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us stock market, trend trading stock
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3/04/10 Stock Split Report
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Stock Split Report Subscribers:
MARKET ALERTS:
Targets hit alerts: None issued
Buy alerts: None issued
Trailing stops: None issued
Stop alerts: TSL
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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The Market Video is DIVIDED 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 segment 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:
- Stocks rally modestly, taking the edge off potential downside.
- Financials, key techs move higher, giving some backup to the small caps and mid-caps
- Upside move but no change to relative positions
- Same Store Sales jump past expectations
- Jobless claims high but do fade from last week.
- Pending home sales tumble as credit attracts fewer buyers
- EU issues surface again and are still rather dire.
- Jobs report a throwaway, but with it out of the picture stocks can get to work on defining their next move.
Stocks manage to hold a late gain this time though it doesn't change the picture that much.
It was a choppy session, but the market did finish the day positive. Little was accomplished as the indices remained in the same relative position. They are breaking higher from the tombstone doji shown the past couple of sessions, and that mitigates some of the immediate downside issues. Overall, however, the relative position of the market and indices remains the same. NASDAQ is still testing the middle of its January consolidation range, while SP500 has not made it up to that level yet. We can always fall back on the small and mid-caps because they broke to new rally highs this week as they led the market to the upside. The question is whether NASDAQ and SP500 will follow.
There was good news out premarket and in the early action. Same store sales were much better than expected as consumers spend despite the low consumer confidence readings. Jobless claims were lower. Q4 productivity was stronger than expected, which was good for profits near term, although not great for more jobs in the near future. Factory orders were solid. Stocks started modestly to the upside and then turned negative, but did prevail with modest gains in the end. After overcoming weak data and bad news out of Europe the prior month to rally, stocks had good news on Thursday but could not do a lot with it. With the late bounce, it looks like there was some short covering ahead of the jobs report tomorrow. The market has set up a bearish pattern as indicated in previous summaries and the plays on Thursday's report, and that still exists. There are some short positions out there and there are some ready to take the downside. When I say "some," I am being tongue-in-cheek; there are a lot of people who think the market might be turning lower despite the ebullience heard on the financial stations about the rally.
The market was unable to do much of anything with the mediocre gains. The market is still in no man's land and trying to decide what its near-term move will be as the indices test the important January peaks. With the jobs report out Friday morning, no one wanted to stick the neck out on the session. Indeed, the jobs report might finally break the market one way or the other. At the same time, you have to question whether it can do that given uncertainties in the jobs report due to the severe inclement weather the country experienced in January and February. That has thrown a question on whether any jobs number reported will be skewed too light or heavy. Remember, there are always adjustments to the jobs reports, and we have to factor in (and out) seasonal adjustments. When something such as weather comes along, it can skew the entire picture and make the data virtually unusable.
Mediocre gains make sense given that the market has had a good run over the past three to four weeks and hit a key resistance level. On the session, it looks as if it would be just another struggle all day long and a close well off the high. But, unlike Tuesday and Wednesday, the indices caught a bid late in the session and managed to rally back to positive territory, although there were no big moves. NASDAQ +.5%, SP500 +.37%, SOX was flat, small caps +.44%. The action put a better light on the recent trade. As seen on Tuesday and Wednesday, the gaps-to-doji after the market run and overall patterns of the indices in several key stocks were bearish. The market action on Friday managed to mitigate that, but only to a certain extent. Nothing has changed with the relative position of the indices as they test the key levels hit earlier in the year. While SP500 closed higher, it was below the Wednesday peak and is still below the January consolidation range. NASDAQ closed higher as well, but is also at the Tuesday and Wednesday highs as it trades in the lower half of the consolidation range from January.
OTHER MARKETS
Dollar. On Wednesday, it looked as if the dollar was in serious trouble. The news was positive for the economy, but the dollar did not respond that way, gapping lower and breaking out of its recent lateral consolidation. It managed to recover some ground and fill the gap on Thursday, and that moved it back to the bottom of its range. The dollar not only gained against the basket of currencies shown in the DXY0, but also against the Euro (1.3581 Euro versus 1.3698 Wednesday). There was good economic data, and the dollar responded the way it should have, i.e. improving and trying to get back in the near-term trendline. This is somewhat of a normal pullback, and the action on Wednesday helped make it look that way. Wednesday was a different story. It looked to be diving lower, but it caught itself and bounced back on Thursday.
