Welcome to the report. It's released every Friday. Check it out to see the state of natural gas.
Significant News of the Week
Housing Market: Median home prices rise in more than 40 pct of US metropolitan areas in fourth quarter of 2009. The big question hanging over the housing market this year is whether the tentative recovery will stumble after the government pulls back support. The Federal Reserve's $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March. A month later, the newly extended tax credit for first-time homebuyers runs out.
China: The People's Bank of China announced Friday it will raise the ratio of reserves banks must set aside by 0.5 percentage points, marking the second such action this year. The central bank has been tightening monetary policy in an attempt to restrain bank lending. Its moves, however, have raised worries over a potential slowdown in China's economic growth.
Charts:
$SPX: We are still bullish on the S&P long-term; however short-term, the S&P will likely face more selling pressure. On Monday, there will be a meeting of the Eurogroup discussing the 'bailout' plans for Greece. That could be a market-mover.. or not.. so keep short but have stops at 1085
$NATGAS
One important support level is $5.25. We have been bouncing off of it all week. The day that it cracks COMPLETELY is the day to go short/unload longs. It should be interesting to see what happens next.. my guess is that we potentially break out of the blue bull flag next week.
A lot of people are bearish; however $5.25 is holding so you can't go long yet! No D for me.
As mentioned before, buying/shorting in the $5.40-$5.50 range will get you whipsawed.
Trade of the week for Feb 15th-Feb 19th
Go long at $5.30, stops at $5.23
$CPCE
One of the most reliable indicators of future market direction is a contrarian-sentiment measure known as the put/call options volume ratio. By tracking the daily and weekly volume of puts and calls in the U.S Stock Market, we can gauge the feelings of traders. While a volume of too many put buyers usually signals that a market bottom is nearby, too many call buyers typically indicates a market top is in the making.
A huge fractal is playing out.
What is a fractal?
A fractal is a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size copy of the whole, a property called self-similarity. Markets, like oceans, have turbulence. Some days the change in markets is very small, and some days it moves in a huge leap. Only fractals can explain this kind of random change.
I believe this fractal to be 1-2x the length of the Jun-Jul 09 fractal, so that creates a secondary bearish trend for another 2-4 weeks and then we breakout higher.
So I don't mind going long, but only at a favourable entry point (around the low 1040 area) [this is a high probability trade.. if you go long at 1070 you face much more risk].
