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I am generally bearish on precious metals (which probably makes me the weirdest freak on Earth), and I'm extra-bearish on silver. The chart below shows the silver ETF, symbol SLV. Compared to its yellow-colored cousin, GLD, silver has not been making lifetime highs. SLV has been grinding away in the $17 range for a number of weeks, and if precious metals weaken, I believe silver will be harder-hit than its stronger brethren.

I am taking advantage of this point of view by being long ZSL, the ultra-bear ETF on silver. My average price on it now is 4.75, and I am using 4.53 as my stop price.

• Fluor Corp (FLR) posted a lower quarterly profit as energy project spending slowed with the drop in oil and gas prices, and the largest publicly traded U.S. engineering company forecast weaker profits for this year and 2010.
• Third-quarter net profit fell to $162 million, or 89 cents per share, from $182 million, or $1.00 per share, in the same quarter a year before. Revenue fell 4 percent to $5.42 billion. Analysts had expected 90 cents per share on revenue of $5.49 billion.
  
• Backlog at the end of the third quarter fell to $28 billion, versus $30.9 billion three months before and down 23 percent from a year ago, the company said on Monday.  Fluor removed $1.2 billion from its backlog due to an indefinitely delayed Russian gas processing expansion. The company also took a $45 million provision due to a collection issue with the completed revamp of a paper mill.
• Chief Executive Alan Boeckmann said spending had shifted toward the exploration and production side, both offshore and onshore, and that this area was one of its target areas for potential acquisitions, along with infrastructure businesses.  
• "The clients' capital programs have definitely shifted away from the downstream, where it had been over the last couple of years. And so ... the prospects out there reflect that," Boeckmann told analysts on a conference call on Monday.

• The Irving, Texas-based company trimmed its 2009 earnings forecast to $3.75 to $3.90 per share from a range of $3.80 to $4.10, which it had reaffirmed in August. 
• The company set 2010 profit guidance at $3.20 to $3.60 per share. 
• Analysts, on average, had been targeting profits of $3.85 per share for this year and $3.58 for 2010.
• "Looking ahead to 2010, we are taking a cautious view of our markets at this time, but remain hopeful that a broader economic recovery will develop during the year," Chief Executive Alan Boeckmann said in a statement. 

• Despite the lower quarterly results, Lazard Capital Markets analyst Graham Mattison wrote that his firm continues to regard Fluor as "one of the best companies in the energy infrastructure sector, and we view the stock as a core holding.
• "However, the earnings potential of the company's massive backlog and healthy cash balance are fairly reflected in the share price, in our opinion," he wrote. "Risks include slowing end-market demand, lumpiness of bookings and revenues given large-scale projects, as well as potential for cost overruns on projects."  (to be fair those are the same risks that exist every day of every year for this type of firm)
  

Fluor Corporation (NYSE: FLR - News) designs, builds and maintains many of the world's most challenging and complex projects. Through its global network of offices on six continents, the company provides comprehensive capabilities and world-class expertise in the fields of engineering, procurement, construction, commissioning, operations, maintenance and project management.

[Aug 11, 2009: Fluor - Solid as Usual]
[Feb 26, 2009: Fluor and Flowserve Continue Best of Breed Ways]
[Dec 3, 2008: Back of Envelope Look at Infrastructure Sector]
[Aug 12, 2008: Fluor to Hedge Fund Computers: The World Does not End at $110 Oil. Or $80. Or $50]
[Aug 11, 2008: Global Infrastructure Night in Earnings]
[May 16, 2008: Fluor as a Wind Play? $1.8 Billion Says Yes]
[Jul 9, 2008: Fluor vs Perini - a Rising Tide does not lift all Boats]
[Feb 28, 2008: Fluor with Great Report and Boosts Guidance]

To continue with the theme of foreign (to US residents) markets, here is my take on the Italian MIB index. Italy is eurozone's third largest economy.

BOTTOM LINE: Corrections higher in risk and related assets are likely very close to completion. While major US indices advanced about 1.5% higher than expected, EU indices, notably EURO area indices are moving along the expected lines. Internal structures of these indices suggest that the next leg of the decline is imminent.

Below is an hourly chart of the Italian MIB index (Italy is the world's seventh largest economy - just below the UK). The MIB has been much weaker than most EURO area indices, and currently retraced just about 50% of its 11.3% decline. The internal structure of the decline and subsequent rally appears to conform very well to wave guidelines, with the correction finishing (?) with a clear impulse higher (15 minute chart below the hourly chart).

This is a very short-term, 15 minute chart of the Italian MIB.

I hope you find this useful, and have a good day. - - - Aidyn Kussainov

These articles describe the statistical probabilities of long positions on these equities, based on neural net projections, for the next 5-15 trading days. These are not holy grail methodologies, the road to easy street, or anything else. These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.

For 11/10/2009:

                               $INDU              $SPX              $COMPQ

Monthly Momentum   Positive (OB) Positive(OB) Negative (OB)

Weekly Momentum    Positive          Positive         Negative

Daily Momentum       Positive (OB)  Positive(OB) Positive (OB)

(OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today's list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares.

The stocks that demonstrated bullish pattern reversals are shown here:

The momentum model at the monthly level continues to flicker between bullish and bearish and will do so until new highs are made.

The bottom here is that with the exception of $COMPQ, we are pointing higher, regardless of the abnormalities in volume that I see. REITs, insurance, retail continue to dominate the list of reversals. Software and insurance made the final screens.

Here is the neural net screen survivor:

                                      Value/Price est.   7 day ATR   %( 7 day ATR)/Close

Note (O): optionable

*Beta greater than 1.5, Volume greater than 1 million shares on a 50-day simple moving average volume basis.