http://investmenthouse.com/ihmedia/dxy0.jpeg
Oil. Oil is still trying to get through to the topside of its range. It had strong moves on Tuesday and Wednesday that broke it out of the recent consolidation that started the third week of February. It was unable to continue that move on Thursday, but it did bounce off the 80 level on the low and recouped some of the loss on the session. Oil is not in trouble; indeed, it looks like the path of least resistance is still to the upside to the top of the range that runs from 82-84. It has been stuck in the range for quite some time but is showing signs it will make a test at the top of the range. That would be normal. One would expect a commodity to run up and down inside of its range, but the question is whether it makes the breakout. With Europe in trouble and some questions about the US, it might find it tough going at that point. No doubt it is struggling at it gets near that level, feeling a bit of pressure as it approaches the top of the range. Overall, it was a solid session because it managed to come back off the lows, even though it lost ground closing at roughly $80.21.
http://investmenthouse.com/ihmedia/xoil.jpeg
Gold. Gold struggled quite a bit depending on which index you look at. It closed in New York at 1,131.90, -11.40, and it managed to recover some ground in the other markets. On the gold index, it bounced off the low, and it is holding the break over the trend and the rally it posted last week. Indeed, where it traded on the low, it tapped the highs from February and rebounded. It is showing plenty of renewed strength as it continues higher after breaking the downtrend in mid-February. It has set the stage with the market test, and it may test another day to move higher and test the 1160-1165 range on its way back up toward the prior high. Gold has suddenly caught fire again and is looking good. You may question why that is happening if the US economy looks to be improving, but the US is still ready to spend another trillion or three on new programs. There is also the issue of Europe struggling as more sobering data continues to come out.
http://investmenthouse.com/ihmedia/xgld.jpeg
Bonds. Bonds rallied on the session. The 10 year improved (3.60% versus 3.62% Wednesday). There was good economic data in the US, yet bonds rallied. Is it a rally of significance? Not other than that bonds continue to show amazing stickiness given that the Fed has begun to jawbone about raising interest rates and that the US economy and economic numbers continue to look solid. They are not blowing the doors off with a raise to the upside, but they do show steady improvement. Nonetheless, bonds are rising and gold is rallying again. The markets are in a state of turmoil. The stock market is still holding its gains, although near-term direction and the next key move have yet to be determined. That should happen over the next several sessions.
http://investmenthouse.com/ihmedia/tip.jpeg
TECHNICAL
INTERNALS
Volume. Volume was down on NASDAQ. It dropped almost 16% to over 2B shares on the session. Volume was up slightly on the NYSE, rising 1.4% to 950M shares. NASDAQ trade was very low and below average. There was no power in the .5% move to the upside. The NYSE had better volume, but it was still quite modest on the session. The last four sessions have been below average. Over the past month, there are only a couple of days that traded above average. It is moving laterally, weighing its options below the January peak and above the November and December consolidation. NASDAQ volume was lower, falling below average for the first time in over a week. The market move had no power; it was a pensive move as the index moved laterally.
Breadth. Breadth was flat, as one would expect. 1.4:1 advancers on NASDAQ; 1.3:1 advancers on NYSE. There were modest gains to the upside, but the small caps were leading. There are more small caps than large caps, and when they are leading the market, breadth will be better even on lackluster days.
CHARTS
SP500. There is no relative change on SP500. The move to the upside on Thursday put a better complexion on it, but it is still in the same range over the last couple of days. It did mitigate the bearishness of the pattern, although it is an ABCD pattern that has not changed and it is still below the January peak. It has made no decisions as to what it will do. It has bounced above a key level, but there was not a lot of volume. There are no guarantees either way. That is why we have been patient and sitting on our upside gains, letting them continue higher and taking gain as the market rallied higher this week. We also have quite a few downside plays ready to go if they are called into action.
NASDAQ. The NASDAQ is a similar story, but on a higher level. It has moved up into the lower half of its January lateral consolidation. It is still trading in the same range it has traded for the past three days. We have been letting upside positions run higher here as well, but there are some key stocks (such as AAPL and GOOG) that are making solid moves that could have something to say as to what the market does overall. Some of the financials are starting to get active on SP500 and could change the complexion to a significantly different look.
SP600. The big news is still in the small caps and mid-caps. The SP600 moved higher yet again after the tombstone doji on Wednesday. It mitigated that by continuing higher, and that furthered the breakout above its January peak. The small caps are leading, breadth is better, and that is a positive looking down the road for the economy.
SP400. The SP400 did not enjoy as good a day as the small caps. It showed its second consecutive doji, but it still made the breakout above its January peak and has not turned tail and given it up. It will come back and test that level, but it does not look as if it will roll over and crash any time soon. The small caps and mid-caps are leading, and they are economic harbingers indicating better times to come. You could make the logical leap that NASDAQ and SP500 would follow, and they may do so if some of the key leadership continues to act as it did on Thursday.
