|
|
us stock market, trend trading stock
* * * *
2/17/10 Stock Split Report Update
* * *
Stock Split Report Subscribers:
MARKET ALERTS:
Targets hit alerts: None issued
Buy alerts: AMZN; CTSH
Trailing stops: None issued
Stop alerts: SNDK; TRLG
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
SUMMARY:
- Market continues the rebound, gapping higher once more though with less vigor.
- SP500 moving to its key resistance.
- Housing starts hit 6 month high.
- Production and capacity continue to climb.
- Spain holds a decent bond auction.
- Stocks looking for extra impetus after more than a week of gains.
Another upside session puts SP500 at its resistance.
The economic data continued its improvement and that was plenty to motivate stocks to their second straight gain for the week. Futures turned positive on the January housing starts posting a gain ahead of expectations and a 6 month high (even though they are basically in a lateral moved since the start of 2009), and they improved even a bit more on the Industrial Production that came in above expectations (0.9% versus 0.7%) while December was revised up to 0.7% from 0.6%. Didn't hurt that Spain, one if the PIIGS (Portugal, Ireland, Italy, Greece, Spain) held a bond auction and was able to place the paper with a pretty good bid to cover ratio (for Spain).
That was what the market needed to continue its rebound that saw its roots set just over a week back as the indices managed to hold a break and reverse it for this bounce. The dollar was stronger and there was not any new EU bailout story to fuel the upside so the gains were a bit more muted (NASDAQ 0.55%, SP500 0.42%) and volume, on NYSE as it tests key resistance, was lower and still well below average.
OTHER MARKETS
Dollar. The dollar resumed its upside with the same fury it sold on Tuesday, both against the euro (1.3610 versus 1.3770) and on the dollar index. Indeed, the dollar index hit a new closing high since the November bottom. Still in the two week lateral range, but showing that renewed upside vigor. Note that the dollar/euro remains in its range from 1.36 to 1.38 despite the gains. The dollar broke below 1.36 briefly two weeks back but quickly reversed as the EU issues calmed after the initial worry sent the dollar surging. It could very well make the break on a continuation of this rally.
http://investmenthouse.com/ihmedia/dxy0.jpeg
Gold. Gold tried to extend its break over the December/January/February down trendline, but after an early surge it reversed to close lower though still on top of the trendline. Good support at the 1100 level that is also coincident with the trendline, so we see if gold can reload and start back up. This is what we were looking for, i.e. a test of the breakout, to give us a possible entry to play the trend break.
http://investmenthouse.com/ihmedia/xgld.jpeg
Oil. Oil closed mixed depending upon your market. NYMX was up at 77.50, +0.49. Light sweet was down 0.13. Either way oil was basically flat, holding in the middle of its trading range after a strong Tuesday surge took it to next resistance just below 78. What can you say about oil? It is still trading in its range, trying to bounce up toward the top at 82.
http://investmenthouse.com/ihmedia/xoil.jpeg
Bonds. The US 10 year bond, after surging Tuesday on the Athens JPM bombing, fell back and yields rebounded (3.74% versus 3.66% Tuesday). The Fed minutes also played a role as the FOMC members debated when and how to start taking back the monetary stimulus. All agreed it needs to be done, but the majority would not agree with Hoenig to include language regarding a modest hike occurring soon. With the Fed openly debating when and how to remove the monetary stimulus bonds sold and rates rose in anticipation of the Fed selling some of its $2T+ in treasuries and other securities it bought to help fund the financial bailouts.
http://investmenthouse.com/ihmedia/tip.jpeg
TECHNICAL
INTERNALS
Breadth. A return to more anemic levels with NASDAQ at 1.5:1 though NYSE sported a 2:1 advantage to the upside. Rather lackluster on NASDAQ as it led the move higher, another indication the bounce has lost a bit of momentum, but we know the large cap names can push the index even if most of the soldiers are not following.
Volume. Mixed with trade rising almost 2% on NASDAQ but falling 5.5% on NYSE. Both were rather woeful, however, coming in well below average as the indices advanced their move. Again, as this is a rebound move volume is not the primary concern. It does, however, bolster the argument this is indeed just a rebound move inside the range. Without more volume strength an ultimate breakout is less likely, but again, we will worry about volume when that move sets up. Right now this is more of a move back to test resistance than a new breakout.
CHARTS
NASDAQ. Gapped higher for a second session, continuing the push above the 2205ish resistance range. Volume up slightly though still below average. Below average trade the past two sessions on the gap, and as indicated above, that ultimately has something to say when it comes to taking on that January range with bottoms at 2272 to 2285ish. Typically it would bounce up to those levels and then either breakout or stall for a bigger selloff. Right now this bounce is on mostly lower trade, suggesting the latter. That still means we can continue riding a move up to that level though after a pair of gaps NASDAQ likely needs a breather or something new to send it higher.
SP500. The large caps gapped higher for a second session as well, holding the gain and moving up to the October peak as well as the top of the late January consolidation peak. Key test for SP500 as it bumps 1100ish resistance but on that lower, below average volume. Still room to the upside similar to NASDAQ, i.e. moving toward the January range where it hit a new rally high but then sold off (1131 on the lows). A weaker gap on Wednesday and SP500 needs something else to send it upside as well.
