US market resistance levels have held up. Market ready to surge upward.

US market resistance levels have held up. Market ready to surge upward.

Barton Biggs (who runs New York-based hedge fund Traxis Partners LP) says u.s. stock markets oversold, set for `big pop' in coming days.

Dan Fuss, whose Loomis Sayles Bond Fund beat 95 percent of competitors the past year, said he sold all of his Treasury holdings because of prospects interest rates will rise as the U.S. borrows unprecedented amounts.

Oil futures and crude soar on oil demand. Crude futures also jumped as a government report showed stable refined product inventories and rising demand.

Sales of new homes in us jumped in April to the highest level in two years as buyers rushed to qualify for a government tax credit before it expired at the end of the month.

Geithner said the EU actions would be effective and should calm markets.

The OEDC raised its growth forecasts for this year and next as emerging nations rebound.

All the major indices bounced off of the lows of yesterday and closed above the Feb 8 close. Had this market been ready for a reversal of the bull market it would have plummeted through the lows of last fall.

Plot the S&P 500 and you see the resistance level of the previous low on Feb 8, 2010 has not been broken.
http://finance.yahoo.com/echarts?s=%5EGSPC#chart1:symbol=^gspc;range=6m;indicator=bollinger+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
Feb 8 close 1056 May 26 close 1068

The same is true for the New York Stock Exchange, NYA
http://finance.yahoo.com/echarts?s=%5ENYA
Feb 8 6835 May 26 6631 (new method not valid)

The same is true for the Power Shares, QQQQ
http://finance.yahoo.com/echarts?s=QQQQ
Feb 8 42.62 May 26 44.2

The same is true for the Dow Jones Industrials, DJI
http://finance.yahoo.com/echarts?s=%5EDJI
Feb 8 9908 May 26 9974
10000 are not the Dow's last cyclic low close. The resistance level is 9908 not 10000

Plot the NASDAQ and you see the resistance level of the previous low on Feb 8, 2010 has not been broken.
http://finance.yahoo.com/echarts?s=%5EIXIC+Interactive#chart2:symbol=^ixic;range=1y;indicator=bollinger+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off
Feb 8 close 2125 May 26 close 2196

American's should not be afraid of Greek socialists. We need to get rid of our own leftists and cut government "pretend" jobs. When the East Germans were liberated from Communism they revealed that the communist government pretended to give them real jobs and they pretended to do real work. In the end production was so low under international socialism (communism) the stores were all empty and America had to send them food to prevent starvation.

World Markets:

The Baltic Dry Index is showing resurgence in world trade. Demand for commodities is finally rising again just in time to cancel a double dip recession.
http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND

Brazil’s Bovespa stock index rallied, rising sharply as real-estate companies and commodity producers climbed after the measure fell to the cheapest level in more than a year. According to Bay Crest Partners LLC, Brazilian stocks are poised to rebound after a key momentum indicator gave the strongest buy signal since the bear- market low in May 2004.

We believe for now the worst of the current market decline is just about spent. Volume spiked up in the capitulation last Thursday. It looks like we had an intermediate double bottom and it is up from.


Economic Calendar
Last Week
Crude Inventories dropped significantly from 1.95M down to 1.62M and that should cause energy prices to continue rising. The WSJ thinks even 1.62M is a glut, but if that were true the glut is evaporating at a rate that it will be gone in six months. So it seems that even the WSJ had joined GE/OBAMA/MSNBC/Pravda on the negative side thus adding further contrarian evidence that now is the time to buy.

Payrolls increased in 38 states in April, led by Ohio, Pennsylvania and New York, indicating the recovery in the labor market is becoming more broad-based. Federal Reserve Bank of New York President William Dudley said that while the economic recovery is slower than desired he sees the start of substantial growth in employment.

This week:
The declining stock market has caused the leading indicators to turn down like a self-fulfilling prophecy.

Sales of previously owned US homes rose by 7.6% in April to a five-month high of 5.77 million, according to the industry body the National Association of Realtors. Continued extensions of the tax rebate appear to be working. This rebate was the most successful so far.

The economic news since last week has been good but GE/MSNBC/Pravda knuckleheads have been political and spin the news highly negative to take the Obama disaster out of the spotlight.

The Case-Shiller 20-city Index for Mar home prices leaped 2.4% after increasing 0.7% the month before.
Consumer Confidence for May rose to 63.3 from 57.7 the month before.
The FHFA (stressed) Housing Price Index Mar rose 0.3% showing that housing prices are increasing and more homeowners are getting their heads above water.

Yesterday
New Home Sales Apr: The results are excellent even though revisions to the March data make the April data look worse than it is. They revised last months New Homes Sales upward by 28,000. New Home Sales would have been up 92,000 from last month but by quietly raising the March figure the increase is only an excellent 64,000. But if they increased March by borrowing from April the increase could actually be 120,000 for the total new home sales of 536,000. If these adjustments to the data are intended to deceive as evidenced by their systematic rather than random application then the Obama government is intentionally trying to cause the markets to decline. That is very irresponsible of the Obama administration or stupid. It is as though Obama is actively trying to create a great depression with one administration disaster after another.

Durable Orders Apr: rose a spectacular 2.9%. Again the data for last month was quietly raised(by 1.2%) after it was announced so that this months gain was made to appear smaller than it is.

Durable Orders ex Transportation Apr were also manipulated downward by correcting last month's figures upward by 1.3%.

Crude Inventories 05/22 were reported at 2.46M, again a pessimistically large change with last weeks number reported erroneously low (off by one full decimal place). This is perhaps an unintentional reporting error since it is so large (in fact ten times too large).

May 27 Weekly jobless claims dropped 14,000 to 460,000... Great news
8:30 AM Continuing Claims 05/22
8:30 AM GDP - Second Estimate Q1
8:30 AM Initial Claims 05/22
8:30 AM GDP Deflator - Second Estimate Q1
8:30 AM Initial Claims 05/22
8:30 AM Continuing Claims 05/22

May 28
8:30 AM Personal Income Apr
8:30 AM Personal Spending Apr
8:30 AM PCE Prices - Core Apr
9:45 AM Chicago PMI May
9:55 AM U. Michigan Consumer Sentiment May


Market Outlook May 27, 2010
All the American indicators rose during the day and then settled back to their resistance levels at the close. It is as though the market makers want to reinforce these resistance levels in our minds. We will call that to your attention again in the future.

Volume surged as the market lifted off in its early hours and all the indicator critical necklines held as evidenced by the fact that the financial institutions would have sold off if the resistance was broken.

World Markets

Asian markets were up despite Hilary/Obama fighting with N. Korea. Shanghai up 1.2%, Hong Kong up 1.2%, India up 1.8%, and Japan up 1.2%.

European markets are up sharply as the Euro stabilized. Today the European markets are up in the range from 1.9% to 2.4% this morning about half way through their day.

US pre-market futures are up before the start by about 1.9% to 2.4%. U.S. Futures are a snapshot of the moment and do not correlate with what happens by the end of the day.

Panic selling at market lows is unfortunately the rule rather than the exception. That is why the capitulation occurs. Once those who panic are out of the market the next leg of the advance begins. We should finally see this next leg.