LEADERSHIP
Financial. GS has been moving in a lateral range for six weeks. It broke higher on Thursday on stronger volume, clearing an important resistance point at 160. There is another at 165. It held a key level, has bounced off of that, and now it has to shoot down each level of resistance it comes up to as it makes the move higher. It has to start somewhere, and it did start on Thursday. If GS and other financials decide to step up and start rallying, that makes SP500's job much easier in reaching the January peaks. Indeed, but for the financials moving higher on Thursday, SP500 would have closed negative. GS is as important to the market particularly the SP500 as AAPL is to the NASDAQ. MS was rallying as well. WFC was up again this was not a major move, but it has been trending higher the last three sessions. The financials are showing movement, and they could substantially and significantly change the flight of the SP500, putting it in a bullish stance if they continue to move higher.
Technology. AAPL is very important to the NASDAQ. After a pair of doji, it is moving higher, trying to break up this pattern and get through the January consolidation range. This is a key stock for NASDAQ, and it is trying to shake off the lethargy. GOOG took off, and I knew we should have been in it. This is a key level at 525. I looked at it like a deer in the headlights until it gapped higher, and then I did not want us to chase it. It has continued higher, moving up 9 points on Thursday and clearing the 50 day EMA. It is in the process of breaking a resistance point. This is also a key stock for NASDAQ, and it is performing well. As AAPL and GOOG perform, NASDAQ tends to follow.
Healthcare. Healthcare is getting somewhat extended and pausing after a strong run. CELG is coming back in a flag pattern after a strong stair-step and a break higher. RMD is another stock that has rallied well and is moving laterally. Healthcare had money dumped into it, it rallied nicely, and it needs a rest to set up for the next move. They are not done with the moves. We can look for flag patterns the kind of pattern that CELG is showing where it comes back and tests the 10 day EMA and the February peak. That is what you look for to make continuing runs if you want to make a trade on a stock versus getting in for a longer-term play.
Industrial. Industrials are still reverberating from JOYG announcing good earnings. TEX continued higher. CMI is slowing down its move, but it has had a strong surge to the upside. It is a bit extended and may come back to test. Indeed, this is one of the patterns where, as it stair-steps higher, it can come back and test a Fibonacci retracement. You can sometimes get a play out of these, but this one may not have enough room as it comes back to make an ordinary test in an otherwise continuing uptrend.
Energy. Energy is trying to set up again. CVX has bounced off a key level, tested it, moved up, and now it is posting a flag pattern. It has a reverse head and shoulders pattern. If it breaks higher from here, it could be an interesting buy. SU somewhat mirrors the price of oil, but it has not done so of late. It broke an important support level but bounced back above it. Now it has rallied back up and is testing a peak. If it comes back up toward the 30 level and holds, it can break higher and run. I am not saying that is a great pattern to buy into, but that is the kind of recovery happening in the energy sector. These are the patterns that are setting up after some of the stocks have been hit. They have come down to a support level, and that shows that the buyers are stepping back into the stocks.
THE ECONOMY
THE MARKET
MARKET SENTIMENT
VIX: 18.72; -0.11
VXN: 19.1; -0.25
VXO: 17.93; +0.2
Put/Call Ratio (CBOE): 1.01; +0.13
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: 41.4%. Significant jump in bulls, rising from 35.6%. 35% is the threshold level below which suggests bullishness. After the move bulls moved up. Perhaps this lateral market consolidation will be enough to send the indices back up. After peaking at 53 on this move the bulls lost some nerve, 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: 23.3%. As with bulls, a significant change in bears, falling from 27.8%. That indicates more overall market bullishness. Of course it comes after the rally, but at least the market is holding the gains with a consolidation. Down from 26.1% the prior week and 22.2% before that. 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: +11.63 points (+0.51%) to close at 2292.31
Volume: 2.071B (-15.72%)
Up Volume: 1.276B (-258.443M)
Down Volume: 808.57M (-200.368M)
A/D and Hi/Lo: Advancers led 1.41 to 1
Previous Session: Advancers led 1.14 to 1
New Highs: 133 (-61)
New Lows: 9 (-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: +4.18 points (+0.37%) to close at 1122.97
NYSE Volume: 950.156M (+1.38%)
Up Volume: 584.618M (+87.778M)
Down Volume: 349.991M (-49.966M)
A/D and Hi/Lo: Advancers led 1.33 to 1
Previous Session: Advancers led 1.31 to 1
New Highs: 258 (-107)
New Lows: 22 (-12)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Stats: +47.38 points (+0.46%) to close at 10444.14
Volume DJ30: 165M shares Thursday versus 183M shares Wednesday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
FRIDAY
The first Friday of each month is typically all about jobs. There has already been some rejiggering of the numbers. The non-farm payrolls were expected to drop 20K, but have been pushed to -63K. You can call that change a guess because no one knows how to factor in the weather element; that wildcard can skew the numbers one way or the other. That makes this number a throwaway, and you have to wonder what impact that has on the market. The mere fact that it is out of the way will allow the market to make the move it wants to make. The near-term move is what is important right now, given that the market has rallied and the indices are up and somewhat extended near term. They have been trying to consolidate laterally over the past three sessions as they await the jobs number and approach key resistance levels.
