Pre Market - September 28th 2007

I want to thank Lisa for filling in for me the past couple of days while I was busy with a funeral for a fellow firefighter. Lisa is an excellent trader and market analyst. Rebeltraders is a team effort and she is an excellent partner.

We are waiting on some economic data here in the pre market and we will post another update before the market opens.

I want to discuss a chart here for a moment. There is so much talk about technology being the 'hot' sector to be in. I present the Semiconductor Index chart here for discussion. Note the strong resistance as indicated by the blue rectangle. This will not be a 'market leader' unless it breaks above resistance, then at that point we will have tech being a leader.

But, take a good look at the chart. Notice anything? A chart technician will spot this right away. It is the formation of a head and shoulders pattern. If the resistance level holds then the risk of a very strong down trend becomes more likely. The time to add technology stocks to your long term investment portfolio is if it breaks resistance. Until then tech is off limits for long term investments.

Pre Market - September 25th 2007

I mentioned last night that we will need to monitor what Lennar Home Builders (LEN) reports this morning. Well they reported and it was a much worse than expected. The estimates for Lennar were for an EPS of negative $0.55. Lennar came in with a negative $3.25. A huge downward surprise. The company also painted a rather ugly picture of the housing sector in general.

Following the Lennar earnings release, UBS Securities issued a downgrade to 'sell' of all homebuilder stocks. I say to UBS: what planet have you been on the past 12 months?

We are seting up for a gap down when the market opens with futures all decidedly lower this morning.

Pre Market - September 21st 2007

Futures are currently pointing to the upside. Keep in mind that is options expiration day and there may be some added volatility towards the end of the day as people establish new or get out of positions before heading into the weekend.

One thing I am going to be watching closely today is how the financial and housing sectors perform. Will there be more profit taking?

Stocks that have a strong to China are approaching overbought and/or very extended. An example is BIDU. This stocks appears to be reaching a climax and a sell off in the near future would not be a surprise.

So far there have been no significant events in the pre market so we are going to see how this options expiration unfolds as the day goes on. Don't get fooled by early buying or run up in prices. On a Friday with options expiration there is a chance of high profit taking by the close. This is what we will be watching for today to see how confident people are in leaving money in the market over the weekend.

Pre Market - September 18th 2007

Lehman (LEH) came out and beat their estimates for the quarter. The estimates were already lowered substantially so perhaps the estimates were too easy to beat. But that is a subject for another day. The statement released by LEH painted a picture and they could have given it the title of "not so bad". So how will this play into the FOMC decision?

Best Buy (BBY) issued a surprise and issued an upside to their sales and quarterly results. This is considered a surprise as it was expected the market would see some additional evidence of a weakening consumer spending. It is of course only one company but could the Fed look at that too?

PPI came in and it was supportive of a rate cut.

So where are we? Right where we started. Confusion to the max. 2:15 pm today. Will be a crazy day!

Pre Market - September 17th 2007

The situation in the United Kingdom continues to get worse. Long lines of customers are waiting to withdraw their money from NorthernRock. The UK market is down and this action is weighing on our futures so far this morning.

We see the situation in the UK as having the potential to spread and we must watch the outflow from NorthernRock.

There is no significant events in our markets at this time. Futures responding in the most part to the action overseas. We are remaining in cash for now.

Pre Market - September 14th 2007

Futures are down rather significantly thus far this morning on news overnight from Europe that Northern Rock, a mortgage company is now in trouble by the fact that they have had to seek emergency funding in order to remain solvent. Also this morning retail sales figures were released and the data was a downside surprise. A weaker retails figure add the fear back to the markets in that a recession may pan out and become reality.

The pre market volume is higher than it has been in recent days. And on the subject of volume I want to address a comment left last night that the low volume is a result of various religious holidays. One can always find an excuse for low volume, but these days the prevalent reason is, without a doubt, investors/traders sitting on the sidelines. As long as "down" days show higher volume than "up" days, any other excuse is just that--an excuse.

An alert for the short trade on AZO. We want our readers who have entered a short position on AZO to close that trade today while you still have a profit. The reason is that next Tuesday AZO will report earnings. While the recent trading would suggest that there is more downside potential it isn't prudent to hold through earnings. There will always be another opportunity to enter again if earnings prove to be negative.

Pre Market - September 13th 2007

Bad news turns to good news in the futures. Ironic that the markets 'hope' for bad news and that was received this morning in the form of the initial jobless claims. Although the number this morning was not extremely high it was just the fact that it was higher. Traders view this as another sign that the FOMC will cut the fed funds rate. However we note that nothing is a sure thing until it happens.

