This afternoon, leading aluminum producer Alcoa Corp (NYSE:AA) will report earnings after the closing bell. While Alcoa may not move the major stocks indexes much, it is an indication that the start of corporate earnings season is upon us. The trading volume over the past couple of weeks has been extremely light.
This morning, all of the major stock indexes are coming under severe selling pressure. The volume on the decline is very heavy, signaling that institutional money wants out of this market right now. Leading stocks such as Apple Inc (NASDAQ:AAPL), J.P. Morgan Chase & Co (NYSE:JPM), and Exxon Mobil Corp (NYSE:XOM) are all trading sharply lower to start the day.
Investors, traders and even institutions are feeling pain today after the markets collapsed for the second day in a row. Just days after the media proclaimed all was perfect in the world once more, poor economic news ripped the markets from China and the massive bailout of Greece may fall apart. The S&P 500 has fallen over 5% in the last two trading days.
Friday Volatility - Prepare for a stong move into the close
Three Day Rally, Possible Profit Taking Before Job Report
Tomorrow, the U.S. Labor Department will report the September non-farm payroll report. After a three day rally some investors could decide to lock in profits ahead of the report. Economists are expecting a gain of 90,000 jobs. Most traders are expecting an increase of 50,000 jobs.
When the stock markets get into serious trouble the Oracle of Omaha will come out of the woodwork to defend stocks. Once again, Warren Buffett just appeared on CNBC live from the New York Stock Exchange. Mr. Buffett said that he is buying stocks and is investing in the United States. The SPDR S&P 500 Index (NYSE:SPY) has climbed sharply off the lows.
It is pretty sad when the only way to get the stock market to trade higher is by selling off the U.S. Dollar Index (DX Z1). The U.S. Dollar Index measures the value of the U.S. Dollar versus six leading currencies such as the Euro 58.6%, Japanese Yen 12.6 %, Pound Sterling 11.9%, Canadian Dollar 9.1%, Swedish Krona 4.2%, and the Swiss Franc 3.6%.
Anyone who has ever traded these markets for any considerable amount of time knows that the first hour to ninety minutes of the day is the best part of the day. This is a time period when there is volume in the market. Day traders can actually trade off of good support and resistance level. Active markets are always the best markets for trading.
The Dow Jones Industrial Average(DJIA) and the rest of the major stock indexes are having one of the steepest one day declines since the May 6, 2010 flash crash. At this time, there are many selling signals that have triggered. Everyone is talking about the big head and shoulders top pattern that triggered two days ago on the daily chart.