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world stock market, us stock market
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2/16/10 Stock Split Report
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Stock Split Report Subscribers:
MARKET ALERTS:
Targets hit alerts: None issued
Buy alerts: FNSR; JOYG; PCLN; PDCO; TEX
Trailing stops: None issued
Stop alerts: BTU; COH; QID; SLAB
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the SSR alert service you can sign up at the following link:
http://www.investmenthouse.com/alertssr.html
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We have DIVIDED the video into component parts: Market Overview, Technical Summary, Economy, and the Next Session. This allows you to choose the segments you are interested in without having to find the spot in a longer video. Click on the link to the portion you wish to view.
MARKET OVERVIEW
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
http://investmenthouse1.com/ihmedia/MarketOverview.wmv
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
http://investmenthouse1.com/ihmedia/TechnicalSummary.wmv
TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:
http://investmenthouse1.com/ihmedia/Economy.wmv
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
http://investmenthouse1.com/ihmedia/NextSession.wmv
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SUMMARY:
- Last week's end of week rebound continues with NASDAQ moving through next resistance.
- Market assuming EU, IMF or someone will bail out Greece. Just don't ask a German about it.
- Japan now holding more US paper than China.
- Market rolling back up in the range. For real or just that relief move before a deeper selloff? The market will let us know.
No news on the Greece bailout is good news, and market rallies.
Last week's end-of-the-week bounce (ostensibly on short covering ahead of the three-day weekend) continued into Tuesday. Futures were up. They gapped higher when they started trading, and the market gapped higher as well. What was the reason? There was good economic data out, but it did not help the futures too much. They were already up well ahead of the New York PMI topping expectations, as well as the US TIC data. That showed a new wrinkle: China is no longer the biggest holder of US paper. That honor now goes to Japan, given that China dumped 35B or so of US Treasuries and currency. That did not affect the futures, however. They held their solid gains even after that news. What seemed to be the driving force Tuesday was that nothing negative came out with respect to the EU's bailout of Greece over the weekend. The Germans are rightfully upset about it, but here was no indication that there would not be a bailout; indeed others were calling for the IMF to step in. With that, the Euro recovered. It has been somewhat beaten up against the dollar lately. It had its best day since November and that helped drive commodities and related "over there" sectors higher, as they all gapped to the upside and rallied throughout the session. That was enough to push NASDAQ up through the 2250 level that is marked roughly by the top of the consolidation in November and December. It gapped higher, tested, and closed over that level on the day. NASDAQ and the SOX had a decent run, particularly the semiconductors. They were the first to start selling off, and it looked like they were the first to start bottoming and delivering a serious upside move. They cleared the September and October peak along with more resistance at 340. The growth side of the market may be trying to lead things back up. Volume was lower on both NYSE and NASDAQ, but it was livable.
OTHER MARKETS
Dollar. The DXY0 plunked back down to a support line. It tested, bounced higher, and looked ready to move just as it did in mid-January, late January, and early February. Instead, it rolled back and made a new closing low. That is significant. It has not made a lower low, but it made a new closing low on this pullback, and we need to watch that moving forward. The Euro had its best single-day gain against the dollar since November of 2009 (1.3770 Euros versus 1.3618 Friday). The dollar was significantly weaker at the close but was not as weak during the session; it tailed off at the end. That helped push stocks higher into the close.
On a day-to-day basis, if you tune into CNBC or Bloomberg, they will say that the dollar is lower and therefore gold and oil is up (or vice versa). They are referring to the Euro and a range. The dollar has roughly been trading from 1.36 - 1.38 Euros. It is bouncing solidly between those levels. Recall that the dollar got down to under 1.36 Euros just a week and a half ago with the news from Greece and the PIIGS, but then it bounced back up over 1.36. It looked like it had a serious breakout, but then it bounced back as it looked like there would be more bailouts in the Euro-zone. The dollar fell back inside of its range. There is no issue with that. It is range trading against the Euro, but looking at the DXY0, it has been trending steadily higher against a basket of other currencies. Many of the significant currencies in the world are in the basket that makes up the DXY0. Even though it had a tough day or has been range trading with respect to the Euro, it is still trending higher against other currencies. When they talk about weaker and higher, you do not want to get the wrong impression. You have to consider that it is in a range with the Euro, and it is trending higher with respect to the other currencies. The dollar was down on Tuesday, but it did not break its trend. Although, it is showing more wear and tear to the downside than it has up to the point in this relief bounce in the dollar. After this long test and the next surge higher, it is showing it has a bit more to it than a normal relief bounce.
