The Dow Jones industrial average fell more than 250 points in morning trading. Interest rates fell sharply in the Treasury market as investors once again sought the safety of U.S. government debt.

With Thursday’s drop, the S&P 500 is down more than 10 percent from its 2010 trading high last month. Such a drop is considered by many analysts to be a “correction” in the market. Many analysts pay more attention to drops from closing highs, however, not trading highs.

The euro is falling again and continues to hover near a four-year low. It has become a key indicator for confidence in Europe’s economy. The euro fell to $1.2329, a day after hitting $1.2146.

“There’s a question out there now that potentially we could be talking about a collapse of the eurozone or countries breaking away from the euro,” said Tim Quinlan, an economist at Wells Fargo & Co. As recently as four months ago, that wasn’t even considered a possibility, Quinlan said.

Such a stark change in views has unnerved investors, and the euro is now largely driving stock trading. Major European indexes gave up their morning gains and are now sharply lower after the euro retreated.

Please take a moment to view this article at our World Market Media web page: http://www.worldmarketmedia.com/779/section.aspx/1574/post/us-stocks-getting-crushed-dow-off-300-circuit-breakers-near

About the Author

About World Market Media:
WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies.

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Article Source: http://www.articlesbase.com/ - US Stocks Getting Crushed Dow off 300 Circuit Breakers Near

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By: Shamim ZiyaaudhinUnderstanding the direction of the market as well as the economic activity will lead you to profitable trades. Keep up with our live news feed and the trend with Tradermongers.com!

S&P 500 Pivots

On Tuesday all the major indexes were down for the day. ‘Sell in May and go away’ theme was amplified with the European debt crisis, the oil-spill in the Gulf, and the recent 1000 point crash in the Dow Industrials. Commodities are taking a hit as copper is going low and gold is finding ground.

Gold hit a record price in dollars of $1,249 last week. Gold imports have been increasing in India prior to April and May as they prepare for a million wedding ceremonies to be held during that time period. However gold fell short 1.1% falling $13.10 to $1215 as traders and investors are retreating from the markets and finding safety within the dollar. Crude oil is finding similar wear as it is trading around $68 a barrel with the stronger dollar. However crude oil is falling 25% faster than gold according the Dennis Gartman, editor of the Gartman letter.

The S&P 500 index on the 5 minute chart shows a downward trend on Tuesday trading below its moving averages as well as January 2010 support levels. Expect the market to go sideways unless it is given direction by today’s FOMC minutes.

We have told our readers before the S&P 500 is currently undergoing a correction. The seasonal trading strategy of ‘Sell in May and go away’ is currently strong. On the daily chart of the S&P 500 we are currently trading below the January 2010 support level. Expect some support around this area unless the bears take over the market and push the index below the 144 and 200 day moving averages on the daily chart.

The market volatility index measures option activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off. Currently the market volatility is above the 144 and 200 day moving averages on the daily chart. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels:

1219: S&P 500 52 Week High

1150: Natural Support Level

1134: 144 day Fibonacci moving average on 5 minute chart

1131: 200 day Fibonacci moving average on 5 minute chart

1127 – 1141

Major resistance level for the S&P for January 2010

1118: 144 day Fibonacci moving average on daily chart

1084: 200 day Fibonacci moving average on daily chart

Wednesday Economic Calendar:

Mortgage Applications / 7.00 EST

Consumer Price Index / 8.30 EST

Petroleum Report / 10.30 EST

FOMC Minutes / 14.00 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice, and nothing in this material should be construed as such. There is a risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all advice and all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

About the Author

Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News

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Article Source: http://www.articlesbase.com/ - Day Trading Economic News Analysis: S&P 500 May 19, 2010

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AAPH seems to be one of those stocks at the moment. A quick glance online tells us that a lot of people are speculating about buying it, so let’s take a closer look at whether it is worth buying.

AAPH is the stock symbol for American Petro Hunter. The company itself is an up and coming producer of oil and gas, and while it isn’t making many waves at the moment it hopes to do just that in the near future. Crucially it does not talk about becoming a top producer – it hopes to break into the middle ground in this market.

