Thursday Recap

Debt issues in the EU seem to be under control for the short term as bond yields in both Italy and Spain are continuing to fall.  Below are 10 year bond yield charts of both Italy and Spain.  Below is Italy 10 year bond yields.

And Spain 10 year bond yields below.

Below is a chart of the S&P 500 index (SPY).  In the short term the market has hit resistance at the 134 area.  Also note that the market is overbought in the short term at the same time. 

Bottom Line:  The market still looks good here, but I am expecting some consolidation or a slight pull back prior to moving higher.  Earnings are spotty as AAPL and CAT both recorded extremely strong quarters.
Thank you for stopping by.

Disclosure:  We hold SPY in some portfolios.

Thursday Mid Day Update

We are mid day Thursday January 12th.  Just a couple of charts of interest that caught my eye on the big picture.  First, Italian 10 year bond yields are starting to come down under the 7% level today which is a positive development, chart below.

Spain 10 year bond yields are also dropping rather fast.  Below is the chart.

Bottom Line:  Lower bond yields is the goal in the short term for these EU countries.  It looks like the debt crisis in Europe is under control at least for the time being.  I am still expecting higher prices for stocks in the coming weeks ahead based the EU's "kick the can" solution which is starting to take hold.  Thank you for stopping by.

Market Recap - Tuesday December 10th

Three breakout charts below.  First the S&P 500 index ETF (SPY) breaking out above prior resistance.  Please click chart to view.

Although the S&P 500 has not been trading at very high volume, the volume today was 15% higher than yesterday, which counts for something.  Below is a confirmation chart of the transportation index, also breaking out higher.  

Lastly a holding of ours, CELG, has broken out higher on above average volume.  The breakout is a multi-year new high.

Bottom Line:  From a technical basis we have both the S&P 500 and the transportation index on breakouts above previous resistance levels.  On a shorter term basis the market is getting a bit overbought so I would expect some consolidation prior to extending the gains.  CELG a holding of ours has made a clean break higher on above average volume.  I am looking for more upside from them also.  Thank you for stopping by.

Disclosure:  We own shares and options on CELG.

US Dollar and Stocks

I have written about the non correlation between the US Dollar Index and stocks several times including most recently here US Dollar and Stocks . Another words when the dollar index was appreciating higher in value, stocks were falling at the same time.  This non correlation was extremely strong up to around September of 2011.  Let's have a look at a 4 month chart of the US Dollar Index and the S&P 500 with performance since this time.

Notice that both the S&P 500 is higher by 9.62% and at the same time the US Dollar Index is higher by 8.27%.  So the question becomes, has the non correlation been broken?  For the time being yes.  Part of this reason could be due to economic releases that have been better than expected over this past month, or that investment dollars are finding their way out of Europe and into US stocks while the dollar gains strength against the Euro currency. Thank you for stopping by.

Chart of Interest

CELG, a major holding of ours, is on the verge of a multi-year high breakout. The previous price high was 68.25.  What I would typically like to see on a breakout is above average volume and closing near the high of the day. Below is a chart of CELG. Please click to view image.

Bottom Line:  A breakout of the 68.25 area with decent volume could clear the way for this stock to run into the mid 70's.  Technical aside, the company will be giving 2012 guidance on January 9th at the JPM healthcare conference. Thanks for stopping by, and Happy New Year.