Penny Stock Explosion Report
PENNY STOCK EXPLOSION REPORT January 9, 2010
DJIA: 10,618.19 10-YR TSY: 3.82% CRUDE OIL: $82.94
COMP: 2,317.17 GOLD: $1,137.70 $USD INDEX: 77.49
S & P 500: 1,144.98 SILVER: $ 18.48 VIX: 18.13
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. “- George Soros
US MARKETS:
Greetings stock fans. US equities markets ‘kicked-off’ the ’10 campaign on a positive note as market participants found their way back to the desks and proceeded to drive prices into higher ground on healthier volume levels as the tape continues to display favorable technical characteristics.
As a result of last week’s action, we continue to find considerably more long set-up’s as opposed to short set-up’s and this past week was no different as our proprietary ratio has now ‘sky rocketed’ to a favorable reading of 15.5:1 versus last week’s 5.8:1, which continues to suggest that this tape remains in a favorable posture and should continue to receive the benefit of doubt until or unless proven otherwise.
While such an extreme jump from last week’s proprietary indicator has certainly garnered our attention and perhaps provides us with some ‘pause’, the facts speak for themselves and we will continue to allow the tape to do ‘the talking’ and act accordingly.
Moving on to the markets themselves, as previously noted, many market participants have found their way back to their desks evidenced via healthier volume levels, albeit, volatility remains relatively benign, for now. Nonetheless, the bias remains favorable where we continue to experience a tape grinding into greener pastures and last week’s action was no exception with the DJIA posting gains of 1.8%, while the COMP tacked-on 2.1% and the S&P 500 leading the way, finishing better by 2.7% at 52-week highs as evidenced by the chart below:
As the chart above suggests, nothing much has changed in the past week from a technical perspective as the Spoo’s continue higher and trade above their respective moving averages, which remains a positive. Additionally, relative strength continues to improve via its RSI 66 read, as well as the MACD now residing comfortably above the 0 line, both suggestive of a favorable posture.
While we have yet to ‘sprint/explode’ to new highs in favor of the ‘grind’, readers should be aware that we find ourselves fast approaching short-term overbought conditions (RSI 70) from a relative strength point of view, where the tape may find some pause after a bit more upside.
Nevertheless, should the tape find the footing ‘sticky’ in the days ahead and perhaps experience some consolidation/pullback, both technical conditions, as well as our proprietary ratio remain positive and continue to suggest that this tape remains ‘innocent’ until or unless proven otherwise.
GLOBAL MARKETS:
For the third consecutive week, global markets/bourses traded with a positive bias across the board as ‘green’ remained the dominant theme throughout, where prices in Asia closed out the week of trade at higher levels with the exception of the Shanghai Composite, whom was unable to join the party and finished with fractional losses for the week. Nonetheless, nothing much has changed abroad since our last report, thus, we’ll reiterate our words of last week when we penned, “Whether it be the BSE 30; Jakarta Composite; KLSE Composite; Nikkei (surprise?); Singapore Straits or Taiwan Weighted, who all posted gains for the week and flirt at or near year highs or, the Shanghai Composite; Hang Seng and Seoul Composite, who continue their grind into northern territory, the global reflation trade has surely cast a wind at the backs of all markets both in North America; South America and abroad. As for ‘Down
Under’, both the All Ordinaries, as well as the NZ 50 remain anything but ‘Down Under’, as both continue to display favorable characteristics and trade at or near their respective highs as well. Moving on to Europe, while the CAC and FTSE finished this past week of trade on the positive side of the ledger and the DAX finishing on a ‘flat’ note, all three continue to trade at or near their respective yearly highs. In essence, 2009 will more than likely be better known as the year of the ‘Great Global Reflate’! Yet, the long-term question that remains is, ‘at what future consequence/s’, if any?”, which remains prevalent today.
Under’, both the All Ordinaries, as well as the NZ 50 remain anything but ‘Down Under’, as both continue to display favorable characteristics and trade at or near their respective highs as well. Moving on to Europe, while the CAC and FTSE finished this past week of trade on the positive side of the ledger and the DAX finishing on a ‘flat’ note, all three continue to trade at or near their respective yearly highs. In essence, 2009 will more than likely be better known as the year of the ‘Great Global Reflate’! Yet, the long-term question that remains is, ‘at what future consequence/s’, if any?”, which remains prevalent today.
BONDS:
There were no material changes this past week in ‘Treasury Land’ as the 10-Year spent the week trading within a fairly narrow range and when all was said and done, the ‘Note’ finished the week of trade basically where it had started, shedding 2bps to close out at 3.82%. Having gone ‘topside’ of our noted short-term figure of 3.6% a few weeks ago, the 10-Yr made a quick dash to the upper end of its multi-month range (4%) where it presently resides and continues to consolidate. Moving forward, support may be found at the 3.5%-3.6% level, as well as its rising 20; 50 and 200-Day moving averages, while the 4% and 4.2% figures represent multi-month ‘hurdle/resistance’. On a sidebar, when examining the weekly chart action of the 10-Yr, we can observe the ‘potential’ of a possible inverted (bullish) H&S (Head-and-Shoulders) pattern developing. Whether such formation materializes
in its entirety remains premature at this time. However, if such pattern does indeed play itself out in the weeks/months ahead, we may have a date with higher rates down the road.
in its entirety remains premature at this time. However, if such pattern does indeed play itself out in the weeks/months ahead, we may have a date with higher rates down the road.
