Added: Jan 23, 2012
Author: NicholasOlesen
Duration: 6:3
Please visit http://www.nicholasolesen.com for more information. Here is a summary of what I spoke about: This past week was another strong week for stocks as the S&P 500 gained 2.0% during the four days the US markets were open, Last Week's 10-Yr Treasury Yieldwhich marked its third consecutive weekly climb and a break above 1,300 which is both a psychological number and support level. But those still holding onto Treasuries were slightly hurt as the 10-year Treasury yield went back above 2%, meaning the prices dropped approximately 1.5%. Since domestic markets were closed on Monday in observance of Martin Luther King Day, the week started on Tuesday with traders encouraged by news that China's fourth quarter GDP climbed 8.9% from the prior year. The country also reported that retail sales and industrial production for December climbed at a double-digit clip from one year ago. Last Week's S&P 500 IndexThere was some mid-week buzz about the International Monetary Fund wanting to expand its lending capacity, reportedly in the range of $600 billion to $1 trillion, in order to be able to meet a perceived financing shortfall. That same day the World Bank lowered its global growth forecast to reflect 2012 growth of 2.5% and 2013 growth of 3.1%. Leading up to the week's end, trade on Thursday saw stocks score varied gains as participants digested a deluge of data and a raft of earnings reports. The big story on the economic side was that weekly initial jobless claims made a surprisingly sharp drop to a near four-year low of 352,000. Although it wasn't a shock, confirmation came on Thursday that Eastman Kodak officially declared bankruptcy. Now for a short lesson on what I look for in technical charts like this one. There was a very clean inverted head and shoulders that ended during the first week of January and, now that the S&P 500 has held above the 1,300 support level for a few days, the technical analysis shows the S&P 500 should move close to 1,350, the next resistance level and then go through a normal short-term correction. I recommend investors look out for these levels and, if you want to make a tactical trade, sell a portion of the index and wait for it to pull back to around 1,265, the next major support level. If it breaks through that level though, that means we could see a retest of the 1,226 support level. This week kicks off the first of two very busy weeks for earnings so watch out for these companies: * Monday -- Texas Instruments Inc, Halliburton Co * Tuesday -- Apple Inc, DuPont, Johnson & Johnson, McDonald's Corp, Verizon Communications and Yahoo! Inc * Wednesday -- Boeing, ConocoPhillips and United Technologies * Thursday -- 3M Co, AT&T Inc, Starbucks and Time Warner Cable Inc * Friday -- Chevron Corp, Honeywell International and Procter & Gamble Co Economic indicators to watch will include: * Wednesday - December pending home sales data * Thursday -- Weekly claims for jobless benefits; December durable goods orders; New home sales for December * Friday -- Commerce Department's first look at fourth-quarter U.S. gross domestic product and the final reading for January on consumer sentiment from Reuters and the University of Michigan. As always, please contact me with any questions or comments, Nicholas The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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