S&P 500: Short Term Bullish Trend Terminated

SPY was so bullish in the first eight sessions in the last two weeks. I warned to look out for a top two weeks ago. Now, the caution is gone. SPY had a successful break out. There is no major resistance above the current price level. However, in short term, the performance in the last two sessions announced the termination of the last bullish run. Most likely, SPY will pull back a little. I've put two horizontal green lines here. If SPY pulls back above or in the zone of these two lines and then goes up, there will be a long rally for SPY again. If SPY pulls back below the green line around 112, be cautious of a fake break out! Happy trading!

S&P 500: be cautious for a top

As predicted in my last blog, S&P 500 had a nice bullish run last week. Let's re-examine the current market in the following figure:
After the bullish run, the market became over-bought. Three short term bearish signs are emerging: 1. RSI is approaching a short term max. 2. The price is almost over it's 2 SD range. 3. The price is very close to the reversed head-shoulder rebound level: 115. This does not mean an immediate trend reversal and short, but this does mean to be cautious and if necessary take profit. What I can say at this point is: SET STOP now! The chance of a pullback next week is increasing. The level of pullback should be closely watched. If it's too big, a possible double head pattern can form. In case this pattern forms, it will be a very bearish sign in combination of the divergent MACD I mentioned in the last blog.

S&P 500: Technical Analysis

The stock market ended flat on Friday. It seems the market is losing a direction. Many stock investors are confused about the market move. Indeed it's very difficult to find a direction in this quite neutral set-up: 1. The RSI is neutral. 2. The current price is around the monthly moving average. However, if we look more closely, we can see that the market has an attempt to move higher in a short term. The double bottom of the RSI and the reversed head-shoulder pattern favor a bottomed correction. The only unconfirmed signal is the unbroken neckline. In addition to those bullish signs, there is a longer term bearish concern: the reversed MACD. This is a very powerful indicator for longer term trend reversal. If the neckline cannot be broken and then the market turns south, it won't be a correction any more, it'll be a beginning of a bearish market for a least a couple of months.

Apple Still a Good Call

Analysts' Recommendation

My Performance This Year

Is Yahoo! a strong buy?

Standard & Poor's issued a strong buy for Yahoo! (Ticker: YHOO) recently. They believe Yahoo's revenue will increase 7% in 2010 and 2011 respectively and they also see the joint venture between Yahoo! and Miscrosoft is a good sign. Is YHOO a strong buy?

Fundamentally, analysts expect Yahoo! to make good earnings in the next couple of years. Here is the earnings estimates:

If the current economy is recovered healthily, Yahoo!'s earnings trend looks promising!

Technically, Yahoo! is in a mid-term downtrend. However, in short term, there is a well formed bottom as indicated by the green arrow in the following figure (Weekly chart of YHOO). The bottom is confirmed by the last week's rally. In short term, it's extremely important to observe whether the blue downtrend resistant line will be broken through. If it's broken, it's a sign of a mid-term trend reversal and also exhibits a possible long term rally!

On the other hand, the contraction of short interests also indicates a bullish trend for Yahoo!, as seen in the following figure.


In summary, the fundamental and technical factors indicate that Yahoo! is on a right track for a bullish run!

Chicken stocks that will be affected by China's tariffs

There is an ongoing chicken war between China and the US now. Those two stocks will be affected. But who is the Chicken Little? :)

Pilgrim's Pride (PPC): duty-fee 80.5%
Tyson Foods (TSN): duty-fee 43.1%

Top 10 hot Tech stocks for 2010 by Kiplinger

1. Applied Materials (AMAT)
2. Autodesk (ADSK)
3. Cisco Systems (CSCO)
4. Hewlett-Packard (HPQ)
5. Microchip Technology (MCHP)
6. Micron Technology (MU)
7. Nice Systems (NICE)
8. Nvidia (NVDA)
9. Vistaprint (VPRT)
10. Yahoo (YHOO)