|
|
world stock market, us stock market
* * * *
1/04/03 Investment House Alerts Report
* * *
IH Alert Subscribers:
MARKET ALERTS:
Targets hit alerts issued Friday: AVID (+140% on options); GRMN (+280% on options)
Buy alerts issued: SYMC; APOL; STK
Trailing stops issued: BER
Stop alerts issued: None issued
Stocks buck some bad news, avoid a sell off.
Home Depot fell short in December and had to warn for fiscal 2003. Last year HD was offering free financing for 12 months on purchases over $200 and apparently that led to more sales. This year it did not make that offer and sales were off. Go figure. Radio Shack also warned as RSH again failed to live up to its supposed promise (remember back in the '80's when RSH was going to rule the PC market because of its established outlet base?).
Those warnings had the pre-market jittery, but after a modestly lower open stocks recovered and spent most of the session hovering near flat. Early afternoon selling threatened to make the day rather dismal, but a last hour rally evened things back up. Not an impressive session by itself, but considering it followed the big Thursday jump where some softness could be expected and considering the anchor chain from HD on the retail and building sector, the action of simply holding onto gains was not bad from a bullish perspective. Not a ringing endorsement, but in this environment of uncertainty it was something of a victory.
THE MARKET
The market licked some wounds last week, managing to rally back from the door that leads back down to the cellar. In less colorful language, the large indexes managed to keep from completing the head and shoulders patterns, rallying back up over some near resistance to fight yet another day.
Thursday provided the big move as stocks that had just sold hard rebounded. Volume was up but still overall light. Breakouts were few. It was not a rally that changed the market character; it was a rally that prevented a breakdown. That in itself was somewhat bullish. Once again the market was able to overcome all of the uncertainties of potential war with Iraq, problems with North Korea, and the Venezuela oil crisis and stave off a major drop. While the bias has been to the downside, there are some wire threads underneath the softness that are holding the market up.
Those wires are the prospect of better economic times ahead. Oil price increases are a definite threat to that recovery, but as of yet they are not dampening the economic recovery. Retailers grudgingly admitted that the holiday season saw a sharp pickup late that prevented the predicted disaster. Auto sales shot up yet again. The national manufacturing picture brightened considerably. Jobless claims are showing that a bottom in the job market has been hit. That is the underlying strength that has thus far prevented a real sell off.
The rally did not change the market character, however. There are still the same problems overhanging stocks. Those are the same ones outlines above. That creates the uncertainty that keeps big investors from making bigger bets on the future. If the market avoids breaking down in the head and shoulders pattern and one or more of these issues is resolved there will be considerable upside momentum. Until then we see the pressure on the market, punctuated by rallies such as last week that look pretty decent but lack a lot of punch. Friday there were scattered breakouts, but relatively few. In addition, however, there are some of the leaders off the October low looking better (e.g., BRCM, KLAC); they could trigger a further move up to that next key resistance. Volume remained below average. The market needs some continued positive economic news to really get moving in the face of the war uncertainty.
Market Sentiment
VIX: 27.98; -0.54
VXN: 45.71; -1.34
Put/Call Ratio (CBOE): 0.76; 0.0
Nasdaq
Tapped down toward the 18 day MVA on the low but a late rally pushed it back just over the 50 day MVA on the close.
Stats: +2.23 points (+0.16%) to close at 1387.08
Volume: 1.152B (-10.56%). Volume remained anemic.
Up Volume: 692M (-458M)
Down Volume: 435M (+324M)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Advancers led 2.24 to 1
New Highs: 71 (+17)
New Lows: 14 (-6)
The Chart: http://www.investmenthouse.com/cd/$compq.html
A very choppy session that suffered a hangover from the Thursday rally. Up and down all session, it fought off a test of the 18 day MVA (1376) in the early afternoon and rallied to close right at the simple 50 day MVA (1386). A nice recovery after looking ready for the dumpster Monday and Tuesday as it broke and closed below the recent trading range and was ready to complete the head and shoulders pattern. Now it is back in the middle of that recent range with roughly 1350 on the low and 1427 (the August high) on the upside. It was a nice, higher volume recovery, but it was not clear signal that the buyers were back in control. There was no breakdown, there was no breakout. It is still in a standoff.
S&P 500/NYSE
The Thursday rally pushed the large caps to the next resistance point and Friday they could not push past that level, a bit winded from the previous rally.
Stats: +0.01 points (0%) to close at 908.59
NYSE Volume: 1.117B (-9.21%). Volume could not continue the climb on the tail end of the holiday season. The real work starts this week.
Up Volume: 532M (-607M)
Down Volume: 578M (+503M). Stand off.
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 3.51 to 1
New Highs: 69 (+2)
New Lows: 10 (-1)
The Chart: http://www.investmenthouse.com/cd/$spx.html
Managed to hold a test of the simple 50 day MVA on the session low (903), but could not budge past resistance from the July, August, and September interim highs at 911. Without the buy side volume it did not have enough power to break through. Monday we will see if those returning from holiday will be ready to buy and push the index through near resistance and over the left shoulder of the pattern at 925. It is at the top of the current range at 911 with a bottom at 875. There will need to be some good news to break it up and out of this range.
DJ30:
Similar to the SP500 the DJ30 managed to rally off of the bottom of the recent trading range at 8250, the point that also marks the breakdown point in the recent head and shoulders pattern. After twice testing 8250 on the low Monday and Tuesday it has moved in one session to the top of the trading range near 8650 with the left shoulder in the pattern at 8800. Friday it tapped the 50 day MVA on the session low (8552) as it sold in the early afternoon, but it too turned and rallied. It could not close positive but held its ground. Lower volume on such an indecisive session is not bad, particularly with HD losing over 3 sticks on the session.
