Altria Group Inc. (NYSE: MO) leads off the Merrill Lynch list. With the Marlboro brand still dominating world markets, Altria’s stock is expected to grow earnings and its dividend. The Merrill Lynch price target is $42. The Thomson/First Call estimate is $36. Altria pays shareholders a strong 4.90% dividend.

E. I. du Pont de Nemours & Co. (NYSE: DD), better known as DuPont, has been one of the dogs of the Dow this year. With an improving domestic and global economy helping earnings, a two-year chart breakout is a very positive sign. The Merrill Lynch target is $68, which would represent a 30% gain. The Wall St. consensus is $55. The stock pays a solid 3.40% dividend.

Macy’s Inc. (NYSE: M) is a leading retailer that makes the grade. It is also benefitting from an improving economy and a consumer that may be back on track, and the stock might be poised to break through 2006-2007 highs. Merrill Lynch has a price objective of $55. The consensus estimate is $46.50. Shareholders are paid a 1.80% dividend.

Merck & Co. Inc. (NYSE: MRK) is another of the dogs of the Dow to make the list. The drug giant announced today a worldwide collaboration on a diabetes drug with rival Pfizer Inc. (NYSE: PFE). The Merrill Lynch price objective on Merck is a move back to 2007 highs at $62. The consensus is $51. Merck pays investors a 3.60% dividend.

Microsoft Corp. (NASDAQ: MSFT) is another mega-cap stock to hit the Merrill Lynch radar. Like most large tech stocks, Microsoft has underperformed the overall market in the past year. Merrill Lynch’s price objective is $37.50, which would represent a breakout from a large 14-year base. The consensus estimate for the stock is $32.20. Shareholders receive a 3.90% dividend.

Monsanto Co. (NYSE: MON) rounds out the Merrill Lynch top names to buy. The company benefits from huge demand for agricultural products, and the stock may be ready for a price breakout back to 2008 levels. Merrill Lynch’s target is $125. The consensus is close at $120. Investors are paid a 1.40% dividend.

Combining solid technical charts with fundamentally strong business models is a great way for investors to hedge their downside risk. Each of the Merrill Lynch stocks is large cap company with a proven track record of success. Companies that will continue to survive even if the market hits a temporary wall.

One thing which has to be considered here is that if you go back to early 2012, Apple shares rose from $400 to $500 in almost record time. Its stock closed out 2011 at $401.44 on a dividend-adjusted price and shares first hit $500 on February 13, 2012. Shares then went from $500 to $600 in another rapid measure as the stock hit $600.00 for the first time on March 15, 2012. The stock then took until September 18, 2012 to hit $700 for the first time and that peak-a-boo above $700 was the top that only lasted a few days.

With the stock currently at $504, things might not seem so bad. We have brought up one statistic all the way down that should be a stark reminder for investors about falling in love with a company and maintaining that love for too long. Apple’s market cap is now about $475 billion since the stock has fallen so much. For Apple to go back to above $700 it will be a rally of about 39%. That translates to more than $185 billion in theoretical investor inflows into Apple alone.

If you look at the two-year Apple stock chart from stockcharts.com you will see that $500 to $510 has tried to be hard support for about 3 months now. If this level does not hold, there is really nothing but what technicians would refer to as “dead air” on the chart down to $425 to $450.

What could be a saving grace? A very positive earnings report next week that blows the doors off of estimates… Stay tuned.

For Thursday’s chart analysis, Phil Erlanger said:

Wednesday saw SPY trading pivot to support. We noted, “The range from resistance to support is VERY wide given yesterday’s (Wednesday’s) puke. Pivot will be a challenge today. SPY could be down for a fifth day in row which is very oversold on a number of days basis.” SPY indeed did trade down for a fifth day.   This morning SPY hit resistance at $143.96 and has failed. Watch for a retest or a break of pivot at $143.45. The market remain fragile despite the positive open.

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

SEPTEMBER 27, 2012

The Silver Institute has the demand in silver off the map with holdings at or near investor record levels. The report said that investors have purchased more than 32 million ounces of silver through silver-backed exchange-traded products so far this year, and now the total ETF-holdings total more than 608 million ounces with a value of $20.5 billion through September 15. The 20% return in silver has also helped, but the demand growth has fueled this gain also.

The Silver Institute said that this is also fueled by “a desire by investors to diversify their portfolios with hard assets, the diminished value of key currencies and continued global economic uncertainty.”