(O) ALL   4.52/1 66.7%         1.92                   0.98               3.32

(O) EBIX 3.39/1 57.1             2.21                  3.51               6.14R

Read and repeat. We are still in an uptrend, but I still remain skeptical of a powerful rally, and if it comes, it may come at a cost of future upside, so be careful out there.

The same warnings apply from the last few days. Buying volume is still suspect, and the economic and world news is a wild card. Stay focused on stops and targets until we see breaks to new highs. I still believe it will be difficult for us to do that without some kind of a correction, and it could take weeks or months to shake out.

Take care,

DBB

Some Potential Swing Trading Opportunities for today...

These stocks will be monitored by you every day!!! Follow the master plan and you will be on your way to learn to trade stocks like a PRO... enjoy...

The results are generated by my stock scanner. Only the first 5 results are displayed here for every scan.

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Long Swings

Window

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 7) and (adx(10) > 30) and (pdi(10) > mdi(10)) and (high() < sma(close,5))

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Results for NYSEARCA

RWM	NYSEARCA	ProShares Short Russell2000	11/9/2009
TWM	NYSEARCA	ProShares UltraShort Russell2000	11/9/2009
TZA	NYSEARCA	Direxion Small Cap Bear 3x Shares	11/9/2009

Swings

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and (force_index(3) <= 0) and (force_index(13) >= 0) and (adx(10) > 30) and (high() < high()[-1]) and (high()[-1] < high()[-2]) and (close() > sma(close,10)) and (close() > sma(close,20))

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1-2-3-4

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and ((adx(10) + adx(20))/2 > 30) and (pdi(10)+pdi(20) > mdi(10) + mdi(20)) and (low() < low()[-1]) and (low()[-1] < low()[-2]) and (high() < high()[-1]) and (high()[-1] < high()[-2])

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Cross

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(sma(volume,20)>=500000)and(close() > 12)and(sma(close,5)>sma(close,15))and(close() < sma(close,5))and(close() > sma(close,15))and(high() < high()[-1])and(close() > open())

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Triangle

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and (close() > sma(close,20)) and (high()[-2] > high()[-1]) and (high()[-2] > high()) and (low()[-2] < low()[-1]) and (low()[-2] < low()) and (high()[-1] > high()) and (low()[-1] < low())

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LNT	NYSE	Alliant Energy Corporation	11/9/2009
TEL	NYSE	Tyco Electronics Ltd.	11/9/2009
TOT	NYSE	TOTAL S.A.	11/9/2009

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Results for NYSEARCA

Reverse

Scan Code From www.StockScanPRO.com:
(sma(volume,20)>=500000)and(close() > 12)and(high()[-2] > high()[-1])and(high()[-1] > high())and(low()[-2] > low()[-1])and(low()[-1] > low())and(close()[-2] <= open()[-2])and(close()[-1] <= open()[-1])and(close() >= open())and(volume() > 1.5 * sma(volume,20))

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Breakouts

Scan Code From www.StockScanPRO.com:
(sma(volume,20) > 200000)and(close() > 7)and(high() >= max(high,40))and(high()[-1] >= max(high,40)[-1])and(volume() > 1.5 * sma(volume,20))and(close() > open())and(volume()[-1] < sma(volume,20))and( (close() - low()) >= (0.75 *(high() - low())) )

Results for NASDAQ

Results for NYSE

HNZ	NYSE	H. J. Heinz Company	11/9/2009
REV	NYSE	Revlon, Inc.	11/9/2009
TRW	NYSE	TRW Automotive Holdings Corp.	11/9/2009

Dow Jones Industrial Average

9^th Nov 09

Key Statistics

Open: 10,020.62

High: 10228.23

Low:10020.62

Close: 10226.94

Change: +203.52 (+2.03%)

Prev Close: 10023.42

RSI: 50

Snapshot

• Dow ended +203.52 (+2.03%) points higher, after touching a 13 months high at a little higher level.
• The general consensus at the G-20 meet, urging the countries to carry on with the stimulus package for the time being, was the main catalyst to fuel up the Wall Street.
• GE finally agreed on the valuation terms of its television and movie business carried in NBC Corp, with Comcast, thus helping the stock to shore up further.
• Gold continued to rally on Monday, by settling at $1102 per ounce.
• US $ continue to weaken further against global currencies.

Current Market view �" Cautiously upwards

Market Strategy

Traders/Investors are advised to let the profits carry forward & use further correction as a buying opportunity. One could take long positions on every dip.

Market Commentary

Stock opened the session higher on the back of back of statements from G-20 summit urging different countries to continue with the stimulus package for a little longer period, and not withdraw them immediately. With no other economic data due lined up for the day, the market continue to rally right till the end of the day, and all the three major indices ended with gains of over 2 to 2.3% during the session.

The S&P 500 gained 24 points, or 2.2%, to settle at 1,093.07 and the Nasdaq composite rose 42 points, or 2%, to close at 2,154.06 during the Monday session.

General Electric (GE) was amongst the early gainers to carry on from last week’s pop-ups, after the company settled the valuation issue for its television and movie business in NBC Corp for a sell off of same to Comcast Corp. The stock of latter, however, remained almost unchanged.

Kraft launched a $16.3 billion hostile bid for takeover on Monday for British candymaker Cadbury after the deadline for the initial bid passed without a deal. Cadbury, however, rejected Kraft's initial $16.7 billion offer in early September and again turned it down.

Materials stocks had sported the best gains for most of the session. The sector was helped along by broader market support and interest in basic materials and commodities amid the dollar's decline. The sector finished with a 3.2% gain as buyers showed favor for steel stocks (4.5%) and diversified metals and mining stocks (4.6%).

Gold mining stocks like AEM continued to surge ahead by almost 5%, on the back of higher prices of gold, which closed above $1100.

