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world stock market, us stock market
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11/24/09 Investment House Alerts
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IH Alert Subscribers:
Thanksgiving week schedule:
Monday and Tuesday: Usual reports focusing on technical summary
Wednesday: Continuing Play tables, market data summary
Thursday: Market closed
Friday: Market open half session. Continuing Play tables, market data summary
MARKET ALERTS:
Targets hit alerts: None issued
Buy alerts: POWR
Trailing stops: None issued
Stop alerts: None issued
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VIDEO TECHNICAL SUMMARY. Detailed chart-based analysis of the key index and leadership charts are covered.
TO VIEW THE VIDEO TECHNICAL SUMMARY ONLY CLICK THE FOLLOWING LINK:
http://investmenthouse1.com/ihmedia/TechnicalSummary.wmv
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SUMMARY:
- Familiar pattern: after an up Monday the bid fades.
- GDP revision in line, falls to 2.8%.
- Consumer confidence bounces back . . . but remains terribly low.
- Bond sales still attracting plenty of buyers. Still some worry in the world
- Fed lowers its unemployment outlooks, discusses possible speculation bubble
- Market typically up this week but not expecting any breakout from the range
Market wanders laterally after a stronger Monday.
The SPYs were bouncing up and down, but trading above the Monday close in the early morning hours. The dollar was slightly down (1.4977 Euros versus 1.4965 Monday). As the market moved toward the open, there was a slight giveback in the futures, but the dollar helped buoy them into the open nonetheless.
The GDP had its first revision (2.8% versus 3.5% originally reported). Expectations were 2.8%, so there was no surprise there. The only surprise would have been if it was lower, and it may be revised lower given the additional data coming out. Consumer consumption fell (2.9% versus 3.4%). Business investment also fell (-4.1% versus -2.5% originally reported), and that is a bit worrisome but somewhat expected. The concern will be how much lower they go as the next revision comes out and the economic data keeps coming in. Some experts have said that the entire gain could be wiped away if the revisions keep trending in this path, but that remains to be seen. That was not hopeful, but since it was in line, it did bounce the futures back up nicely. There were also earnings out. DSW, AEO, and DLTR in retail all beat the street and traded higher in the premarket.
The SP500 shows the pattern for the day. The futures were up, but the market sold off rather aggressively right out of the gates. The indices were down 1% or more, so there was a serious pullback early on. At 10 o'clock Eastern time, there was a reading on consumer confidence (49.5 versus 47.5 expected; revised to 48.7 from 47.9 the prior month). It was better on almost all fronts, and the market rallied back up to its morning peaks (they were not great because it closed without making it back up to the high). The peaks of prior session should be watched because they can act as resistance. It did not get close to that before turning over and fading back down.
There was good and not-so-good news. Consumer confidence at 49.5 is still very weak and at recession levels. Consumers remain extremely bearish about their future, and you can understand why with job rates so high and with benefits going to large corporations versus small businesses. The market was able to fight its way back through the session, and it turned positive heading into the last hour. What brought that about was the 5 year bond auction with a 2.81 bid to cover ratio (the highest ratio of the year for this issue). There was a 2 year auction on Monday that produced one of the lowest yields ever for the 2 year at 0.802%. That is very low, but it shows a lot of demand for the US Treasuries even with all of our debt issues (investors are also putting their money in gold, of course). That shows worry about what will happen in the future of the world economies. There is a lot of concern about 2010 because there are a few more predictions of a double dip recession. The good news in Treasuries rallied the market and turned SP500 modestly positive on the session.
The FOMC minutes came out at 3 o'clock Eastern time. The Fed lowered its unemployment range (9.3% to 9.7% versus 9.5 to 9.8%) for 2010. That was a positive, but they also noted worry over a potential speculative bubble being caused due to the rates being kept down for such an extended period. They assigned a low probability to that, and said they would remain alert" to any signs of a speculative bubble. You can almost argue that there is a speculative bubble in the financial markets right now since the money being printed is not being loaned out. The irony is that the Fed underscored the facts in its own minutes that show it is not being used. Consumer loans were down in October, falling almost 1% from September. Even though the economy is supposedly improving, consumer loans continue to decline. The money is not being utilized, and the stock market rallies around the world are being fed by the extra liquidity that is not being lent out. The market is smarter than a lot of the Fed and sold off into negative territory after that news. It managed a late bounce, but that closed all of the indices negative for the day. NASDAQ -0.31, SOX +0.31%, SP600 -0.5%, large cap techs -0.4%, and the Dow and SP500 were flat.
Gold finished flat on the day ($1,169.70, +5.00). It was not one of its more spectacular days, but the angle of attack has accelerated over the month. There is a lot of ongoing buying in gold. The dollar was a bit stronger while oil closed lower ($76.15, -1.41). Oil is falling at a disparate rate with the dollar, and that is something to keep an eye on moving forward.
TECHNICAL
INTERNALS
Volume was down 3% on SP500 to 951M shares. It was not able to crack $1B the past two sessions. That is not unusual for a holiday week, so there is no reason to be concerned about it. There is a lateral move with the low volume, so there is no issue in selling. In breadth, decliners led advancers by a margin of 1.2:1. It was modestly lower, but that is expected on this type of session.
