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Fear indicator is on the rise

SAN FRANCISCO (MarketWatch) — The Chicago Board Options Exchange volatility index, or VIX (VIX 23.84, +3.65, +18.08%) , continued to climb Tuesday as concern over European debt problems was compounded with a more than 200 point decline in the Dow Jones Industrial Average  (INDU 10,927, -224.76, -2.02%) . The VIX rose 23.7% in recent activity. Also, the iPath S&P 500 VIX Short-Term Futures (VXX 22.60, +0.23, +1.03%) , an exchange-traded fund tied to the VIX, saw a rise of 9% in recent activity.

I will be looking at the major resistance level of VIX to do some entry again. Do watch out!

Just saw another article on the reason of the selldown.

The drop in the U.S. indexes follows even steeper declines in European markets and paralleled a drop in some currencies and commodities. The euro slid below $1.30 for the first time in a year, while oil dropped 4% to under $83 a barrel. Treasury prices rallied to two-month highs.

“It is clearly one of those days when we’re reminded the world is still a dangerous place, and we’re always subject to accidents, man made or otherwise,” said Stuart Hoffman, chief economist at PNC Financial.

“It is part Greece, part oil disaster and part unsuccessful terrorist plot and everyone is running for safety,” said Hoffman, pointing to the rally in U.S. Treasury bonds and the dollar.

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Categories: indice, vix Tags: ,

No sell in may and go away?

NEW YORK (MarketWatch) — U.S. stocks surged Monday, with retailers rallying after a report showed consumer spending at a record level and as investors took heart from the latest merger activity, including UAL Corp.’s $3.15 billion deal with Continental Airlines Inc.

The Dow Jones Industrial Average  (INDU 11,152, +143.44, +1.30%) ended up 143.22 points, or 1.3%, at 11,151.83, its biggest one-day gain since mid-February and nearly recouping Friday’s 159-point slide.

All but one component traded higher, led by shares of Caterpillar, Inc.  (CAT 69.78, -0.16, -0.23%) , which gained 2.7%.

Alcoa Inc.  (AA 13.13, -0.02, -0.15%) was the sole decliner among the blue chips, with shares of the aluminum producer down 2.1%. more

May actually open higher for Dow. One shouldn’t be too surprise given that the stock market is so unpredictable. With the earnings so good this quarter, its hard to emulate next quarter. We shall see if it happens

Categories: djia, indice, market, news, stock Tags: , , , ,

Looking ahead: Singapore

STI

Trend: Sideway hold or downtrend (uptrend line broken), 2930 to hold for uptrend else trend reversal with lower low being made. Mini-downtrend line holding the upward movement. Have to move upwards above 3040 for uptrend to resume.

Indicators: MFI, RSI and Stochastic all turning down. MACD crossover and turning down. CCI turning up.

Candlestick: Last candlestick is a doji with high volume.

Conclusion. Bull and bear are in a tussle right now with the bear getting the upper hand.

Banking Sector

Daily chart: Rebounding from resistance turn support. Very similar to STI but the last candlestick is a white spinning top. It might be forming a bullish flag. RSI MFI seems to hold.

Weekly chart: market seems to be overbought at the moment with possible formation of double top.

Commodities sector

Daily chart: downtrend or possible sideway and last candlestick looks really bad. with all indicators heading southward.

Weekly: 20w MA seems to hold. 3 black candle for last 3 weeks.

Marine sector

Daily: strong uptrend with all indicators doesn’t look good. Put a trailing stop below 20d MA.

Weekly: 5w MA holding the sector but it is the first dark cloud cover after 9 weekly white candle and it its very far from home (20w MA). Look to cash out at least half for stocks in this sector. Stochastic is also giving same signal.

Properties sector

Daily: back to support level. It seems to be beaten down real bad. 5 EMA is holding the downward movement with all indicators turning up from oversold region.

Weekly: doesn’t really look good for now. Better to wait for 1 weekly white candle before going into this sector.

Dow Above 11000

WSJ

Stocks rose, prompting the Dow Jones Industrial Average to close above 11000 for the first time since September 2008, with Caterpillar, Alcoa and Chevron in the lead.

The Dow climbed 8.62 points, or 0.08%, to 11005.97, its highest close since Sept. 26, 2008. Caterpillar was the measure’s best performer, up $1.46, or 2.2%, to 66.73, after Baird upgraded its investment rating on the industrial giant’s stock to “outperform” from “neutral.” The firm cited higher machinery production rates and an expected increase in global mining capital spending.

Alcoa rose 18 cents, or 1.3%, to 14.57, as investors’ hopes rose for the aluminum giant’s first-quarter report. Chevron was also strong, up 93 cents, or 1.2%, to 80.43.

The Nasdaq Composite climbed 3.82, or 0.16%, to 2457.87, its highest close since June 19, 2008. The Standard & Poor’s 500 index added 2.11, or 0.18%, to 1196.48, its highest close since Sept. 26, 2008.

The gains were small as investors were cautious about making big bets ahead of the start of earnings season.

“The market’s very tenuous and cautious,” said Roy Williams, chief executive of Prestige Wealth Management Group. “The market had a lot of momentum in the end of March, but now it’s really trying to find its way and just hanging out to see what the major companies report for their earnings and what’s going to happen from a jobs standpoint.”

He noted that, when fourth-quarter earnings were reported in January, stocks sold off despite earnings and revenue topping analysts’ estimates, as upside “surprises” had already been priced in. “It’s a case of buy the rumor, sell the news,” Williams said, noting that he expects the trend to repeat.

“I think we’ll have a small selloff here and, after earnings season concludes, I think we’ll rally again, in June. So we’re optimistic, but we’re cautious,” he added

A new psychology level for Dow, will this be a fake breakout instead? I got the feeling the market is way to hot. It’d be bad for indices to move higher without any consolidation. So will STI follow brother dow up to 3000 level?

Companies like caterpillar is being watched by investor as they provide clues to what will happen later in the economy.

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