daytrading sep 19 pre-market, page-2

Aksier's Weekly Report

The Scorecard from Friday / The Past Week
Markets
XJO 4,149.4 points, +77.7 points, Up 1.9% / -45.3 points, Down 1.1%
DJIA 11,509.1 points, +75.9 points, Up 0.7% / +517.0 points, Up 4.7%
SPX 1216.0 points, +6.9 Points, Up 0.6% / +61.8 points, Up 5.4%
NASDAQ 2,622.3, +15.2 points, Up 0.6% / +154.3 points, Up 6.3%
FTSE 5,368.4 points, +30.9 points, Up 0.6% / +23.0 points, Up 0.4%
DAX 5,573.5 points, +65.3 points, Up 1.2% / +383.6 points, Up 7.3%
Hang Seng HSI 19,455.3 points +273.8 points, Up 1.4% / -411.3 points, Down 2.1%
Nikkei 8,864.1 points +195.3 points, Up 2.3% / +126.4 points, Up 1.1%
Shanghai 2,482.3 points +3.3 points, Up 0.1% / -15.5 points, Down 0.6%

AUD/USD 1.0361 +0.0037, Up 0.4% / -0.0072, Up 0.7%

Key Commodities
Gold +$22.30 to $1,813.00, Up 1.3% / -$43.30, Down 2.3%
Silver +$0.75 to $40.70, Up 1.8% / -$0.58, Down 1.4%
Oil USD -$1.28 to $87.92, Down 1.4% / +$1.46, Up 1.7%
Copper USD -$0.0238/lb to $3.9340, Down 0.6% / +$0.0694, Down 1.7%


Market Direction XJO: Last week was again very volatile. The market is at its most challenging point since the GFC in 2008. Any good news is getting sold into and the effect of bad news is being amplified. Short term our market is going to continue being driven by events in Europe and further signs of a weakening US [and global] economy. Since my last report in May, the chances of a double dip recession in the US have significantly increased. The economic recovery, driven by a low interest rate environment and stimulus measures has faltered. The problems in Europe and the poor economic outlook probably mean that the market will remain challenging for the next 12 months. I expect the lows of the current cycle won't be reached until sometime in 2012. The XJO is trying hard to bounce however the indicators are giving conflicting signals and with resistance at just above 4,200 points, further gains are likely to be limited.

US Dollar
The US dollar has broken out of its long term downtrend as shown on the weekly chart below. It looks to be headed for 79.0

Market Direction DJIA: Looking at the daily DJIA chart there is more potential upside in the first part of this week with a potential target of just under 11,800 points. However there is a bear flag which has been forming since early August and if the pattern plays out then the target would be around 9,700. Given the string of poor economic data which has been coming out of the US in recent months and the increasing likelihood of a double dip recession, I cannot see how we will get a breakout to the upside from the current pattern. If the DOW was to fall to 9,700 I would expect the XJO to be in the 3,400 to 3,600 range.

Economic Data:
The economic calendar for the coming week is very quiet. All eyes are likely to be on the outcome from the Federal Reserve's Policy Making Committee. Anticipation is building that the Fed will adopt a new stimulus measure known as �Operation Twist� where it would replace some of its short term bonds with longer dated ones. The move, last used in the 1960s is designed to stimulate lending and borrowing by bringing long term interest rates down. It is called a twist because it should have the effect of bringing short term interest rates up. Whether any further stimulus prevents the US economy from entering another recession remains to be seen.

USD Federal Reserve Policy Makers Meeting - Sept 20 & 21
AUD Monetary Policy Meeting Minutes - Tuesday 11:30am
EUR German ZEW Economic Sentiment - Tuesday 7:00pm
USD Building Permits - Tuesday 10:30pm
GBP MPC Meeting Minutes - Wednesday 6:30pm
GBP Public Sector Net Borrowing - Wednesday 6:30pm
USD Existing Home Sales - Thursday 12:00am
USD FOMC Statement - Thursday 4:15am
CNY HSBC Flash Manufacturing Index - Thursday 12:30pm
USD Weekly Unemployment Claims - Thursday 10:30pm


Company Reporting Season:
Although earnings season has not yet begun there are some significant companies reporting this week. Fedex will be one to watch as being amongst the worlds largest freight companies, they are a bellwether of economic activity, or a lack of it. The real earnings season for the September quarter is about a month away.

Monday: Asahi Co Ltd, New Hope Corp Ltd.
Tuesday: Adobe Systems Inc, Murchison Metals Ltd, Oracle Corp.
Wednesday:
Thursday: Fedex Corp, Nike Inc.
Friday:


Stocks To Watch

Cardia Bioplastics: CNN/CNNOA Cardia Bioplastics appears to be on the verge of a substantial increase in sales for their range of biodegradable and low carbon footprint packaging. Sales for the Fy2012 are expected to be at least triple that of 2011. The company's primary activity is the manufacture and supply of resins which can then be used by manufacturers of packaging to produce more environmentally friendly packaging products. The company has some truly global brand names aligned with or as direct customers including Nestle, Kimberly Clark (owners of brands such as Huggies and Snugglers), Colgate Palmolive, KFC, McDonalds Japan, and the list goes on. If any of these customers commit to a long term large supply contract with Cardia then a major re-rate is likely to occur. News Due: Further updates on increased sales including possible contracts with major global brands. Price Target: The stock has a very nice rounded bottom formation which could be a cup and handle pattern developing. If the price breaks above 1.4 cents then a target of 2 cents appears likely. Disclosure: Holding CNN/CNNOA

Chesser Resources: CHZ Chesser commenced a 30,000m drilling campaign at their Kestanelik project in Turkey in mid July following a $7.35m capital raising. Results from the first hole (KED 44) were released to the market on the 26th of August with an intersection of 5.4m @ 15.7g/t Au. In that announcement the company stated that results were awaited from further holes which had intersected both the new vein structure and the K2 vein. If Chesser's geological interpretation is correct then the results from hole KED45 can be expected to be around 2-2.5 times the width of KED 44. With the drilling program now well underway a more comprehensive update of progress is due at any time. News Due: Further results from drilling at the companys Kestanelik gold project in Turkey. The maiden JORC resource for the project is due out in the fourth quarter of 2011. Price Target: The stock looks to have put in a second higher low last week after falling away following significant falls in the gold price. A close above 68 cents would be bullish with an initial target in the high 80's. Note the last time CHZ had a golden cross preceded a rise from around 60 cents to above $1.20. I am hoping for a repeat on good results from Kestanelik and in the leadup to their maiden JORC resource late this year. Disclosure: Holding CHZ

/Jacka Resources: JKA/JKAO/JKAOB The management of Jacka come with an impressive pedigree having created a great deal of shareholder wealth at Hardman Resources. The company currently has an interest in the Hammamet West oilfield in Tunisia and is negotiating for a share of the Ruhuhu PSA in Tanzania. Jacka is also examining other projects in East Africa. News Due: I noted when preparing this update that the last announcement from the company was the release of the quarterly report for June 2011 on the 29th of July. Given we are now more than six weeks on, I would be surprised if an update or news was not close. Results of negotiations with the Tanzanian government over the Ruhuhu PSA. News on bids for projects in East Africa with Pancontinental. Progress on acquisition of new projects. Price Target: JKA is on the verge of breaking out from a flag pattern. A close above 11 cents will signal this with a target around 17.5 cents. The slow stochastics and MACD point to further rises in the days ahead. Disclosure: Holding JKA

Good luck to all traders this week.