Nymph’s Take on This Week

Tonight in the Asian Session we got the RBA minutes which made it pretty clear that they won’t cut rates for awhile. As a result of that and the China Banks adding liquidity to prop up their 3 year low stock market..we are getting a risk on rally with the eur/usd hitting over 1.2400 in the Europe Session. Commodities and Banks are the stock plays.

But what is the Bigger Picture…Well, of course it is the Rally in Oil, especially Brent which is sitting off of last weeks highs of 115ish at 114 in the Europe Session. And  the Big question, what will trigger a reversal in this crazy rally that it has been on? I, of course, thought that it would sell off last Thursday/Friday with talk of Iran Sanctions G5+1 meeting being set in the end of August and the Option X of Brent. This was a especially a good set up with White Houses talking (along with UK and France) about dusting off plans regarding the Strategic Reserves. BUT, alas, we had major talk of possible attacks on Iran by Israel and gossip that the Negotiations were at a difficult stage which supported Oil and prevented the sell off. Well, we are in a New Week. Cathrine Ashton (pic above) is talking by phone with Jalili (pic above) about a date for the meeting for the Global Leaders. The White House appears to be putting pressure on Israel to dampen down War talk. API/EIA is expected to show a build again if we believe Reuter Analyst. My take is that the market is waiting for that Date of a New Meeting of Iran and Global Leaders or Israel to blow something up..my bet of course is with talks. What really amazes me is how little demand there is for Oil out there. Tonight China is showing they used less Oil, even less Iranian Oil which they are paying way below market value for.

For the rest of the Week, IMHO, the most interesting pieces of data is the Flash PMI’s out of China and Europe. China is being hit with bad weather and Europe was going on Vacation so they should be on the ugly side. Most of the Press is talking about the Greek/German/France meetings but Merkel’s people are coming out tonight downplaying any chance of having anything big coming from all of this…so yawn. The other biggie is the FOMC minutes, mainly more detail about what everyone was thinking, or not thinking. BTW, it is amazing how enthnocentric our Fed is. If you read, like RBA’ s (Australia’s Central Bank) you get have the minutes focused on Global Markets…but ours are normal one or two paragraphs on page Nine or so. Anyway, we should see that the Fed is not as QE happy as the market thinks it will be imho. UK GDP data is something to watch.

But, the true story is Oil..so we must sit and wait. (some argue that North Seas Production is a big factor, but that is one field out there and it was only important last week before options because the Buzzard Field was controlling the Brent Price because it was historically the lowest…but we are in Oct Options now and Buzzard should be open mid October and with demand being so low it really is of little importance. So for tomorrow, we should sit and chop after this “risk on” rally peters out until we get news out of Cathrine Ashton that no new meetings are going to be set with Iran or we get news of a End of August Meeting date for Iran and the Global Leaders…until then we sit and wait.

Its 2:13 pm est right now, I blog at my own site but had to play with Fly’s new Toy. At the moment the SPX on the minute chart is breaking under key MA’s on the one minute chart. 1280.85ish is turn the lights off with nothing but air under it if we can take out that support. The Volume has no room to go to the upside and has topped. Eur/USD has support at 1.4138. We hit our high for the day and us bears can finally have a day.

It has been a great honor to be the King, ah Princess of the Peanut Gallery for the Month of May and I want to thank everyone who voted. Yet, it is coming to an end sadly and I will be handing over my Crown tomorrow.

So, I want to take a few minutes to wish either Po Pimp or Mr. Cain Thaler an early congratulation on their top vote. I enjoy reading them both so much. And of course  all the other posters at IBank Coin and the Gallery.

It is such a nice touch that I finally got my sell off at the end of my reign, stupid Shanghai Copper Bubble.

Also, I want to thank everyone that commented on my articles during the month.  I learned from those comments so much and was able to focus better on my weekly analysis.

For the market now, tomorrow we find out if the SPX can hold that 1045ish level, if not it is going to be down, down, down and I wouldn’t expect any really dip buying until we see AAPL in the 209ish range again, and even that will be short lived. If we rally it should only recover to the 1117ish range and back down we will come.

Call if a Vortex or whatever…I just call it a big mess caused by a bubble that I have been watching formed since the Chinese New Year’s in 2009. It needs to pop and it won’t be pretty…bubbles never are.

Thank you again for my honor and ciao.

[youtube:http://www.youtube.com/watch?v=jaZzZactGQU]

As I watch tonight the Shanghai Comp take out the 2500 level with a 4.27% drop, falling to a level that was not seen since April 2009. I just have to sit and marvel how many other factors that are all coming together as we move to test and maybe taking out our recent lows in many of the markets around the world. This could possibly happen today, including SPX’s 1050ish recent low as SPX futures is coming close to that range tonight.