Over the coming weeks watch for Rebeltraders to move to a dedicated server with a new software platform. This is the next step in the process of Rebeltraders moving to a complete web site with member forums, chat, etc. The Blogger web host was good for us to use to get started but we have already outgrown this software platform and we need to move to our own servers to keep up with the growing readership.

Pre Market - September 12th 2007

There was a surprise overnight in Japan with the sudden resignation of the Prime Minister. The Asian markets did not react violently however it did send the Yen down. And at the same time the US greenback has also dropped even lower.

Current US Futures are pointing towards a lower open. We remain on target with our projections and our stock picks we gave you on Sunday.

Pre Market - September 11th 2007

We are waiting for Ben Bernanke to speak in Germany. This will take place at 11 am (eastern time). And as usual all ears will be listening to what he has to say.

Also today OPEC is meeting to discuss if changes are necessary in crude production levels. We should expect some volatility today in the energy sectors.

A thought on what happens on September 18 with the FOMC announcement. Lisa and I share the view that in light of the recent economic indicators that when (and if) the FOMC issues a cut to the Fed Funds rate we will see a spike in the broad markets. However, we feel it is likely that the spike will be an opportunity for those who are looking much further down the road an opportunity to sell out. They will take advantage of the spike to sell into the strength. It may last a day, a couple weeks, we just don't know. But we do see a rate cut as providing only a temporary boost to the market and then we will sell off again and begin our bear market. We believe the economic damage is just beginning to be known and the rate cut will only be another shot with the paddles but the end result will be "a code" (first responder talk for a death). Keep in mind that a rate cut will further weaken the US dollar which is already near historic lows now.

Pre Market - September 10th 2007

There is no significant news this morning. The futures have been drifting around. We are standing firm with our market assessment that selling on strength is taking place and will continue to do so.

Economic Data-

Monday, September 10th- 3pm: Consumer Credit...

Tuesday, September 11th- 8:30am: Trade Balance...

Wednesday, September 12th: Bank Reserve Settlement; 7am: MBA Mortgage Applications; 10:30am: EIA Petroleum Stats...

Thursday, September 13th- 8:30am: Initial Claims; 2pm: Treasury Budget...

Friday, September 14th: 8:30am: Current Account, Export Prices ex-ag, Import Prices ex-oil, Retail Sales; 9:15am: Industrial Production, Capacity Utilization; 10am: Business Inventories, Michigan Sentiment-prel...

Speakers- Monday- 7:30am: Atlanta Fed President Dennis Lockhart will be speaking in Atlanta; 11am: San Francisco Fed President Janet Yellin will be speaking in San Francisco; 2pm: Dallas Fed President Richard Fisher will be speaking in San Antonio; 7:30pm: Federal Reserve Governor Frederic Mishkin will be speaking in New York... Tuesday: 11am: Federal Reserve Chairman Ben Bernanke will be speaking in Germany

Pre Market - September 7th 2007

Breaking News

The Government employment data was just released and the numbers were much lower than expected. This was the first decline in payroll numbers in four years and the largest decline in manufacturing jobs since July 2003.

Ok, now what does this mean? Traders were looking to this employment data to get a clue on what the FOMC might do on September 18th. The thinking was that if the employment data was 'soft' it would add to the traders confidence of a coming rate cut. But with the numbers we got this morning it may have actually crossed an invisible line in the sand and now traders are more concerned now with the chances of a recession are higher. So a rate cut is now secondary to the concerns of a recession.

With the employment data showing negative growth today the chance of a rate cut is certainly raised, but now the reaction may be more centered on the recession possibility and is why we are seeing a large drop in futures. It may come down to things are worse than thought and a rate cut may be too little too late now.

At this time the futures are all down very large. What happens when the markets open remains to be seen.

Again, this is why we have been telling you to sit in cash and not be in there trying to fight this market. If you took long positions yesterday there is a high probability chance that all of your trades will be wiped out today. While others keep saying to buy we are telling you to wait it out and preserve your capital. Let others throw their money away, we are saving ours and NOT LOSING IT !

Knowing when to trade is just as important as what to trade!

Pre Market - September 6th 2007

Mixed pre market data with the futures moving in the same fashion. Initial claims came in and were slightly better than expected. But the key will be tomorrows employment data.