http://investmenthouse.com/ihmedia/dxy0.jpeg
Gold. Gold had another strong day. It had a strong week last week and is tearing off big chunks to the upside. XGLD (1,119.40, +25.90). On some of the other exchanges, it was up as much as $30.00. It tried to double bottom in December and January, it broke to a lower low in February, but it has come right back. Notice it reversed that one day off an old support level, undercut it, and then reversed. It has been moving well since. On Tuesday, it broke through this three-point downtrend spanning December to early February. If you are looking at a play on this, you will look for it to rally higher toward the 1150 mark, come back and test, and then take off back to the upside for a run to 1200.
http://investmenthouse.com/ihmedia/xgld.jpeg
Oil. Oil is having another great move. It has been trading in a range and is still in the range, but it made a higher low a week back and has rebounded. When it looked to be running into trouble at the key resistance level at 76, there was a big break higher on Tuesday as the dollar traded lower. People just felt it was time to buy oil. That is a trade that says things will be good enough overseas to keep the demand for oil higher. It looked like they were discounting the fact of good economics this year, given the EU issues and what that might hold for the rest of the world. Oil held at support, rebounded, and is now trying to break through a key range. Overall, it is still moving inside of its range, so you cannot assume it will make a breakout. It made a double bottom over the prior low in December, and that is a more bullish scenario as investors build in hope for the economic future of the world and demanding oil, given that the EU or some combination of the EU, IMF, and others will bail out Greece.
http://investmenthouse.com/ihmedia/xoil.jpeg
Bonds. Bonds rallied. They were down early as stocks moved higher, and you would expect that to be the case. The 10 year was trading higher premarket at 3.72%. Things turned around, and the 10 year rallied pushing the yield down (3.66% versus 3.69% Friday). Again, this is inside its range. The bond has been very much trading inside a range, and that is important to note. It came back down to the bottom of the range and started to bounce when it looked like it should be selling. That tells us that it is still range trading. Other markets are bouncing right now and we need to see what they will do when they get back to their previous highs. This could be oil or gold (though it is a long way off the top of its range) and stock indices as well. They are rebounding and may carry higher and test the prior high. That will be the key whether or not they hold and break through that level, or that is just their final test before they get down and do some serious testing or correcting.
http://investmenthouse.com/ihmedia/tip.jpeg
TECHNICAL
INTERNALS
Breadth. The advance/decline line was very solid on Tuesday at 2.5:1 on NASDAQ and 3.8:1 on the NYSE. There was good breadth, and most sectors were moving higher. That is something we have seen of late. On upside days, big groups of stocks are moving well as far as breadth. Prior to that, in the selling, big groups of stocks were selling off. This could still fit in the category of a relief move, given that many stocks sold lower and the breadth was high on the downside. You would expect that as they cover up and stocks rally, that breadth would be higher across the board. That is exactly what we have seen.
Volume. Volume was down significantly, falling 9:3% to 1.9B on NASDAQ, and dropping 18.5% on the NYSE down to just over 1B shares. This put both of them below average.
CHARTS
NASDAQ. Volume was below average on NASDAQ. NASDAQ gapped higher, rallied through the 2205 level from the November and December peaks, as well as the October peak. It has cleared a lot of the resistance. There is still some it has to go through from the end of February, but that is a minor point and one could expect NASDAQ to rally back up to the 2275 level at the bottom of the January peak. I am not worried about the volume because this is a range-trade move. It broke out, sold off, fell back into this range, and now it has rallied back up. If it were showing great volume on the way up, you would say it might break out to the top. I am not worried about that right now. It should not be a major concern because if it does clear this level in late January, it will move up to the bottom of this range or into the range from January. That will tell most of the story, and by the time it gets there, it will have to sit down and take a nap unless something major changes that drives it through that level. If that happens, you will look for big volume to take it higher through the range. For now, we are looking at this as a range-trade move. We will play it to the upside, and if it gets better, we will take it and run with it. We still have some AAPL, RIMM, and many other stocks to the upside that we can gladly run higher. I will not attach false expectations to it, however, and say we have to have big volume on this move just because we are looking for a rally back up to the prior top of the range. Do not get too hung up with volume when looking at range-bound stocks or range-bound indices.
