The Red Roadmaster’s US Market Monthly Re-cap + Stock Talk ™

25 April 2010 Date Line: Hong Kong (SAR) China

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Red’s Bull Alert: Wall Street hits 19 month high Friday

Re-cap of the US Stock Market Action for the Week ending 23 April 2010

For the Week: the S&P 500 was up 2.1%, the DJIA rose1.7%, and the NAS gained 2%. It was the 8th straight week of gains for the DJIA and NAS, and the S&P has gained in 7 of the past 8 weeks running.

For the Day: The DJIA closed up 69.99 pts, or 0.63%, to 11,204.28, the S&P 500 gained 8.61 pts, or 0.71% to close at 1,217.28, the leading NAS tallied up + 11.08 pts, or 0.44%, to end the session at 2,530.15.

Energy shares lifted the broad market after Crude Oil rose 1.7% to above US$85bbl on positive economic data. The S&P energy index rose 2.3%, as Chevron closed up 1.8% at US$82.67/shr.

Merck & Co climbed 5% to US$35.46/shr, making it the top gainer on the DJIA. The drug maker said its costs related to US. healthcare reform will be a far smaller percentage of total company sales compared with rival drug makers.

That news helped the healthcare sector recover a 2 day selloff on fears over the impact from the new healthcare overhaul law. The S&P healthcare index was up 1.1% on the day, but is down 2.5% for the month.

On Earnings Front: American Express Co rose 2.7% to $48.05/shr after its results beat expectations and the credit card company struck an optimistic tone about future client spending.

Strong earnings have contributed to the market's gains in recent weeks, with the benchmark S&P 500 up nearly 80% from the 12-year lows of March 9, 2009.

Homebuilders were up 3.3% after data showed sales of newly built single-family homes rose last month to their highest level in 8 months. The homebuilders index racked up its biggest weekly advance since July 2009, rising 12.8%, and is on track for its 6 straight month of gains.

New orders for durable manufactured goods ex. transportation posted the largest gain in over 2 yrs.

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The NAS's gains were limited by Qualcomm Inc and Amazon.com which both gave disappointing forecasts earlier last week. Qualcomm fell 2.8% to US$38.25/shr and Amazon was down 4.3% at US$143.63/. Microsoft Corp Inc dipped 1.3% to US$30.99/shr after it reported its Q-1 profit jumped, but the report failed to meet Wall Street's heightened expectations.

Commodities had a pretty solid session Friday as the CRB Commodity Index put together a 0.7% gain, its 4th straight advance and put it 1.0% higher for the we

Crude Oil prices were also strong as prices climbed 1.7% to US$85.12 bbl, a closing high on the week.

Gold prices gained 0.9% to settle at US$1153.30 oz., and Silver prices advanced 1.1% to US$18.20oz.

Advancing Sectors: Energy (+2.3%), Materials (+1.3%), Health Care (+1.1%), Utilities (+0.8%), Industrials (+0.7%), Consumer Discretionary (+0.5%), Tech (+0.5%), Financials (+0.4%)

Declining Sectors: Telecom (-0.2%), Consumer Staples (-0.1%)

Volume and Breadth: About 9.28B/shrs traded on the NYSE, the AMEX and NAS, below last year's estimated daily average of 9.65B/shrs. Advancers outnumbered decliners on the NYSE by 2,161 to 869, and on the NAS, advancers beat decliners 1,702 to 991.

 

Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance

Apr-23-2010 QQQQ 50.52 Very Bullish (0.52) 50.18 50.59

Apr-23-2010 DIA 111.96 Bullish (0.40) 111.20 112.35

Apr-23-2010 SPY 121.81 Bullish (0.41) 121.22 122.23

Major World Markets

Shanghai   2,999.48 -33.79 -1.11%

Shenzhen 11,703.96    -62.85 -0.53%

HSI 21,454.94 -55.99 -0.26%

Dow 11,134.29 +9.37 +0.08%

Nasdaq 2,519.07 +14.46 +0.58%

Nikkei 10,949.09 -140.96 -1.27% 

FTSE100 5,665.33 -58.10 -1.02%

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Gold and Crude Oil Focus Report (Weekend Up-date) w/Technical Outlooks

Gold dipped, halting a 2day rally, as the Euro sank to a new 11 month low against the USD. However, the recovery after sliding to as low as 1132 signaled the precious Yellow metal's underlying strength.

