22.2.

2016
Wall Street Pauses to 1,950 Points: Traders New Obsession!
Index

Last

Daily change

R2

R1

PP

S1

S2

DJX

16,392

(-0.13%)

SPX

1,918

0.00%

193.27

192.64

191.54

190.91

189.81

Nasdaq

4,504

0.38%

102.72

102.17

101.40

100.85

100.08

Stocks closed mixed on Friday as they tried to shake off the losses in crude; with that said, stocks still
succeeded in capping off no more and no less than their strongest week of gains year to date. The S&P 500
rallied 2.9% for the week. Its encouraging to see that though crude dropped, stocks didnt fall into line and
drop in lock step with crude something we had been seeing of late. The link between the trading of the
two needs to be severed for the market to build a lasting rally. It seems that investors are feeling that the
market needs to stabilize to some degree. When considering the fact that the market rallied 6.5% from last
weeks bottom with 3 straight days of gains of at least 1% each, the bearish thrust on Thursday and Friday
was minimal to say the least.
When considering the fact that the economic diary this coming week is jam-packed with economic figures
as well as speeches from economic policymakers, investors in any case were expected to be on watch,
carefully eyeing the Fed for any hint about the central banks next move but a stronger than expected
inflation reading last Friday will sharpen investors focus all the more!
After investors entered 2016 with expectations for 3 or 4 rate hikes by years end, market players of late had
lowered their forecasts to but one rate hike at most for 2016 on the background of low inflation and global
market volatility. Fridays figures showed though that core consumer inflation an index calculated by
factoring out volatile and seasonal figures the likes of energy and food had risen in January at its highest
rate in the last four-and-a-half years to an annualized 2.2%.
The rise in inflationary pressures has already changed market expectations about the next Fed move.
Inflation figures clearly caught the market off guard. At this point just a week ago the market had priced in
a 20% probability of there being one rate hike by years end. The chances have now risen 40%, primarily due
to Fridays inflation figures. The dollar immediately jumped after the figures release, the market perceiving
higher inflation as a nod to the Fed to tighten its monetary policy by moving to hike rates.
The stock market has had its pulse on expectations for Fed policy changes. Low interest rates in general tend
to support stock prices, dividend stocks usually receiving preferential treatment from investors primarily
the service sector (XLU) where interesting dividend stocks can be found. In a rising interest rate environment,
banks tend to take the lead.
Expectations for higher rates represent part of the oft-quoted reason by investors for the markets 11%
plunge. The S&P 500 has now recorded losses of 6% on the year, after having ended last week up; last week
was only the third winning week this year.
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Inflation figures have now been tacked on to the latest economic figures strong job market numbers and
strong consumer spending which will compel the Fed to weigh more seriously implementing further rate
hikes. In other words, the possibility of more rate hikes has been put back on the table.
Consumer spending figures, the index favored by the Fed to gauge the inflation rate, will be released this
coming Friday, and are likely to either confirm or undercut the latest inflationary numbers. The other
economic figures likely to move the market this coming week include the Supply Managers Index for the
manufacturing sector and for the service sector, along with two different consumer confidence indexes.
The bulls took comfort this past week in that stocks succeeded in distancing themselves from the latest
bottom, though some traders had hoped that the S&P 500 can successfully break through the key 1,950
point level. Neither crude or China weighed down the market as they had in previous weeks.
Weekly Summary: Indexes soared, ending the week with flying colors, despite the last 2 days of the trading
week. The Dow Jones rose 2.62%, the S&P 500 took off 2.84%, and the NASDAQ surged 3.85%.
SPY Technical Perspective:
The 1,950 point level has become traders new obsession. This level on the S&P 500 can be described as the
line in the sand. Its make it or break it for stocks which need to make it past this key hurdle for traders to
have the confidence that the worst is behind them, given the dismal start to the trading year. Some traders
are saying that this is the point at which to take profits, though others are saying that at this point, were in
the free and clear, so its time to open your purse strings and start buying.
Its not just that the 1,950 point level is easy to remember. Its also a level that has served often as a catalyst
for intraday market changes. In particularly volatile trading on August 25 th, the S&P 500 rose to a high of
1,948 points before retracing its way back down and closing at a bottom. The following days high was 1,943
points. After a number of additional dramatic moves around the 1,950 point level, the S&P 500 soared on
October 2, closing at a high at the 1,951 point level. Another decisive move above this level on the following
trading day signaled the markets all-too-sweet rally in the month to come!
Of late, the S&P 500 has honed in on its daily high at 1,947 points or alternatively, at 1,950 points on
January 12th and 13th and on February 1st.
Now, a breakout above the 1,950 point level seems to be where the bulls are placing their hopes. Likewise,
it seems that traders have become very technical of late. The prior level upon which traders obsessed to
such a degree was the 1,812 point level, perceived as the markets low and a level whose breakdown will
set off another wave of negative momentum.
Were the market to rise and close this week above the 1,950 point level that would pave the way for more
gains in the direction of the next resistance level in the 2,000 point area. Any declines this coming week are
likely to halt at the 3 open gaps which accompanied the upward movement the previous week, the most
solid support level being in the 1,800 point area.

Have a great trading week!