With the Silver Wheaton versus SLV ratio at almost 1.2 (1.197 now), we took a look a several other extremes on the Ycharts chart below:

• 1.29 in March 2011
• 1.29 in Dec 2010
• 1.37 earlier in December 2010

Another strong situation is that Hecla Mining Company (NYSE: HL) has even outperformed Silver Wheaton in the last month with gains of 35% versus about 23%. Still, Hecla remains a turnaround situation after mine issues pounded the stock earlier this year.

The price-ratio of Silver Wheat to the Silver ETF is getting to well above-normal levels. That being said, you can see that the ratio has reached even more extreme measures.

JON C. OGG

For Thursday’s chart analysis, Phil Erlanger said, “Wednesday we are above resistance at $144.33 but were close to breaking back under it. He noted, ‘If we hold, then we would move to a long bias for today. If we fail, then get aggressive on the short side below $144.33 and use trigger indicators to lock in profits.’ The SPY closed at $144.39. Today we have just moved above support on SPY at $144.28. Watch to see if we hold support. My prediction is range bound until the FOMC decision then REALLY pay attention to the value lines if we get some volatility. Remember to use a break above resistance to get more aggressive long and a break of support to get more aggressive on the short side.”

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

If you did not watch our prior video, here is the link for your review.

September 13, 2012

The S&P 500 Index is being led higher by big gains of 2% or more in the large S&P components of J.P. Morgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC), and General Electric Co. (NYSE: GE) after Mario Draghi unveiled his bond buying plans.

For Thursday’s S&P 500 SPDR chart analysis, Phil Erlanger said:

Wednesday we were trading pivot to resistance when we penned. It was noted, “The test is to move above pivot at $140.87 and hold there. Also, watch to retake the 5 minute high of $141.06. Get more aggressive on the short side if SPY breaks pivot.” The short side worked for a move down to $140.65. Remember to use trigger indicators to cover shorts. Today is a gap open well above resistance. Watch to see if the 5 minute high holds at $142.31. We would use the 5 minute low to go “aggressively” short at $141.92.

If you did not watch our video from August, here is the link for your review.

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information you can sign up here.

SEPTEMBER 6, 2012

Erlanger Value Lines are designed to identify key levels for the intraday trader or for anyone trying to establish a new position during trading hours. The Value Lines fall into three categories: Support and Resistance, Extreme values and Range values. From a practical point of view, the Value Lines can act as targets and triggers for short-term trades.

Some think it is uncanny how these levels stop or turn back short-term price swings. We do not. Why? Because both high frequency traders and program trades have built these levels into their models that cause them to gravitate to resistance, pivot or support along with range values like the 5 and 60 minute ranges. We have compiled here the daily chart, the daily analysis for traders to use, and then we have followed it with a general guideline after the daily commentary along with a sample chart.

Thursday’s trading established the support line (green) as the ceiling for the day. It was tested early but failed to break through highlighting a negative day.

Today, the opening has stayed within the resistance (141.29) and coming close to the support (140.25). Pay close attention to see if we can cross above the pink pivot line (140.86) and take a run at resistance levels to close the week out strong.

If you did not watch our video, here is the link for your review.

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

General Notes:

If price moves above the red Resistance value line, then the intraday bias turns positive:

A positive bias reflects times when only long trades are considered.

If price moves below the green Support value line, then the intraday bias turns negative:

A negative bias reflects times when only short trades are considered.

If price remains within the green Support and red Resistance value lines, then the bias is neutral. The pivot line can be used to establish an intra Value Lines bias. Pivot to Support is negative and Pivot to Resistance is positive.

If price remains within the first hour high and low value lines, then the bias can also be viewed as neutral. This is especially true if the first hour range is inside the range set by the support and resistance value lines:

A neutral bias reflects times when both long and short trades may be considered or (depending on the traders style) a time for no trading. All Erlanger Value Lines can be used as short-term target levels. This is especially true if a few are clustered together.

AUGUST 24, 2012

Erlanger Value Lines are designed to identify key levels for the intraday trader or for anyone trying to establish a new position during trading hours. The Value Lines fall into three categories: Support and Resistance, Extreme values and Range values. From a practical point of view, the Value Lines can act as targets and triggers for short-term trades.