Same store sales data being released this morning has been on the upside and a surprise to the markets. This in conjunction with the rise in the LIBOR rates has the markets 'confused'.

Mixed signals for those wanting a rate cut on September 18th. Market will be floating today until any other news which gives the market a sense of the intentions of the FOMC. ISM data will be released at 10am. And in addition to that there are various Fed members that will be speaking today: Poole (11am), Yellen & Kroszner (11:30am), newbie Lockhart (12:25pm), & Fisher (2pm). This is a lot of Fed talking heads in one day! And the market will react to every comment they say.

Pre Market - September 5th 2007

The US futures are down across the board. Hesitation is the key word this morning as some are taking profits on yesterdays run up to resistance. Additionally, the ADP report issued earlier showed an increase in unemployment and this is sending some caution back into the markets this morning.

Of note from the retail sector Costco (COST) missed their same store sales estimates. Stock is trading down about 5% in pre market. Costco is considered a bellweather stock by many for the retail sector as they are a well run company with a good mix of products. So with Costco down that has a chill running through the retail establishment today.

We will watch for what is said in the Beige Book Data when it is released this afternoon. We're looking for an opening to the downside and it remains to be seen if the weakness extends or turns around.

Pre Market - September 4th 2007

Good morning Rebels. I hope everyone had a happy and safe holiday weekend.

And while I am on that subject let me briefly comment on the widely talked about situation of the trading volume (and the lack thereof) over the past week. Many of the news media and others want you to think it has to do with the holiday. That many traders, hedge fund managers, and the like are all on vacation and that is why the volume has been so low. Rebeltraders does not hold the same belief as the media does on this subject. If you go back 20 years ago then the claim about vacations and the low trading volume is valid. Today every hedge fund manager is a cell phone call away from making a trade, a wireless laptop keystroke away from making a trade. Technology today has enabled those in power to remain in power, even if they are sitting on the beach somewhere.

With the markets in one of the most volatile states in recent memory do you actually think that those who are in control of vast sums of money are just closing up shop and heading out for a long holiday? Of course not. Even if they are not in the office they are STILL in control of their investing capital and will move it if needed. Vacation or no vacation.

The lack of trading volume during the previous 10 trading sessions is low because of the uncertainty in the markets. I am still looking for more market sell off in the near term. The markets are not out of the woods and there is more downward pressure still out there. When reading the tapes I still see selling on the strength. Someone is taking money out in bits and pieces.

The charts are footprints of the smart money (smart or not is is essentially the large money that matters here). These footprints tell us where the markets are going. If the volume is light then that means that the large money is stepping lightly. If they step lightly then who are we to try and trade against the ones who truly move the markets.

This morning the futures are down and have been floating around in negative territory. Today we watch for the construction spending data and the ISM manufacturing data to be released at 10:00am. Vehicle sales data will be released throughout the day.

When the market opens today I am adding to my position in Gold (GLD) in my long term portfolio. As I explained in previous commentaries Gold prices have traditionally been a 'safe place' during a recession and on a weakening dollar. Both of which are distinct possibilities in the future.

We are watching the markets and when the time comes to jump in then we will be jumping in and we will hold your hands as we go in to help guide you to the best places in the pool to be in.

Pre Market - August 31st 2007

Emotions running at fever pitch

Economic data and reports from Bloomberg overnight on what President Bush will do to address the people who may lose their homes caught up in the credit crisis have emotions running at record levels this morning.

Futures are up on the psychological boost in traders minds that the FOMC has what it needs now to cut overnight lending rates. In addition to that what is raising the futures is the financial sector on the news that President Bush will initiate policy which would rescue homeowners who face foreclosure on their homes and fit within a certain criteria. That has some pressure being lifted off of the mortgage sector and the mortgage companies are being bid higher in pre market.

A risk taker who likes placing bets on the tables at Vegas would jump on board this morning and join the anxiety driven moves this morning. A disciplined trader will continue to wait for logic to take over and set a direction, not anxiety.

Has the world changed overnight, absolutely not. The only thing which has changed overnight is the levels of anxiety and actually the 'will they/won't they" questions on if the FOMC will cut the Fed Funds rate has actually increased now. So with that much uncertainty we will wait for clear direction, not perceived direction.

Pre Market - August 30th 2007

Unemployment data came in and it is showing a continued decline in the employment situation. This figure would be bullish for those counting on the FOMC to do a rate cut. The GDP number came in and it was "as expected" with no major surprises, this is bearish for those wanting a rate cut.