Strength among diversified banks (+4.3%) and life and health insurers (+4.7%) helped the financial sector finish the session 3.6% higher and overtake materials as the session's best performing sector, after initially, materials was doing better.

Caterpillar Inc. was also amongst the major gainers in the session.

Out of the 30 Dow constituents, 29 stocks ended up with gains and only Kraft Foods Inc. shed a nominal part of its value. American Express and Bank of America were the top gainers in session amongst the Dow constituents.

Earnings for Tuesday

• Tyco International
• Universal Power Group
• Vodafone Plc
• American Apparel
• Crew Energy Inc.

The Day Ahead

• Goldman Sachs Stores sales weekly data

Stock of the Day �" Sprint Nextel Corp. (S)

Price - $3.43

Strategy �" Long

RSI �" 54.28

insert.a.chart.S 

Sprint Nextel (S) moved up after a gap-up opening on volumes on Monday. The stock gained over 20.7% in a single session on Monday alone.

While the Sprint Nextel Corp. (S) has already breached the 20 days moving average only on Monday in the process, it is also racing close to its 50 days moving average. The stock looks all set to touch $4.14, once it breaches its 50 days MA.

Casey Mulliganasks:

So a year later, in September 2009, after living through a year of "disaster," how did real consumption expenditure (one economists' favorite measures of living standards) compare to what it was in September 2008?

He observes that consumption (as well as disposable income) were higher than they were a year ago.

Since we're concerned with living standards, as opposed to economic activity, I thought it of interest to look at per capita consumption. Since population is available only on quarterly basis, I compare consumption per capita in 2009Q3 to that in 2008Q3.

Figure 1: Log personal consumption expenditure, in Ch.2005$ (blue) and linear time trend estimated over 1967Q1-2009Q3 period (red). NBER defined recession dates shaded gray, assuming recession ends in 2009Q2. Source: BEA, GDP 2009Q3 advance release, NBER and author's calculations.

Per capita consumption is 0.3 percent (in log terms) below the level in 2008Q3. Moreover, per capita consumption is 6.5 percent below the 1967Q1-09Q3 trend (which grows at 2.9 percent per annum).

Is that a disaster? Maybe not. But one wonders how much lower per capita consumption would have been in the absence of the actions undertaken by fiscal and monetary authorities around the world.

DALLAS/November 9, 2009 �" The purchase and financing of an average-priced new vehicle took 21.9 weeks of median family income in the third quarter of 2009, according to Comerica Bank’s Auto Affordability Index. The third quarter reading improved 0.6 of a week, pushing the latest Index reading to the best affordability on record. Median family income was roughly unchanged in the third quarter. The average total cost of a light vehicle, however, fell by $800 to $25,500. The drop mostly reflected a 2.4 percent decline in the average amount spent on a new car.

"The impact of the cash-for-clunkers program cannot be isolated in the data that we use to construct our Index," said Dana Johnson, Chief Economist at Comerica Bank. "However, the average amount that consumers spent on new vehicles in the third quarter was the lowest since early 2004. That along with the monthly pattern of sharp declines in July and August strongly suggests that the federal rebate program was largely responsible for the improvement in affordability this past quarter. In all likelihood, affordability will deteriorate modestly in the current quarter now that these rebates are unavailable."

I was on Fox Business earlier this afternoon talking about what could turn the dollar around.

Here is a chart showing how G7/G8 (which is now G20) finance ministers and central bankers meeting has coincided with major tops and bottoms in the EUR/USD. I’ll have more on that soon at FX360.com

1. [Jan 7, 2008: Reader Pledges Toward Mutual Fund Launch]
2. [May 26, 2008: Frequently Asked Questions]
3. Our story in Barron's [A New Kind of Fund Manager]
4. [November 2009: General Updates, Questions]
   

individual stocks

For the 11th "four week" period the fund returned +4.6%, versus the market's -0.5%, so an out performance of +5.1%.

On a cumulative basis the fund is now +69.5%, versus the Russell 1000's +15.6%, so an out performance of +53.9% for our "year to date" if you will. (thus far 44 weeks)

The gap filled perfectly at 1075; since this market has become nothing more than computers using technical measures we should at least have a cursory bounce here - Ive bought index ETFs and calls for the bounce (if and when).

unless we recapture the 50 day moving average I'll be holding all short positions with a target to S&P 1020

So after an initial hit to the jaw, just as we saw a month ago as people are staggered that things are not improving... speculators should go back to joy within hours or by early next week as they realize - in their world - life is good.  Main Street is an afterthought...  the market should come to its senses shortly and realize everything is on "track".

Well, folks, the bulls have done it again - it looks like buyers have sprung an amazing fifth Bear Trap in the last few months that - if recent history repeats - will lead to another new high in the S&P 500.

Let’s take a look at the prior four traps that led to new highs:

What I’m showing is the daily S&P 500 from early June, 2009.

The highlighted regions represent the unyielding price rise (almost literally straight up for 8 or 9 days at a time) that came directly after a classic breaking of support via the 20 (or 50) period exponential moving average.

Generally, a break in a moving average triggers sell orders in the expectation that support is broken.

Stop-losses are placed above the entry (usually back above the average) and any sort of upward movement triggers a vicious cycle where stop-losses become “buy to cover” orders, further driving prices higher with buying pressure.

A Bear Trap is thus sprung when a valid or classic sell signal is generated and then price moves upwards into the ‘pocket’ of stop-losses from the short-sellers.  To be a bear trap, a valid sell signal has to occur.

1.  The Head and Shoulders Pattern neckline was broken, in addition to price breaking under the 200 day SMA, generating a very powerful sell signal… that led to an even MORE powerful rally when the signal failed.

2.  A break of the 20 day EMA after a strong selling bar (down-day) triggered entry… and as price moved higher back above the 20 EMA, a flood of stop-losses helped drive the index higher four days in a row.

