Market commentary

Market commentary for 06/16/2008

Good day!

Friday morning's action was similar to Thursday. The Indices opened with a gap up. This time we saw more weakness right after the open and the SPY/QQQQ filled their gaps. After that we saw strong moves up above the previous highs, which broke the 60 min trend lines. The buying pace was very strong with heavy volume which suggests that the daily lows will hold this time. After the morning run, the indices started with corrections and until the last 30 minutes there was not much action and trading risk was too high for new setups. On the 60 min charts we can see that the indices formed reversal patterns (phoenixes). I was hoping that the phoenix would hold until Monday, but the strength before the closed brought the Indices to new daily highs and their previous resistance areas.

http://www.ivicacharts.com/diagrams/2008/06162008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqq60.jpg

The DIA was the strongest and closed under its' 10sma on the daily chart, the SPY closed at its 100sma, while the QQQQ closed at its' 200sma daily resistance area. With Friday's strength, the indices broke their intraday downtrends lines and set the stage for possible reversals from daily lows next week. There are plenty of resistance areas and for that possibility, daily volume and pace must increase. For now we can expect that the daily lows will hold for some time. The weekly charts will show us more clearly what we can expect for next week.

http://www.ivicacharts.com/diagrams/2008/06162008dia.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spy.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqq.jpg

The DIA support area held and formed a pivot bar on the weekly chart with heavier volume. We can see the same situation on the SPY and QQQQ weekly charts. Obviously the QQQQ is still the strongest and its weekly pullback was the smallest. It closed above its 10/50sma support area, while the SPY closed above its 20sma support area. The same applies to the daily charts.... there are several resistance areas, especially for the SPY/DIA weekly charts (10/20/100sma).

http://www.ivicacharts.com/diagrams/2008/06162008diaw.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spyw.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqqw.jpg

Now what can we expect for next week? It is option expiration week which usually brings whippy market action and this time the charts support that scenario. The weekly volume is higher, the support areas have been reached and we have several resistance areas very close. We can also see that the selling volume is heavier than the buying volume which leads us to the conclusion that we still have more sellers than buyers. My opinion after all is that is we can expect a consolidation (correction) week with lots of whippy action. I don’t expect strong bounces on the SPY/DIA charts. The weekly divergence can continue, between the stronger QQQQ and the weaker DIA. On the weekly charts, the trend is still down. Generally I will expect that the indices will take a break from the selling pressure continuation, without a strong reversal, but with more choppy daily action.
If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!

Kind regards.
Ivica
 
Gazprom Neft (GZPFY.PK), the oil production subsidiary of Gazprom (OGZPY.PK), has stated in its 2007 Annual Report that it expects to more than double oil output to 2.0 million barrels per day by 2020 from a production average of 864,000 bpd in 2007. A production figure of 2.0 million bpd would be higher than all other individual Russian oil producers, if they do not achieve significant production growth going forward: Lukoil’s (LUKOY.PK) production in 2006 was 1.92 million bpd and Rosneft’s (RNGZY.PK) annual production average in 2006 was 1.6M barrels per day.

Gazprom Neft's production target is assessed to be attainable, mainly due to the Company's ownership of the massive, and largely undeveloped South Priobskoye oil field, one of Russia's largest known oil fields, known in Russia as "the Pearl of West Siberia." Additionally, Gazprom Neft has also indicated that Gazprom will transfer its oil fields -- containing an estimated 5 billion barrels of possible oil reserves -- to Gazprom Neft.

Further, Gazprom Neft has signed a 51%/49% joint venture with Lukoil in early 2008 to develop and produce undeveloped oil fields. Lastly, it is possible that Gazprom Neft will continue to consolidate large to medium sized producers of oil -- Gazprom Neft acquired 50% of mid-sized Slavneft (420,000 bpd) and 50% of Tomskneft (260,000 bpd production) within the last 12 months.

The factors suggest that Gazprom Neft's oil production and reserves have a high probability of more than doubling by 2020, and the stock price, at a current market capitalization of $38Bn (at early 6/08), should increase over the intermediate to long term.