SOX. The SOX broke through the September and October peak that held them in check last week. They bounced early in the month, tried it again last week, and could not quite get through. They made it with a gap on Tuesday, and they cleared the 50 day EMA at the same time for what that is worth. They cleared the late-January peak as well. The semiconductors, the first to lead to the downside, are leading to the upside. Many of these patterns are not great, but they are not bad. They are bouncing back up from selling in a range. SP500 made a small double bottom. It was in the middle of a chunk of resistance, but notice how it made the first one on the top of the range, and it made the second one in the range and reversed. That is the case with many stock patterns I looked at over the weekend. They have rallied nicely, but they have rallied quite a bit (as has NASDAQ). You do not want to jump into any semiconductor stock, although you may catch a rally back up to the 360 level. As soon as you move in on an extended stock, 8 times out of 10, it seems it turns right back on you.
SP500. SP500 is still lagging. It moved up through the September peak, but that just puts it below October and in the middle of the November and December range. NASDAQ has already popped through this level, and SP500 has some serious overhead from 1105 - 1115 to deal with. I have no doubt it will take them out if NASDAQ continues to move as well. It will follow along. It got some help from financials today, and if they wake up as well, they will be more than happy to follow NASDAQ back up. We would be looking in the 1125 - 1135 range to see how SP500 trades when it gets to that key level (the bottom to the middle of the January high where it rolled back on this test). That will be the significant level for each of the indices to test and see whether they will break through, fail, or try to make a run above it and then reverse and fail. There are many things you look for when that happens, but it looks as if they want to do that with this roll to the upside.
SP600. The small caps also had a great session, and they did move through some of the resistance at the September peak. They are at the October peak now. They have the same shelf of resistance in late January as the other indices, running from 330 - 332. After closing at 329, they are right there. They have had a nice run to this point, and it would not take much to get back to the 335 - 338 level at the bottom of the January peak and the lateral move. That is what we will be watching for as the small caps try to bounce back up. It is important to note that the small caps, similar to the SP500, are not above the next key resistance point yet. Indeed, NASDAQ has to do serious work because it just barely cleared it. One day does not usually break resistance, particularly when there is low volume on it. The small caps are a growth index, and they are not moving up as rapidly as NASDAQ and the SOX, so that is something to keep an eye on as this bounce unfolds.
LEADERSHIP
Leadership was up across the board as the breadth shows, but they were not all great patterns. A lot of them were just gapping back up after some serious selling, but the buyers do not seem to care about that. In addition, many of these patterns showed a double bottom. There are two things to notice from the moves higher. Many are showing the short double bottom. On AKS, there is the initial low, the bounce, and then the lower low that undercut and then reversed. Then there was a tradable move off a rebound. Second, there are many gaps out there, and unfortunately, stocks are already up 3 - 5 days in many cases, and they gapped higher off that. They can now continue the momentum to the upside. It is trading within a range, but it made it much more difficult to move into positions. We have many good plays to look at, and we could not enter them all because there are gaps. There were not good entry points because the gaps were not conducive to giving buys that we were comfortable with.
Energy. APA had a double bottom the last week or so, and then the gap higher. Overall, it is still in a big trading range. HAL had the move up, and it was more of a sharper bottom. I was looking for this to be a bear flag, but it gapped out and over some resistance from late January and late December. It is also still inside of a big consolidation range. It is still in a big trading range itself. CVX had a double bottom and a bounce, and then a gap higher over the 200 day EMA. That took it past some resistance and right with some others, but it is still in good shape on stronger volume. It looks like it wants to run higher. It is trading in a big consolidation range; indeed, it has broken below it. It gapped lower, gapped higher and that is called an island reversal. That will give it some momentum near the 76 level at the bottom of that range.
