If Slovakia votes no, stocks tank tomorrow

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 10th of October.
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This morning I was reading that there are approximately 3.2 million job openings here in the United States. With more than 14 million people out of work in this country, how can we possibly have 3.2 million job openings still not filled?

These are job openings that the private sector needs to fill. I know from our own experience here at our company, finding competent people it extremely difficult. Part of the problem, in my opinion, is that many job applicants have no skills.

The CEO of Cummings, Tim Selso said he can't find skilled workers for his manufacturing plants. This is a common complaint that many CEOs share.

According to economists, the average worker contributes about $45,000 a year to GDP. If we could just fill 1/3 of those jobs, it would have a huge impact on the economy.

Like many traders today, we were surprised at the velocity of the rally which is based on a potential agreement coming into place in Europe. At the moment no one knows what the deal is, and nobody in a position of authority is indicating what the deal is. The vote from Slovakia has the potential to torpedo any recovery and is a big hurdle approaching tomorrow. If that tiny country votes "no" to this proposed agreement, it could send stocks, and in particular bank stocks, to the cellar!

That leaves us with just one option... What are the Trade Triangles saying?

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2 STOCKS IN THE NEWS
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NETFLIX (Symbol NFLX) - Listens to their customer base. Stock jumps, but is it over on the downside? According to our Trade Triangle technology, the answer is no.

APPLE (Symbol AAPL) - Pre-sells 1 million 1Phone 4S's. But, remains stuck in a broad trading range.

Now let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011.

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S&P 500 INDEX
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The S&P 500 Index just moved into overbought territory today with the strong rally. Even with today's strong rally, our Trade Triangle technology continues to indicate a trading range. Certainly there is heavy resistance at the 1220 level, which in the past has turned this market to the downside. We want to see how things develop in the next 24 to 48 hours. Intermediate and Long-term traders should continue to hold short positions in this index.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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SILVER (SPOT)
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The silver market continues to move in a sideways fashion. Resistance is evident around the $33.50 range and we expect to see more range bound trading. Our Chart Analysis Score is -75, indicating some of the downside pressure has been relieved from the market. As always we will rely on our Trade Triangle technology to keep us on the right side of the trends. Traders who are following our Trade Triangle Technology should be short this market with appropriate stops.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 75
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Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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GOLD (SPOT)
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Not much change in the spot gold market from last week. Spot gold continues to consolidate around the $1,650 level. However, our Chart Analysis Score for this market remains at + 55, indicating that a trading range in the short term is very much intact. We would not be surprised to see this sideways action continue for another week or so. I think most traders would be better off just watching from the sidelines until the volatility subsides. Only long-term traders should maintain long positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 55
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Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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CRUDE OIL (NOVEMBER)
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The November crude oil market has rallied back to an area that was previous support and should present some fairly serious resistance. We were somewhat surprised at today's action however, our Trade Triangles remain in a sideways mode indicating a trading range. We are not totally convinced that this market has turned around and we expected to once again reverse and test the $80 level. As you know, this market has been closely tied in to the movements of the S&P 500. Overall we still view the trend in this market as negative. Intermediate and Long-term traders should continue to be short the crude oil market.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
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Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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DOLLAR INDEX
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We were a little surprised at how far this market had pulled back from the recent highs, however it did not change the bullish scenario that we have for this index. The next 24 to 48 hours are going to be important for this market, as we believe it should begin to find some form of support around current levels. We continue to be friendly to this market and want to hold positions with money management stops. This index is coming from a large energy field that is capable of carrying it much higher. Intermediate and Long-Term traders should maintain long positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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REUTERS/JEFFERIES CRB COMMODITY INDEX
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The REUTERS/JEFFERIES CRB COMMODITY INDEX had its last major low around the 316 area on August 8th. We expect this previous support area to now act as resistance. We have seen this happen time and time again in the markets. The 316 level also coincides with the midpoint of the Donchian trading channel. Intermediate and Long-Term traders should maintain short positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 75
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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This is Adam Hewison for MarketClub and I'll see you tomorrow with my mid-day update. Don't forget to enter for a free 1 year subscription to MarketClub on a HP WiFi Tablet.

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Adam Hewison
President of INO.com
Co-founder of MarketClub
MarketClub's 1 PM. Update for 10/10/11

25 thoughts on “If Slovakia votes no, stocks tank tomorrow”

  1. It is not due to lack of skills, two things are at play, corporate executives want us to work for free, and the computer filtering is blocking job seekers from the jobs.

  2. Further to the Chartwatch: the Fib 50% retrace is close to resistance at 121.2 If SPY breaks to the upside, the target would be 124.5

  4. fha permits strategic short sales and clients can buy again as long as they were on time with the mortgage before the short sale and as along as all other credit instruments are intact and on time. this already exists.