In fact, while the market has only focused on Greece's deficit issue, such problem has also rooted in other countries including the US, Japan and the UK. If worries intensify and spread to these countries, I do believe Gold will likely benefit.

Crude Oil initially slumped as global stock market sank on the revision of Greece's debt deficits. Together with disappointing inventory report released last Wednesday, the front-month WTI contract sank to as low as 81.73. However, buying interests came in at that level as the price reversed, and Crude Oil ended the day flat at 83.7. Strong rebound in equities and attack of Iraqi Oil pipeline also supported Crude Oil.

Specifically to the Crude Oil market, damage of an oil pipeline from Iraq to Turkey disrupted supply which will take around 3 days to resume.

The Overall Technicals for Gold

Gold's recovery from 1124.3 continued last week, and reached 1157.9. A further rise will likely come initially this week. But, since the recovery from 1124.3 is looking corrective in nature, I expect the upside to be limited by 1170.7 resistance level, and bring one more dip to continue the whole consolidation. A move below 1135.2, the minor support, will turn the intra-day bias back to the Southside for 61.8% retracement if 1084.8 to 1170.7 at 1117.6 and below

The Big Picture: the lack of impulsive structure in the rise from 1044.5 suggests that it is the 2nd leg of the whole consolidation pattern that started at 1227.5. Right now, there is no confirmation that rise from 1044.5 is completed, and another rise might come on. However, even in that case, strong resistance should be seen above 100% projection of 1044.5 to 1145.8 from 1084.8 at 1186 to complete the rise and bring the another fall to retest 1044.5 before consolidation from 1227.5 completes.

Meanwhile, a break of 1084.8, a Key support level, will indicate that the 3rd falling leg has likely started, and will then target a new low below 1044 before completing the consolidations from 1227.5.

The Long Term Picture: the rise from 681 is treated as resumption of the long term up-trend from 1999 low of 253 after a interim consolidation from 1033.9 has completed in form of an expanding triangle. The next long term target is 100% projection of 253 to 1033.9 from 681 at 1462 level.

So, I will hold the Bullish POV as long as 931.3 structural support holds.

The Overall Technicals on Crude Oil

Crude Oil's rebound from 80.53 resumed towards the end of the session on Friday after a initial setback and closed strong at 85.12.

A further rise is now expected to retest the 87.09 high, a sustained break there is needed to confirm the rally’s resumption. Otherwise, another fall will happen before the consolidation from 87.09 concludes.

On the Downside: a break below 81.73, the minor support, will turn the intra-day bias back to the Southside for a 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8% retracement at 76.22.

The Big Picture: the medium term rise from 33.20 is viewed as a correction to the overall correction that started in Y 2008 at 147.27. My preferred POV is that the rise from 33.2 is in form of a 3 wave structure (73.23, 65.05) and should be near to completion.

Strong resistance is expected around 90 a Key level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring a reversal.

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Then, even though another rally cannot be ruled out in here, the upside potential will likely be limited.

On the Downside: the break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed.

Should that be the case, I will turn Bearish on Crude Oil and expect the down-trend to target a new low below 33.2.

The Long Term Picture: there is no change in the POV that the fall from 147.27 is part of the correction to the 5 wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong, and can continue, there is no solid evidence that suggest fall 147.27 is completed and I am preferring the case that rebound from 33.2 is a corrective rise only.

Again, having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27. Stay tuned…Paul A. Ebeling, Jnr. www.livetradingnews.com

Some Stocks to Watch this Week   

American Express Company (AXP), Caterpillar, Inc. (CAT), The Home Depot Inc. (HD), KB Homes (KBH), and Xerox Corp. (XRX).

