Market Overview

At the close of the equity market in the US yesterday the Dow and S&P 500 showed modest gains.

Even though that fact does not point to a true direction by the investors, yet the Dow and S&P reached a 2 year highs at the close yesterday, which is by itself a somewhat breaking point.

Energy stocks showed modest gains as well but the sector as a whole did not suggest any clear direction or momentum while gaining only 0.4%; however the long run outlook pointing to promising profits as the annual gain will reach as high as 17%.

The broader market didn’t really make any kind of an upward push until the final  hours of trading. Even then buying interest was moderate and without conviction since only about 560 million shares traded hands. That was the case in the prior session, vacations and snow storms kept many traders away from their desks in the last week.

Support was losing grounds at market close therefore stocks ended the day with less than thrilling results. However stocks appeared unchanged despite the fact the dollar (USD) rallied back from a loss of 0.8% to a gain at the end of the trading day.

Currencies overview- 6:48 A.M.

The US Dollar recovered in the late hours of trading yesterday and after hours trading showing the continuation of that trend is ahead.

However Precious metals were unfazed by the US Dollar bounce. Silver settled at approximately $30.31 after a 3.6% gain while gold gained 1.7% at $1405.90 per ounce. On the other hand looking ahead the commodity market, Oil and Gold in particular, points to loses ahead of the New Year

The US Dollar index found support after nearly a 5 month slide hitting as low as 80.25 and bounced back up late last night.

The EUR/USD pair still showing gains as of early this morning stabilizing at about the 1.312 to 1.313 range as of 6:00am

The US Dollar still paired weaker against the other major currencies, especially the Japanese Yen (JPY) which gained nearly 0.19% over the USD. That fact can be contributed to a stronger than most others Japanese industrial recovery despite the fact unemployment remains high in Japan.

The currency market behavior in the last few weeks and the weakening of the US Dollar until yesterday bounce might show a change of direction in the market, and if it can gain a momentum we might see a recovery of the US Dollar.

Taking into consideration it is a short and “thinner” week in trading, unless investors are looking to liquid some assets or investments for tax purposes into the end of 2010, most markets will stay at a “non-impressive” movements until after the New Year, while most traders attention is directed elsewhere (family vacations, holiday shopping etc.)

However analysts believe that the US Dollar is due for a rally in 2011 starting in January and setting the trend for the rest of the year, so don’t let the low volatility of the forex market fool you or catch you off guard heading into the New Year.

The highest risk factor remains with the EUR/USD pair as the volatility reaches over 75%, followed by the USD/JPY at 45%, and all others are far behind (CHF, CAD, AUD, and GBP vs. USD).

Housing Market and Real Estate

It is a known fact that the economic crisis started (and probably will end) with the housing and Real Estate market in the US as a result of open ended loans and mortgages by the leading financial institutions.

It is also safe to assume that the housing market also will be the last to recover, however the US housing market showed signs of recovery by an increase of over 10% in pending sales of existing homes for the month of October 2010.

The forecast for the month of November is not expected to be as bright but still shows signs of some moderate increase and if the trend continues into 2011 we might be able to finally state the fact that the US housing market have bottomed out and behind us.

However financial institutions are still holding back with credit and loans and that might slow down further recovery in the US housing market, which might lead to a rally in the EUR/USD pair as investors are looking to for better gains elsewhere.

Economic Forecast

As we have seen signs of recovery in the US housing market and equity market, coupled with the fact the commodity and energy markets have shown resistance in recent months, it is safe to predict we might be on our way to a more stable and profitable market in the coming year as the economic crisis seeing some light at the end of the tunnel.

By Gideon Barazani

as was written here about 2 weeks ago i still believe the USA market Dow will hit 9000 before we can see any day light…

bears are coming back in a hurry !! so if you can short the market , do it now and ride it on the way down….

for one it was option expiration day, after a week long of a down market there was a great opportunity for option play!!

the market huge swing (from 125 points down to 125 points up , a 250 points swing!!) presented great opportunities in the option market for that day (day of expiration)

few examples are : aapl was down to 231 in the morning  and its 240 call for that day was at .25 , if you would predict the market swing and got 10 contracts @.25=$250 at the intraday trading aapl gained more than 13 points !! and that option was selling at mid-day for $5.90  so your $250 will cash out as $5900!!!

that was true more or less for many other active and dynamic stocks such as Goog, fslr, bidu , and more

it was a great option play day!!

As predicted yesterday by myself , the market lost steam during the early morning trading’ already at the pre-market trend showing in negative territory and more than just moderate’ it drops below 10,000!!

Another factor to take into consideration is that today is May options expiration day’ so the market may play a sea saw  all day to find its correct closing mark due to options day!!

don’t get scared too easily, it might not get there again, however we are on a down trend recently for sure ! i started to write about that down trend few days ago , and especially yesterday i wrote that the market might go down dramatically and the Dow might hit 9000 points again or close to it’ it maybe a time to short the market again, and in few weeks buy it back, VIX is high and investors finding better avenues to invest and leaving the stocks rather quickly, so again watch out for the slide !!! if there is any bright spot for a good stock, it maybe FSLR (First Solar) that was upgraded today (Thu May 20th.) it is close to its button (at 106), and should  swing back up to its natural at 125.

the look ahead  for tomorrow ( Friday May 21st.), i see another down day, for the first time in a long time you might see the Dow hits below 10,000 !!!

is the market back to a down trend behavior ? or it is only a minor correction to the gains we experienced in  the last 3 months.

In my humble opinion the market will continue its slide before it runs up again, but it maybe time to start buying certain stocks that are hitting close to bottom : STP is under 10, DRYS is under 5, FSLR is under110, so some stocks start looking attractive again.

The market should continue to slide maybe under 10,000 soon , and even close to 9,000 before it makes its final run to over 12,000.

Watch for opportunities and be careful with your buying!

maybe trade of the month!!! DNDN  got its FDA approval after a long wait and a wild ride all over the scale.

The prostate curring medicine company been doing trials for the las few years, and the day had come to give it a “shot” and try that “mircle medication” that costs $93,000 on a full scale, might save many men lives!!!

just last year at the market buttom (March 2009) i recall DNDN went all the way down to about $6  per share!! and been gaining steady since then.

in the last week alone it went from $38 a share to $54 a share !!   a gain of more than 40% in ONE WEEK! and a gain of  almost 900%  since march 2009!!  that is a winning stock …watch that stock goes to over a $100 / share before years end!!

By Bestwriter

lets think together how many weeks that market was gaining ? not to mention the big gains on GOOD stocks like AAPL , and others, so there is plenty of room for profit taking, and today was a day like that … watch out for some gain back in the rest of the week

By BestWriter

March  2009 the market hit a new low , and was the most opportunist ever!!

GNW gained over 2000% since then !!! (was at under $0.80 per share and as of today is over $17 per share)

LVS gained almost 900% as well n one year!! (was  at $2.5 and now at $22 !!)

AAPL hit an all time high as of this morning pre-market quote (over $230)

stocks like  HIG, LNC, BAC, and other financials are at 52 week highs!! is it a trend that will continue ? or we are still in a bear market run ?

By BestWriter

The week starting on a down trend, which translates to  an oportunity to maybe buy some close to the buttom stocks like LDK and DRYS and of course Citigroup , the market is hlding strong regrdless of some profit taking , but some few stocks are still a BUY  considering the end of the month is report time for many companies.