Semiconductors. NVLS had a triple bottom pattern. It rallied up nicely, and gapped higher on Tuesday. No volume, but it is just riding the momentum higher. Many chips were already up well over a week. You are looking to see how they handle the January and (in some cases) the December lateral consolidation move. XLNX had a double bottom, and it has been rallying well. It gapped higher, but also in this trading range. There are a lot of trading ranges out there stocks that moved up in their range before the Tuesday gap higher.
Financial. Financials finally started to help on SP500. JPM had the double bottom action, it rallied, and then it gapped higher on Tuesday on stronger volume. MACD is trying to show something here as well, but there is a tremendous amount of resistance. GS sold off, but it would not go below 150. It spent three weeks at that level and gapped higher on Tuesday. It has resistance at 160 - 165, but this stock is a bit different than most. It can get ahead of steam and run, but it has big range to move through.
That is not the whole story with respect to leadership, but it is something I saw in many stocks that were sold and beaten up over the prior four to five weeks in the market selling. They just decided to turn and rally back. That does not necessarily mean it is a great move, but it is more in line with the market rebounding inside the range to come up and test. That is the playable bounce, and that is why we have been buying into stocks on the way back up. Not all of the patterns are in bad shape. There are some such as FNSR that look quite decent on its way up. ITW made a double bottom at the 200 day EMA, gapped higher, and looked solid moving to the upside. Stocks such as PDCO surged higher on strong volume after a nice pennant-type pullback or ABCD pattern. There are patterns out there, but this market is in a range where the indices have sold off and are rebounding. Many of the stocks are following their index higher, whether they are in a great pattern or just recovering from the sharp selloff.
THE ECONOMY
Please view the Economy Video at the following link:
http://investmenthouse1.com/ihmedia/Economy.wmv
New York manufacturing trying to point the country back in the right direction.
TIC data shows Japan now the largest holder of US paper.
Greece bailout appears to be a fact if only in idea, but the Germans do not like it.
THE MARKET
MARKET SENTIMENT
VIX: 22.25; -0.48
VXN: 21.92; -1.05
VXO: 21.57; -1.67
Put/Call Ratio (CBOE): 0.88; -0.03
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: 34.1%. Sharp decline in bulls as the impact of the prior 4 week decline finally hit. Of course it hit just as the market bounced this past week. Still, it is now below the 35% level, down from 38.9%, and that is considered bullish for the market overall. After peaking at 53 on this move the bulls continue to run, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Getting close to the 35% level that is the threshold for what is considered a bullish climate. 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: 26.1%. A commensurate rise in bears, jumping from 22.2%. Over 35% is considered bullish for the market, so still a ways off even though bulls are falling to a bullish level. Continuing the rise from 16%ish on the lows this leg where it held for several weeks. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. 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: +30.66 points (+1.4%) to close at 2214.19
Volume: 1.961B (-9.3%)
Up Volume: 1.7B (+368.92M)
Down Volume: 301.219M (-507.285M)
A/D and Hi/Lo: Advancers led 2.52 to 1
Previous Session: Advancers led 1.47 to 1
New Highs: 110 (+47)
New Lows: 8 (-14)
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: +19.36 points (+1.8%) to close at 1094.87
NYSE Volume: 1.081B (-18.6%)
Up Volume: 975.175M (+424.265M)
Down Volume: 99.281M (-659.444M)
A/D and Hi/Lo: Advancers led 3.84 to 1
Previous Session: Advancers led 1.04 to 1
New Highs: 150 (+54)
New Lows: 39 (+1)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Stats: +169.67 points (+1.68%) to close at 10268.81
Volume DJ30: 234M shares Tuesday versus 296M shares Friday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
WEDNESDAY
The market is still news driven. Tuesday was a continuation of the bounce given that there was no negative news out of the EU with the Greek bailout. The market had sold off on that news, and since there was nothing the change the assumed fact that the EU (or IMF or combination thereof) will bail out Greece and the others. The market is building back in what that news took away in late January and early February. Tuesday could be considered a continuation of a relief move because there was no bad news. With the assumption that the bailouts are in place, as long as there is nothing to upset that assumption, this rebound has room to run. With NASDAQ and SOX clearing resistance, they can lead the indices back up to the January peaks. That will be the lick log. A bounce is typically one that would move up to test the prior peak, and if it is going to fail, it will fail there spectacularly with a deeper correction. It is either going to rebound and fail at that point, or it is going to keep going.