:p
 
Quote from berendoc:

Gazprom Neft (GZPFY.PK), the oil production subsidiary of Gazprom (OGZPY.PK), has stated in its 2007 Annual Report that it expects to more than double oil output to 2.0 million barrels per day by 2020 from a production average of 864,000 bpd in 2007. A production figure of 2.0 million bpd would be higher than all other individual Russian oil producers, if they do not achieve significant production growth going forward: Lukoil’s (LUKOY.PK) production in 2006 was 1.92 million bpd and Rosneft’s (RNGZY.PK) annual production average in 2006 was 1.6M barrels per day.

Gazprom Neft's production target is assessed to be attainable, mainly due to the Company's ownership of the massive, and largely undeveloped South Priobskoye oil field, one of Russia's largest known oil fields, known in Russia as "the Pearl of West Siberia." Additionally, Gazprom Neft has also indicated that Gazprom will transfer its oil fields -- containing an estimated 5 billion barrels of possible oil reserves -- to Gazprom Neft.

Further, Gazprom Neft has signed a 51%/49% joint venture with Lukoil in early 2008 to develop and produce undeveloped oil fields. Lastly, it is possible that Gazprom Neft will continue to consolidate large to medium sized producers of oil -- Gazprom Neft acquired 50% of mid-sized Slavneft (420,000 bpd) and 50% of Tomskneft (260,000 bpd production) within the last 12 months.

The factors suggest that Gazprom Neft's oil production and reserves have a high probability of more than doubling by 2020, and the stock price, at a current market capitalization of $38Bn (at early 6/08), should increase over the intermediate to long term.

:p
More...

Yes, the surest way to make a lot of money is to buy an overexposed and overbought stock in an overexposed sector.
 
Market commentary for 07/02/2008

Good day!

Tuesday's action indicates the possibility for a daily reversal and that is something that I will focus on. The day started with a gap down and after the open consolidation on the intraday charts, the good news at the 10:00 am ET reversal period saw the indices bounce and filled their gaps with strong intraday runs. But that strength was not enough for consolidations at highs and after the indices reached their 60 min 10/20sma, they all traded back to lows and formed double bottom patterns. For the DIA that was a lower low, for the SPY it was a slightly lower low, while for the QQQQ that was exactly the open low support area. We can also see on the 60 min charts that volume was higher than on previous days. The strength of the afternoon reversal is a sign of a possible daily correction after last week's move down.

http://www.ivicacharts.com/diagrams/2008/07022008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07022008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07022008qqqq60.jpg

On the daily charts we can see that volume was heavy and we finally had a green bar. Is that the bottom??? We can’t know right now, but the charts suggest that. After a move, for new low risk setups, we need rest and that is exactly what I will watch for now. It will be important to see the correction pace and action and after that we will see if this is a longer term bottom or just the market taking a breathe before a downtrend continuation. After the DIA's 4 selling waves it won’t be unusual to see a longer daily/weekly correction.

http://www.ivicacharts.com/diagrams/2008/07022008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07022008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07022008qqqq.jpg

My focus over the next few days will be on the long side and I will expect to see a daily/weekly correction. For now the safest place will be with intraday setups and with “own way” charts like SII. I will use those charts for swing setups while intraday setups will be used for day trades. Also, right now I’m not interested in new swing short setups, because the market charts are too extended for that.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/03/2008

Good day!

Oil was up and the indices were down. That is the short explanation of Wednesday's action. From a technical analysis view that means the indices retested Tuesday's low and formed 60 min double bottom patterns. We saw very choppy market action for most of the day. Every try to break up after the strong close on Tuesday failed and brought the indices lower. The day started with a small gap up, enough for a 60 min double top and at the end of day we got a double bottom. We can clearly see that on the 60 min charts.

http://www.ivicacharts.com/diagrams/2008/07032008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07032008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07032008qqqq60.jpg

The daily charts are showing us the same action which is back to the previous lows. The only difference is volume. Wednesday's volume was lower which suggests that this support area could hold. Right now it impossible to predict that, because with the market weakness over the last few weeks, we could easily see a gap down at the open and some panic action, but we could also see a bounce from the double bottom patterns. Remember that a double bottom can bounce after slightly lower lows and because of that a break to new lows will not be automatically give us low risk short setup. Since my focus is on low risk setups, I won’t take it.

http://www.ivicacharts.com/diagrams/2008/07032008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07032008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07032008qqqq.jpg

The market will close at 1:00pm ET on Thursday and that will be the start of a long holiday weekend. With a very uncertain world situation and the rise of oil, I don’t expect that many traders will be happy holding trades over the weekend. I will expect some action in the morning after the open, possibly for the first 2 hours. I will therefore be focused on intraday setups only and again only on a possible bounce.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/08/2008

Good day!

