The Market Direction…

Market Direction Summary (02-02-2010)

Dow-30 +111.32 @ 10296.85; S&P 500 +14.13 @ 1103.32; Nasdaq 100 +16.20 @ 1776.92; Russell 2k +4.80 @ 614.05; VIX -1.11 @ 21.48; U.S. Dollar Index -0.17 @ 79.00; 10 Year Tsy Rates -0.19 @ 36.35; Crude Oil +2.05  @ 77.00; Gold +9.10 @ 1114.30; CRB +5.21 @ 273.19; DJ-U.S. Real Estate Index +2.88 @ 174.78

Yes, it really is earnings season. Refusing to be upstaged anymore by EU issues related to Greece’s sovereign debt problems or even Washington’s political haggling over regulatory reforms and economic recovery assistance programs, positive earnings results finally earned some respect from the market’s audience.

However, a slightly better than expected Pending Home Sales index (Dec-2009 actual @ 96.6 vs. Nov-2009 revised @ 95.4) played a supporting role. The just barely good enough housing results were more than good enough for the Global Timber Fund (CUT) and homebuilder exchange traded funds (i.e. XHB and ITB). In fact, Hillbent’s entire real estate ETF universe responded positively and experienced six short-term and three intermediate term trend upgrades. Overall volume increased signficantly within this group (see below).

Commodities, having succumbed to renewed dollar strength and being extremely oversold, rebounded to be included amongst today’s top performers. Notable trend upgrades occurred for the DB Agriculture (DBA), DB Commodities (DBC), Gold Trust (GLD), Platinum Fund (PTM).

Energy related ETFs, Gasoline Fund (UGA) and Oil Fund (USO), continued to move on the momentum created by yesterday’s better than expected gains in the ISM Manufacturing Index report.

DB Base Metals Fund (DBB) remains well below its short and intermediate trend resistance levels, but appears to have found support at its 38.2% retracement level. Acting as a bullish catalyst for industrial metals was January’s reported U.S. Vehicle sales at Ford being up an annualized 25%. DBB closed up 0.84% on surging volume.

Price Volume Analysis…

Although today’s dominant trading pattern was bullish (36% price up & volume up) and showed a definite improvement in morale, the breadth was hardly a cause for celebration.

Come on buyers… Let’s pump up the volume! We can’t hear you!

ETF New Highs & Lows…

ETF 5 Day New Highs: (Note * denotes 250 day new high)

• U.S. Equities (DIA, SPY, IYZ, XLB, XLE, XLF, XLI, XLP, XLV, XLY, BBH, CUT, GDX, HAP, IGF, ITA, KIE, PPH, PXR, RKH, SLX)
  
• International Equities (EWC, EWW, EWZ, ILF, ISI, EWG, IEV, RSX, VGK, EWH, EWJ, FXI, IFN, VNM, EEM, GAF, GML, GUR)
  
• Commodities (DBA, DBC, GLD, PTM, SLV, UGA, UNG, USO)
  
• Forex (BZF, CEW, FXC, FXM, XRU)
  
• Bonds (N/A)
• Real Estate (ICF, ITB, IYR, REM, REZ, RTL, XHB)
  

ETF 5 Day New Lows: (Note * denotes 250 day new low)

• U.S. Equities (N/A)
• International Equities (EWT)
  
• Commodities (N/A)
  
• Forex (FXA)
• Bonds (BWX, EMB, JNK, TLT)
  
• Real Estate (N/A)

Closing Comments…

The market, even after two consecutive days of positive performance, still remains widely oversold from a short-term perspective. This gives it plenty of stretching room should bulls decide to make a charge.

However, consensus estimates and actual results for the all important employment reports (ADP on Wednesday, Jobless Claims on Thursday, and Employment Situation on Friday) will overshadow the market as the trading week winds down to a conclusion.

In regards to earnings, there are 63 S&P 500 constituents reporting quarterly results over the next three days. Some that could help us connect the dots for a better macro-picture of the economy are consumer credit barometers: MasterCard (MA) and Visa (V); real estate bellwethers: CB Richard Ellis (CBG), Simon Property (SPG), Kimco Realty (KIM), and Weyerhauser (WY); international energy offshore driller: Diamond Offshore (DO); and technology infrastructure leaders: Cisco (CSCO), Akamai (AKAM), Broadcom (BRCM), and Memc Electronic Materials (WFR).

Fasten your seatbelts, the rubber will begin to meet the road of the true Market Direction over the next three days!

Signing off at Hillbent on The Market Direction and ETF Market Trends™…

ETF Market Trends™ Monitor (02-02-2010)

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Diary: 02-02-2010

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Market Direction Summary (02-01-2010)

Dow-30 +118.20 @ 10185.53; S&P 500 +15.32 @ 1089.19; Nasdaq 100 +19.68 @ 1760.72; Russell 2k +7.21 @ 609.25; VIX -2.03 @ 22.59; U.S. Dollar Index -0.30 @ 79.17; 10 Year Tsy Rates +0.45 @ 36.54; Crude Oil +2.30  @ 74.95; Gold +23.40 @ 1105.20; CRB +2.39 @ 267.98; DJ-U.S. Real Estate Index +3.07 @ 171.90

No comments this evening…

Price Volume Analysis…

The dominant price volume relationship for Monday’s trading was distribution (55% price up & volume down) and makes me a bit suspicious of this young rally.

A win is a win in the history books, but expanding volume is the sort of stuff that creates momentum and sustainability. The lack of it shows that many investors are not yet fully committed to buying these dips at this stage of the game.

