Stock Tiger Stalking Stocks™ For Monday June 1, 2009 You may subscribe to this newsletter free - subscribe Past 5 days Dow Nasdaq Close Friday Dow +96.53 at 8500.33, Nasdaq +22.54 at 1774.33, S&P +12.31 at 919.14   Summer. Actually it will be 20 days until the summer solstice but June in the Northern Hemisphere is the beginning of summer in most minds as schools get out, vacations begin and the sun shines. The last week of May brought a nice market move back to the range of the recent highs in the bear market rally. The Nasdaq made a new high only 11 points under the 1785 high from last November. There was a late move up on all the indices late on Friday to close out the month in good fashion with good volume also. In the final hour many financial stocks which had been down turned around and ended with a gain. The US dollar lost 1.4% on Friday which caused gold and oil to rally. Commodities in May were up 14% while the S&P gained about 5%. For the week the dollar was down 0.86% to a new low of the year. This is good for US exporters as their prices will be more competitive  on foreign markets but it is tough on the US consumer as all imported products are more expensive. For trading the advantage is still in favor of the bulls as the majority of chart set ups are bullish ones. With summer comes generally lower volume and also generally increased choppiness, though we are used to that now. Historically June is up about 52% of the time but only 39% of the time in the first year of the presidential cycle. Maybe at least we can start the month off well and keep the rally going a few more days this week. The 30-year T-Bond yield pulled back in the last two sessions but note the huge increase this year and the recent golden cross on the  chart. We have had deflation but the bond traders are moving rates up with the idea that inflation will soon come and the commodities are acting accordingly. Increased rates are not good for the housing market as mortgage rates will also increase. Existing-home sales climbed modestly in April as buyers took advantage of foreclosures and discounted prices. Home resales rose by 2.9% to a 4.68 million annual rate from 4.55 million in March. It is also a time of the year when sales are generally higher. About 45% of the 4.68 million in April sales were foreclosures and short sales. The large number of these distressed property sales has driven prices lower, year over year. The median price for an existing home last month was $170,200, down 15.4% from $201,300 in April 2008. New home sales during the month of April went up 0.3% to 352,000, marking the second time in three months that the reading was up. While the data point, which measures sales of single-family homes, was positive, the number came in worse-than-expected as economists had been forecasting a reading of 360,000.   This chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes 192 ounces of gold to buy the median single-family home. This is considerably less that the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down 68% from its 2001 peak and remains within the confines of its four-year accelerated downtrend. This graph shows the priced decline of homes and that average trend line from 1950. If they go back to that trend they would need to fall an additional 13%. The Commerce Department’s durable goods orders report showed that orders for goods designed to last for more than 3 years rose 1.9% in April to $161.5 billion following a 2.1% decline in March. Economists had looked forward to 0.5% growth in the durable goods orders. Excluding transportation orders, new orders rose 0.8%. Transportation equipment orders jumped 5.4% to $40.5 billion. Shipments of durable goods were down 0.2% and unfilled orders declined 1.2%, while inventories also fell, dropping 0.8% in the month. The key non-defense capital goods orders, excluding aircraft, which is a measure of capital spending fell 1.5% The U.S. Department of Labor reported that initial jobless claims came in at 623,000 for the week ended May 23.  The 4-week moving average of initial claims, a statistic that flattens out week-to-week fluctuations in the data, dipped to 626,750 from the revised mark of 629,750 seen in the previous week. Continuing claims, which measures the number of people receiving ongoing unemployment help, rose once again and set another record high. The statistic climbed 110,000 to 6.788 million. This graph so previous  employment declines in perc4entaged and the length of those declines with the current period in red.  Crude oil inventories fell by 2.1 million barrels in the week ended May 15th to 368.5 million barrels. Even with the decline, stockpiles remained above the average range for this time of the year. Gasoline inventories declined by 4.3 million barrels and were below the lower limit of the average range. On the other hand, distillate inventories rose by 1.8 million barrels and were above the upper limit of the average range. Refinery capacity utilization averaged 83.4% over the four weeks ended May 15th, lower than last week's 83.8%. The U.S. GDP shrank at a 5.7% rate in the first quarter compared to a 6.3% GDP decline in the previous quarter. The contraction was worse than the 5.5% decline expected by economists. On a year-over-year basis, the first quarter GDP declined by 2.5% compared to 0.8% decline in the fourth quarter.  