The dollar rallies and the world catches a red flu. It looks like Europe is pre-occupied with a near bankrupt Greece and Portugal weakening the Euro. Japan's national pride is hurt with the Toyota fiasco and China is re-evaluating based on a stronger dollar. Even Australia was hit as commodity prices sank. The question is: Can the US stock market rally on a stronger dollar? Can the US get use to being the financial leader again?
Around the world:
Asia
The Hang Seng gave up almost all of yesterday's gains in a trend down day. The Nikkei is worried about the impact of Toyota and a stronger dollar as it remained weak all day.
Europe
Europe is down around a percent as the financial wizards are trying to find the best course for financially struggling Greece and Portugal.
United States
Economic news
The job theme continues today with the weekly initial jobless claims out at 8:30. 455K claims are expected, it would be nice to re-approach our recent low of 432K. Any trend lower than last weeks 470K will be seen as positive.
10am factory orders will be up for scrutiny and Timmy will be speaking at 10. We will watch the dollar around that time to see if the or factory orders have any effect positive or negative. Weekly natural gas numbers are out today we have been drawing down the reserves over the last 8 weeks are so but have slowed down the draw. A positive number (build) today should send NG spinning lower.
Earnings
The Earnings calendar is full and I can not cut and paste it. I did have one member ask me last night about a downloadable version of earnings which I spent some time looking for. I did run across this Yahoo page which I share with you this morning:
http://biz.yahoo.com/z/extreme.html
This is a list of all the earnings surprises for the day.
Breadth Charts
40 DMA % Index
I did get my RUT information back so the charts are more complete now. Yesterday we curled back down again.
A rally today is needed to head us back up. The NYSE remains in control while the Nasdaq and RUT look to be barely holding on from making a new recent low on the indicator.
The chart moves to a bearish -6 today.
10 Day High - Low
I lost my color coding in the move from version 4 of StockFinder to versioin 5, but we can tell if bars are higher and lower. The NYSE is the only index yesterday that made improvements on this chart. It puts in a plus 2 score while the other two put in a disappointing neutral. The good news is that the chart remains somewhat to the bullish side still.
52 Week New Highs
This chart confirms what we see on the 10 day high - low chart. It too puts in a +2 score for the same reason. The NYSE is bullish and the Naz composite and Russell 2000 are neutral here.
Conclusion
We are in a fragile area. The bulls did an ok job of holding up yesterday but they need to rally here today and with a gap down opening looming that puts the starting line that much farther away and the bulls may be out of breath just getting to the starting line. The US has to get use to taking the lead here in the world once again with a stronger dollar and stronger recovery. We will see today if we are ready to do that.
The charts scored a -2 today today which is slightly bearish to neutral.
$SPX
Looking at the SPX chart you can see the problem. Yesterday was an NR7 day with all movement below the close from the two day rally we had off the recent bottom. That 1101 area is a high frequency failure area from a retracement bounce so that adds doubt to whether or not we can go higher. The 1103 line forms the top of a an ugly looking cup and we put in the start of a handle yesterday.
The goals for the bulls today.. to break that 1103 area and begin to claim the high ground. If we can rally today or tomorrow it should be a good one. The air about 1103 is pretty clear to 1114.
The bears can just hold. Another NR7 day or lower will really put in doubts about the last two days here. prints below 1090 or even 1095 will shake up the market today. To pull more bulls into the bear camp prints below 1085 and down will be needed.
-Marlin aka; RedlionTrader