Here are just a few things help it all, Spot Price in Iron Ore out of China and India are breaking below 140/tone after China Government announced that are removing the Export rebate this week causing the steel mills to have a decreased interest in purchasing the ore. At the same time Rio Tinto Group in an interview at the Fortune Global Forum in Cape Town said that “If the spot price drops below quarterly pricing and the steel mills basically force us to sell at that lower spot price that will probably be the end of quarterly pricing.” Tomorrow should reflect even a clear break from that level to the downside.

Copper Prices on the Comex Futures, yesterday tested it’s 50MA on the daily as resistance and falling under it tonight appears that a 200MA/50MA cross should be coming tomorrow or the following day on that chart.

10 year Bond dropping under 3.00%, not seen since May 2009 tonight

Tonight, The Conference Board reporting that the leading economic index for China had the smallest gain in five months in April, revising down its gauge for the economy’s outlook. We also have Thursday night the Global Purchasing Managers Indexes for June coming out including China which will probably follow along with this indicating a global slowdown. Plus, we will be starting our next earnings quarter that has India Monsoons, China Flooding Hurricanes and European Vacation time slow down to deal with.

Everyone knows about the Oil Spill and Baltic Dry Index problems…which continues. Plus, as everyone knows I declared AAPL topped last Monday, (article below) .

Gold also hitting a 52 week high.
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Eur/USD is getting back to that all time 50% retrace level of 1.2134. ..Yes there is a lot of support at 1.2200 but we could be seeing it soon.

Just sort of amazed by it all. I could go on with so many other things I am seeing, but maybe I should just sit here and think about all the stupid analyst upgrades over the last few weeks, which is probably the best indication that April 2010 was our top, stupid analyst.

It could be an interesting day tomorrow.

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BP continues, CEO still hated, love those talking cats

Oh Boy, Oh Boy July 1st is next Thursday, the start of a New Earning Season..Oh I must decorate, go buy presents…I love the smell of a fresh brand new earning Season.

So what will be watching? Well, we are going to be watching if China is going to buy commodities after China Government cut export rebates which start on July 15. Also, Eur/USD is still holding the 50% support of 1.2134ish still but the Oz (Australian dollar) has been getting weaker, so we need to watch that.

Also, we have the biggie event on Friday, The Non Farm Payroll Numbers. We know the game plan, Wednesday and Thursday we will be thinking and talking about what the heck the numbers will be…the suspense is always so crazy. Our SPX range should be 1045ish for the low and 1121ish for the high.

Most are expecting Window Dressing for the end of the month. Normally, when everyone is waiting for something it won’t come. So let’s look at what we will be looking at next week, will our Summer Bummer ala Woody Dorsey still continue on?

Monday

German CPI data which will give us any indicator of possible inflation.

In the USA we get core personal expenditure for May and also Personal Income from the Dept of Commerce, Bureau of Economic Analysis or BEA, so we find out how much everyone is getting paid and how much we are spending each month. Could tell for possible “Vortex Action” ala Fly. At 11:30 est. we get 6/3 month auctions.

How to Trade This

Mutual Fund Monday may start to get nervous being long into the start of earning season and upcoming NFP data. We actually could see a selloff, especially if Friday’s Trend continues down.

Tuesday

Overnight the Japan Industrial Production will be released by the Ministry of Economy, Trade and Industry which measures Japanese Mining and Factories. We could get a risk off move if good. Later we get the EMU confidence data from the European Commission, this is for June, so we get to hear about surveys of consumers, executives,etc to see what everyone is thinking in Europe. Last week’s Ifo data out of Germany wasn’t that bad so maybe they won’t be that depressed.

When USA opens we get to see if our Confidence is up too? We get to hear how consumers are feeling from June from the The Conference Board which is a “global, independent business membership and research association working in the public interest”, Ok. , Case Shiller for April comes out, this was before the Tax Credit ended it of course, looks at changes in the value of the residential real estate market in 20 regions across the US. At 11:30 we get the 1 year auction and the 4 week auction too. At 3:00 we get Farm Prices from the Department of Agriculture which is an end of the month the index of prices received by farmers for the current month.

GIS General Mills after the bell

How to Trade This

Little data that could really move things. Trend should continue. Companies normally preannounce about 20 days before they report; with the problems in Europe and decrease in growth in China we should expect to start to hear them come in about this time. Watch the Ag names around the Farm Report, especially because MON is reporting in the morning.

Wednesday

UK GDP from the office of National Statistics comes out and in the Our Session the Canada GDP comes out. Both we are looking for hope of continued growth, Sterling and CAD can move on data.