  5. we'll take out the DOW top on sept 1 and the market may go long a bit more but that's it. my wave count shows complete market deterioration after that. also, if you are going to take a position one way or another, you need to base it on something. just saying the dow looks great is not a reason. nobody takes that commentary seriously.

  7. More talk this morning about the vote than yesterday. If not approved on the first round they could have a second vote today or later this week. So it will be interesting how this will be reviewed and discussed in the markets today.

  9. Interesting in watching the news (talking heads) on the financial media no one was mentioning the vote. Not even in "Fast Money." They kept saying we have 2 weeks of waiting. Well the final vote is today and it is important because all 17 members of the European market needs to be in agreement. Right now its in the air and Gold and other markets are nervous about it.

  10. Chartwise, Spy has backed off the 55EMA three times in the consolidation (between 107 and 122) that began Aug 8. Monday, on the fourth attempt, it nosed over 55EMA at 119.58. Good sign, but it has to break resistance at 122.09 before one can have confidence that we're in a bear market rally. If that happens, a lot of triangles will turn short term positive.

    Place your bets ladies and gentlemen.

  13. For info only

    FT
    ........................
    Iveta Radicova said she was willing to tie approval of enhancements to the European financial stability facility to a confidence motion ahead of a crucial vote in the Slovak parliament on Tuesday.
    ...........................
    If Ms Radicova fails to secure Mr Sulik’s support, the government could turn for help to Robert Fico, the leader of the left-wing opposition SMER party, who has said he would support EFSF, but at the price of the government dissolving itself.
    ...............
    In spite of the political drama in Bratislava, European Union officials appeared sanguine about the consequences on the eurozone’s firefighting efforts. One official said he hoped that a last-minute appeal by European Union leaders would be enough to persuade recalcitrants in the Slovak parliament to fall into line. Another said the Slovak parliament would probably hold a second vote if the government was defeated on Tuesday, even if that brought the collapse of Ms Radicova’s government.

  14. The mortgage rules need to be changed to permit underwater workers to move.

    Adam , get some apprentices.

  15. It seems strange that I keep hearing this mantra of corporations not being able to find skilled workers. I know lots of skilled workers that are looking for a job. The skilled workers I know apply for jobs and hear nothing back.If they do find a job it pays 10% - 20% less that what they were making before they got layed off in the recession. Maybe its not so much that they can't find skilled workers as that they don't want to pay skilled workers for their skills.

  16. Jackson and Rick need to look at the numbers not a bear market rally. A simple crayon will tell you what Adam is describing in great detail. This is a bear market, trade it like one and ignore the news. And add to your positions....your short positions.

  18. We will see what happens tommorrow as stated, it looks like Slovakia is holding their ground, as well as a tnother tiny country

  20. I went short last week the S & P 500 on your downtrend Bear Market call.

    So far the trade has lost nearly 20% as of today's close. So much for your Bear Market downtrend.

    R

  21. J;

    I think the final vote is tomorrow. I don't see the significance myself. You know they will keep bailing out. But will it do any good or just make the problem worse?

  22. Seems the markets couldn't care less. I don't know what all this "tanking" talk is about. I've been hearing this is the mother of all bear market rallies for a couple years now and yet, the stock market has never looked better. Last week was a fake out.

  23. There are .2 million job openings because people don't have the right skill sets ro enough education and many who do are not mobile. Where I live, 17 miles north of Pittsburgh, it seems half of the businesses have for hire signs up. But around here, the entry level workforce is very small. And there is no way for the unemployed in pittsburgh to get here. In sociology, it is called "spatial mismatch". Several other big firms, like Westinghouse Electric, have hundreds of unfilled job openings. But mostly they need professionals, like engineers. A very large chunk of the unemployed in the country don't have high school diplomas. We already have enough people to shovel shit in Louisiana. that is why my daughter, who is a junior in electrical engineering and is fluent in three languages, has eight interviews last week for a summer job.

  24. Im my opinion the solution is obvious but it seams no one wants to do it. Yes there is a real lack of job skills in America and honestly there are plenty of things to blame it on.

    That said why isn't anyone thinking of on the job training Apprenticeships are as old an idea as you can get but now days companies like Caterpillar as well as most of Americas industries wont consider hiring people without the ability to - hit the ground running -- so to speak and that is not realistic. Sure it would cost money and manpower for this but think about the loyalty and proper training that the new employee would receive.

    I have been in the workplace for almost 40 years and if there is anything I know its that no matter what company you work for you still have to learn that particular companies business rules and procedures to do a good job no matter what kind of certificate or sheep skin you have.

    American business and industries need to step up to the plate and do what is needed to get new people trained in the skill sets they are going to want any way. You will get talented, loyal, and eager employees who know they are getting the best education anywhere - ONE THY CAN USE. Not just theory.

    Thanks
    Mike

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