Sensex Up 94.87 Points On Friday For 13th Consecutive Weekly Rise In 4 Years

Sensex rose 94.87 points or 0.6% to 15103.55
Nifty climbed 14.25 points or 0.3% to 4586.90.
Mid Cap fell 0.7%. Small Cap fell 1%.
BSE 500 was up 0.3%. Sensex gainers: 20
Of 13 BSE Sectoral indices, 9 posted gains.
Advancers: 1496, Decliners: 1334, Unchanged: 60
Advancers outpaced decliners by a ratio: 7:6.

Sensex Day’s Range: 15257.30 - 14993.60
Nifty Days Range: 4582.20 - 4453.45
52-Week Range: 15992.90 - 7697.39
52-week % change: -5.5

Sensex gainers included Grasim +6.1%, Tata Motors +5.3%, Bhel +5.3%, L & T +4.4%, Infosys +3.9% and Tata Power +3.8%.

Sensex losers included ITC -5.5%, Reliance Infra -3.7%, State Bank -3.1%, DLF -2% and Reliance Ind -1.9%.

Capital Goods index rose 3% led by BEML +13.2%, Bharat Elec +5.7%, Bhel +5.3%, Walchandnagar +5%, L & T +4.4% and Kirloskar Oil +1.5%.

IT index climbed 2.6% helped by Aptech +3.9%, Infosys +3.9%, Financial Tech +1.9%, TCS +1.9% and Wipro +0.5%.

Auto index raced 2.5% assisted by Hero Honda +5.6%, Tata Motors +5.3%, Mahindra & Mahindra +3.1%, Cummins +3% and Ashok Leyland +3%.

PSU index moved up supported by Dredging Corp +5.2%, STC India +5%, IOC +3.9%, Chennai Petro +3.7%, MTNL +3.7% and Nalco +3.1%.

Other sectoral movers were: Teck +1.6%, Consumer Durables +.8%, Healthcare +.8%, Bankex +0.5% and Power 0.2%.

FMCG index fell 2.3% due to selling in ITC -5.5%, United Breweries -3.2%, Ruchi Soya -3%, United Spirits -1.3% and Tata Tea -0.9%

Realty index plunged 2.1% helped by Phoenix Mills -8.9%, HDIL -5.7%, Indiabulls Realty -4.8%, Anant Raj Ind -4.1% and Puravankara Projects -2.5%.

Other sectoral losers were: Oil & Gas -0.8% and Metal -0.03%.

Volume shockers on the BSE:
JP Hydro 32.05 million shares; Unitech 30.50 mln shares; Satyam 26.57 mln shares and Ispat Industries 22.82 mln shares

Turnover:
Total traded turnover remained above Rs 1 lakh crore mark today as well, which stood at 1,01,636.53 crore. This included Rs 26,735.22 crore from NSE cash segment, Rs 65,938.39 crore from NSE F&O and the balance Rs 8,962.92 crore from BSE cash segment.

Buzzers:
MRPL +23.8% at Rs 93.65, Parle Software +20% at Rs 102.95, CHI Investments +20% at Rs 44.25. Zodiac Clothing +19.7% at Rs 354.85 Bannari Amman +14.8% at Rs 1035 and Jeetking Info +13.4% at Rs 214.

Heavy Losers:
Fem Care Pharma -14.2% at Rs 561, Solar Ind -12.4% at Rs 249.55, Lakshmi Overseas -10% at Rs 105.20, Sunflag Iron -9.8% at Rs 24.40, Nucleus Software -9.6% at Rs 106.45 and Compuage Info -9.2% at Rs 49.55.

Oil drilling counters bullish:
The shares of Aban Offshore rose 8.5 per cent to Rs 1240.95 on the BSE after its report about recast of debts came in the Economic Times today.

Shiv-Vani Oil too hit 10 per cent upper circuit filter but fell to end high 8.4 per cent to Rs 328.85 on the BSE.

Analysts say, the rising oil prices and the falling interest rates augur well for the companies

Sugar shares attract buyers:
The sugar shares attracted sizable buying after CLSA initiated coverage on the sector with a buy rating. Bajaj Hindusthan was up 8.9% and Bannariamman gained 12.8%. Balrampur Chini, Dhampur Sugar, Dharani Sugars, Dwarikesh Sugar, KCP Sugar, Oudh Sugar Mill, Ponni Sugars (E), Rajshree Sugars, Sakthi Sugars, Shree Renuka Sugars, Simbhaoli Sugar, Triveni Engg, Upper Ganges and Uttam Sugar surged 2.5-5%.

Media attracts buying:
Multiplexes such as Adlabs Films, PVR and Inox Leisure rose 4-5 percent on expectations they will start releasing movies from next week after a spat with producers over revenue-sharing got resolved.