Some heavyweights on the earnings front this week

Caterpillar and 3M Co. highlight this week along with US Steel Corp (X); chipmaker Texas Instruments (TXN); chemical maker DuPont (DD) and credit and debit payments network Visa Inc (V).

Energy heavyweights reporting include: Exxon Mobil Corp (XOM) and Chevron Corp (CVX) are also on

For a full earnings list see: http://biz.yahoo.com/research/earncal/20100426.html

American Express Company (AXP) Up-date 8 Last Look: March 17, 2010

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April 25, 2010

Paul A. Ebeling, Jnr. Analyst

Today let’s look at American Express Company (AXP), one of the World’s largest travel agencies, from a Technical POV. The overall indications, after Friday’s (April 23) market action, are Neutral: in the near Bullish, term, mid-term Bullish, and long term Neutral. The recent Candlestick Analysis is: Very Bearish.

**Chart by: http://www.stockta.com

Latest News and Opinion: Stocks: 8 weeks up and counting

http://money.cnn.com/2010/04/25/markets/sunday_lookahead/index.htm?source=yahoo_quote

Friday’s Market Action Close 48.05 +1.28 Volume 17,471,000/shrs

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There is a Bearish DOJI Star on April 23, and two Gaps open up between March 5 at 39.00/47.66, the near term resistance is NIL, support at 47.66, and the 50 day (EMA) exponential moving average is 42.43.

This is American Express Company (AXP): The Company is one of the world's largest travel agencies, but it is better known for its charge cards and revolving credit cards. And yes, the company still issues traveler's checks and publishes such magazines as Food & Wine and Travel & Leisure through its American Express Publishing unit. Its travel agency operations have more than 2,200 locations worldwide and its Travelers Cheque Group is the world's largest issuer of traveler's checks (it also issues gift cards). But the company's charge and credit cards are its bread and butter; American Express has more than 92 million cards in circulation worldwide.

Competitive Landscape

Demand is driven by consumer income and demographics. The profitability of individual companies depends on the correct assessment of repayment likelihood and effective collections activities. Large companies have an advantage in using computers to serve large portfolios of mortgage and credit card loans, and also have access to cheaper sources of funds, but small companies can compete effectively in the cash lending or sales finance segments, where personal contact is more important.

Consumer Finance Industry Forecast

The output of US credit cards and finance companies, which includes consumer finance, is forecast to grow at an annual compounded rate of 1% between 2008 and 2013. Data Sourced: December 2009

American Express Company (HQ)

Chairman, Chief Exec. Officer: Kenneth I. Chenault

World Financial Center200 Vesey StreetNew York, NY 10285United States -Phone: 212-640-2000Fax: 212-619-9230http://www.americanexpress.com

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Caterpillar, Inc. (CAT) Up-date 21 Last Look: April 13, 2010

April 25, 2010

Paul A. Ebeling, Jnr. Analyst

Let’s have a look at Caterpillar, Inc. (CAT), the World's #1 maker of earthmoving machinery and a leading supplier of agri. equipment, from a Technical POV. The overall indications, after Friday’s (April 23) market action, are Bullish: in the near term Bullish, mid-term Bullish, and long term Very Bullish. The recent Candle Stick analysis is: Bearish

**Chart by: http://www.stockta.com

Latest News and Opinion: Wall St Week Ahead: Profits still hold Key

http://www.reuters.com/article/idAFN2519760220100425?rpc=44

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Friday’s Market Action Close 68.78 + 1.27 Volume 9,044,600/shrs

There a DOJI on April 21 and four Gaps open up between February 9 and April 12, 2010 at 52.15/65.76, the near term resistance 69.52, support at 67.58, and the 50 day (EMA) exponential moving average is 62.59.