We had quite a ride Monday. The Dow had a 250 point move from the high to the low and back up again. Oil opened the day down almost 5 bucks and it stayed lower all day finishing the day down 4 dollars. The dollar was stronger and a couple of bearish remarks by a couple of fed presidents took the financials and the markets to new lows. The QQQQ did rally back and finish plus for the day. From a fundamental basis I will just say lets wait and see with the official earnings season which starts today with AA reporting after the bell.

From a technical basis the Indices held support for now. Did we see the bottom or not? That is the $64,000 dollar question because Monday brought the indices down to new lows and the same strong reversal. The QQQQ's reversal was back to the morning high, while the DIA and the SPY gave back half the reversal. So the result of Monday's market action is a big daily bar with whippy intraday action and without direction signs. After Monday I don’t have any new bias or opinion about market action. I still think that all scenarios are open.

http://www.ivicacharts.com/diagrams/2008/07082008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07082008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07082008qqqq60.jpg

On the daily charts we can see that support area held and we still don’t have extreme volume. I truly think that we must wait market reaction first and that trading risk is very high. Obviously selling pressure is slowing and with extended charts without enough rest a new low risk short setup is impossible. On the other side we still don’t see any real buying interest and we can't see that pattern forming on the daily charts.

http://www.ivicacharts.com/diagrams/2008/07082008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07082008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07082008qqqq.jpg

I can talk now about trading risk and it is very high for swing trades. On the daily charts we can see that support holding for now and low risk short setups are now out of the question. For the long side it will be nice if we will see a strong intraday initial move and the continuation patterns. But for now we don’t have that and with very choppy daily action all that can easily turn to is a rounding bottom pattern which will remain high trading risk for swing trades and then we will look for opportunities on small time frames and fast trades. Right now I TRULY think that cash is best position and that patience is very important. I know that can be very frustrated, but market action will come back and we must be patient and wait for that. We can’t or shouldn't fight it, so let’s be smart and wait for the market to come to us.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/16/2008

Good day!
Interesting day for sure!!!! The PPI came out way hotter than expected, retail sales fell off a cliff, European and Asia markets were crashing, oil was up and the dollar fell to all time lows against the Euro. Not surprising the market fell and fell hard down almost 250 points. Bernanke testifying made matters worse saying the economy was going to be worse than previous thought and inflation is a bigger problem. Just as the bottom was coming out, oil started to fall, financials started to rally and the markets rallied all the way back. The markets held support and rallied, Is this the bottom or just a Dead Cat Bounce? We shall see. INTC reported after the bell and beat on both the revenue and earnings, JAVA also reported well. Perhaps these numbers will provide a gap at the open that might be sustained.

Tuesday didn’t give anything new. Weakness in the morning with a move up and move down before close. On the 60 min charts we can see the scenario that was predicted for the day worked and equal move support area held. Indices bounced but trading channel is still holding and indices closed in the middle of it. On the daily chart we got another doji bar and we can see that volume still increasing which suggests uncertainly for the future direction. I don't really have an expectation for tomorrow I don’t have much to say since the last two weeks nothing new has happened and the odds for strong break down increase every day. Because of that my focus will stay same. As traders we can’t know for sure what tomorrow will bring. Chart action can suggest that and right now market action is not helping us. As traders, it is very important to recognize risk and we can know that. It remains high and I will say it is higher and higher. Because of that it is important to trade with very small risk and don’t forget that cash is very good position these days. Let’s wait for the market to move first and then we will follow it.

http://www.ivicacharts.com/diagrams/2008/07162008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008dia.jpg

http://www.ivicacharts.com/diagrams/2008/07162008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008spy.jpg

http://www.ivicacharts.com/diagrams/2008/07162008qqqq60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008qqqq.jpg

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/21/2008

Good day!

