In a week when technology market leaders such as Google, Intel and even Apple are coming off their 52 week highs, MOT is looking strong. Positive sentiment for the stock was generated by the release of their latest smart phone, the Droid. On a day where most stocks are falling, MOT is up $0.11 to $8.84. The 52 week high is $9.45. If $9.45 is broken, the next targets for the stock are $10.50, $11.75 and $13. Support for MOT lies at $8.10, its 50 day moving average, and $7.90. Major support for MOT remains at $7. The fate of MOT will be determined by how well they do in the smart phone market. A good entry point to go long the stock would be around $8.

Until yesterday, the last time the S&P 500 closed below its 50 day moving average was back in early to mid July. The index then kept climbing to new 52 week highs. For the S&P 500 to close above this key level, the number needs to be better than 1050. Failure to close above 1050 means the widely followed stock index could retest its 200 day moving average at 920. The headwinds faced by equity bulls include high stock valuations and growing doubts of an economic recovery taking hold without government support. 1,100 is proving to being a major barrier for the S&P 500 to cross. Market watchers will need to look at how the U.S. dollar is behaving to find direction for equities. 

In today’s trading, the financial ETF, the Financial SEL SPDR, fell through the critical 50 day moving average. The XLF is presently at $14.27. From early March to the middle of October, the ETF surged from under $6 to under $16. A 50% correction during this incredible run suggests the XLF can correct back to $11. The 200 day moving average is at $11.75. Above these levels, support for XLF lie at $13.75, $13 and $12. Causing the downward pressure on the financial sector are worries that the economic recovery has yet to take hold and possible legislation that could allow the federal government to wind down “Too Big To Fail” banks.

Despite the price of gold holding above $1,000, gold stocks are beginning to roll over. Looking at the ETF, the SPDR gold shares, it is trading below its 10 day moving average. The ETF is trading at $101.68, approaching its old resistance of $100. If GLD fails to hold this level, the next major support levels are the 50 day and 200 day moving average, or $98 and $93 respectively. The gold rally is looking tired and some sellers need to be taken out before the next move up starts. A good entry point to go long GLD is nears its 200 day moving average. As before, the U.S. dollar will determine the future direction of commodities. Resistance lies around $105.  

Over the last few days of trading, the stock markets started strongly on good corporate earnings and decent economic data and then closed near its lows of the day. Last week, the volatility index hit a 52 week low around 20, signalling growing investor complacency. Given these developments, it indicates that equities have hit a short term top. The confirmation is to see how the stock markets close at the end of the day. If it regularly closes near its lows, it suggests that sellers are now in control of the markets. Recent stock valuations are pricing in a “V” shaped recovery. Though corporate profits are strong, it has come from cost cutting and not revenue growth. Until the VIX climbs back up to 30, one should be taking the opportunity to sell equities on strength.

Last year’s stock market darlings, the fertilizer producers, are so far this year’s duds. This morning, Agrium warned that profits will be 95% lower due to weak sales, tepid pricing and lower margins. In reaction, investors are dumping AGU, sending the stock down over 5% to $53.75. Immediate support is at its 50 day moving average of $50. The next major support levels are $45 and $35. The 52 week high low trading range is $22.08 to $57.63. If the 200 day moving average is broken at $43, it suggests the long term trend for the stock will turn negative. For short term investors, AGU is a sell. At this point, one thing that will support the stock is rumours of a buy out.    

Much of the attention has been put on the hot sectors, such as gold, energy, financials and technology. The pharmaceutical stocks were largely ignored. For bottom pickers, they probably noticed that PFE has been steadily climbing up. Since mid-July, the stock started to trade above its 200 day moving average. In fact, the 50 day moving average is now above the 200 day moving average. This development suggests a positive long term trend. PFE is presently bouncing off a major resistance level of $18.50. Strong support is at $16.50 or its 50 day moving average. Given the tick up on PFE, the market is saying that Obama’s health care reforms will likely be watered down. If the $18.50 level is broken on the upside, the next targets are $20.50 and $22. 

The very popular ETF known as the United States Natural Gas Fund or UNG is getting attention as a popular way to benefit from higher natural gas prices. Its exposure to various derivatives, rolling over of natural gas futures and worries of new government rules to clamp down on commodities speculation makes UNG too volatile for most investors. A better way to invest in this sector is to own shares of well managed natural gas producers that can thrive in a low pricing environment. CHK is one such company. They have extensive exposure to unconventional natural gas production. This technology has opened up more access to natural gas reserves and allows producers to make money as low as $4 per BTU. CHK is trading at $29.52, close to its 52 week high of $30. If $30 is broken and the stock holds above this level, CHK is poised to go higher. The next target is $44. Major support lies at $26 or the 50 day moving average. 

The VIX index is near its 52 week low of 21.41. The last time we saw this level was in August of 2008. When the financial crisis hit, the VIX surged to 90. A low VIX number suggests that investors are bullish about stocks. Given that the way to make money in stocks is to go against the crowd, it could be time to lighten up on your equity positions. Despite strong results from Apple, Pfizer and Texas Instruments, the major stock indexes are trading lower today. Despite the positive sentiment as indicated by the low Vix number, equities are being sold off. Furthermore, the seasonally anticipated correction in stocks did not occur. In fact, stocks gained in September. Selling pressure ssems to be building. If the stock markets begin to close near its lows of the day, it’s time to hit the sell button. 

This week is the peak of the earnings season. After the markets close today, AAPL is reporting their Q4 earnings and is expected to be $1.42 per share. The whisper number is $1.60. Anything at or better than this number means the upward bias for the stock will continue. The 52 week high of $192.32 will be easily broken. The new targets are between $225 and $250. If the results and guidance are underwhelming, expect a massive sell off in AAPL stock. The immediate downside target is $178, or its 50 day moving average. The next major support level is at $160. The 200 day moving average is at $135. AAPL is currently trading at $188.14, relatively unchanged.