3.  Using the exact same logic as before, but this time the “Melt-Up” avalanche yielded almost 9 up-days in a row with only a one-day doji pause.

4.  This time price broke solidly on another strong selling bar under the 20 EMA, but technically supported off the confluence of the 50 day EMA and the lower Bollinger.  Still, the rise back above the 20 EMA coincided with another (almost) 9 day price rise with only a minor pause.

5.  It looks like it’s happening again, in that a break of both the 20 and 50 day EMA triggered in more short-sellers… and now we’re having their stop-losses taken out yet again which - if history since July is any guide - will lead to a new price high in the S&P 500.

Take a moment to read my prior post entitled, “A Look at the 12 Most Recent Failed Sell-Signals in the S&P 500” for additional, detailed insights.

There was a similar post I wrote entitled “Recent Failed Sell Signals and Short Squeezes in the SPY” which is a prior discussion on this concept.

Also, this post is almost identical to my ‘prediction post’ of the same logic that forecast the most recent price highs - “If History Repeats, Will it Mean New Highs for S&P 500?”

Be aware of the current “character” or behavior of the market and realize the nuances like this that can help prevent losses or translate into gains.

Corey Rosenbloom, CMT
Afraid to Trade.com

These articles describe the statistical probabilities of long positions on these equities, based on neural net projections, for the next 5-15 trading days. These are not holy grail methodologies, the road to easy street, or anything else. These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.

For 11/09/2009:

                               $INDU              $SPX              $COMPQ

Monthly Momentum   Positive (OB) Positive(OB) Negative (OB)

Weekly Momentum    Negative         Negative       Negative

Daily Momentum       Positive           Positive         Positive

(OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today's list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares.

The stocks that demonstrated bullish pattern reversals are shown here:

 As on Friday, the momentum model at the monthly level is still flickering between bullish and bearish and will do so until new highs are made. Retail continues to lead, as well as prepared foods, healthcare, and drugs. Only the retail name passed the net screens, though DMND was close (except for average gain), and BVF simply did not pass on the overall statistics. At least the survivor that passed the screens is in a strong sector.

Here is the neural net screen survivor:

                                      Value/Price est.   7 day ATR   %( 7 day ATR)/Close

Note (O): optionable

*Beta greater than 1.5, Volume greater than 1 million shares on a 50-day simple moving average volume basis.

(O) KSS 4.30/1 61.8%         1.28                    2.03              3.58

The same warnings apply from the last few days. Buying volume is still suspect, and the economic and world news is a wild card. Stay focused on stops and targets until we see breaks to new highs. I still believe it will be difficult for us to do that without some kind of a correction, and it could take weeks or months to shake out. No one knows the answer, however, which is why we need to continue to monitor the situation daily and protect equity at all times and manage position sizes and risk parameters.

Take care,

DBB

Although oil prices are up about $1/bbl this morning, given the juxtaposition of the dollar index pressing against its October low (see our comparison chart of oil and the dollar), a holder of long positions in oil and the US Oil Fund ETF(NYSE: USO) could be disappointed. That said, I am also mindful of the fact that Friday's weakness can be construed as a successful test of critical support at $76.55, and as long as $76.55 contains any forthcoming weakness, the near-term pattern in oil argues that a three-week bull flag should thrust to the upside in the upcoming sessions �" towards a target of $86-$88.

insert.a.chart.USO

"We believe it is prudent to lock in some profits, and focus on developing an income stream in the event that we get either a major correction or double-dip recession," says Glenn Rogers.

 insert.a.chart.IGR

The contributing editor to The Internet Wealth Builder suggests, "It seems to me to that the most promising areas worth considering are high-yield bond funds and international real estate funds, preferably with some underlying income." Here, the reviews four income ideas.

"I like high-yield bond funds, even though there is concern that interest rates will rise in 2010.

"Most bonds don't do well in the kind of rising interest-rate environment that we are likely to experience sooner than later, given that the U.S. government has been printing money like crazy and commodity prices have been going through the roof.

"Surely price inflation can't be far behind. When that happens, rates will begin to rise and bonds generally will fall in price.

"However, high-yield bonds should become more valuable since rising interest rates will also signal a recovering economy and high-yield companies will be seen as less vulnerable to credit, economic, and business risk and therefore more desirable. So locking in high-yield income now makes a lot of sense.

"As for real estate funds, often they produce decent income and this is still an area that remains beaten-down when compared to other sectors. These securities have already moved up quite a bit but not as much as the financials and commodities, for instance.

"Real estate funds are more volatile and risky than some of the bond funds that I'm going to suggest but I think it's worth having a sprinkling of them in your portfolio because if I'm right about a resurgence in inflation, real estate offers a good hedge.

"Personally, I'm buying half a dozen of them and will watch them over the next several months to see how they perform. If the payouts are as advertised I will be happy with that since I'm primarily looking for income from these choices with some growth potential as a bonus.

"Here are my suggestions:

"ING Clarion Global Real Estate Income Fund (NYSE: IGR) invests globally and currently yields 8.3% on an annualized distribution of 54c a share.

"It holds 70 companies with half of the fund's holdings based in the U.S. But you have decent international exposure with holdings in Australia, Canada, and the United Kingdom, along with a small position in Asia.

"The fund is up about 80% year to date but still down 15% on an annualized basis and the holdings appear to be fairly conservative. Certainly we are not buying this one at the bottom up but I suspect it still has room to run and you are getting paid pretty well to wait.

"PIMCO is one of the premier bond managers in the world. No doubt you have seen Bill Gross, the chairman of PIMCO, interviewed frequently on various financial channels as one of the most knowledgeable bond fund managers in the world.

"PIMCO Income Opportunity Fund (NYSE: PKO) is a closed-end fund that currently pays monthly dividends of 17.7c per unit to yield close to 10%.