This is Caterpillar, Inc (CAT): Caterpillar is the world's #1 maker of earthmoving machinery and a leading supplier of agricultural equipment. It makes construction, mining, and logging machinery; diesel and natural gas engines; industrial gas turbines; and electrical power-generation systems. Caterpillar has plants worldwide and sells its equipment globally via a network of 3,600 locations in 180 countries, offering rental services through more than 1,600 outlets worldwide, and it provides financing and insurance for its dealers and customers. Cat Power Ventures invests in power projects that use Caterpillar power generation equipment, and Caterpillar Logistics Services offers supply chain services

Industries Where Caterpillar Competes

Construction, Mining & Other Heavy Equipment ManufacturingAgricultural Machinery ManufacturingFinancial ServicesInsuranceTransportation Services

Caterpillar, Inc. (HQ)

Chairman and CEO James W. (Jim) Owens

100 NE Adams St. Peoria, IL 61629United States Phone: 309-675-1000Fax: 309-675-1182

http://www.cat.com

Caterpillar Subsidiaries

Caterpillar Logistics Services, Inc.Mitsubishi Caterpillar Forklift America Inc.Progress Rail Services Corporation

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The Home Depot, Inc (HD) Up-date 10 Last Look: February 24, 2010

April 25, 2010

Paul A. Ebeling, Jnr. Analyst

Today let’s look at The Home Depot Inc. (HD), the World’s Biggest Home Fixer Upper Store, from a Technical POV. The overall indications, after Friday’s (April 23) market action, are Bullish: in the near term Bullish, mid-term Very Bullish, and long term Very Bullish. Recent Candle Stick Analysis is: Neutral

**Chart by: http://www.stockta.com

Latest News and Opinion:   Spring Boosts Home Depot, Lowe's

http://online.wsj.com/article/SB10001424052748703441404575206021437001794.html?ru=yahoo&mod=yahoo_hs

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Friday’s Market Action Close 36.39 + .67 Volume 21,336,800/shrs

There are two Gap open up between February 8th and 17th at 28.07/29.75, the near term resistance is NIL, support at 35.64, and the 50 day (EMA) exponential moving average is 32.60.

This is The Home Depot, Inc. (HD): The Company operates as a home improvement retailer primarily in the United States, Canada, and Mexico. The Home Depot stores offer building materials, home improvement supplies and lawn and garden products that are sold to do-it-yourself customers, do-it-for-me customers, home improvement contractors, trades people and building maintenance professionals. The company also operates EXPO Design Center stores that provide products and services primarily related to design and renovation projects. As of January 26, 2009, it operated 2,274 retail stores in 50 states in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico, and China. The company was founded in 1978 and is based in Atlanta, Georgia.

Competitive Landscape

The industry is driven mainly by residential real estate construction and renovation. Large chains have expanded rapidly in recent years by focusing on the home improvement market, with contractor sales as a sideline. Smaller companies, often family-owned lumberyards, can compete effectively by catering to contractors (for whom price is less important than other services), through a wider range of specialty products and services, and by serving areas unattractive to the big-box stores because of limited customer concentration.

Building Material Supply Industry Forecast

The value of US private and public construction of buildings, which is a driver for building material supplies, is forecast to grow at an annual compounded rate of 5% between 2008 and 2013. Data Sourced: December 2008

The Home Depot, Inc. (HQ)

Exec. Chairman and Chief Exec. Officer: Francis S. Blake 

2455 Paces Ferry Road NWAtlanta, GA 30339United States Phone: 770-433-8211Fax: 770-431-2685

http://www.homedepot.com

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KB Homes (KBH) Up-date 2 Last Look: March 22, 2010

April 25, 2010

Paul A. Ebeling, Jnr. Analyst

Today, let’s look at KB Homes (KBH), the Built to Order US home builder, from a Technical POV. The overall indications, after Friday’s (April 23) market action, are Bullish: in the near term Bullish, mid-term Very Bullish, , and long term Very Bullish. The recent Candle Stick analysis: Neutral

**Chart by: http://www.stockta.com

Latest News and Opinion: Tax Credit Helps Lift New-Home Sales

http://online.wsj.com/article/SB10001424052748704388304575202350084392506.html?ru=yahoo&mod=yahoo_hs

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Friday’s Market Action Close 19.33 +.46 Volume 7,007,400/shrs

There are no Gaps open up or down on the Chart, the near term resistance is NIL, support at 18.35, and the 50 day (EMA) exponential moving average is 16.87.

