Less than stellar retail sales figures from Black Friday are dragging down consumer durable stocks. Motorola is no exception. Its Droid smart phones are well recieved but is not generating the buzz like Apple’s iPhone. Looking at the chart of MOT, the bias is towards the down side. After failing to break above its 50 day moving average at $8.50, MOT is trading lower. Support levels are $7.75 and $7. The 200 day moving average is at $6.50. If support at $7 holds, MOT will be a short term buy. Seasonal factors at the end of the year favor technology stocks. If so, MOT will probably range trade between $7 and its 52 week high of $9.45. 

The S&P 500 is so far down 1.5% to 1,094 on the news of the delay in debt payments by Dubai World. Because of the shorter trading day and light trading volume, it is not a true reflection of the market reaction as most traders are still on holidays. Never the less, it is likely to keep a damper on any strong stock rallies as the Dubai event brings back to light that dangers are still out there. The S&P 500 is trading below its 50 day moving average of 1,100. Support levels are 1075, its 50 day moving average, and 1025. Resistance is its 52 week high around 1,113.

When the US markets open Friday morning, attention will be paid to the financial sector. Dubai is rattling investor confidence after its proposal to hold off debt payments. This could potentially be the biggest sovereign default since Argentina in 2001. Looking at the financial ETF, the Financial Select SPDR, the 50 day moving average is acting as resistance. The XLF closed yesterday at $14.67. Support levels for the XLF lie at $13.80 and $12.25, its 200 day moving average. Given the worries about the financial institutions and its exposure to emerging market debt, the XLF will likely open at lower levels. The question is how low will the XLF go. 

Looking at the technology ETF, the Technology SPDR, the seasonal trade which ends in early January is still in play. The XLK chart shows that it is still in a strong upward trend. Trading at $22.04, it is above its 50 day moving average of $21.20. The 200 day moving average is at $18.40. As long as the XLK maintains its upward trend, the immediate upside targets are $24 and $25.75. The holiday shopping season and the major consumner electronics show held in early January are the major reasons why there is positive investor sentiment for technology stocks. 

AEO is up approximately 5%, trading at $15.19 on decent Q3 results. Like most corporations, strong profits were generated from cost cutting and not top line growth. Never the less, the clothing retailer expects a better 2010. AEO is bouncing off its 200 day moving average around $14.25. If this level holds, AEO should have a nice bounce back towards its 52 week high of $19.86. Immediate resistance levels on the upside are $17.10, its 50 day moving average, and $18.50. If the 200 day moving average is broken, the downside targets are $13.25 and $12.75. Major support remains at $11.90. The seasonal trade should help propel AEO higher. Look to buy this stock on dips. 

The stock of this home improvement retailer is trading near its 52 week high of $$36.66, closing today at $35.90. If the stock fails to break the $36.66 level on the upside, it will likely go lower. L is to be sold on strength. The retailer is facing plenty of fundamental head winds, facing a very debt ladened consumer and struggling home values. Immediate resistance levels on the upside are $39 and $44 respectively. Support for L lies at its 50 day moving average at $35 and $33.50. Its 200 day moving average remains at $28.50. Given that the unemployment rate is still high, the outlook for the home improvement sector remains muted. The investor should look to put their money elsewhere. 

Thanks to the Fed throwing the US dollar to the dogs in order to revive the economy, the carry trade has proven to be profitable for many investors. Despite the fundamentals, commodity prices have been rallying thanks to near zero U.S. borrowing rates. The same can be said for other asset classes such as stocks. Looking at the long U.S. dollar ETF, the PowerShares DB US Dollar Index Bullish, it could be set for a reversal. At $22.44, it is very close to major support at $22. If this level holds, look for UUP to bounce back up to its 200 day moving average at $24. Reasons for becoming short term bullish on the Greenback include the seasonal demand for dollars as American corporations take in profits from their international operations. Another is that the U.S. dollar carry trade is incredibly crowded. Any strength in the Greenback could trigger unwinding of this popular trade. 

Producers of natural gas are not having a good year. While other commodities are hitting yearly high levels, natural gas are hitting lows not seen since 2003. Weak demand and robust production, especially from shale gas, is translating to bulging gas inventories. As a result, the lower price are dragging down the share price of major natural gas producers. Such is the case with ECA. ECA has broken through its support level of $54. The next target is $50.75, its 200 day moving average. After this, the next downside target is $44. The 52 week trading range is $34.00 to $63.19. Resistance levels are now $58, its 50 day moving average, $60 and $63.19. If the 200 day moving average cannot hold, the natural gas bulls will be heading for the exits. 

The price of crude has been stuck in a range between $75 to $80. On the upside, the weakening US makes its cheaper for investors to buy crude with other currencies. On the other side, ample supplies and growing extra production capacity are keeping a lid on oil prices. According to one energy analyst, if it weren’t for the crumbling US dollar, oil should be trading around the $50 to $60 area. For oil to break out on the upside, the excess inventories are being absorbed by significantly higher global economic activity. For oil to trade more on supply and demand fundamentals, the world’s central banks needs to remove the massive liquidity out of the financial system. Right now, cheap money is making investing in bonds, commodities and stocks quite attractive. Unless the US dollar bounces back in a meaningful way, the $75 to $80 trading range will persist for the immediate future. 

Some market watchers believe that what is good for GS stock is good for the rest of the stock markets. This group believes that if GS stock drops, it can bring down the equity markets with them. Since late October, GS has been trading below its 50 day moving average. Resistance on the upside remain at $180, its 50 day moving average, and its 52 week high of $193.60. If these levels fail to be broken on the upside, important support levels are $158 and $143, its 200 day moving average. If financial stocks cannot substain its upward trend, the foundation for an equity rally won’t hold. GS is considered the best run financial institution. If they can’t thrive, who can? They are considered as the canary in the coal mine.