"It is highly rated by Morningstar and the fund is up about 18% over the past year, which is not bad for a bond fund.

"The fund holds a variety of bonds, mainly corporate issues ranging from U.S. giants Citicorp and American Airlines to international leasing finance companies. PIMCO is very well run and this has been a steady performer since its inception in 2007.

"Finally, here are two iShares funds you may want to look at, although I am not formally recommending either:

"iShares S&P U.S. Preferred Stock Index Fund (NYSE: PFF) focuses on U.S. preferred shares issued by companies like Ford, Wells Fargo, MetLife, etc.

"It offers a high monthly dividend but the payment varies significantly from one month to the next so if you need predictable cash flow, this may not be your best choice.

"For example, in 2009 the payments have ranged from 17.9c a unit in January to 31.4c per unit in July.  The shares are up significantly from their March low of $15.05 but the units are far less volatile than funds that focus on common stock and of course the yield is much better.

"iShares Barclays Aggregate Bond Fund (NYSE: AGG) has a relatively modest yield of about 4% based on a monthly variable dividend.

"But it appears to be rock solid, having barely moved through the worst of the meltdown last March so it's worth buying some just for stability and peace of mind.

"Morningstar gives it a four star rating. This may be the least exciting part of your portfolio, tracking as it does government bonds, government-sponsored bonds, and corporate bonds, but least you will be sleeping well at night."

A Quick Update on the Crude Oil Market

I was just looking at the charts and they are beginning to look very, very bullish. The formation I show you in today’s video is a classic continuation pattern to the upside. This pattern also confirms a Fibonacci target number we are looking at.

This video is short and to the point and I think it will get you thinking about this energy market.

As always our videos are free to watch and there is no need to register. After you watch the movie, please feel free to comment on blog.

All the best,

Some Potential Swing Trading Opportunities for today...

These stocks will be monitored by you every day!!! Follow the master plan and you will be on your way to learn to trade stocks like a PRO... enjoy...

The results are generated by my stock scanner. Only the first 5 results are displayed here for every scan.

For full results, subscribe now to StockScanPRO for 30 days FREE, then only pay $9.99 a month!.

SECRETS TO GREAT RESULTS:
CONFIDENCE - PATIENCE- FOCUS - DISCIPLINE

Long Swings

Window

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 7) and (adx(10) > 30) and (pdi(10) > mdi(10)) and (high() < sma(close,5))

Results for NASDAQ

Results for NYSE

DLB

NYSE

Dolby Laboratories, Inc.

11/6/2009

Results for AMEX

Results for NYSEARCA

RWM	NYSEARCA	ProShares Short Russell2000	11/6/2009
TWM	NYSEARCA	ProShares UltraShort Russell2000	11/6/2009
TZA	NYSEARCA	Direxion Small Cap Bear 3x Shares	11/6/2009

Swings

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and (force_index(3) <= 0) and (force_index(13) >= 0) and (adx(10) > 30) and (high() < high()[-1]) and (high()[-1] < high()[-2]) and (close() > sma(close,10)) and (close() > sma(close,20))

Results for NASDAQ

Results for NYSE

RCI

NYSE

Rogers Communications Inc.

11/6/2009

Results for AMEX

Results for NYSEARCA

1-2-3-4

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and ((adx(10) + adx(20))/2 > 30) and (pdi(10)+pdi(20) > mdi(10) + mdi(20)) and (low() < low()[-1]) and (low()[-1] < low()[-2]) and (high() < high()[-1]) and (high()[-1] < high()[-2])

Results for NASDAQ

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UL

NYSE

Unilever Plc

11/6/2009

Results for AMEX

Results for NYSEARCA

Cross

Scan Code From www.StockScanPRO.com:
(sma(volume,20)>=500000)and(close() > 12)and(sma(close,5)>sma(close,15))and(close() < sma(close,5))and(close() > sma(close,15))and(high() < high()[-1])and(close() > open())

Results for NASDAQ

Results for NYSE

EAC	NYSE	Encore Acquisition Company	11/6/2009
KRC	NYSE	Kilroy Realty Corporation	11/6/2009
TDC	NYSE	Teradata Corporation	11/6/2009

Results for AMEX

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Triangle

Scan Code From www.StockScanPRO.com:
(sma(volume,20) >= 500000) and (close() > 12) and (close() > sma(close,20)) and (high()[-2] > high()[-1]) and (high()[-2] > high()) and (low()[-2] < low()[-1]) and (low()[-2] < low()) and (high()[-1] > high()) and (low()[-1] < low())

Results for NASDAQ

Results for NYSE

DLB	NYSE	Dolby Laboratories, Inc.	11/6/2009
HS	NYSE	HealthSpring, Inc.	11/6/2009

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Results for NYSEARCA

FAZ

NYSEARCA

Direxion Financial Bear 3x Shares

11/6/2009

Reverse

Scan Code From www.StockScanPRO.com:
(sma(volume,20)>=500000)and(close() > 12)and(high()[-2] > high()[-1])and(high()[-1] > high())and(low()[-2] > low()[-1])and(low()[-1] > low())and(close()[-2] <= open()[-2])and(close()[-1] <= open()[-1])and(close() >= open())and(volume() > 1.5 * sma(volume,20))

Results for NASDAQ

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PRE

NYSE

PartnerRe Ltd.

11/6/2009

Stock of the Day �" Apple Inc (AAPL)

Price - $194.34

Strategy �" Short

RSI �" 54.78

MACD �" 1.84

insert.a.chart.AAPL 

Apple Inc is showing sign of reversal from a bullish trend. In short term, Apple Inc. around 190 could be a good candidate for initiating fresh short positions for a target $170-172 by keeping a stop loss of $181.