The NASDAQ's volume gained a sliver to 1.8B shares. It is a modest gain and quite low as with the NYSE. There was low volume on the lateral move, so there are not too many issues there. NASDAQ s breadth was lagging at -1.45:1.
CHARTS
One week ago, there was a big Monday. It was a nice up day, and the rest of the week moved back down with a bigger selling on Thursday (due to the semiconductor downgrade and other issues). This Monday there was another move back up, and it was waffling on Tuesday in the same pattern. There is no Thursday of trade this week, so it will be curious to see if things continue to wander sideways. Notice the low volume as it moves sideways. It continues at the top of the range and continues along resistance lines. It is moving laterally along the 2007 downtrend and the 2004 resistance level, and that is to be expected after such a strong move higher running into key resistance levels. It is also holding the top of the range, so it is showing some strength.
NASDAQ shows the same action. There is a gap lower, a test down to the 18 day EMA, but then a rebound to hold in a lateral range on low volume. It is up at resistance as well C these are levels from 2008, and it is wandering laterally. The interesting thing is that SP500 is doing this as the dollar continues trying to show a bit of strength at this level. It tried to pull back on Monday but held and showed some strength on Tuesday. With its relationship to the dollar, SP500 is working laterally and waiting for the dollar to decide what it will do.
Although the SP600 is not tied as much to the dollar, it is pulling the same action as SP500. They are moving laterally but at much lower levels. They are still struggling and trying to get through their resistance. They have not cleared any resistance at key levels. They are economic harbingers, so one should watch how they play out over the next month or so. January could be critical because it is usually a small cap month. If they do not perform to start the year (and indeed start to break down), that plays into the double dip scenario.
The semiconductors are still struggling after the gap down last week. They bounced back on Monday but are still below resistance. They are wandering laterally with the rest of the market but at a lower level; they are not strong. They are a growth area: if the economy takes off, everything seems to have a chip in it. The semiconductors are well off their highs, the small caps are well off their highs and moving laterally, while the large caps are at their highs moving laterally and are dependent on what the dollar will do.
LEADERSHIP
The steel stocks look decent. RS is showing a nice spike in volume, and STLD has a nice pattern going. STLD has shown good volume on the upside it can make a break higher C there is a double bottom with handle, and that is not a bad picture. Copper is holding its highs and moving laterally; it looks like SP500. Telecom is also showing some leadership. VZ has taken off to the upside recently, while others such as AMX have the SP500-look to them. They are moving laterally but are still in that uptrend. They are looking good but are not where you want to buy in.
In energy, SLB is moving laterally and trying to come up. That will be a common theme: moving laterally, holding gains, holding a support level, but not able to take off to the upside. In retail, DSW announced its earnings and gapped higher. BBY has had a nice breakout rally, and it had a pullback today on higher volume. Retail remains in good shape. I argue that the market is rallying on liquidity, but with retail stocks moving up, these could be actual gains. Given that there was so much fear and worry last year at this time, however, there will be upside in retail by comparison. When you combine that with pent-up demand, you see retail popping higher.
AAPL also has the SP500 look to it. There is plenty of leadership, but most of it is not in a position to buy. You have to look around for some smaller-priced stocks where the money is filtering down, such as AEZ. It has a triangle, a breakout, and a test. That is an interesting pattern, and this is happening a lot in small stocks. We are looking at those on the report of course.
THE MARKET
MARKET SENTIMENT
VIX: 20.47; -0.69
VXN: 21.5; -0.53
VXO: 18.89; -0.73
Put/Call Ratio (CBOE): 0.88; +0.21
Bulls versus Bears:
This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn t have the cash to drive it higher.
Bulls: 44.4%. Finally cracking some from the recent spike (48.3% last week, 49.5% prior). Of course this is just in time for SP500 to break key resistance. Believers may have waned but the liquidity did not. Still well over the 35% level that is the threshold for what is considered a bullish climate. It does not mean things are necessarily bearish; that takes a reading in the 60% range. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level. Dramatic rise from 21.3% in November 2008, the bottom on this leg. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40 s is a decline of significance. A move to 35% is a bullish indicator.
Bears: 26.7%. Bounced up on the selling in conjunction with the decline in bulls. Up from 24.7% and 22.5% before that. Rebounding from the big drop 31.1% and 35.6%. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.