In the USA the Chicago Purchasing Managers Index comes out which sees how giddy the Chicago Purchasing Managers are and we get our first piece of “What will NFP be on Friday” game with the ADP (Automatic Data Processing) Employment figures come out.
Before the bell MON, After APOL

How to Trade This

ADP could be better than expected, which could give a relief rally if we had been selling off. Watch MON.

Thursday

First we get Japan Taken Data from the Bank of Japan so we can see what the business climate in Japan is. Then “PMI’s AROUND THE WORLD” starts off with China when their Purchasing Managers Index comes out. The “PMI’s around the world” continues when we get to hear what Purchasing Managers from Germany, UK, EMU, Swiss, etc comes out. This normally will carry over into the US session. If they are happy and have their “PMI Party Hats On” we could open big..So we have to watch for this.

In USA, we continue with the “What will NFP Be” game with the Monster Employment Index and the job loss report from Challenger Gray & Christmas, an outsourcing consulting company. Many look to that report to get a feel for NFP numbers for Friday. Motor Vehicle Sales, ISM manufacturing, Construction spending, Pending Home Sales from the National Association of Realtors will also come out that will give us a pulse of Consumers. Canada will be out celebrating Canada Day.

The start of earnings season, STZ, MEI, MSM after the bell FLOW

How to Trade This

Because we are getting NFP Friday morning it could be some heavy whipsaw action. With the PMI’s around the world probably weaker than previous month we could have a continued sell off but Challenger, Monster could give hope…yep, whipsaw. For myself I will be interested in earnings. Each Earnings Season seems to have a theme, and I normally can spot the trend after about 20 or so earnings calls. Can’t wait to see what this Earning Season will bring.

Friday

EMU Producers Price index comes out in the early morning from Eurostat and it is an index that watches the prices received by Manufactures. In the morning we get our Biggie… USA Nonfarm number and May Factory Orders.

How to Trade This

NFP is a Survey, random, crazy and don’t believe anyone who says they have any idea what it will be. The trick to it is not to watch market action…but instead the F/X action after it is announced. You have to watch to see if it is playing Risk On (Euro, OZ, KIWI, and CAD moves up) or Risk Off (USD and Yen moves up)…they are the lead dog and normally market action right after the report could cause a head fake.

Well, if any stock is the poster child for the bullish rally of 2009 and 2010 it has to be APPLE. Everyone loves it. No one dare short it. So, if this rally shall roll over it will be only when Apple does. So let’s look at Apple thru the Magical Fibonacci world of the Nymph.

TODAY June 21st was a BIG DAY FOR APPLE

It hit major resistance. Looking at the 2007 high of 202.20ish and the 2008 low of about 79.31, the 161.80% is exactly at 278.50ish which is one difficult resistance level and guess what, we hit it for the first time ever today. Notice the immediate sell off at this point today.

Looking at Fibonacci Moving Averages

The Monthly, multiyear doesn’t have any resistance and its first support level is at 167.16ish. The Weekly, multiyear also has no resistance and first support at 238.13. For the daily chart for the year, no support until 256.08ish range. On the 60 minute chart, multi week we broke under the 21MA at 272.99ish. The 30 minute chart multi week is 274.29ish for the 21MA for resistance.

On the Five minute, 10 day chart Apple caught support on the 377MA at 269.25ish today and needs to hold that level if it has any desire to try and retest its all time high again. Yet, my take is that it doesn’t look strong enough to even try again…it may try to wash out stops just above the level. But, because not that many people apply Fibonacci to their analysis there probably are not that many stops worth even trying for.

The Next Fibonacci level is at 401.41ish which makes the risk/reward on the crazy level for a company that makes “trendy” things.

For Future Earnings, yes you can argue the analyst estimates are way too low and they will blow away numbers like last quarter. But, everyone knows that so therefore it should be priced already in the stock. Yes, I can argue price/earnings and low PEG to push the stock higher. But, at this resistance level it doesn’t matter. Plus, we can’t believe that the growth of the I Phone will continue at the same rate of YoY increases over 100%. A saturation point has to be coming and I strongly believe that point will come way before the stock can move to 401.41ish. Again risk/reward is not there.

39 Analysts follow the company. There is only ONE sell, One Underperform and THREE holds out there. We also know China is working on knock off versions. Plus, Google Android out there as potential competition.

Yes, this is the most popular stock out there and a shrine for many. But bottom line, right here, at a MAJOR FIBONICCI resistance there is not enough of any catalyst to buy here at resistance and therefore I declare it the top to APPLE and if you hold it you may want to take profits because I bet a lot of professionals soon will….we will see.