Stock Pick of the Day

American International Group, Inc. (AIG)

Closing Price: $35.48

Change: ($-3.80; -9.67%)

RSI: 41.2

50 days MA: $38.37

insert.a.chart.AIG 

American International Group, Inc. (AIG) has tapered off from its dead cat bounce from around $33 to $39.28 last week, as the stock has finally retraced from $39.28, to $35.48 on Friday.

The stock continues to be strong grip of bears and is all set to test its earlier support levels of $32.3.

Though the insurer has come out with some profits in the quarter ended September, yet traders could consider going short till it slips to $34.

Weekly Market Commentary- (Nov 2-Nov 6)

DJIA Industrial Average

Open: 9712.73

Close: 10023.42

Change: 310.69 (3.2%)

RSI: 47.06

MACD: 40.24

Strategy: In the coming week starting Nov 9, it would be a better strategy on part of the trader, to buy stocks only on stock specific basis on correction, as the market shows signs of tiring up every time it tries to out the resistance level of 1090-1100 points on broader index S&P 500.

Highlights of week:

·        The week was dominated by status quo strategy adopted by FED regarding the interest rates.

·        The Nasdaq Composite Index moved up by 3.3% from its opening on Monday, compared to an almost comparable pick up of 3.2% in the DJIA, and similar gains noticed in the week from opening in S&P 500 index.

·        The gains in stocks posting good results was short lived, whereas all such stocks ending up with poor results for September ended up with strong losses.

·        AIG, major insurer ended up with profits for the second straight quarter, but earlier its bear rally in anticipation of better results was short-lived and witnessed a sell off on Friday.

·        The US $ remained volatile throughout the week, but ended up with minor loss of 0.7% against Euro and some other global currencies.

·        Gold picked up strongly, and breached all time level of $1100, but ended at a level of $1095 per troy ounce, or net gain of 5.3% for the week.

·        The unemployment data was disappointing, with a 10.2% unemployment rate estimates, but was absorbed later in the session.

The Weekly Commentary

The 3.2% gains for the week recorded in the week were led largely by some better earnings for the quarter, which were announced in the last week.

Of the larger market cap companies reporting last week -- Cisco, CVS, Kraft (KFT), Qualcomm (QCOM) and Time Warner (TWX) -- all reported better-than-expected results. Kraft, however, came up came up short on revenue, and as a result fell 2.7% for the week. 

Regarding Cisco, the tech giant authorized $10 billion more in share buybacks issued a solid outlook during its conference call, helping its shares gain 4.3% on the week.

In one of the major merger and acquisition activity announced during the week, Warren Buffet's Berkshire Hathaway announced a cash and stock offer for Burlington Northern at $100 per share. The news sent BNI up 29% for the week. Its peers, Union Pacific and CSX also posted healthy gains of 13%.

General Electric was also a standout gainer during the week after a pause, as some analysts upgraded the stock citing the chance of company going for disinvesting some of its non core business lines in near future.

An unemployment rate of 10.2% was reported by Labor Department this week. However, the week on week new jobless claims is now slowing down.

Apart from AIG, Fannie Mae also came out with its earnings, which were not outstanding.

The consumer staples giant, Starbucks, which is a coffee major from US, shot into limelight following its reasonable earnings this week, and may remain in focus in near future.

Gold was a precious commodity which shot into limelight again last week, by breaching $1100 mark, and ending the week with over 5.3% gains.

The Week Ahead

At the fag end of results season, some of the major retail companies like Macy’s, Wal-Mart, Dollar General and J.C.Penny report their earnings from Wednesday to Friday.

Apart from these companies, there are some other companies like Tyco, Vodafone, Flour, Disney also announce their earnings during the week starting Nov 9.

Economic events ahead

Monday: No major economic events are scheduled for Monday.

Tuesday: The NFIB small business survey is released on Tuesday.

Thursday: Jobless claims are due to be released for the week; Federal Budget is also scheduled for the same day

Friday: Consumer sentiment for the month of November; International trade and import prices are to be reported.    

.... of course Warren wraps himself in the US flag in his public reasoning for the purchase

It is hard to imagine why Wall Street would cheer a 10.2 percent official unemployment rate since the stock market actually ended the day higher after this dismal news.  Since the start of the recession, 8 million people have lost their jobs.  A total of approximately 27 million people are unemployed, underemployed, or have given up looking for work.  All the talk of improvement got people out looking for work again and that is why the unemployment rate saw a big jump from 9.8 percent to 10.2 percent even though employers “only” cut 190,000 in October.  The data is deceptive for many reasons.  For one, long-term unemployment is a sign that many jobs will be lost forever.  The second more ominous point is that many sectors are experiencing mini-depressions.

All job cuts are not equal.  If we had to sum it up, paper pushing jobs in the financial sector seem more immune than good producing jobs.  Let us look at how the real employment situation is panning out:

government jobs

Since the start of the recession 22 months ago in December of 2007, the government has added 78,000 jobs employing some 22.44 million people.  It is interesting to look at local and state taxes that are being pummeled yet this sector is still up.  It would be one thing to create new jobs but looking at the chart above, jobs were never cut.  What did the government actually do?  States like California implemented furloughs and raised taxes in many cases.  Of course, the major issue in many states is the bloated pension system that puts an unsupportable burden on those who are actually still working.  I can understand that someone needs to live and support themselves in retirement.  But in California for example, you have many people receiving $100,000+ pensions and many only worked until their early 50s.  What is clear from the above is the government did not cut any jobs on a net basis.  So we can scratch this sector when looking at where the jobs were lost.