Poor earnings and outlook from GOOG and MSFT resulted in a weak QQQQ which resulted in a daily trap. The financials and the DIA were helped by positive results from C. Even the poor results from MER did not rain on the financials parade from lows earlier this week. Those were the reasons Friday's trading risk was very high and the divergence was very large. We can see that on the 60 min charts. The DIA and the SPY consolidated at the highs which suggests a buying continuation, while the QQQQ consolidation at low suggest a break down. I believe that the DIA will win in that battle, but since 60 min rest period is too small we can’t expect an equal move. I think that we will see a move to the 200sma resistance area and the SPY will see a move to the previous high which is also the daily 20sma resistance area. If that is the case the trading risk for longer than one day will be higher because obviously we saw the initial move from the lows and when a bounce stalls it usually is time for a rest period and I think we can expect s correction next week after the daily bounce. From the corrective action we monitor future expectations. The DIA's first resistance is 200sma on the 60 min chart and 200sma on the weekly chart. The SPY has its first resistance at the daily 20sma, while the QQQQ after Friday's bad news lost most of bounce from lows. For a long continuation it is important from indices to form a higher low which will be a sign for possible weekly correction. My bias for next week will be on the long side and I think that we will see more weekly correction, but many resistance areas are overhead and I think the buying pace will be weaker than the selling pace. That will result in choppy daily action and a higher trading risk. If that is the case I will use larger stops in my trading plan to avoid false stops.

Earnings and oil price changes are dominating our daily trading. With all trades monitor the earnings calendar if you are holding stocks overnight. Monday AAPL reports which can change the mood of technology and the smaller regional banks report all week. If their earnings are poor we probably will lose the entire bounce we had this past week.

http://www.ivicacharts.com/diagrams/2008/07212008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07212008diaw.jpg

http://www.ivicacharts.com/diagrams/2008/07212008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07212008spyw.jpg

http://www.ivicacharts.com/diagrams/2008/07212008qqqq60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008qqqq.jpg
http://www.ivicacharts.com/diagrams/2008/07212008qqqqw.jpg

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/24/2008

Good day!
Earnings season, OIL and the dollars strength are the fundamental reasons the market is moving the way it is. If your earnings are good (ISRG) you are rewarded and if they miss(COST) you are punished. Oil breaking down has had a positive impact on stocks whether its good for them or just psychologically making people feel good.

The morning strength of the indices reached exactly the resistance area that we where looking for. That was the DIA daily resistance and $117 number resistance area, 200sma 60 min for the SPY and the QQQQ both were stronger than expected and made their way back to the previous bounce high. The resistance held very nice and we saw a correction. For the QQQQ it was a stronger intraday pullback to 60 min support area while the DIA and the SPY correction pace was much weaker and both fell in the 15 min range. For the rest of the day we didn’t see much action as the range area held which increased the trading risk for new setups.

On the 60 min chart the DIA and the SPY chart I see a possible scenario if when we see another 60 min buying wave. It is interesting that the equal move resistance area is the same as the daily equal move resistance area. Since we are in earning season that scenario is very possible, but also we must know that indices reached daily resistances and all pulled back from the high. That action can continue tomorrow. Right now my focus will be the 60 min consolidation (range) which can break in either direction quite easily so I will be careful watching intraday action for a breakout pace.
For those who are interested for Forex market I like to announce that you can see all uptakes on my site (soon I will open the trading room) and if you will have any question please feel free to contact me.
For stock setups focus will be again on intraday setups and smaller time frames, unless I find an “own way” chart. As I write this AMZN and BIDU had good earnings which are propelling the indices higher. This will probably lead us to a morning gap.
.

http://tinyurl.com/645af2
http://tinyurl.com/5m7use

http://tinyurl.com/5jjd7b
http://tinyurl.com/6ocpat


http://tinyurl.com/58ovv7
http://tinyurl.com/6yrntk


Wish you all good trading!!!

Kind regards.
Ivica
 
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