1-14-10
MUNCHIN’ ON THE NUMBERS
CURRENT BUY – 100% of portfolio stock allocation $$$
KEYLINE 7-25-09 BUY 50% allocation only (S&P @ 970)
SIGNAL 10-9-09 BUY balance of 50% (S&P @ 1071)
Stocks & Bonds Today
Retail sales were well short of expectations for December. But, once again investors shook that off and the rest of the day it was bulls in charge, once again. We are very close to closing over the S&P 1150 area and, in fact, touched 1150 in today’s trading. Remember I am talking the cash index here. The futures for the March contract only got to 1147 as a high, as the futures continue to trade at a discount to cash, a mildly bearish condition. But, don’t tell the bears that. They have believed the discount would work for them for months and so far all they have done is lose money.
I am including the S&P chart today so you can see what I meant when I said we continue to ”walk up” the Headline on the chart and walkin’ the 90’s” in the MOMENTUM SECTION.
Do note however, we are RIGHT AT my “Cap” line and a break above it would be the most robust move I could think of right now. Will we? From all I have seen so far, yes. I do say that with just a little bit of trepidation, as the green line (fast sto) on the Keyline Chart is at a horrendously high 96.9!! This is what I mean by “walkin the 90’s.” It is true that since the “ALL IN” signal on October 9 at S&P 1071 we are closing in on another 100 S&P points and nearly 200 points since our original 50% commitment on July 25th last year. Amazing! Will we make the 1220-40 target predicted in July 2009? We will, unless some totally unexpected event sends everything into the dumper (must be a better way to say that-Hummm). I think the last 60-70 points will come faster that the earlier ones, however. That is quite typical of this kind of move – the kind no one believes can continue, but does.
Bonds rallied again. This time it was a good auction result that spurred bond buyers. So, rates dropped a bit today and the close on bonds was ABOVE the Keyline again. Wonder of we will still be there after the PPI and Sentiment reports in the morning? If both are favorable, look for a bit of a boost for bonds. Controlled costs (PPI) and confidence (Sentiment) are best of both worlds for bond buyers. Again, I want to stress that this is the most important market to watch right now. I will have a chart in the Weekly Keyline report next Monday, but the MOMENTUM SECTION continues to show the possibility for more rally and if prices can climb above the Keyline and stay there, this stock market will be full steam ahead. No bond rally? No stock rally. Clear enough?
The Rest of the Story
Oil just keeps slipping (did it two days in a row). But, as long as supply is there, as long as the dollar doesn’t fall out of bed, and as long as it stays cold, the price of oil will get sluggish every time it is in the low $80 range for the foreseeable future. It brings out supply from all over the world and fills inventories, which send prices down.
Gold up another $5 today. No big shakes, but it just keeps climbing. You don’t have to wonder if you’re a regular reader about how I feel about gold, do you? You new readers — Buy Gold. Buy Gold. Buy Gold. We may try the last high in the mid $1,200 area before this current move is over. Possibly, even a new high.
Dr. Copper? Well, what do you say about the Eveready bunny? While it was off a tiny tad today, this inflation indicator, one of the best over all the years I have been I this business, just continues to climb. Not good news for the Fed or for us, for that matter. Sure hope it doesn’t get back to the $4 level or more. Tired of seeing copper downspouts, copper wire, and all that ripped out of public and even private places. Ugh!
The Dollar went nowhere again today. A tad down, but the currencies of the world are all in worse shape than ours, so in comparison, we are holding our own.
And the NASDAQ inched higher, too. But, as I have told you so many times, unless there is a major news bit in the Tech sector, it pretty much follows the Dow and S&P. So it did today. Nuf said.
Oh yes, before I go. I have added a section to the bottom of the daily MUNCHIN’ that gives you the current support and resistance prices of the indices and commodities I follow in my MUNCHIN’ report every day. The S&P and bond numbers are for the front month future contracts, not the cash indices. Some of you do trade them and this is for you.
The Bottom Line
So, four days down one to go and it is an important one, what with the PPI and Sentiment numbers at 8:30-9 am in the morning. Should be interesting to see the numbers, but even more interesting to see how bonds react. Their response will tell us a lot about the stock market for the next 3-4 days.
So, until tomorrow, as always, do hope you trading day was a profitable one. Actually have some sun today! Will be back tomorrow Lord willin’ and the creek don’t rise.