The next sector is the FIRE economy:

fire employment

Given the 8 million jobs officially lost in this recession, a mere 600,000 came from the finance, insurance, and real estate industries.  This is the sector that is largely responsible for the housing bubble and the entire finance mess yet it is not taking a major cut as it should.  Why?  The bailouts are targeted in protecting many of these Wall Street paper pushers.  In fact, you can see that in the last month it actually added jobs.  The 6.6 percent drop does not reflect the actual overall fall in employment.  Again, this sector is being supported by the trillions in taxpayer money.  So where are the job cuts really coming from?

Construction employment has taken it on the chin:

Construction employment is down by a stunning 20 percent since the start of the recession.  It is interesting that from the start of the recession, construction and the FIRE sector had roughly the same number of employees benefiting from the housing bubble but where the FIRE sector lost 600,000 jobs, the construction sector has seen 1,557,000 jobs cut, nearly 3 times the rate of the FIRE sector.  Apparently building a home is less valuable than writing a toxic mortgage.  Again, the government bailouts are protecting an over employed FIRE sector while throwing other sectors of the economy to the wolves. Keep in mind both of these sectors used the same underlying asset (real estate) to expand.  The housing bubble is now the U.S. Treasury and Federal Reserve bailout of the FIRE economy.

Durable goods manufacturing has also been slammed:

manufacturing jobs

Durable good manufacturing has fallen a stunning 18 percent since the recession started.  If we look at construction and durable goods, both sectors are experiencing depressions while the FIRE sector is experiencing a tiny recession.  And take this data point as a reference:

Durable goods and manufacturing:

December 2007 jobs:               8.728 million jobs

October 2009 jobs:                  7.121 million jobs

FIRE sector:

December 2007 jobs:               8.242 million jobs

October 2009 jobs:                  7.697 million jobs

This should tell you what is happening to many average Americans.  Only two years ago, the durable goods and manufacturing sector had 486,000 more jobs than the FIRE sector.  Now, the FIRE economy has done a role reversal and has 576,000 more jobs than the durable goods manufacturing sector!  Who are we really bailing out here?

Conclusion

Simply taking the employment report at face value is meaningless.  What is happening is the bailout structure is designed to prop up the primary industries that created the housing bubble.  Many of the FIRE jobs are over compensated Wall Street cronies who are using taxpayer dollars to gamble.  The real fact is many sectors of the American economy are in deep recession.  Unless you work for the government or the FIRE sector, chances are your industry is in a deep recession.  Then again, why else would the stock market be up by 60 percent since March?  It is easy to make money when you eliminate the biggest line item (employees) for short-term bottom line gains for those in the FIRE economy since your job is subsidized by the taxpayer.

William Sterling of Trilogy Global Advisors has an interesting new paper on the abrupt changes in financial markets subsequent to Lehman's bankruptcy on September 15, 2008.

Sterling's paper is in part a response to earlier analyses by John Taylor (2008, 2009) and John Cochrane and Luigi Zingales who noted that the spread between the LIBOR interest rate (London Interbank Offered Rate) and the OIS (Overnight Index Swap) rose only gradually following the Lehman bankruptcy, leading these scholars to see Lehman as just one of many relevant developments at the time. But Sterling questions the meaningfulness of the LIBOR or OIS indicators during these weeks given that markets seized up and little trading activity was occurring in these instruments. Sterling instead proposes to take a look at Bloomberg Financial Conditions Index, which Bloomberg launched in August 2008. The index is based in part on the observations by Rick Mishkin on some of the regularities observed in earlier historical financial crises. The components of the Bloomberg index are as follows:

Source: Sterling (2009)

Here's Sterling's graph of the behavior of the Bloomberg index, in which the remarkable character of events following September 12 is pretty striking.

Source: Sterling (2009)

Even if the Lehman failure is agreed to as a definitive event, it is not clear to me that this establishes that all would have been fine if the Fed had only bailed out Lehman as they had Bear Stearns and AIG before. That question is inherently and unavoidably counterfactual. We can't know-- and decision-makers at the time couldn't know-- which domino might have been next to fall had this one been propped up.

But I think it is fair to conclude that the middle of September of 2008 marked a clear turning point in the unfortunate sequence of events through which we have recently come.

I wanted to do an update post on the infamous Natural Gas fund UNG, now that it has (almost) completed a test of the prior lows as mentioned in my prior post entitled, “A Weekly and Daily Chart View of UNG on October 28th.”

Let’s see the daily chart spanning back to the beginning of 2009… and witness the stellar drop from $25 per share to $9.

In the prior post on October 28th, I remarked:

“If the prior trend continues, then we will be looking for a price move down to test $9.50 or $9.00 in the next few weeks - provided that the $12.00 level holds as it seems to be doing as resistance.”

The $12 level did indeed hold and price did fall to close Friday just a hair above $9.50 and could test the September lows at $9.00 to try for a ‘double bottom”… or worse yet a new price low.

Beyond the price pullback to the $9.50 level, I wanted to share a lesson about the arc failure pattern in August.

Even without me drawing the arc, it is clear that price was attempting to form a “Rounded Reversal” or “arc” pattern formation (also called a “Saucer” or “Scallop”).  Generally, these are bullish reversal patterns that form near the lows of a major price move.

In general, it’s impossible to call the exact bottom of a rounded reversal pattern, but more than not they do lead to trend reversals.

However, when they fail, they can fail very hard, as the example above in UNG shows us.

UNG began to form a rising arc, looking like the pattern was complete in June and August 2009… but when price broke beneath the arc, a down-move was sharply accelerated by this pattern failure.

It’s one of many examples where a common pattern forms and when the pattern fails, throwing the traders who expected a reversal off balance, it often leads to a swift, sudden and often powerful move in the OPPOSITE direction than is expected… in part due to stop-losses being triggered.

I think this is an excellent example to reference for your studies on a failed “Rounded Reversal” or arc formation… and how powerful price moves can occur at these failures.