We were not chasing the upside modest as it was on Thursday, although there are some plays I would be willing to enter into if they do show a move. There are stocks setting up that we can take advantage of if they show the move. That is riskier given that the market is extended and near resistance levels. Any buys we make will most likely be partial buys. If we see a good move and do not want to miss out on any part of it, we can get a partial move and see if it holds or if it tests and gives a new buy point where we can complete the buy. If it falls, we have a good stop point to get out with minimal losses.
There is no change in the position heading into the jobs report. The indices are still extended and trying to decide what they will do. Until they do, we will be patient. We have plays at the ready both ways, and as the market makes its break, we will be able to either let the upside plays run and add to them, or close them, protect the gain we have, and play the downside. The market will show us the way. Right now, it is time to be patient. We could have bought stocks today but decided there was no need to ahead of the jobs report, particularly given where the indices are right now.
Support and Resistance
NASDAQ: Closed at 2292.31
Resistance:
2292 is a low from January 2008
2319 from the September 2008 peak
2320 to 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:
2273 to 2282 marks bottom of January 2010 lateral peak
2275 - 2278 from the February 2008 and April 2008 lows
2245 from July 2008 through 2260 from late 2005.
The 50 day EMA at 2222
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
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
The 200 day SMA at 2066
2060 is the August peak
2048 is the early October 2009 closing low
2015 from an early August 2008 peak
S&P 500: Closed at 1122.97
Resistance:
Bottom of the January 2010 consolidation 1131 to 1136
1133 from a September 2008 intraday low
1151 is the January 2010 peak
1156 is the Sept 2008 low
1185 from late September 2008
1200 from the July 2008 low
Support:
1119 is the early December intraday high
1114 is the November 2009 peak is breaking
1106 is the September 2008 low
The 50 day EMA at 1102
1101 is the October 2009 high
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 1037
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 10,444.14
Resistance:
10,496 is the November 2009 high
10,609 from the Mid-September 2008 interim low
10,730 is the January 2010 peak
10,963 is the July 2008 low
Support:
10,365 is the late September 2008 low
The 50 day EMA at 10,307
10,285 is the late December consolidation peak
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
The 200 day SMA at 9660
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
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
March 01 - Tuesday
Personal Income, January (08:30): 0.1% actual versus 0.4% expected, 0.3% prior (revised from 0.4%)
Personal Spending, January (08:30): 0.5% actual versus 0.4% expected, 0.3% prior (revised from 0.2%)
PCE Prices - Core, January (08:30): 0.0% actual versus 0.0% expected, 0.1% prior
Construction Spending, January (10:00): -0.6% actual versus -0.6% expected, -1.2% prior
ISM Index, February (10:00): 56.5 actual versus 57.9 expected, 58.4 prior
March 02 - Tuesday
Auto Sales, February (14:00): 3.8M prior
Truck Sales, February (14:00): 4.4M prior
March 03 - Wednesday
Challenger Job Cuts , February (07:30): -77.4% actual versus -70.4% prior
ADP Employment Change, February (08:15): -20K actual versus -20K expected, -60K prior (revised from -22K)
ISM Services, February (10:00): 53.0 actual versus 51.0 expected, 50.5 prior
Crude Inventories, 2/26 (10:30): 4.03M actual versus 3.03M prior
March 04 - Thursday
Initial Claims, 02/27 (08:30): 469K actual versus 470K expected, 498K prior (revised from 496K)
Continuing Claims, 02/20 (08:30): 4500K actual versus 4600K expected, 4634K prior (revised from 4617K)
Productivity-Rev., Q4 (08:30): 6.9% actual versus 6.3% expected, 6.2% prior
Unit Labor Costs, Q4 (08:30): -5.9% actual versus -4.5% expected, -4.4% prior
Factory Orders, January (10:00): 1.7% actual versus 1.8% expected, 1.5% prior (revised from 1.0%)
Pending Home Sales, January (10:00): -7.6% actual versus 1.0% expected, 0.8% prior (revised from 1.0%)
March 05 - Friday
Unemployment Rate, February (08:30): 9.8% expected, 9.7% prior
Nonfarm Payrolls, February (08:30): -63K expected, -20K prior
Hourly Earnings, February (08:30): 0.2% expected, 0.2% prior
Average Workweek, February (08:30): 33.7 expected, 33.9 prior
Consumer Credit, January (15:00): -$4.5B expected, -$1.7B prior
End part 1 of 3
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