SP600. The small caps (+0.62%) gapped as well and moved above the October peak as it did. The small caps are trying to join NASDAQ and SOX and lead to the upside. After 7 advances in 8 sessions it too could use a breather before taking on the bottom of the January peak at 335.
LEADERSHIP
Energy. Big moves Tuesday then a test back on Wednesday. Gaps all over to start the week and then the dollar strengthened and all those saying energy was able to move higher even with a strong dollar were backtracking some Wednesday. Good gaps higher and modest tests; overall still a positive near term picture for energy in just about every sector.
Industrials. Managed an additional upside push similar to the markets though volume was overall better on the individual stocks in these sectors. Continuing the rebound but as with the indices, a pretty far run from here and a pause to rest before taking on the next highs would not be unusual.
Retail. Holding the more bullish positioning nicely, either extending the gains modestly or holding their ground. Retail continues to suggest the consumer will remain looser with the wallet and purse.
THE MARKET
MARKET SENTIMENT
VIX: 21.72; -0.53
VXN: 21.4; -0.52
VXO: 21.19; -0.38
Put/Call Ratio (CBOE): 0.92; +0.04
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: +12.1 points (+0.55%) to close at 2226.29
Volume: 1.998B (+1.89%)
Up Volume: 1.347B (-352.212M)
Down Volume: 683.217M (+381.998M)
A/D and Hi/Lo: Advancers led 1.46 to 1
Previous Session: Advancers led 2.52 to 1
New Highs: 122 (+12)
New Lows: 16 (+8)
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: +4.64 points (+0.42%) to close at 1099.51
NYSE Volume: 1.02B (-5.57%)
Up Volume: 679.016M (-296.159M)
Down Volume: 330.782M (+231.501M)
A/D and Hi/Lo: Advancers led 2.03 to 1
Previous Session: Advancers led 3.84 to 1
New Highs: 86 (-64)
New Lows: 16 (-23)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Stats: +40.43 points (+0.39%) to close at 10309.24
Volume DJ30: 193M shares Wednesday versus 234M shares Tuesday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
THURSDAY
Thursday already with initial jobless claims (that have shown improvement on the unadjusted numbers the past two weeks), January PPI, Leading indicators, and the Philly Fed manufacturing report. Full calendar along with the usual potential stories from the EU and who knows where else. Earnings are still coming out with HPQ announcing solid results after hours and trading modestly higher.
This has been a difficult week getting entries on the upside bounce as many stocks gapped to start the week, held the move, and then gapped again Wednesday. Indeed we went contrarian a bit Wednesday, picking up some downside positions on the next gap higher and with SP500 bumping next resistance. With the week-plus of gains and the back to back gaps this week the upside is a bit extended outside of trades with short time and price horizons.
Even without the gaps it is time to be a bit cautious as NASDAQ trades between 2205 and the bottom of the January range while SP500 gapped to the next resistance at 1100 to 1105. Ideally there is a move up to test the prior high that turns at a lower peak and triggers a deeper corrective move as part of the basing process. With NASDAQ out in the lead SP500 may not make it there. Indeed, there is nothing written in stone that the market fails and makes that deeper correction. All we are looking to is how moves occur historically. There has been a long run from the March low and this is a more significant correction; after a long run that typically triggers the basing process though if you look back to June and July you see the market recovered and continued to rally.
Thus for now we let our upside run as far as they will; taking new upside overall is somewhat treacherous given the gains the past week or more though there are individual plays that still are in good position just as we are seeing some nice downside setups moving into and indeed are already in good position. As the move continues we will look at both to see if they present opportunities.
Support and Resistance
NASDAQ: Closed at 2226.29
Resistance:
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 2204
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 2037
2015 from an early August 2008 peak
S&P 500: Closed at 1099.51
Resistance:
The 50 day EMA at 1098
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 200 day SMA at 1026
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
Dow: Closed at 10,309.24
Resistance:
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:
10,285 is the late December consolidation peak
The 50 day EMA at 10,269
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 9552
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): 591K actual versus 580K expected, 575K prior (revised from 557K)
Building Permits, January (08:30): 621K actual versus 620K expected, 653K prior
Export Prices ex-ag., January (08:30): 0.7% actual versus 0.5% prior
Import Prices ex-oil, January (08:30): 0.4% actual versus 0.3% prior (revised from 0.4%)
Industrial Production, January (09:15): 0.9% actual versus 0.7% expected, 0.7% prior (revised from 0.6%)
Capacity Utilization, January (09:15): 72.6% actual versus 72.6% expected, 71.9% prior (revised from 72.0%)
Treasury Budget, January (14:00): -$42.6B actual versus -$46.0B expected, -$91.9B prior
Minutes of FOMC Meet, 1/28 (14:00)
February 18 - Thursday
Initial Claims, 02/13 (08:30): 430K expected, 440K prior
Continuing Claims, 02/6 (08:30): 4500K expected, 4538K 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): 0.1% expected, 0.1% prior
End part 1 of 3
|
us stock market
trend trading stock
|
