONOMIC REPORTS
 
THIS WEEK'S U.S. ECONOMIC REPORTS
TIME (ET)REPORTPERIODACTUALCONSENSUS
FORECAST
PREVIOUS
MONDAY, APRIL 22
8:30 amChicago Fed national activity indexMarch-0.01 (3mo)--0.12 (3-mo)
10 amExisting home salesMarch4.92 mln5.03 mln4.95 mln
TUESDAY, APRIL 23
9 amMarket flash PMIApril52.0--54.6
9 amFHFA home price indexFeb.7.1% y-o-y--6.7% y-o-y
10 amNew home salesMarch417,000421,000411,000
WEDNESDAY, APRIL 24
8:30 amDurable goods ordersMarch-5.7%-3.2%4.3%
THURSDAY APRIL 25
8:30 amWeekly jobless claims4/20339,000351,000355,000 
FRIDAY, APRIL 26
8:30 amGDP1Q2.5%3.2%0.4%
9:55 amConsumer sentimentApril76.474.072.3
 
 MarketWatch
MarketWatch


NEXT WEEK'S U.S. ECONOMIC REPORTS
TIME (ET)REPORTPERIODACTUALCONSENSUS
FORECAST
PREVIOUS
MONDAY, APRIL 29
8:30 amPersonal incomeMarch 0.4%1.1%
8:30 amConsumer spendingMarch 0.1%0.7%
10 amPending home salesMarch --3.9%
TUESDAY, APRIL 30
8:30 amEmployment cost index1Q 0.5%0.5%
9 amCase-Shiller home price indexFeb. --8.1% (yoy)
9:45 amChicago PMIApril 52.852.4
10 amConsumer confidence indexApril 61.359.7
WEDNESDAY, MAY 1
8:15 amADP employment indexApril 170,000158,000
10 amISMApril 50.951.3
10 amConstruction spendingMarch0.7%1.2%
TBAMotor vehicle salesApril 15.3 mln15.3 mln
2 pmFOMC announcement    
THURSDAY MAY 2
8:30 amWeekly jobless claims4/27346,000339,000
8:30 amTrade deficitMarch -$42.0 bln-$43.0 bln
8:30 amProductivity1Q 1.0%-1.9%
FRIDAY, MAY 3
8:30 amNonfarm payrollsApril 160,00088,000
8:30 amUnemployment rateApril7.6%7.6%
10 amISM nonmanufacturingApril 53.554.4
10 amFactory ordersMarch -2.9%3.0%
 

LAST WEEK'S U.S. ECONOMIC REPORTS
TIME (ET)REPORTPERIODACTUALCONSENSUS
FORECAST
PREVIOUS
MONDAY, APRIL 15
8:30 a.m.Empire State indexApril3.17.8 9.2
10 a.m.NAHB home builders indexApril424644
TUESDAY, APRIL 16
8:30 a.m.Consumer price indexMarch-0.2%-0.1%0.7%
8:30 a.m.Core CPIMarch0.1%0.2%0.2%
8:30 a.m.Housing startsMarch1.04 mln933,000968,000
9:15 a.m.Industrial productionMarch0.4%0.3%1.1%
WEDNESDAY, APRIL 17
2 pmBeige Book    
THURSDAY APRIL 18
8:30 a.m.Weekly jobless claims4/13352,000346,000348,000
10 a.m.Philly FedApril1.34.02
10 a.m.Leading indicatorsMarch-0.1%0.2%0.5%
FRIDAY, APRIL 19
 None scheduled   
 

Long-term GDP forecasts
DATEREPORTPERIODFORECASTPREVIOUS
July 31GDP2Q1.5%2.5% (1Q)
Oct. 30GDP3Q2.5%2.5% (1Q)
Jan. 2014GDP4Q2.8%2.5% (1Q)