Market this week:
Sensex up 3.3 per cent
Nifty up 3.1 per cent

Commerce Minister sees export stimulus in Budget:
In an exclusive interview to CNBC-TV18, Commerce Minister Anand Sharma hinted that there would be a stimulus package for exports in this Budget as the government was concerned over the fall in exports. He also promised to ensure export incentives to continue beyond 2009.

Sharma stated that the Commerce Ministry would recommend measures to the Finance Minister and that he would personally discuss all issues related to the Commerce Ministry with the Finance Minister. He added that interest subvention would also be under consideration.

Asian Markets:
Hang Seng, Nikkei, Straits Times and Seoul Composite went up 1-1.4%. Jakarta Composite was up 2.27%. However, Shanghai Composite fell 0.48% and Taiwan Weighted lost 0.28%. MSCI’s measure of other Asian markets rose 0.8

Optimism:
–The underlying trend in the market is that, apart from expectations of reforms, there is a visible chance this government will last for the full five-year term and there will be continuity in policies

–Faster economic growth on increased reforms is expected to fuel corporate earnings

Silver Elliott Wave Alternative Counts Analysis

Having looked out to months if not years and decades in our last article, we shift to the other end of the scale and how the eight hour chart of silver is going. I mentioned a near top to subscribers recently and one target price was the 61.8% Fibonacci retracement of the entire March to November 2008 drop. On the NYSE that drop was $20.90 to $8.79 and if we do our sums that retracement comes out at $16.27. Yesterday silver got as high as $16.23 and has reacted to the downside with a dollar drop so far.

We also mentioned that the US Dollar may find support at its last major bottom of about 78 in mid-December and this would cause a negative reaction in silver and gold. The Elliott Wave count for the move since 17th April offers support for this thesis as the chart below suggests.

An identifiable 12345 impulse wave can be seen which could now see downside to the next major level of support. The alternate wave count is given below which allows for a little more upside in the days ahead. Once this correction finishes it is one more surge up to new multi-month highs for silver. The alternate count is invalidated if silver drops below a price of $14.80 which is a violation of wave 2 territory.

 

Thursday Stock Market Snap Back Rally Session

The indices had a real good snapback session after yesterday's losses, moving higher from the get-go, consolidating all morning, and then moving higher mid-day. A subsequent mid-afternoon consolidation held support, and they came back up in the last hour to close near the session highs.

Net on the day the Dow was up 74.96 at 8750.24, the S&P 500 up 10.70 at 942.46, and the Nasdaq 100 up 17.30 to 1492.74.

Advance-declines were just under 4 to 1 positive on New York and 2 1/2 to 1 positive on Nasdaq. Up/down volume was about 3 to 1 positive on New York on total volume of 1 1/4 billion. Nasdaq traded over 2.4 billion and had a better than 4 to 1 positive volume ratio.

TheTechTrader.com board was nearly all higher today. Only a few issues were down just small fractions.

Leading the way to the upside was portfolio position OGXI, up 4.37 to 25.02. Potash (POT) gained 4.13 to 114.79, and Mosaic (MOS) added 1.24 to 53.68.

Financials were very positive, with Goldman Sachs (GS) up 7.32 to 149.47, JP Morgan (JPM) up 1.37 to 35.35, and Morgan Stanley (MS) up 1.48 to 31.20. Wells Fargo (WFC) advanced 97 cents to 25.10.

Apple (AAPL) jumped 2.78 to 143.74.

The U.S. Oil Fund ETF (USO) gained 1.44 to 37.69, as crude oil snapped back. The iShares MSCI Brazil Index ETF (EWZ) rose 1.84 to 56.07.

The iShares FTSE/Xinhua China 25 Index (FXI) was up 73 cents, and the Direxion Financial Bull 3x Shares (FAS) gained 84 cents to 10.52.

Thetechtrader.com portfolio positions: Patriot Coal (PCX) snapped back 48 cents to 8.80, Pyramid Oil (PDO) added 85 cents to 8.40, China Green Agriculture (CGA) advanced 70 cents to close at 8, and Brigham Exploration (BEXP) jumped 43 cents to 3.91.

There was a big move in the junior solars today, as Canadian Solar (CSIQ) advanced 3.08 to 15.65 and Yingi Green Energy ( YGE) jumped 1.74 to 14.77. Low-priced biotech OCLS was up 1.04 to 4.40 on 6.6 million.

Stepping back and reviewing the hourly chart patterns, the indices had a positive session today, spiking up at the close and moving higher in a 45-degree rising channel with a strong close

Tomorrow, I'll be presenting at the Traders Expo in Pasadena, Calif., and off the desk. So have a good weekend, and we'll talk to you again on Monday.

Good trading!