ETF New Highs & Lows

ETF 5 Day New Highs: (Note * denotes 250 day new high)

• U.S. Equities (RSX, EWH, FXI, GAF, GUR)
• International Equities (N/A)
• Commodities (PTM)
• Forex (CYB, UUP)
• Bonds (AGG, MBB, SHY, TIP, TLT)
• Real Estate (ITB, REM, XHB)
  

ETF 5 Day New Lows: (Note * denotes 250 day new low)

• U.S. Equities (VXX, XLU, XLV, IHI)
• International Equities (EWC, EWW, EWZ, ILF, ISI, EWG, EWQ, EWU, IEV, VGK, EWA, EWJ, EWY, GAF, GML)
  
• Commodities (CWO, DBA)
  
• Forex (FXA, FXB, FXY, XRU)
• Bonds (AGG, BXW, EMB, HYG, IEF, JNK, MBB, MUB, SHY, TLT)
  
• Real Estate (N/A)

Closing Comments…

Should the market continue to rally from its extremely short-term oversold condition, which I previously mentioned as a possibility, then caution should be used as it approaches levels of resistance.

Unless it can be reversed, the breakdown in the intermediate downtrend really increases the potential for further downside risks and volatility.

Signing off at Hillbent on The Market Direction and ETF Market Trends™…

ETF Market Trends™ Monitor (02-01-2010)

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Diary: 02-01-2010

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Market Direction Summary (01-29-2010)

Dow-30 -53.13 @ 10067.33; S&P 500 -10.66 @ 1073.87; Nasdaq 100 -30.06 @ 1741.04; Russell 2k -5.89 @ 602.04; VIX +0.89 @ 24.62; U.S. Dollar Index +0.54 @ 79.47; 10 Year Tsy Rates -0.49 @ 36.09; Crude Oil -1.20 @ 72.65; Gold -4.40 @ 1081.80; CRB -1.99 @ 266.59; DJ-U.S. Real Estate Index -0.93 @ 168.83

Comments for Friday’s trading session will be very brief. I could easily fill up space discussing market fundamentals, but since the market seems to be ignoring the existing fundamentals and is obviously displeased with what it sees further ahead (which is something that none of us can foresee or predict), this would be futile.

I have provided ample warning on several occassions regarding the deterioration of momentum in the short and intermediate trends. Therefore, the accelerated selling should come as no surprise. Those heeding the warnings have had an opportunity to either move out of harm’s way or protect portfolios with hedging strategies.

Much to the displeasure of many investment professionals, the S&P 500’s failed to hold support at 1080. Granted, it closed within 7 points of this level and one could easily see it snap back above this number due to an increasingly large percentage of oversold stocks. However, I would still be very skeptical of any rallies and probably treat them as opportunities to sell into strength until the intermediate trend is able re-establish its bullish trajectory.

The next logical destination for the SP-500 seems to be near the November-2009 lows @ 1030 zone. For the Nasdaq 100, a retesting of the October & November lows of 2009 or @ 1652-1656 area could also be next.

As this report focuses on ETFs, one may want to consider the aforementioned comments if exposed to the SPY, QQQQ or any equity sector and industry exchange traded funds.

Lastly, I just want to recall attention to the U.S. dollar index and its ETF proxy (UUP). It’s been putting on a grand show and beginning to remind me of Lord of the Rings’ Return of the King. The longer it can stay above its 200 day moving average, the stronger the likelihood that this develops into viable support.

A genuine rally in the dollar becomes a real game changer as a lot of investors have an overwhelmingly bearish bias towards it. Considering the nation’s fiscal policy and necessary or unnecessary (depending upon one’s views) measures undertaken to stimulate the economy, a stronger dollar probably does not fit into many calculus equations.

Meanwhile, for those who may not have noticed, the primary trend for the Euro (FXE) is now downward and bearish. Should this persist, and it likely will at least until the PIGS (Portugal, Italy, Greece, and Spain) default risk situation is confirmed to have been quarantined, asset re-allocations will cause tectonic shifts of capital which in plain English translates into more market volatility.

As always, time tells everything.

ETF New Highs & Lows

ETF 5 Day New Highs: (Note * denotes 250 day new high)

• U.S. Equities (XLF, BBH, RKH, RTH)
• International Equities (N/A)
• Commodities (N/A)
• Forex (CYB, UUP)
• Bonds (AGG, MBB, SHY, TIP, TLT)
• Real Estate (ITB, REM, XHB)
  

ETF 5 Day New Lows: (Note * denotes 250 day new low)

• U.S. Equities (DIA, IWM, QQQQ, SPY, VXX, IYZ, XLB, XLE, XLI, XLK, XLU, XLV, XLY, CRBQ, CUT, FAA, FDN, GDX, HAP, IAI, IGF, IGN, IHI, ITA, IYT, KIE, KOL, MOO, NLR, OIH, PHO, PPH, SEA, SLX, SMH, SWH, TAN, XME)
• International Equities (EWC, EWW, EWZ, ILF, ISI, EWG, EWQ, EWU, IEV, VGK, EWA, EWJ, EWY, GAF, GML)
  
• Commodities (DBA, DBB, DBC, JJC, JJG, UG, USO)
  
• Forex (BZF, FXA, FXB, FXC, FXE, FXF, FXM, FXY)
• Bonds (BWX, EMB, HYG, SHY, WIP)
  
• Real Estate (N/A)

Closing Comments

No further comments this evening…

Signing off at Hillbent on The Market Direction and ETF Market Trends™…

ETF Market Trends™ Monitor (01-29-2010)