If we look at the pattern it has achieved on the stock market we can see that the last year in particular has been of great interest to potential investors in AAPH. Back in March time in 2009 its shares were much lower than they are now, climbing up to a peak during the summer. And while they then dropped to a certain extent, they now seem to be climbing once again. Indeed they look to be going up to the highest point they have achieved all year. Could they end 2009 on the highest note yet?

This is clearly the possibility that has got people interested, although of course we should look at the whole picture. As we write this we are going into the weekend and the last price for the AAPH stock was $0.61 a share. This was actually down two cents on the starting price for the day, although things had gone as high as $0.64 at one point during the day. Those who had bought and sold at the right time would have made a small profit. But what about those who have hung onto their shares in the hope that AAPH may have better successes in the near future?

Only time will tell whether the shares will improve further and achieve a higher rate. But things look promising and AAPH is definitely a stock to keep an eye on. With nearly 24 million shares in the pot in total, there is a lot of potential here and it will be interesting to see how AAPH opens in the coming week.

About the Author:

Next, check out our free penny stock picks that have made huge gains. Your #1 spot for stock market analysis.

Article Source: ArticlesBase.com - A Look Into AAPH

Investors look forward when they think about where the markets will be. The S&P 500 PE ratio reflects this view and it helps to explain the sudden spike in the S&P 500 PR ratio in the chart below. After earnings for the S&P 500 companies fell off a cliff, investors anticipated the market would recover, leading to the record high PE ratio for the S&P 500.

As of the September 2009 quarter the S&P PE ratio remains very high at 86, as the trailing four quarters of earnings still include the earnings of -$23.25 in December 2008 and $7.52 in March 2009 quarters. Using data from Standard & Poor’s for the S&P 500, as reported earnings for 98% of all reporting companies, creates an S&P 500 PE ratio of 86.34 as of September 30, 2009. The trailing four quarters of earnings was $12.69. As a point of reference, the annual trailing earnings for the S&P 500 two years ago was $78.60 for the September 2007 quarter with a 17.70 S&P 500 PE ratio. The plunge in earnings during the recession caused the S&P 500 PE ratio to leap to its high.

As shown on the chart below, the S&P 500 PE ratio is forecast to fall just above 16 by the end of 2011. The S&P PE ratio estimates are from Standard & Poor’s.

S&P 500 Earnings Forecast

Standard & Poor’s prepares an earnings forecast through the end of 2011 for the S&P 500. The chart below shows actual trailing annual earnings since the June 1990 through September 2009. It also includes the forecast for earnings through December 2011.

What stands out is the sudden jump in earnings that begins with the quarter ending December 2009. Part of this sudden change is the large drop in earnings reported for December 31, 2008 is no longer part of the trailing earnings. For the quarter ending December 31, 2008 the S&P 500 delivered $23.25 in losses for that quarter alone due to the large write-offs in the financial sector.

Once the major write-offs are no longer part of the four quarter trailing earnings, the annual earnings return to a forecasted $46.36 for the S&P 500. In addition, Standard & Poor’s has raised their forecast for earnings for 2010 from $45.84 three months ago to $53.02 currently. Part of this increase is due to better earnings in the third quarter of 2009. We need to remember that the bulk of earnings improvement came from cost cutting, as revenue growth was minimal. For earnings to expand as forecast, we will need to see revenues expand significantly.

S&P 500 PE Ratio Forecast

In the recession of 1990 – 1991, the S&P index began to climb before the end of the recession. Following the end of the 2001 recession, the S&P 500 fell another 200 points before rebounding. So far in the recession of 12/2007 - September 2009, the S&P 500 fell significantly and rallied through November 2009.

Using the S&P 500 earnings forecast from Standard & Poor’s, we can assess and forecast the S&P 500 index through 2011.

Using the trailing four-quarter earnings from Standard & Poor’s, we can apply a PE ratio to derive the S&P 500 index forecast. Keep in mind that the median PE ratio is 15.7. Moreover, the PE ratio is mean reverting, so we should expect it to migrate toward that level or lower.