 

A Little Perspective Into This Week’s Market Trend

At last, the end of an eventful week is upon us with the release of US unenjoyment figures today.

Yesterday’s central bank hoe-down was a bit of a limp fish, with no particularly earth-shattering revelations from the BOE, BOE, or JCT. Yet there was one interesting datapoint that certainly caught the eye, particularly in advance of today’s payroll report.

While the initial jobless claims figure was bang in line with expectations, the generally-smoother continuing claims figure registered a considerable surprise, coming in lower than the previous week and undershooting the consensus forecast by a robust 120k. Given that this data is among the most useful in pinpointing economic turning points, this would appear to be more fodder for the green shoots crowd.

And so it might well prove to be, in the end. Then again, perhaps not. After all, it takes more than one week’s worth of data to confirm a trend or a turn. And while the chart above appears to suggest that continuing claims are indeed flattening out, with the benefit of a little perspective we can see that this change is essentially undetectable from a longer-term perspective. So while yesterday’s figure may prove to be an important turning point in the fullness of time, Macro Man is waiting to reserve judgment….and he certainly isn’t making a judgment on today’s figures based on yesterday’s data.

One other notable feature yesterday was a melee in the foreign exchange market around 1pm London time yesterday, when the dollar suddenly went bid, particularly against sterling, and rumours started to fly that Gordon Brown was resigning/no he wasn’t/yes he was/no he wasn’t.

Leaving aside the issue of whether Gordo’s continued presence on the public stage is a positive or a negative for the pound, the recently-hibernating bears on sterling are beginning to rouse from the slumber. Surely recent price action is a turning point?

Well, again, maybe it is…but maybe it isn’t. It turns out that Rio Tinto has spruned Chinalco’s advances with a two-word response (the second word of which is “off”) and decided to raise money and go it alone. This capital raising is being done on an FX-hedged basis, which entails the sale of significant amounts of sterling….and guess what? Yesterday’s most notable sellers of the pound were the three book-runners!

It’s not like we needed a reminder that this market remains rather challenging for traditional macro punters, but yesterday’s sterling price action provided one anyways. Hopefully with the benefit of a few months’ perspective we can look back at this period, shake our heads, and enjoy a good chuckle.

 

The S&P 500 And The 200-Day Moving Average

Lately there has been a great deal of talk related to the S&P 500 (^GSPC: 942.46 0.00 0.00%) closing above its 200 day moving average for the first time since the end of 2007.

The first question traders should ask themselves is whether this technical artifact has any relevance to trading. The simple answer is that it depends upon how many people pay attention to the 200 day moving average and incorporate rules related to it in their trading methodologies. For example, there are many traders who prefer - or insist upon - long positions only when the instrument in question is above its 200 day moving average and shot positions only when it is below the 200 day moving average. In sum, if enough people pay attention to the 200 day moving average, it becomes a self-fulfilling prophecy of sorts.

But is there an edge in incorporating the 200 day moving average into trading decisions? Condor Options took up this subject earlier today in Exponentially Curb Your Enthusiasm and concluded that since 1965, long only strategies that incorporated the 200 day simple moving average (SMA) and exponential moving average (EMA) for the SPX both beat a simple buy and hold approach. (Interestingly, the EMA approach had a better track record than the SMA approach.)

A quick glance back at a long-term SPX chart show why the 200 day SMA has helped generate excellent timing signals. Note that from 1996-2000 and 2003-2007, the 200 day SMA kept investors in the bull market almost all the time. Investors would have been in cash (or perhaps even short) during the 2000-2003 bear market and from the beginning of 2008 to the present.

Looking at the SPX since the beginning of 2008, one can see the steady decline in the 200 day SMA, which actually peaked in January 2008.

Before getting too excited about the 200 day SMA, it is important to look under the hood at the data that goes into the calculations. Right now, the 200 day window includes data going back to August 19, 2008, when the SPX closed at 1266.69. Tomorrow that number will be dropped from the calculations and replaced with one that is likely to be close to today’s close of 942.46. That is 324 points lost from the index calculations, which means that if the markets drift sideways, the 200 day SMA will be declining at rate of about 1.6 points per day as the higher closes from August scroll off. In fact, since the beginning of 2009, the 200 day SMA has dropped 48, 46, 69, 46 and 37 points in each of the five months.

Another factor to consider is that the lows of March 6^th and 9^th are now almost three calendar months behind us. That translates into 61 and 62 trading days. It also means that the March lows will be in the midpoint of the data series in 38-39 trading days, which means that the 200 day SMA is most likely to continue to decline until the last week in July before turning back up.

So, go ahead and consider the 200 day SMA to be a potential support level or long/short inflection point, but going forward, this line on the charts should continue to decline and be less and less relevant, unless, of course, the markets follow the green line down.