To see a successful example of the “Rounded Reversal” leading to a trend reversal in Crude Oil, see any of the following posts in chronological order:

December 30, 2008:  Volume Surging in USO and DXO Oil Funds

January 20, 2009:  Possible Reversal Up in USO Oil Fund and Crude Oil

February 3, 2009:  Rounded Reversal Taking Shape in Crude Oil

March 21, 2009:  A Quick Look at Crude Oil and the US Dollar Index (where I called a target for Crude Oil to be at least $70)

The Rounded Reversal is one of my favorite patterns, as it is often very easy to spot and trade.  However, there is no pattern that works 100%, and in the event that a popular pattern fails, it can leave you an even better opportunity to trade in the opposite if you are aggressive and nimble enough to do so.

Let’s see if price can form a double bottom on a positive momentum divergence… or if the pervasive downtrend will crack prices to yet another new low.

Corey Rosenbloom, CMT
Afraid to Trade.com

As far as I can tell, I have not yet posted about the use of Bollinger bands in conjunction a rate of change (ROC) indicator to identify volatility breakouts.

In summarizing the action in the VIX over the course of the past two weeks, the chart below captures some of the drama in terms of 10% (solid green) and 20% (solid blue) moving average envelopes. In the six month time frame included in the chart, the moving average envelopes flag last week’s VIX spike as the most powerful since stocks turned up in March. The moving averages also indicate that the VIX low of 20.10 from three weeks ago is the second strongest in terms of penetration of the lower moving average envelopes.

The study below the main chart utilizes a 10-day rate of change function as well as Bollinger bands that are tuned to 20 days and 1.6 standard deviations. Note that in this study both the VIX spike and the prior VIX low represent the largest upward and downward moves in terms of magnitude relative to the Bollinger bands.

The rate of change indicator is a valuable way to measure sharp price moves. When combined with the Bollinger band indicator, it is possible to better identify sharp upward and downward moves, particularly when the underlying has a habit of making sudden large moves, as is the case with the VIX.

For additional posts on related subjects, readers are encouraged to check out:

• VIX Spikes Above Bollinger Bands
• The VIX and Bollinger Bands
• Bollinger Bands and the Standard Deviation Setting
• Charting the VIX with 10 Day SMA Envelopes
• Chart of the Week: Might Recent Volume Bottom Doom Stocks?

[source: StockCharts]

I’ve been watching Goldman Sachs (GS) closely as a barometer for financial stocks and thus the broader market for some time now, and the stock faces a critical area to overcome to continue on its upward trajectory.

Let’s take a look at Goldman Sachs’ daily chart to note the overhead EMA resistance that is bearing down to form a potential Bearish Cradle Sell Signal… and then temper that bearishness with a look at the Weekly Chart.

Just doing quick commentary here, Goldman Sachs (GS) is underneath both the 20 and 50 day EMA and has formed a lower swing high, which is the first steps in beginning an official new downtrend.  We’re not quite there yet, as the EMA structure is still positive, and a single lower low does not a trend reversal make.

But Goldman has to prove itself and claw its way back above these EMAs, or else a Cradle Sell signal will trigger and these EMAs could hold as overhead resistance, locking in a lower swing high and further deteriorating the upward movement.

A Cradle Sell Signal forms when the 20 period EMA crosses under the 50 EMA, as  price rallies up into this “confluence crossover zone” of the EMAs, forming a potential “dual-wall” of overhead resistance.  A doji or some other reversal candle would be the official ’sell short’ signal if these EMAs cross.

If price stays low, it looks like the EMAs will crossover bearishly at the $175 level, so let’s all watch that very closely for clues as to the potential pathway of Goldman for the future… and perhaps the XLF (Financial ETF)… and by proxy the general market.

But wait, there’s more!

If the daily chart looks like Goldman Sachs is about to fall into the abyss… the weekly chart is showing a nice ‘go long’ confluence moving average buy signal.  What?  Let’s take a look.

The 20 week EMA rests at $167 and the 200 week simple moving average rests at $164, forming a loose confluence zone at the $165 level as expected (and potential) support.

For now, and if Goldman closes to end the weekly candle to where it is now, then we would have a doji that has bounced off confluence support - a buy signal.

That’s the simple analysis and it throws a monkey wrench into the plans and hopes of the bears/sellers.

Additional analysis shows a negative volume and momentum divergence on the weekly chart for almost the whole duration of the rally in 2009 - that’s a bearish non-confirmation of higher prices and tilts the odds slightly to the bearish camp.

So we have resistance on the daily chart at $175 and support on the weekly chart at $165.

This is similar to the situation I highlighted occurred for IBM in my July 24th post:

“Daily and Weekly Conflicting Opportunities in IBM.”

I then followed-up on August 24th’s:

Updated Post on IBM Shows Why Multiple Timeframe Analysis is Critical.

The Weekly Bullish Signal in IBM overpowered the Daily Sell Signal in that example.

I also highlighted a similar pattern on RIMM in the June 30th post:

“Bullish or Bearish on RIMM?  Depends on Your Timeframe.”

Like IBM, RIMM also took the bullish cue from its weekly chart, rallying to a new high in September… before collapsing back to $60.

Will it happen again in Goldman Sachs?

Watch $175 for a bullish breakout and $165 for a bearish breakdown to see.

Corey Rosenbloom, CMT
Afraid to Trade.com

These articles describe the statistical probabilities of long positions on these equities, based on neural net projections, for the next 5-15 trading days. These are not holy grail methodologies, the road to easy street, or anything else. These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.

For 11/06/2009:

                               $INDU              $SPX                 $COMPQ

Monthly Momentum   Positive (OB) Positive(OB) Negative (OB)

Weekly Momentum    Negative         Negative           Negative

Daily Momentum       Positive         Positive            Positive

(OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today's list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares.

The stocks that demonstrated bullish pattern reversals are shown here: