Dow +165.77 at 12307.35, Nasdaq
+50.15 at 2454.50, S&P +20.16
at 1360.03
Strong
Dollar
Actually the US Dollar had lost about 40% of its value against a basket of other
currencies since 2002. Treasury Secretary Paulson is laughed at as he so often
talks of his strong dollar policy and keeps a straight face wile saying it. This
weekend again Paulson said, "With regard to the dollar, my view has not changed:
a strong dollar is in our nation's interest." Traders say he talks up the US
currency to try and help inflation and limit the need for higher interest rate
hikes that could hurt economic growth. At the same time the U.S. needs a weak
dollar to spur growth, but it needs to attract foreign investment so the often
repeated phrase is to try to reassure foreign investors. On one hand the weak
dollar helps increase profits for multi-national US corporations and other US
exporters as their products cost less in other currencies than they did in the
past. On the other hand all use consumers pay more for any imported product like
oil, (therefore gasoline), clothing, food, toys and cars - a lot more. This, in
reality, weak dollar policy adds greatly to inflation. We show the dollar chart
later on and the resistance areas.
This past week the dollar rose to a one-month high against the euro as some
thought that the Group of Eight finance ministers meeting this weekend would
signal that they favor a stronger dollar. - With central bank chiefs absent from
the meeting though as it turns out, currencies were not mentioned in the G8's
final joint statement on Saturday.
Friday the consumer price index
figure rose more than expected to 4.2 percent
year-over-year from 3.9 percent, while the core
inflation figure (the official one not necessarily the
real one) held steady at 2.3 percent in May. "Raging
food and oil prices continued to fuel upside inflation
risks, and led the preliminary U. of Michigan confidence
reading to fall to a 28 year low of 56.7 from 59.8."
There is now being priced in a a 22 percent chance of a
25 basis point rate hike by the Federal Reserve at the
end of the month.
A Commerce Department report
showed that retail sales rose to a better-than-expected 1%
in May, with the increase coming in ahead of the
expected increase of 0.5%. Year-over-year, retail sales
were up 2.5%. Sales, excluding autos, climbed 1.2%,
faster than the 1% rate in the previous month and the
0.7% rate expected by economists. Sales at motor vehicle
& part dealers rose 0.3% compared to the previous month,
but it declined 7% from the year-ago.
The Labor Department’s jobless
claim report showed that the number of individuals
claiming for unemployment benefits rose 25,000 in the
week ended June 7th to 384,000 from the previous week's
revised figure of 359,000. Economists had expected
jobless claims to rise to 370,000 from the 357,000
originally reported for the previous week.
The US Fed funds short term rates are
at 2% down from 5.25% in 2006. They may start going back
up by Autumn or sooner. The Japanese
Monetary Policy Board have been sending signals
that it will revise rates higher, due to the
inflationary environment prevailing across the globe. It
is now at the whopping (low of) .05%. Interest
rates across the eurozone currently stand at 4%. "Last
week the ECB's President, Jean-Claude Trichet suggested
the central bank may ignore signs of a cooling economy
and hike up rates by a quarter-point in July to combat
the fastest inflation in 16 years."
The major indices for last week
with only the Dow showing a gain.
The top and bottom sectors for the week.
The best and worst industry groups for
last week.
The Dow found support and rallied two days to close back over the 62%
retrace. It has resistance at the 50% which soon will be at the trend line
shown. Some up vs. down volume suggest that there needs be a retest of this past
week's low and it may go lower before the correction ends. RSI turned up but we
prefer it when it has goes under 30 first as that is often at major turn points.
Stochastics have not yet moved back over 20 which would be bullish as least
short term.
The Dow point and figure chart with the shown price objective of 11,750.
The Dow 5-min renko chart
showing automatic trading results using only CCI
and modified stochastics. Clearly you could have made
money the last two days using this.
The transportation average had
two days of rally as well but is nearing the broken
trend line where shorts are likely to enter though
stochastics are oversold.
The Nasdaq ran to the 200-day
EMA. If it does break higher the underside of its broken
trend line would be more resistance which is now just
over 2500.