Economic Calendar
DAY

TIME (EST)

Event

Forecast

Impact

Tuesday

8:30

Case-Shiller 20-city Index

5.8%

Normal

Tuesday

10:00

Consumer Confidence

97.3

High

Tuesday

10:00

Existing Home Sales

5.30M

Normal

Wednesday

10:00

New Home Sales

523K

Normal

Wednesday

10:30

Crude Inventories

Low

Thursday

8:30

Initial Claims

270K

High

Thursday

8:30

Durable Orders

2.0%

Normal

Thursday

9:00

FHFA Housing Price Index

Normal

Friday

8:30

GDP - Second Estimate

0.4%

High

Friday

8:30

Personal Income

0.4%

Normal

Friday

8:30

Personal Spending

0.3%

Normal

Friday

8:30

Core PCE Prices

0.1%

Normal

Friday

10:00

Michigan Sentiment - Final

91.0

High

Earnings Calendar
Symbol

Company

AM/PM

Day

AGN

Allergan plc

AM

Monday

MSI

Motorola Solutions, Inc.

PM

Monday

HD

The Home Depot, Inc.

AM

Tuesday

Macy's, Inc.

AM

Tuesday

SJM

The J. M. Smucker Company

AM

Tuesday

LOW

Lowe's Companies, Inc.

AM

Wednesday

TGT

Target Corp.

AM

Wednesday

TJX

The TJX Companies, Inc.

AM

Wednesday

CRM

salesforce.com, inc.

PM

Wednesday

HPQ

HP Inc.

PM

Wednesday

LB

L Brands, Inc.

PM

Wednesday

NTES

NetEase, Inc.

PM

Wednesday

APA

Apache Corp.

AM

Thursday

BBY

Best Buy Co., Inc.

AM

Thursday

CPB

Campbell Soup Company

AM

Thursday

DLTR

Dollar Tree, Inc.

AM

Thursday

ADSK

Autodesk, Inc.

PM

Thursday

BIDU

Baidu, Inc.

PM

Thursday

BMRN

BioMarin Pharmaceutical Inc.

PM

Thursday

DLR

Digital Realty Trust Inc.

PM

Thursday

EOG

EOG Resources, Inc.

PM

Thursday

GPS

The Gap, Inc.

PM

Thursday

INTU

Intuit Inc.

PM

Thursday

KHC

The Kraft Heinz Company

PM

Thursday

MNST

Monster Beverage Corporation

PM

Thursday

PANW

Palo Alto Networks, Inc.

PM

Thursday

SBAC

SBA Communications Corp.

PM

Thursday

22.2.2016
Today's Picks Day Trading
Symbol

Breakout

KMT

Momentum

Momentum

$20.00

ADSK

RRC

VZ

$51.20

WDAY

AN

TRMB

$23.86

WTW

TMUS

DLR

$82.24

UAL

WWAV

$38.67

WYN

$69.64

ACC

$44.00

KS

Breakdown

$9.00

New York Strategy Swing

Date

Stock

Long\
Short

Statues

Date
Close

Profit \
Loss

1.2.2016

EQY

Long

Close

2.2.2016

+0.76%

17

3.2.2016

SKX

Short

Close

10.2.2016

+3.04%

18

4.2.2016

BID

Long

Close

5.2.2015

+0.35%

19

8.2.2016

ATI

Short

Close

12.2.2016

+1.26%

20

9.2.2016

ANF

Long

Close

9.2.2016

-4.3%

21

9.2.2016

IDTI

Short

Close

16.2.2016

+4.44%

22

12.2.2016

FIT

Long

Close

19.2.2016

+11.67%

23

16.2.2016

EXC

Long

Open

+1.86%

24

18.2.2016

AEE

Long

Close

+0.10%

25

10

18.2.2016

RLYP

Short

Open

-0.27%

26

11

18.2.2016

KORS

Long

Close

-0.19%

27

12

19.2.2016

BA

Short

Open

+1.05%

28

13

19.2.2016

GME

Short

Open

+1.59%

29

19.2.2016

19.2.2016

14

30

15

31

16

32

Date

Stock

Long
\Short

Statues

Date
Close

Profit \
Loss

Today's Picks Swing "New-York Strategy"

No.2 WYN

No.1 KMT
Company Name
Entry Point
Stop Area
1st Target
Swing Target
Avg. Volume
Sector
Earnings Date
Risk Rate
Risk\Reward Ratio

Kennametal

20
18.89
20.70
22.64
1.88M
Industrial Goods | Machine Tools
& Accessories

Normal
2.38:1

Company Name
Entry Point

Wyndham Worldwide

69.64
67.90
70.45
73.91
1.39M

Stop Area
1st Target
Swing Target
Avg. Volume
Sector
Earnings Date

Services | Lodging

Risk Rate
Risk\Reward Ratio

Risk Rates: Normal Regular size, High Consider reducing size, Low Consider to increase size

High
2.45:1

Today's Picks Swing "New-York strategy"

No.3 WWAV
Company Name
Entry Point
Stop Area
st

1 Target
Swing Target
Avg. Volume
Sector
Earnings Date
Risk Rate
Risk\Reward Ratio

No.4
The WhiteWave Foods

38.67
37.39
39.20
40.14
2.28M
Consumer Goods | Food - Major
Diversified

Normal
1.15:1

Company Name
Entry Point
Stop Area
1st Target
Swing Target
Avg. Volume
Sector
Earnings Date
Risk Rate
Risk\Reward Ratio