Some think it is uncanny how these levels stop or turn back short-term price swings. We do not. Why? Because both high frequency traders and program trades have built these levels into their models that cause them to gravitate to resistance, pivot or support along with range values like the 5 and 60 minute ranges. We have compiled here the daily chart, the daily analysis for traders to use, and then we have followed it with a general guideline after the daily commentary along with a sample chart.

For Thursday’s S&P 500 SPDR chart analysis, Phil Erlanger said, “Wednesday’s action was contained between the resistance and support lines.  We had a good hard test of the 141.11 support line (green) which resulted with a bounce from this level to finish off the day. Today we start out with a strong testing of the pivot line again at 141.24 and breaking below creating a negative day.  This level will act as a ceiling until proven wrong which will bring opportunity to the long side.”  If you did not watch our video, here is the link for your review.

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

AUGUST 23, 2012

Webinar Registration: Do intraday market swings caused by high frequency and program traders drive you crazy? What if you could know how they are going to trade each and every day? Now you can if you follow the Erlanger Value Lines as they were created on the floor of the NYSE. High Frequency traders came from the floor. Watch our free webinar this Thursday at 4:30 p.m. EDT and you will never trade the same way again. Register here.

For Tuesday’s S&P 500 SPDR chart analysis, Phil Erlanger said, “Monday we were trading pivot to resistance when we gave our update. Look to use yesterday’s 2 hour high to get long above $140.89 or go short a break of pivot at $140.51. This worked out well as SPY traded to a low of $140.04. We recommended to use triggers to manage the trade. Our trigger kicked us out of the short at $140.23 so $0.27 were made. Today we traded above resistance but then failed at it. So now we are trading resistance to pivot. Use a break of pivot at $140.55 to go short or a move back above resistance to go long at $141.06.”  

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

General Notes:

• If price moves above the red Resistance value line, then the intraday bias turns positive:
• A positive bias reflects times when only long trades are considered.
• If price moves below the green Support value line, then the intraday bias turns negative:
• A negative bias reflects times when only short trades are considered.
• If price remains within the green Support and red Resistance value lines, then the bias is neutral. The pivot line can be used to establish an intra Value Lines bias. Pivot to Support is negative and Pivot to Resistance is positive.
• If price remains within the first hour high and low value lines, then the bias can also be viewed as neutral. This is especially true if the first hour range is inside the range set by the support and resistance value lines:
• A neutral bias reflects times when both long and short trades may be considered or (depending on the traders style) a time for no trading. All Erlanger Value Lines can be used as short-term target levels. This is especially true if a few are clustered together.

August 14, 2012

Erlanger Value Lines are designed to identify key levels for the intraday trader or for anyone trying to establish a new position during trading hours. The Value Lines fall into three categories: Support and Resistance, Extreme values and Range values. From a practical point of view, the Value Lines can act as targets and triggers for short-term trades.

Some think it is uncanny how these levels stop or turn back short-term price swings. We do not. Why? Because both high frequency traders and program trades have built these levels into their models that cause them to gravitate to resistance, pivot or support along with range values like the 5 and 60 minute ranges. We have compiled here the daily chart, the daily analysis for traders to use, and then we have followed it with a general guideline after the daily commentary along with a sample chart.

For Friday’s S&P 500 SPDR chart analysis, Phil Erlanger said, “Thursdsay we  were trading pivot to support on the SPY.  We noted,’Watch for a move above $140.42 to add new buys. One could try to short a break of $139.93 although it seems this may be a tough trading and if it does break timing tools should be used to lock in gains before they evaporate.’ We closed at the end of the day at $140.62. Today we are trading below support. Look to go long above $140.21 or short a break of the 5 minute low $139.31.”  

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

General Notes:

• If price moves above the red Resistance value line, then the intraday bias turns positive:
• A positive bias reflects times when only long trades are considered.
• If price moves below the green Support value line, then the intraday bias turns negative:
• A negative bias reflects times when only short trades are considered.
• If price remains within the green Support and red Resistance value lines, then the bias is neutral. The pivot line can be used to establish an intra Value Lines bias. Pivot to Support is negative and Pivot to Resistance is positive.
• If price remains within the first hour high and low value lines, then the bias can also be viewed as neutral. This is especially true if the first hour range is inside the range set by the support and resistance value lines:
• A neutral bias reflects times when both long and short trades may be considered or (depending on the traders style) a time for no trading. All Erlanger Value Lines can be used as short-term target levels. This is especially true if a few are clustered together.

August 10, 2012