This is KB Homes (KBH): The company markets homes under its Built to Order brand, allowing buyers to customize their homes through KB Home Studio. The program lets customers choose from thousands of options to be included in the construction of their new homes. The company also has branding deals with Martha Stewart and the Walt Disney Company. KB Home offers financing, mortgage assistance, and home insurance through Bank of America.

Competitive Landscape

Demand depends heavily on the health of the US economy, including corporate profits and local government budgets. The profitability of individual companies depends on accurate project bids and efficient operations. Large companies have advantages in their ability to engage in multiple projects simultaneously and in many types of construction. Small companies can compete effectively by specializing, working in a limited geography, or serving as subcontractors on larger projects. Average annual revenue per industry worker is US$290,000. Data sourced: December 2009.

KB Home (HQ)

Jeffrey Mezger, Chief Exec. Officer, and President

10990 Wilshire BoulevardLos Angeles, CA 90024United StatesPhone: 310-231-4000Fax: 310-231-4222

http://www.kbhome.com

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Xerox Corp. (XRX) Up-date 2 Last Look: December 18, 2009

April 25, 2010

Paul A. Ebeling, Jnr. Analyst

Today let’s look at Xerox Corp. (XRX), the computer company best known for Black, White and Color copies, from a Technical POV. The overall indications, after Friday’s (April 23) market action, are Neutral: in the near term Neutral, mid-term Bullish, and long term Bullish. The recent Candle Stick analysis is: Very Bearish

**Chart by: http://www.stockta.com

Latest News and Opinion: Xerox Swings to Loss, but Sales Soar 33% on Services-Unit Gains

http://online.wsj.com/article/SB10001424052748703709804575201762366378780.html?ru=yahoo&mod=yahoo_hs

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Friday’s Market Action Close 11.32 +.87 Volume 79,286,800/shrs

There is a DOJI on April 23, one Gap open up on April 23 at 10.57/10.78, the near term resistance is NIL support at 10.93, and the 50 day (EMA) exponential moving average is 9.92.

This is Xerox Corp. (XRX): The Company is best known for its color and black-and-white copiers, but it also makes printers, scanners, and fax machines. The company sells document management software and copier supplies, offers such services as consulting and document outsourcing, and holds a stake in a joint venture with Fuji Photo Film called Fuji Xerox. Xerox designs its products for businesses in the financial services, graphic arts, health care, government, and industrial sectors. Customers include FedEx Office and Southern Company. The company's subsidiaries include the Palo Alto Research Center (PARC) and marketing software provider XMPie.Competitive Landscape

Demand is tied to consumer and business income. The profitability of individual computer companies depends on purchasing and production efficiencies, and on technological expertise. Large companies have economies of scale in purchasing and production. Small companies can compete successfully by specializing in certain products or by developing superior technology. The industry is highly automated: annual revenue per employee is about US$400,000.

Computer Manufacture Industry Forecast

The output of US computer manufacturing is forecast to grow at an annual compounded rate of 4% between 2008 and 2013. Data Sourced: December 2008

Xerox Corp. (HQ)

Anne M. Mulcahy, Exec. Chairman, Chief Exec. Officer

45 Glover AvenuePO Box 4505Norwalk, CT 06856-4505United States Phone: 203-968-3000Fax: 203-968-3218

http://www.xerox.com

Xerox Subsidiaries Fuji Xerox Co., Ltd.Global Imaging Systems, Inc.Xerox Canada Inc.

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE OR IN OUR NEWSLETTERS. Red Roadmaster is not registered as a securities broker-dealer or an investment advisor either within the US Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. The information contained on our website or in any of our newsletters should be viewed as commercial advertisement and is not intended to be investment advice. Any information found on our website, or in any of our newsletters is not provided to any particular individual with a view toward their individual circumstances. The

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