METALS:
Both Gold and Silver put in a solid week of trade as the former posted gains of 3.7% in last week’s trade, while the latter sprinted higher by 9.7% as both metals were able to ‘re-capture’ their 20 and 50-Day moving averages, which from a technical viewpoint, is encouraging. Nevertheless, both Gold and Silver remain in consolidation mode and while further upside is certainly possible in the days/weeks ahead and cannot be discounted, we’re not quite ready to pronounce, “New Highs” around the corner, just yet, as we suspect both the ‘yellow metal’ and ‘Hi-Ho Silver’ have additional work before the next leg higher ensues. In the meantime, Gold finds ‘potential’ resistance in the $1140-50 zone and perhaps more significantly at the $1175 figure, while $1100-20, as well as the $1050-75 range should lend support in the days/weeks ahead. As for Silver, both the
$18.50-75 level, as well as the $19.50 figure ‘may’ pose as headwinds/resistance, while the $17-$17.50 and more significantly, the $16 level, should provide support in the days/weeks ahead. Regardless, both Gold and Silver remain firmly in their secular bull and it’s only a matter of Time before both find their way to much loftier levels!!
$18.50-75 level, as well as the $19.50 figure ‘may’ pose as headwinds/resistance, while the $17-$17.50 and more significantly, the $16 level, should provide support in the days/weeks ahead. Regardless, both Gold and Silver remain firmly in their secular bull and it’s only a matter of Time before both find their way to much loftier levels!!
CRUDE OIL:
Crude continued its ‘winning ways’ in last week’s trade as ‘black gold’ tacked-on gains of 4% to close out the week of trade at $82.94bbl and has now gone ‘topside’ on a ‘close’ of our longstanding 82 figure which represented ‘potential’ headwinds/resistance. While oil finds itself in a short-term overbought position based on its relative strength reading of RSI 70, as well as experiencing gains in eleven out of its past twelve trading sessions, we would not be the least bit surprised to witness some pause/consolidation in the days/weeks ahead in order for crude to ‘catch its breath’. Nonetheless, the trend is positive and perhaps after a bit of ‘backing-and filling’, higher prices may be in the offing? Moving forward, crude finds ‘potential’ resistance in the 88-90 zone, while the 77-80 area should lend
support.
support.
CURRENCIES:
The $USD index continues to display constructive action as the ‘greenback’ remains but a ‘stone’s throw’ from its flattening 200-Day moving average and continues to consolidate its recent thrust where last week’s action reinforced such behavior as the ‘Buck’ remained in its side-ways grind and finished with fractional losses to close out the week at 77.49. Looking ahead, if the index can now go ‘topside’ of its 200-Day (78.30ish) moving average on a ‘close’ and can ‘stick’ for 48 hours, such development (should it materialize) would more than likely induce further buying, while a breach/break of the 77 level may just prompt selling pressure. In the meantime, the $USD index remains in a neutral posture as we await its next move. Thus, the index continues to find congestion/resistance in the 78-79 zone (78.30ish/200-Day), as well as the 80-81 area, while
the 77-77.50 and 76 levels provide ‘potential’ support.
the 77-77.50 and 76 levels provide ‘potential’ support.
US Markets:
Short-Term: Bullish- SPX Above Its 20; 50 & 200-Day MA’s
Intermediate-Term: Bullish- Improving/Grinding
Long-Term: Neutral- SPX 1,100 Has Been ‘Re-Captured’
(Yet, within the confines of a secular-Multi
Year Bear based on Weekly charts)
POTENTIAL INDICES SUPPORT/RESISTANCE:
SUPPORT RESISTANCE
DJIA: 10,423; 10,320; 10,020 10,632; 10,834; 11,025
COMP: 2,270/80; 2,240; 2,206 2,334; 2,360; 2388
S & P: 1,130; 1,115; 1,103 1,147; 1,168; 1,188
POTENTIAL SET-UP’S:
LONGS:
Amkor Technology Inc (AMKR) 7.33; X Crossing 7.70
Arc Sight Inc (ARST) 28.90; X Crossing 29.25
China Auto Logistics Inc (CALI) 5.77; Back to support at 4.80 and more aggressively above 6.35
Entrée Gold Inc (EGI) 3.25; Back to support at 2.70-.80 and more aggressively above 3.65
International Tower Hill Mines Ltd. (THM) 7.81; On pullbacks to 6.50 and more aggressively X Crossing 7.85
Ram Energy Resources Inc (RAME) 2.14; From here back to 1.90 and more aggressively above 2.45
Taser International Inc (TASR) 5.56; On pullbacks to 4.75 and more aggressively above 6.05
SHORTS:
We continue to find very few favorable risk/reward set-up’s on the short-side with the exception of scalps and reiterate our thoughts from last week when we stated, “Much like last week, where our proprietary work showed a 5.5:1 ratio in favor of ‘potential’ Long set-up’s versus ‘potential’ Short set-up’s, that ratio has since increased this past week to 5.8:1 Long’s vs. Short’s this week”, and has now ‘exploded’, presently residing at reading of 15.5:1. “Therefore, no ‘potential’ short set-up’s this week and should one choose to hedge their long exposure, such can be accomplished via booking partial profits; writing covered calls and utilizing the indices via short ETF’s and or a combination thereof”, which remains relevant today!
**** DO NOT forget to keep your eyes open for pullbacks on names that have already broken-out. There are numerous from these reports during the past several weeks/months and we hope that you have participated and profited handsomely!!****
Have a profitable week of trade!!
PennyStockExplosion
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financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries and extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be "fwdlooking statements". Fwdlooking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks of uncertainties which could cause actual results or events to differ materially from those presently anticipated. Fwdlooking statements in this action may be identified through use of words such as "projects", "foresee", "expects", "will", "anticipates",
"estimates", "believes", "understands", or that by statements indicating certain actions "may", "could", or "might" occur. Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, Pennystockexplosion.com has relied upon information supplied by its customers, and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, Pennystockexplosion.com and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any
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