Imports, which are a deduction from GDP calculations, declined. Personal consumption rose 1.5%, revised down from the 2.2% growth estimated earlier. However, the sore spot was inventories, which deducted 2.8% off growth. The Chicago Purchasing Managers Index dropped to 34.9 in May from 40.1 in April. That was well below the consensus estimate of 42.0 and is indicative of a manufacturing sector in contraction given the reading below the dividing line of 50.0. In nearly every component index, readings went in the wrong direction for proponents of the recovery trade. New orders fell to 37.3 from 42.1; order backlogs dipped to 26.3 from 36.9; inventories rose to 31.5 from 30.6; employment declined to 25.0 from 31.8; supplier deliveries fell to 43.0 from 45.4; prices paid increased to 29.8 from 28.4; and production held steady at 38.1. The weeks top and bottom sectors:   The major indices from last week.     The multi index chart with resistance lines if they break out from current patterns. Note the top Bollinger bands as they are also resistance unless the candle "pushes" them up out of the way. The Dow monthly is not far from the 200-month EMA at 8666. This and a bit above it are also resistance areas from previous months and the 62% retracement line is at 9415. Stochastics and RSI are on monthly buy but the rally may stall toward the end of the week as some Volume Oscillator T's of Terry Laundry may hit their right sides and expire. Dow weekly with clean detail. Dow Jones Utilities bounced at support bt both moving averages are still pointing down. Dow Jones Transportation index made a two-week closing high on Friday. MACD just starting to cross over bullishly. The Nasdaq weekly made a new 2009 high since the March lows and now just under the 50-week EMA at 1780. The daily Nasdaq has the resistance line at 1786. The Nasdaq 100 ETF QQQQ closed near the dotted-line resistance. With a strong move over it could in time reach the 200-day at 40. The Nasdaq Summation index NASI is still pointing lower while the Nasdaq is going up so one is wrong. Either the Nasdaq will pullback again soon or this is slow and will cross back over soon. The VIX is testing its recent low. The semi conductor index SOX closed jut a little under it recent highs. The 50% retrace is at 294. The S&P 500 long term and the current retracement. To get to the 62% line it needs to go to 1015. The S&P 500 August to March of 1936 compared to today. If it is similar to that period a move of 50% from the low would be to 1,000. (from 667) The S&P 500 weekly and it does not look like we pulled back enough to count as a minor b wave pullback within the major B wave up move. The S&P 500 daily like many still under the 200-day EMA now at 943. The NYSE under its 200-day EMA and a pretty clear trend line to watch for a break if the market pulls back. The percentage of stocks  on the NYSE trading over their  50-day average is 84%, down from the peak but still at a level when pullbacks have started in the past. The advance/decline ratio chart on the NYSE has it back in the flag that it was in since 2007 Value Line Arithmetic index is near the high resistance and note that the 50-day and 200-day are closing in and could make a golden cross - if they cross and that would be bullish. The S&P 400 mid caps under the 200-day and the recent high of 590.   The Russell 2000 monthly made a high at resistance this month and ended a bit lower. Both stochastics and RSI are still on a buy for longer time frame though these are slow-to-change signals. The Russell 2000 has not made it back to its high which is now at the 200-day EMA.   The financial spider XLF closed back just under the broken trend line and may try a break back over it. The London market FTSE is in a little triangle just at the 200-day EMA and a break out could take it to test its 2009 high at 4675. The Russian RTSI ended the month up over 30% and has been absolutely on fire since its low up over 120%. The Ruble has been strengthening but the Russian government does not want it too as it is  better for exports is it stays low to aid to economic recovery as export is then more attractive. A weak Ruble  also gives an advantage to Russian product purchases at home as foreign products are more expensive with a weaker Ruble.. Once the CRB commodity index broke out it kept moving for 5 days and is nearing the 200-day EMA resistance.   Crude oil monthly ended the month at this resistance and the trend line that was broken last year. It is now back over the 62% retrace which is bullish. The oil daily chart as it is now over the 200-day EMA. RSI is overbought. The double long ETF for oil DXO had 5 days of gains and is overbought and had a possible reversal candle on Friday. The US Oil Fund USO ended the month up 27%. The line it ended at is one we had as a downside first target. The top line is the next resistance and a likely strong one. Because of the large decline, even with this gain from the lows, the stochastics are not yet back over 20. Gold weekly chart with the top Bollinger band at 996. It could move above there to test the recent high at 1007 but in the past it has pulled back after touching the top band. One Gann Square of Nice chart suggests a move to 1013.   