We will play the upside bounce as we have been. We will pick up good stocks in the right buy time. That is why we have a lot of upside positions still ready that are moving well. We are going to let them continue to run as the market makes this bounce presumably up to the prior peak to test it. We will see; the market is news-driven, and it can change on a day-to-day basis. If there is nothing to upset apple cart, we could get the test and a more significant pullback afterward. Then there could be a more significant correction that is very playable and can be very profitable. We will have to see how the liquidity plays out. Remember, that is always back there, driving the market. It is fueling any gains because there is plenty to tap into, as long as those holding it (that would be a lot of the financial institutions and corporations) feel it is safe enough to put the money to work in the market. If they feel that way, then the liquidity is there to drive the market higher. There were some bad feelings during this period, now they are rebounding, and this is going to be the test. We will try to play this rally up to that point, take some nice gain off the table, and then see what the market holds when it gets there.
Support and Resistance
NASDAQ: Closed at 2214.19
Resistance:
2218 is the August 2005 peak
2245 from July 2008 through 2260 from late 2005.
2275 - 2278 from the February 2008 and April 2008 lows
2292 is a low from January 2008
2319 from the September 2008 peak
2326.28 is the January high
2324-2370 is a range of resistance from early 2008
2382-2395 from 2008
2412-2415 represents a series of peaks and lows in 2007, 2008
2453 is the August 2008 peak
Support:
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
The 50 day EMA at 2203
2191 is the October 2009 peak
2177 is a low from March 2008
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
2143 is the October 2009 range low
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
The 200 day SMA at 2035
2015 from an early August 2008 peak
S&P 500: Closed at 1094.87
Resistance:
The 50 day EMA at 1097
1101 is the October 2009 high
1106 is the September 2008 low
1114 is the November 2009 peak
1119 is the early December intraday high
1133 from a September 2008 intraday low
1150 is the January 2010 peak
1156 is the Sept 2008 low
1185 from late September 2008
1200 from the July 2008 low
Support:
1084 to 1080 (September 2009 peak)
1078 is the October range low
1070 is the late September 2009 peak
1044 is the October 2008 intraday high
The August peak at 1040
The early October 2009 closing low at 1025
The 200 day SMA 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
Dow: Closed at 10,268.61
Resistance:
The 50 day EMA at 10,267
10,285 is the late December consolidation peak
10,365 is the late September 2008 low
10,496 is the November 2009 high
10,609 from the Mid-September 2008 interim low
10,963 is the July 2008 low
Support:
10,120 is the October 2009 peak
9829 is the September 2008 closing high
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
The 200 day SMA at 9542
9430 is the early October low
9387 is the mid-October peak
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
February 16 - Tuesday
Empire Manufacturing, February (08:30): 24.91 actual versus 18.00 expected, 15.92 prior
Net Long-Term TIC Fl, December (09:00): $63.3B actual versus $50.0B expected, $126.4B prior (revised from $126.8B)
February 17 - Wednesday
Housing Starts, January (08:30): 580K expected, 557K prior
Building Permits, January (08:30): 620K expected, 653K prior
Export Prices ex-ag., January (08:30): 0.5% prior
Import Prices ex-oil, January (08:30): 0.4% prior
Industrial Production, January (09:15): 0.8% expected, 0.6% prior
Capacity Utilization, January (09:15): 72.6% expected, 72.0% prior
Treasury Budget, January (14:00): -$46.0B expected, -$91.9B prior
Minutes of FOMC Meet, 1/28 (14:00)
February 18 - Thursday
Continuing Claims, 02/6 (08:30): 4500K expected, 4538K prior
Initial Claims, 02/13 (08:30): 430K expected, 440K prior
PPI, January (08:30): 0.8% expected, 0.4% prior
Core PPI, January (08:30): 0.1% expected, 0.0% prior
Leading Indicators, January (10:00): 0.5% expected, 1.1% prior
Philadelphia Fed, February (10:00): 17.0 expected, 15.2 prior
Crude Inventories, 2/12 (11:00): 2.42M prior
February 19 - Friday
CPI, January (08:30): 0.3% expected, 0.1% prior
Core CPI, January (08:30): 0.2% expected, 0.1% prior
End part 1 of 3
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