The Nasdaq 60-min chart shows
the resistance shorter term at the yellow line.
The weekly Nasdaq 100 chart
still above its 50% retrace.
60-minute Nasdaq 100 under
both moving averages and had a negative EMA crossover as
the 200-period is now above the 50-period EMA.
The S&P 500 60-minute chart
shows that the gap from mid April was filled and that
now it is at the 50-period EMA and minor resistance.
The weekly S&P 500 went almost
to the 200-day EMA and formed a hammer candle which can
signal a short term reversal but we know being trapped
between the 50 and 200-day averages can be a pin ball
type event back and forth between the two.
Weekly NYSE similar to the S&P
chart but wider spread between the 50 and 200-day EMAs.
This shows the NYSE number of new
lows in red and the Dow closing prices in
blue. Note that the number of new lows has gone down on
each low of the Dow in 2008. This may signal a final
(medium term) bottom is developing.
The S&P 400 mid caps bounced
right at the 50-day EMA though stochastics is still
under 20.
The VIX ran to resistance and
about to the trend line and pulled back so far which
indicated less fear for the moment.
The VIX point and figure chart calls it a triple top break out with a
target of 28 though the Friday dip could change this if it continues.
The 30-year bond now pays 4.8% interest and seems the bottom is in and
maybe be many years ahead of higher interest rates.
The Japanese yen dropped more to the 200-day EMA and almost to the 50%
retrace.
The US Dollar long term chart showing the
bounce and the trend line resistance areas above.
Fed funds futures on the Chicago Board of Trade show a
61 percent chance the central bank will increase the 2
percent target lending rate by at least a
quarter-percentage point at its August meeting, compared
with 9 percent odds a week ago. There's a 27 percent
chance policy makers will lift the rate to 3 percent by
December.
Shorter term dollar showing the target and above it the 200-day EMA.
Oil did not make new highs this week but stayed close to its high and on
the monthly chart we see the top channel line. We think a strong reason for the
move up is due to speculators buying the futures contracts as the regulations
have loop holes. Futures are designed for producers to be able to hedge their
production to help even out prices so non producers were supposed to be limited
to the amount of contracts that could be traded. There are ways around this that
are being used and congress is investigating. Reminds one a bit of the Hunt
brothers and the cornering of the silver market and its price went from $1.95
when they started buying in 1973 to $54 in the early 1980s. Oil now is not being
bought like silver but contracts that control its price are. In this weekend's
Barrons contributor
Alan Abelson writes " ......the
idea that runaway commodity prices is all the fault of
the big, bad speculators is so much piffle. They may
make a splash or even waves, but they don't make a
trend" Yes we agree that prices are not all their
fault but we belied the prices would be much lower without them.
US Treasury Secretary Henry Paulson during this weekend's Group of Eight meeting
nsisted the problem of high oil prices stems primarily from tight supplies and
said we need more investment in oil exploration and production. Seems strange
that the finance ministers are making policy statements about oil prices but if
they are it would be good if they also mentioned conservation, higher mileage
standards and the use and development of alternative energy. France, Germany and
Italy, place greater blame for high oil prices on speculators.
Also in Barrons this weekend they mention
this about Mexico: "Believe it or not, our No. 1 source
of illegal immigrants and illegal drugs is also our No.
3 source of imported oil. Mexico shipped us about 1.3
million barrels a day in March, according to the Energy
Information Administration. Canada is our top supplier,
at 2 million barrels a day, followed by Saudi Arabia at
1.5 million barrels. Then come Nigeria, Venezuela, and
Iraq."
This oil chart
with Exxon Mobil in gold both still in the
narrowing triangle.
Exxon Mobil XOM is planning to divest
its domestic retail gasoline business over the next few years, according to
The Wall Street Journal. The company plans to sell most of the stations to
distributors that already own and operate many of the stations.
Gold is at the 38% retrace and the 200-day EMA not far below. Support
under that is 800 at the 50% retrace and 750 at the 62% retrace and the trend
line.