Using the December 2009 quarter, the earnings forecast $46.36, and a PE ratio of 25 gives us a target price for the S&P 500 index of 1,159. On Wednesday December 9, 2009, the S&P closed at 1,096. A PE ratio of 20 gives us an S&P 500 index of 927. If the S&P 500 PE ratio remains between 20 and 25, we should see the S&P 500 index climb to a range of 1,060 to 1,326 in 2010 and 1356 to 1695 in 2011.

Now look back at the forecast for the S&P 500 PE ratio through 2011. It is the first chart in this article. Notice that the PE ratio declines slowly reaching 16.16 by the end of 2011. From the table above, apply a PE of 15 to 17 and you get an S&P 500 forecast range for the end of 2011 of 1017 to 1152, about where we are now.

In other words, in order for the S&P 500 index to climb much further the S&P 500 PE ratio must remain in the 20 - 25 range. History tells us that this is unlikely. We are more likely to see the S&P PE ratio fall from its current level even as earnings rise.

How should investors proceed from here? Standard & Poor’s as well as other firms have increased their forecast for earnings in 2010. Should these earnings forecasts rise again, it will help push the S&P 500 index up. We will need to monitor earnings results and changes in the forecast throughout the year to get a better idea of the trend in earnings.

Second, evaluate your PE ratio assumptions based on the outlook for the economy and the markets. If earnings are running above the forecast from Standard & Poor’s, then we might expect the PE ratio to stay closer to 20. On the other hand, if earnings expectations are falling, then the PE ratio could move toward 15 faster. In each case, the S&P 500 PE ratio is likely to move down over time.

Yale University Professor Robert J. Shiller, author of Irrational Exuberance: Second Edition uses a modified PE ratio that smoothes out the volatility in the ratio. The denominator of this modified ratio is average inflation-adjusted earnings over the trailing 10 years. Shiller calls this modified ratio “p/e10.” Using this data the modified ratio “p/e10” produces a PE ratio of slightly over 15, which is very close to the median of 15.7. In December 2007, the beginning of the current recession, the “p/e 10” was 25.95. Since markets tend to cycle above and below the median, we should expect the “p/e 10” to fall further before turning back up.

Using December 2010 trailing four-quarter earnings forecast of $53.02 times the median PE ratio of 15.7 gives us an S&P 500 index of 832. From this perspective, the risk is to the down side.

Either approach tells us to expect the S&P 500 PE ratio to trend down. An expansion in the S&P PE ratio will not come along to help the market. Bargains will be harder to find and real sustainable earnings growth will be even more important. Earnings must come from revenue growth.

More likely, we are entering a period where the market, as defined by the S&P 500, will be range bound with 1200 on the high side and maybe 900 on the low side. This range will give plenty of opportunity for stock pickers and anyone willing to buy on the pullbacks, an opportunity to bet the market. It will not help the buy and hold crowd.

About the Author:

Principle: Hans E. Wagner, CEO of Trading Online Markets LLC and Peregrine Advisors LLC
I began investing in high school and have remained active in the markets. A graduate of the US Air Force Academy with an MBA majoring in Finance from the University of Colorado, I continued to invest throughout my career in the US Air Force, Bank of America, Coopers & Lybrand, and working for Ross Perot before retiring at 55. During that time I have gained a very good understanding of what works and what doesn’t. I hope to impart that knowledge to others, so they can achieve financial independence as well.

Article Source: ArticlesBase.com - S&P 500 PE Ratio - Forecast 2010 - 2011

Alcoa Inc. (Alcoa) is engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined. Its products are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, and industrial applications.

In the announcement of the Alcoa, Klaus Kleinfeld, Alcoa President and Chief Executive Officer said “The financial and operational measures we took in the first half of the year are having a strong positive impact on our cash position and profitability, Despite unfavorable currency and energy headwinds, our performance this quarter indicates that Alcoa is weathering the economic storm and is in excellent shape to benefit when the market recovers.”

Written by FinancialAdvisorWatch.com

As per the FINRA arrangements with SEC to settle ARS sales, Financial Industry Regulatory Authority does not contact investors directly. Brokerage firms send a letter to eligible investors with an offer to repurchase ARS that the firm sold to them.