NASDAQ
Stats: -6.83 points (-0.31%) to close at 2169.18
Volume: 1.807B (+0.89%)
Up Volume: 736.025M (-606.819M)
Down Volume: 1.119B (+651.834M)
A/D and Hi/Lo: Decliners led 1.45 to 1
Previous Session: Advancers led 2.42 to 1
New Highs: 61 (-77)
New Lows: 18 (+2)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -0.59 points (-0.05%) to close at 1105.65
NYSE Volume: 951.135M (-2.94%)
Up Volume: 407.401M (-388.688M)
Down Volume: 522.679M (+352.022M)
A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Advancers led 3.41 to 1
New Highs: 133 (-150)
New Lows: 45 (-4)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Stats: -17.24 points (-0.16%) to close at 10433.71
Volume DJ30: 163M shares Tuesday versus 182M shares Monday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
WEDNESDAY
The day before the Thanksgiving holiday is usually a quiet session but is also frequently upside. The market typically has a general drift higher over the Thanksgiving week, and if there is an upside bias, then that reinforces the upside all the more. One could expect a drift upside, but it may be more like last week: the big move up, then a lateral move and a drift toward the end of the week. The market may just have a lateral move because it will be difficult for the market to make a breakout to a new high and for SP500 to drag the other indices higher. There will be light volume, there have been a lot of gains built in, and investors have been pensive. They are split as to whether the big money managers will ride into end of the year with no issues, or if those that do not have their gains built in will want to push the matter and try to make money in the last month of the year.
There is a lot of data out that might influence the market since there will be light volume, but the bias will remain lateral overall. It will continue upside, and I will look there to see what plays come up. I sometimes want to buy into this week if there are solid patterns and if I think the trend will continue into December. It likely will, given the liquidity, so we will take advantage of a good setup. I do not want to go overboard, and I was looking more at partial positions today.
Support and Resistance
NASDAQ: Closed at 2169.18
Resistance:
2177 is a low from March 2008
2191 is the October 2009 peak
2210 (from September 2008) to 2212 (the July 2009 closing low)
2275 C 2278 from the February 2008 and April 2008 lows
Support:
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low
The 18 day EMA at 2152
2143 is the October 2009 range low
The 50 day EMA at 2115
2099 is the mid-September 2008 closing low
2070 is the September 2008 intraday low
2060 is the August peak
2048 is the early October 2009 closing low
2016 is the early August peak
1984 from late September
1962 is the bottom of the August 2009 range.
1947 is the October gap down point
1897 is the October post gap intraday high.
1880 is the June peak
1862 is the July peak
The 200 day SM A at 1841
S&P 500: Closed at 1105.65
Resistance:
The March/July up trendline at 1105 is right there
1106 is the September 2008 low
1133 from a September 2008 intraday low
1185 from late September 2008
1200 from the July 2008 low
Support:
1101 is the October high
1097 is the 2007 down trendline
The 18 day EMA at 1090
1080 is the September 2009 peak
1078 is the October range low
1070 is the late September 2009 peak
The 50 day EMA at 1068
1044 is the October 2008 intraday high
The August peak at 1040
The early October 2009 closing low at 1025
The early August intraday peak at 1018
The November 2008 peak at 1006 closing 1007.53 intraday
992 is the August 2009 consolidation low
956 is the June intraday peak
944 is the January 2009 high
The 200 day SMA at 940
935 is the January closing high
Dow: Closed at 10,433.71
Resistance:
10,609 from the Mid-September 2008 interim low
10,963 is the July 2008 low
Support:
10,365 is the late September 2008 low
The 18 day EMA at 10,234
10,120 is the October 2009 peak
The 50 day EMA at 9957
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak
9654 is the November 2008 high
9625 is the October 2008 closing high
9620 is the August 2009 peak
9430 is the early October low
9387 is the mid-October peak
9116 is the August low
9088 is the January 2009 peak
8985 is the closing low in the mid-2003 consolidation
8934 is the December closing high
8878 is the June peak
8829 is the late November 2008 peak
The 200 day SMA at 8771
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the Economy section.
Existing Home Sales, October (10:00): 6.10M actual versus 5.70M expected, 5.54M prior (revised from 5.57M)
November 24 - Tuesday
GDP - Second Estimate, Q3 (08:30): 2.8% actual versus 2.8% expected, 3.5% prior
GDP Deflator - Second, Q3 (08:30): 0.5% actual versus 0.8% expected, 0.8% prior
Case Shiller 20 City Home Price Index, September (09:00): -9.36% actual versus -9.10% expected, -11.30% prior (revised from -11.32%)
Consumer Confidence, November (10:00): 49.5 actual versus 47.5 expected, 48.7 prior (revised from 47.7)
FHFA Home Price Index, September (10:00): 0.0% actual versus 0.1% expected, -0.3% prior
FOMC Minutes, 11/04 (14:00)
November 25 - Wednesday
Personal Income, October (08:30): 0.1% expected, 0.0% prior
Personal Spending, October (08:30): 0.5% expected, -0.5% prior
PCE Prices, October (08:30): 0.1% expected, -0.5% prior
PCE Prices - Core, October (08:30): 0.1% expected, 0.1% prior
Initial Claims, 11/21 (08:30): 500K expected, 505K prior
Continuing Claims, 11/14 (08:30): 5565K expected, 5611K prior
Durable Orders, October (08:30): 0.5% expected, 1.0% prior
Durable Orders ex Trans, October (08:30): 0.6% expected, 0.9% prior
Mich Sentiment-Rev, November (09:55): 67.0 expected, 66.0 prior
New Home Sales, October (10:00): 404K expected, 402K prior
Crude Inventories, 11/20 (10:30): -0.887K prior
End part 1 of 3
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world stock market
us stock market
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