So the market remains very confused this morning. Futures are down, The Yen is up again, The 10 year T-Note yield is heading in the direction of "flight to safety" again. So what to do?

Now you can see why we are not providing daily swing trades. It is pointless to be trying to swing trade in this mess. As Lisa said last night the "smart money" is also unsure of what to do. Lisa makes a very good point and that is the smart money moves our markets, if they don't know what direction to move it then how are we to profit on a daily basis when they themselves are being carried off the playing field on stretchers.

Never be to anxious to jump into the market. You are NOT missing out on big profits.. What you are missing is the anxiety, emotion, and hair pulling market which is taking out the best of them. Yesterday the markets went up big on the thought that the Feds would cut based on a letter that Ben Bernanke issued. And in that letter traders read between the lines and saw a rate cut coming. Now this morning there is mixed signals (again) as to will they or won't day. So we have a market that is set to open lower at this moment.

Again, this is why we are not advising our readers to be swing trading right now. The risk is higher than the reward. The risk of substantial losses outweighs the risk of making consistent money. Remember that people who have been trying to get into the pits (the market) and trying to trade are getting hit, bumped, slammed, whipsawed, and downright beaten up. And as on the football field the medics are having to keep rushing onto the field to pull out another player who lost. Don't be the next victim to be carried out on a stretcher, have patience.

Pre Market - August 29th 2007

Not much has changed overnight so the advance in the futures may be an advance which could be quickly sold down today. We can't say with certainty if this is short covering only (which I suspect) or some bargain hunters who want to try some risky trading on a possible bounce. The Asian markets dropped overnight as expected following our market sell off yesterday.

One note of interest is that in Germany their equivalent to our consumer confidence figures dropped substantially. Declining consumer confidence is not just an American issue.

I don't anticipate any swing trades today. Risk is higher than the reward still. A bounce this morning could be turned around later by those still bailing out of the stock market.

Pre Market - August 27th 2007

Good Morning Rebels,

Quiet morning (so far). The upcoming week will have much that the markets will be looking at for signs of where to go.

• Monday - Existing home sales (10:00 am)
• Tuesday - Consumer confidence (10:00 am), FOMC minutes (2:00 pm)
• Wednesday - MBA Applications (7:00 am), crude inventories (10:30 am)
• Thursday - GDP (8:30 am), Initial Claims (8:30 am), natural gas inventories (10:30 am)
• Friday - Personal income & spending (8:30 am), Core PCE inflation (8:30 am), Chicago PMI (9:45 am), factory orders (10:00 am)

Also on Friday Fed Chairman Ben Bernanke will be speaking on the sub prime issue.

Pre Market - August 24th 2007

"Don't fight the trend"

This is important to remember. The market is always right, even if we don't like it. When you look at an index chart and it is running into resistance don't take long side trades in the 'hope' that the market will rally. That is a 'bet', not a 'trade'.

Use the market strength to your advantage. So far volume has been bigger on downward moves than it has been on upward moves.

Durable goods numbers came in a few moments ago and they were stronger then expected. This is a double sided sword. On one side it provides a piece of information about the economy and gives the economy is falling folks a pause in their steps and usually this would be good for the markets. But on the other side it could give the Feds a reason to offset the Fed Funds rate cut. Actually the Durable goods numbers are not all that reliable as they keep revising them the next month. And the trend has been lately to revise downward. So I don't put much into the durable goods data.

The data that will have more of an impact this morning will be the new home sales at 10am. Looking at a mixed day with a higher probability of downward movement as we end the trading week and many will not want to leave money in the markets through the weekend.

Pre Market - August 23rd 2007

The Bank of Japan did not raise their rates, left them unchanged. Good for us.

Futures were up good this morning but as the morning has been moving towards the open the futures have fallen a bit. Could today be the day of "sell the news" on advances in the market? Could be. Don't be surprised if you see a selling on advances today. There is a strong desire still to sell on upswings by those who want to get out. And we are at resistance levels so that will present some obstacles as well.

If you were still watching my recommended stocks in the weekly newsletter and you bought at the recommended price then you had an excellent entry on BRLC that I provided you the setup for. If you took the entry on BRLC from my newsletter your sitting on a good profit. Don't let it get away from you. Sell it if the market sells off.

See my previous post for ideas today depending on the movement of the market today, but don't base the first 30 minutes on the market direction. Wait until it settles and we get a better view of what the direction will be. I anticipate an early run and then a selling off towards the end of the day.