“FINRA is very concerned that these fraudulent e-mails will ensnare investors in an identity theft—or some other type of—scam.” Investors should know that no legitimate organization will e-mail them requesting personal information,” said John Gannon, FINRA’s senior vice president for investor education.

FINRA in their public statement are urging the recipient of this e-mail to forward them to whistleblower@finra.org, and take no further steps in responding them.

Written by FinancialAdvisorWatch.com

The economic slowdown and severity of the stock market decline last year, and in January and February of this year, had the financial media and investors convinced the recession was headed down into the next Great Depression, and the Dow was therefore headed down to 1,000.

I didn’t believe it. After being bearish and in downside positioning last year enough to be up 9.2% for a year when the S&P 500 was down 36%, I turned bullish in early March. In this column I predicted a substantial rally would take place.

My reasons were that in the severe doom and gloom the market had been beaten down to an extreme oversold condition beneath key long-term moving averages, investor sentiment had reached an extreme level of bearishness and fear usually seen at important market lows, and I expected the massive government intervention was going to create a temporary improvement in the economy.

I received a lot of flak. Couldn’t I see how fast the economy was deteriorating, and that government bailout efforts were only going to result in the economy melting down further from the weight of the overwhelming Federal debt being created?

At the time I also said I expected any improvement in the economy would be temporary, that the rally would end, and the downside would resume to another low and the next buying opportunity “in the October/November time-frame”.

The rally has lasted longer than I expected, the market having become very overbought above its long-term moving averages, and investor sentiment having reversed to the high levels of bullishness and confidence usually seen at market tops, a couple of months ago. Yet the rally continued.

However, the deterioration in economic reports over the last two weeks adds another worrisome condition, raising questions about the possibility of a double-dip recession, anticipation of which would not be a positive for the stock market.

Those reports include that in the important housing sector, existing home sales unexpectedly fell 2.7% in August after rising for four straight months, and new home sales rose only 0.7% after being up 6.5% in July. Both disappointments came even though the soon to expire $8,000 bonus to 1st time home-buyers (which has been responsible for 30% of home sales in recent months) was still in effect.

Other recent reports were that Durable Goods Orders declined 2.4% in August after rising 4.8% in July; that Consumer Confidence fell back again in August while the consensus forecast was that it would improve.

The market was spooked on Wednesday when it was reported that the Chicago Purchasing Managers Index fell to 46.1 in September (after improving to 50 in August). A number below 50 means business is slowing, while above 50 would indicate business expansion. The consensus forecast was that the index would rise to 52 in September.

On Thursday, the ISM Mfg Index for September disappointed with a decline. On Friday the Labor Department reported that 263,000 more jobs were lost in September, much worse than the consensus estimate that only 175,000 would be lost. Also on Friday it was reported that Factory Orders declined 0.8% in September, the largest monthly decline since January.

Auto sales have apparently also fallen back into a dark hole after the government’s ‘cash for clunkers’ bonus program ended. The program did not jumpstart ongoing car sales as had been hoped. While some foreign makes saw sales increases, General Motors is reporting a huge 45% plunge in September sales, and Chrysler a 42% decline. Ford reported only a 5.1% decline, but factoring out a big jump in fleet sales, Ford’s sales to consumers fell 14%.

Meanwhile, the American Bankers Association reported on Thursday that increasing job losses continue to weigh on consumers, with home-equity and bank credit-card delinquencies rising to new record highs in September.

With investor sentiment now so bullish, it will no doubt be as unpopular as it was in March to predict a temporary economic improvement and substantial stock market rally, to now say that it looks like the green shoots of summer were temporary, as expected, fueled not by consumer spending, but by government spending disguised as consumer spending.

Those cash bonuses to home and auto-buyers amounted to more than the down-payments they needed to make the purchases, so why wouldn’t consumers take advantage of them. And the purchases did give a temporary boost to the economy, but it could not be described as consumer-driven spending by any stretch of the imagination.