The gold monthly chart has a trend line (only two touches) now just under 800 so
this may be tested this summer.
The gold cloud chart and the red cloud resistance has held.
Market Vectors
Gold Miners GDX 60-minute renko chart showing the
buys and sells from this automatic trading.
Gold and Silver index XAU
is at a trend line and 200-day but this may fall to the
next level if the triangle breaks. Many very weak gold
stocks at the moment.
The Bank Index BKX monthly chart clearly
below the parallel channel. It is in oversold territory
but seems it would be hard for the market to haven a
lasting gain when the banking sector is so weak.
We last had JRCC as a break out at $38.50 and see that it is now at the
top of a parallel channel and a bit above the top Bollinger band. Perhaps it
will consolidate and keep going but there is some negative divergence in the RSI
so a stop also is in order.
Just though we would show a few
ETFs of Foreign markets as these also can be bought and
shorted.
EWZ Brazil now below the 50-day EMA but above
the bottom channel support. If that breaks would expect
a test of the 200-day
EWS Singapore shows
the stochastics slight turn up but a weak chart still.
EWW Mexico still has a small gain for
2008 and now just under the 50-day EMA.
EWO Austria sitting on top of the 38% retrace
from the January low with a trend line at the 50%
retrace line.
EWJ Japan at the lower
Bollinger band so may bounce but looks pretty weak.
EZA South Africa the weakest of the ones
shown.
RSX Russia still over the 50-day EMA and has a gain for 2008.
Weekly economic calendar from briefing.com Also
this week will be earnings from Goldman Sachs (GS),
Morgan Stanley (MS),
& Fedex (FDX)
also reports on wholesale inflation and housing.
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!
News on stocks of interest:
NNRI This gives them $500,000
in this first dividend
NNRF, Inc. Announces ZAO ATOLL EMBP Has Declared 25
Million Ruble Dividend
PLTG
Two additional wells have shown good indications
for production and will be completed before the end of
next week.
Platina Energy Group Reaches Targeted Drilling Depth for
Two (2) Kentucky Wells
PYR.v Has received approval for two
additional wells and after those will ask approval
for 6 more. Gross
production from the 8 wells is estimated to increase as
much as 1,800 bopd and 2,500 mcfd with Pyramid's net
increase being 450 boepd. At even $80 average combined
boepd price this would add about $1 million in monthly
revenues. Pyramid
Petroleum Receives Approval for Well Workovers in
Offshore Gulf of Mexico
GWDC Company gives update and says also
positive on a cash flow basis and are securing as many
containers of specialty coffee as they can.
Growers Direct Coffee Company Provides Operational
Update
New additions to our
watch list.
Remember that we add many stocks to it each trading day.
CLC Over $44.25 - caution at
the open for false moves
CVX Needs a good volume break of this
flag to about $100.50 at the moment
NHWK Over $8.05 on volume
(from sydney31268)
EL Over $49.10
PLXS Over $30.36
PWAV Over $4.41 or on minor pullback
SLM Over $24.13
ILA Over $3.90
PMCS Over $9.00
KGC Gold Short
under $17.97
Photograph by
Natalia Taran
Photograph by engi
Photograph by Gena Fond
That's a full lid for today - will see you all during the week.
Our daily videos are shown and archived on many video webs sites
though the best technical quality is on our own site.
Revver
YouTube
MetaCafe
Veoh
Crackle
DailyMotion
YahooVideo
AOLVideo
GoogleVideo MySpace
MrSwing
We have published a donation page for the ease of you giving to a
charity of your choice. If you have benefited from our site we
encourage you to share with a charity. We have a few recommendations
who all use a high percentage of the donations for the actual
program use. If you have some we should add please send us a note.
Donation Page
Check the
Earnings Calendar
on all overnight holds.
Check the current
message board 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
interface so you can check your mail from anywhere, (you do not need a Gmail
account) send me (ST) a
personal message from the
message board
Include your First and Last name and the name you want to use. Your address will
then be (your choice)@stocktiger.com
Best regards,
StockTiger.com
| |