A closer view of the weekly and the two recent breaks over resistance. Momentum may keep it going to test recent highs but we think there will be another pullback this summer.   The gold cloud chart as it nears the 1000 area resistance. The gold tracker GLD gapped up on Friday and the chances of this gap filling at some point are high.   A closer look to our GDX Renko mechanical trade 60-minute chart. The long from about $32.30 was sold and turned to a short near $38.40 but it was short lived and may have resulted on a small loss as it then went back to buy near the same price. The gain from there has been excellent and for well over a year now this has been a consistent winner long and short. Many others publish our chart now but it has not hurt the performance. The gold and silver index XAU as it has broken above last Autumn's highs. Resistance has a 180 level as well as some a bit lower. Silver had a good move a week ago to just over resistance and continued this week up 7% and nearing the next resistance line. The silver iShares SLV on Friday traded totally above the top Bollinger band so a pullback will come. RSI is also high though longer term it has a golden cross so is bullish. The US Dollar weekly continued its fall as stochastics are not quite low however RSI has room to drop more. The 62% retrace line is at 78 and it may give some support this time also. The daily dollar chart and the big Friday sell decline. On this chart RSI is already under 30.     Butch Cooley Comments (Butch is founder of Leg Up House and the Butch Cooley Worldwide Hunting and Fishing . He has been an active trader for decades.) Due to illness there are no comments this week but we wish Butch a speedy recovery and look forward to Part 3 of the writing on the Great Depression.   Here is a list of stocks reporting earnings on Monday before the open. Check the updated Earnings Calendar  Weekly economic calendar from briefing.com. FED chairman Bernanke testifies before Congress on Wednesday at 10:00. To try futures trading you may sign up for a free simulated account that uses live streaming data. Futures can be volatile so great opportunities  for wide swings. When any of you sign up for a new stockcharts.com accounts there is a space to put in a referral name on that form. If you enter stocktiger@stocktiger.com they give us credit. Thanks!   Featured Companies With the short week there is nothing new this week though progress is being made.  AMBER Ready  http://amberready.com  (not yet trading but keep watch) If you do a Google news search on Amber Ready you will find reports as they have begun their 30 city tour.     Remember to check the blog as information is posted many times each day - please post your own comments and charts. In case you do not know, on the blog topic or any topic on the message center, if you click on the Notify button as shown above, you will be sent an email when new posts are made to that topic. If you trade ETFs our large list of them is here http://stocktiger.com/etf/etflist.php Note on the site pages on the top menu we now have Live Charts. These update themselves and we have several of the popular Ninja Trading mechanical trades that many have used over the years. We also have FAZ and FAS in 15, 5 and 1 minute variations as well as The Dow and others. They do dot yet all fit on the menu so look on the SRS 15-min chart on the top right menu. We have also added free image hosting to the Extras menu.   New additions to our watch list. We add many stocks to it each trading day.   MEE  Over $23.80 RJA  Over $8.05 or $8.14 NVTL  Over $11.88 PTY  Continuation $10.70 STX  Over $9.11 ARCC  Over $7.83 DVR  Over $10.10 ACXM  Over $10.80 on good volume IBM  Over $106.50 continuation KG  Back over $9.50 or top at $9.72 GLG  Over $3.70   For your eyes.......in the city Photograph by torrost       Photograph by Sergey L  - Restaurant over bridge in Moscow     Photograph by Sergey L   That's a full lid for today - have a great week. Check the Earnings Calendar on all overnight holds. Check the current message center also for other good stock candidates as there are several there right now. If you use StockTiger mail you can access your account using simply my.stocktiger.com You can also access your mail using your Blackberry. If you would like a free StockTiger.com email address that uses the Google Gmail spam filter and you can check your mail from anywhere. Send me (ST) a personal message from the message board. Include your First and Last names and the name you want to use. Your address will be (your choice)@stocktiger.com.   MEMBER WEBSITEE StockTiger.com I am not a broker so cannot give financial advice. This notice is for informational purposes. Please do your own DD and refer to our Disclaimer on the Website. (Note - We have no position in AWSR or ERFW or SHHD at the moment. We may receive stock from a third party and if so it would be 144 restricted stock which could not be sold until after 6-months from the time of issue. I own shares in PYR that I bought on the open market.) Copyright © 2006-2009 StockTiger.com Stalking Stocks™ All rights reserved.