Meanwhile, the stock market rally has reached the opposite extreme of its condition in March, with the major indexes very overbought above their key moving averages. Investor sentiment is at the opposite extreme of last March, now convinced the economic problems are over after all, and only good times lie ahead.

While those conditions have been in place for a couple of months now with the market paying no attention, can the market also ignore the addition of a potential double-dip recession beginning to show up in the economic reports?

Sy Harding is president of Asset Management Research Corp, publishers of the financial website ” target=”_blank”>www.streetsmartreport.com”>http://www.streetsmartreport.com/, and the free daily market blog, www.syhardingblog.com” target=”_blank”>www.syhardingblog.com”>www.syhardingblog.com.

About the Author:
Sy Harding is CEO of Asset Management Research Corp., author of 1999’s Riding the Bear and 2007’s Beat the Market the Easy Way, editor of www.StreetSmartReport.com, and www.SyHardingblog.com.

Article Source: ArticlesBase.com - IS A DOUBLE-DIP RECESSION POSSIBLE? October 2, 2009

In the short run, oil prices should remain relatively stable around $70 per barrel as supplies remain strong while demand is only slightly up. Consumers are paying more at the pump due to increased regulations and taxes more than just changes in the fundamental price of oil – increased costs of refinement, combined with higher municipal taxes on final product oil have resulted in increased prices at the pump even when crude oil prices have remained relatively steady. In California, taxes on oil are near all time highs, as legislators turn to petroleum taxes in an effort to help meet both fiscal and environmental goals at the local and regional level. Therefore, the end-user prices of oil may increase even if raw crude prices remain steady in the near future.

Many analysts are divided on the long-run prospects for oil prices, which reflect a variety of factors including economic growth in China and India. While these developing nations (referred to as BRICs by analysts) continued to experience robust economic growth, they are also actively restructuring their production capabilities so that prospects for immediate spikes in oil demand are somewhat limited. Look for oil prices to slowly increase over the next year based on this increase in demand, while consumers seek ways to mitigate energy prices through efficiency and conservation.

About the Author:

At Oilprice.Com we specialize in providing free commodity quotes you can publish on your own sites. We have detailed information sections on Oil prices and other commodities and in depth articles on Finance and Geopolitics. The price of oil is often covered and essential reading for anyone for anyone with an interest in the oil markets

Article Source: ArticlesBase.com - Which Direction Will Oil Prices Go?

There is an enormous paradigm shift taking place in our world. I am not talking about the inflation/deflation play. I am not referring to peak oil or green energy plays that have so often been touted as major trends by main stream media. The fact is, if you ask any REAL investor/trader that’s worth his salt, he will tell you that those trades are not all they are cracked up to be, and that they are really RED HERRINGS put in place to FOOL Joe Trader into thinking that he is unto something while the real money is being made elsewhere. It has been happening for Centuries. You really think the big boys on the street want hordes of day traders and dreamers piling onto their trades before they say you can? Think again. The only reason why you even know about peak oil, green energy, and the inflation/deflation driven commodity plays is because they want you to know. They have taken their seats at the dinner table and are using main stream press, financial journalists, bloggers and newsletter writers (some of those you subscribe to) to tell you that they are ready for you to come join them at the dinner table. And just in case you thought you are being told so you can join in the feast of green energy, peak oil and commodity trades let me be the first to say YOU ARE WRONG! They are waiting for you because YOU ARE THE MEAL! the millions of day traders who think they know something and have a hunch. They are waiting to feast on you.

But there is no need for despair. There are countless independent traders who have been making very good returns in these markets and will no doubt continue to do so going into the new year. The key is to jeep abreast of the “news behind the news” and make sure to use trading tools and strategies that are more evolved than those used everyday by most traders. The game has advanced and you need to keep pace.

About the Author:

Donny is an independent trader/programmer and he now make my living trading the markets as well as developing and selling or leasing trading programs. He is a student of Economic and Financial history and has recently started noticing some significant changes in our Global Financial System. Donny is the publisher of an e-manual on coming trends in 2010 which can be found on his website http://megatrend2010.webs.com

Article Source: ArticlesBase.com - The Mega Trend Of 2010 & How You Can Profit From IT