Wall Street Sector Selector

This week’s rout in the U.S. Treasury Bond market could signal trouble ahead for rising interest rates and U.S. economic growth. Bonds were crushed this week as the Federal Reserve’s “QE2″ program came to an end. chart courtesy of www.stockcharts.com In the chart of (IEZ) above, we can see how the 7-10 Year ETF was pummeled as interest rates rose this week. The 10 Year hit its highest yield since May and fell for five straight days to log their largest weekly loss in nearly two years. U.S. bond auctions experienced poor demand this week, forcing yields to rise more than .3% on the week, the highest since August, 2009. With the end of “QE2,” everyone is wondering who is going to buy all of the U.S. debt that will be coming due in weeks and months ahead. Some of the loudest queries have come from bond giant, PIMCO, executives. In an article on PIMCO’s website, Anthony J. Crescenzi, says, “The Biggest Buyer Leaves the Store But the...

Major stock market indexes continued to meander between significant support and resistance levels and this, of course, can’t go on forever. Expect a breakout soon, possibly as early as this week, as we reach the end of the quarter and half year mark. We continue to see significant risk to the downside in most ETF asset classes and believe that we are in a significant stock market correction within what is still a longer term uptrend, but an uptrend that faces growing threats on a daily basis. We expect the next stock market directional move to be down and you can see our rationale for this bias below. Wall Street Sector Selector will be raising prices on all its portfolios in July and so we are offering a “final summer sale” which will run until Sunday evening at midnight Pacific Time.  You can access this information at Wall Street Sector Selector Summer Sale On My Wall Street Radar Chart courtesy of www.stockcharts.com In the chart of the...

Major stock market indexes continued to meander between significant support and resistance levels and this, of course, can’t go on forever. Expect a breakout soon, possibly as early as this week, as we reach the end of the quarter and half year mark. We continue to see significant risk to the downside in most ETF asset classes and believe that we are in a significant stock market correction within what is still a longer term uptrend, but an uptrend that faces growing threats on a daily basis.

This will certainly be a wild week for ETF investors as the Greek drama continues to unfold and a series of economic reports come in during the week. At Wall Street Sector Selector we continue to feel comfortable with our inverse ETF and put option positions. Our portfolios generally were flat to slightly higher with the Option Master being the best performer (and the highest risk) with unrealized gains so far of +22.7%, +6.6% and +9.5% in our three positions that all were initiated on June 7, 2011. On My Wall Street Radar chart courtesy of www.stockcharts.com In the chart above, we can see how the S&P 500 (SPY) managed to stay above the all important 200 Day Moving Average and remains relatively oversold with RSI in the mid 30s and still well below its 50 Day Moving Average, while MACD continues to indicate negative momentum. A short term bounce here wouldn’t be a surprise, however, Friday’s action was relatively weak into the close and significant...

So now it’s really crunch time for global stock market and ETF investors. The major indexes are down six weeks in a row, the longest stretch for the Dow Jones Industrials (NYSE: DIA) since 2002 and since 2008 for the S&P 500. (NYSE: SPY) Major fundamental problems have been exposed and we sit just above significant support levels that, if breached, will likely lead to lower lows ahead. At Wall Street Sector Selector our Standard and Options portfolios logged nice gains this week and we feel comfortable with our inverse ETF and put option positions going forward into the week ahead. On My Wall Street Radar Chart courtesy of www.stockcharts.com On a technical basis, the market has broken through significant support and now is on a “sell” signal with a downside price objective of 1160. Next major support is at 1250 on the point and figure chart which corresponds closely to the widely watched 200 Day Moving Average at 1253 and the recent March lows...

So now it’s really crunch time for global stock market and ETF investors. The major indexes are down six weeks in a row, the longest stretch for the Dow Jones Industrials (NYSE: DIA) since 2002 and since 2008 for the S&P 500. (NYSE: SPY) Major fundamental problems have been exposed and we sit just above significant support levels that, if breached, will likely lead to lower lows ahead

The Bulls Tried to Charge the All Important 50 Day Moving Average Today and Failed In the face of ongoing disappointing economic news, major indexes rallied in an attempt to overtake the all important 50 Day Moving Averages but fell back to close lower in a failed test of the widely watched level. We can expect more attacks in coming days and the outcome will set the tone for near term market direction. Dow Jones Industrials: (NYSE: DIA) Hi: 12,440 50 DMA: 12407 Close: 12,394 High above 50 DMA, Close below: FAIL —————————————————- S&P 500 (NYSE:SPY) Hi: 1325 50 DMA: 1326 Close: 1320 High at 50DMA, Close below: FAIL ————————————————– NASDAQ 100: High: 2321 50 DMA: 2337 Close: 2310 High below 50DMA, Close below 50DMA: Fail Economic news was poor, again, with the MBA Mortgage Index printing at +1.1 compared to +7.8 last month and April Durable Goods collapsing to -3.6% from a prior reading of +4.4% in April which was also a decline from March’s reading. Also, nervousness continues in Europe over the fate of Greece as the Euro declined...

The global economy seems to be dying on the vine as more news of economic slowdown pours in everyday. The U.S. stock market and ETFs continue to react negatively to deteriorating economic news even as the Federal Reserve bought $6 Billion in their POMO operations today. The DJIA, S&P 500 and NASDAQ are all below their 50 Day Moving Averages while the NASDAQ has also dropped below its 100 Day Moving Average. The NASDAQ and DJIA are now on Point and Figure “Sell” signals, having experienced a Bearish Catapult Breakdown at yesterday’s close and now has a price target of 12,050. Today’s economic reports gave the stock market a quick boost at the open when new home sales came in at +7.3% and an annualized rate of 323,000/year which still is at severely depressed levels. But then, the Richmond Federal Reserve reported a severe drop in activity in the region as the report actually contracted to -6 from a +10 in April. China’s Purchasing Manager’s...

After today’s sell off, major global stock markets hang by a thread with an economic data storm just ahead. Stocks, exchange traded funds, bonds and the U.S. dollar reacted strongly to European debt problems today and suffered a major sell off that took major indexes down to significant support levels, where they now hang by a thread. In the chart of the S&P 500 above you can see how the index has dropped below both the 20 and 50 Day Moving Averages, widely followed technical indicators, and is now deep into strong support levels in the 1300-1310 range. Hanging by a thread. The Point and Figure chart points an even more graphic picture, with prices now resting at a critical juncture. A further drop would trigger a double bottom breakdown and a “sell” signal for the S&P 500. Hanging by a thread. And tomorrow starts the data storm that could well “tell the tale” for the market going forward into this notorious “sell in May...

S&P 500 in critical condition as lunchtime approaches on Wall Street U.S. stock markets got off to a rough start after a rout overnight in Asia and now the S&P 500 (SPY) finds itself in critical condition. Battered by a decline in the Euro to its lowest level in two months, ratings downgrades to Italy and Greece and a resounding defeat for the Socialists in Spain, global stock markets reel in financial uncertainty. The U.S. Dollar (UUP) and Treasuries are up in the standard “flight to quality” trade and here are the critical levels to watch for on today’s close. In the chart above we can see the S&P 500 below the critical 50 Day Moving Average and just above serious support at the 1310 level. Any breach of these levels on a closing basis could spell bad news for the major indexes. On the point and figure chart we can see how a break below 1316 would trigger a “sell” signal and so here, too,...