Need Something To Talk About Tonight?
SIX STORIES IMPACTING THE MARKET TODAY
1. Are you a gun owner? Read this for sure!! http://www.snopes.com/politics/guns/blairholt.asp
2. Reports say that the ratio of jobs to job hunters is over 6 looking for every 1 job available. THAT’S 6!!!!
3. I knew it! Tax on “Caddy” health plans compromised. Union, state, local govt. folks exempt til 2017!!!!
4. With Buffett there with $$$$, looks like Hershey gets Cadbury. What a sweet deal!! (Couldn’t resist!)
5. Most banks paid back TARP. Now, maybe will be taxed extra $90 Billion to “learn lesson.” Huh?????
6. Govt. may limit oil traders investment $$ to prevent another “bubble” in oil prices. But, only in U.S.
MY TAKE: #1 is another gun control try. I thought the Supreme Court nixed that?? Not so. Hummmm. # 5 will just mean you and I will pay higher bank fees, someway. Banks don’t ever pay taxes! #6 is the dumbest approach I have ever heard. The rest of the world will just take our seats on this one. DUMB!! And # 2 is the saddest news today. The saddest.
The Numbers Section
DAILY CHANGES DAILY WEEKLY
Closes as of Thu. 1-14-10 CHANGE (cash) KEYLINE# ABV/BLW
DOW INDU. 10,710.55 +29.78 points 9,846.16 ABV +834.61
S&P 1,148.46 +2.78 points 1,060.27 ABV +85.41
30 YR BONDS 116 27/32 + 29/32 ticks 116 19/32 ABV +8/32
NASDAQ 2,316.74 +8.84 points 1990.73 ABV +317.17
GOLD $1,143.40 +$5.30 $939.50 ABV +$198.690
OIL $79.26 – $0.51 $84.85 BLW -$5.08
DOLLAR INDEX 76.77 -0.10 79.65 BLW -2.78
COPPER $3.4080 -0.4000 $2.6928 ABV +.7282
DOW DAILY PRICE RANGE 56.91 points (With PPI in AM, really tight range!)
S&P DAILY PRICE RANGE 6.8 points (Really thight range here, too!)
NYSE ADV. 1732 DECL. 1300 RATIO: 1.3 Adv for each Decl.
VIX – Volatility Ratio 17.85 DOWN -0.40
EOD BOND YIELDS 1 YR. 0.33% -.020 10 YR. 3.74% -.051 30 YR. 4.63% -.080
CURRENT KEY MARKETS PRICE SUPPORT AND RESISTANCE LEVELS
Symbol or Support Resistance
Name Level Level
Dow Indu. 10,250 10.750
S&P (Mar) 1,075 1,150
NASDAQ 2,175 2,460
Bonds (Mar) 114 16/32 117 24/32
Gold $1,075 $1,225
Oil $68.50 $83.75
Dollar 7400 7800
Copper 3.6750 3.0700
Note: All closes at 4pm using continuous cash contract results
Disclaimer
** The top five sector stocks shown are stocks that are above their Super Chart Keyline and between $5 and $35 in price have been randomly selected from the stocks in the each sector. Their inclusion in the Report is not to be interpreted as a buy recommendation nor is the exclusion of others above their Super Chart Keyline to be interpreted as a sell recommendation. This data is given for informational and research purposes only, as we do not make buy or sell recommendations at any time under any circumstances.
?***Max Whitmore, “The Keyline Report”, and “MUNCHIN’ On the Number”report does not endorse or suggest any of the securities which are mentioned in any way in its Reports. They are provided purely for informational and research purposes only. Max Whitmore, “The Keyline Report,” and “MUNCHIN’ On the Number” do not recommend particular securities to anyone, ever, under any circumstances. The statements made herein include information obtained from sources we believe to be reliable, but no independent verification has been made and we do not guarantee its accuracy or completeness in any manner whatsoever. You should not make any investment decisions of any sort based solely on what you read in the Keyline or MUNCHIN’ Reports. The statements made herein contain general information and do not constitute an offer to buy or sell any security of any description. Subscription to any of the Reports mentioned above is consent by the subscriber of full release of Max Whitmore and the Reports mentioned herein from any claims or actions of any description, legal or otherwise, against Max Whitmore or the Reports. All material herein is Copyright 2010 by Max Whitmore. All rights reserved.
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