Stats: -5.83 points (-0.07%) to close at 8601.69
Volume: 1.117B (-9.21%)
The Chart: http://www.investmenthouse.com/cd/$indu.html
THIS WEEK
Another week of economic data starts with the ISM Services and ends with the December employment report. The market needs a continued dose of good economic data to counter the continued overhang from the seemingly unending worries over Iraq, Venezuela, and North Korea. Indeed, there are some saying that Venezuela will hit the boiling point this weekend, and of course that would have a deleterious effect on the market until the issues were on the road to resolution.
With those competing points what we expect to see is simply the indexes trade in the range (where it is already at the peak) or even move up to next resistance at the left shoulder before it runs out of gas. What we will be watching is whether there are more stocks breaking out as the market tries to move higher. Those will key any move higher. As noted, there were more Friday though still scattered and by no means leading the way. In addition to those breakouts, we started to see some of the stocks that helped lead the move off the October low make some similar moves. Those look as if they are going to help provide some upward movement to test the key resistance levels ahead, and they can provide us good money making runs to that point and maybe beyond. Frankly, given the plethora of yet unresolved world events we would be surprised to see enough buyers come in to send the market up over key resistance once reached, but we can make some money on that move.
Yet, Tuesday the President outlines his stimulus package, and if it has the right mix to satisfy investors that will provide some fuel. There will be enough partisan bickering to make you puke as the focus will be on posturing and not what is good for the country. The fact that it is being addressed at all sometimes seems amazing given the rancor and class warfare raised by our representatives each time it comes up. In short, there are going to be positives that are ready to drive the market, but the problem is at next resistance; will there be enough buyers willing to step in to drive prices higher in spite of the global tensions.
We will thus continue to play it conservative, looking for stocks breaking out of good patterns but also looking at a few more trades on stocks that are in good position to rally near term and put money in the pocket. There remain a few out there while the market tries to show some strength in the midst of a lot of uncertainty.
Support and Resistance
Nasdaq: Closed at 1387.08
Resistance: Simple 50 day MVA (1386) has not been totally cleared. The August high at 1427. The 200 day MVA (1444). Price resistance at 1500. 1574, the May low, is next.
Support: The 18 day MVA (1376) is some support. 1357, the 1998 bear market low. July, August, and September interim highs at 1345. Some price support at 1300. 1250 is the next price support after that.
S&P 500: Closed at 908.59
Resistance: The July, August and September interim highs at 909 to 911. 921 is some price resistance. The early November high at 925.66 and key resistance. Price resistance at 950. 965, the September 2001 closing low along with the August 2002 high.
Support: The simple 50 day MVA (902.48). The exponential 50 day MVA (897). The bottom of the October consolidation range at 875. The September 2000/May 2001 downtrend line at 848. 850 to 855 (the October 1997 and Q2 1998 lows). The March down trendline at 822.
Dow: Closed at 8601.69
Resistance: The top of the recent range at 8630 to 8670. The late July and early September interim high at 8726 to 8762.14 (8745 closing). The early November high at 8800 is key. A range of resistance from 9000 on up to 9050.
Support: The simple 50 day MVA (8552) held on the Friday intraday low. The October high at 8500. The exponential 50 day MVA (8495). 8250, the bottom of the October consolidation range. Then 8000.
Economic Calendar
1-06-03
ISM services, December (10:00): 55.8 expected, 57.4 prior.
1-07-03
Factory Orders, November (10:00): -0.6% expected, 1.2% prior.
1-08-03
Consumer credit, November (2:00): $3.8B expected, $1.5B prior.
1-09-03
Wholesale inventories, November (10:00): 0.2% expected, -0.3% prior.
1-10-03
Non-farm payrolls, December (8:30): 21K expected, -41K prior.
Unemployment rate, December (8:30): 6.0% expected, 6.0% prior.
Hourly earnings: 0.3% expected, 0.3% prior.
Average workweek: 34.2 expected, 34.2 prior.
SUBSCRIBER QUESTIONS
Q: A question regarding revisted stocks. When a stock that was a previous play that hit the buy point, if we already purchased this stock the 1st time and it comes up as a revisited play, would that be an add to point if it hits the buy point listed on the revisited play. Would that be a strong stock that is testing the breakout?
A: Good question. There is more than one point to buy a good stock. Contrary to what some investment advisors think, a great stock will give you more than one entry point. Stocks run higher then test the moves continually. They breakout, run, test back, run some more. We can use those tests as entry points as long as the stock continues to show good action, i.e., making higher lows and showing good price/volume action as it does (rising on the move up, falling overall on the move back down). We like to focus our money in stocks that are doing well, stocks that are showing accumulation and winning attributes. That way we get more money into winners as opposed to spreading our money too thin in so-so stocks. That is why we were selling several positions before year end to free up money and also book any loss so we could write it off.
For revisited plays that have already hit the buy point we are viewing that as a good entry point for add-to positions or new positions. It is showing continued good action, something we want to take a greater part in. In that sense it is one of the stronger stocks because it continues to show good performance and it is at a point where it is a natural buy. If it continues its ways it will be a solid entry point. At the current time we are riding several stocks well past their target price simply because they are showing very good continued action. We have been letting them run and averaging into more and more positions in the stock as the opportunity is presented.
HOLIDAY SPECIAL ON CD SEMINARS ENDS THIS WEEK!!
A few more days and then we are shutting it down after Sunday. Many have already taken advantage of the savings, and there is still time for those that have not. You get the CD's of the live seminars that you view right on your computer. You also get the comprehensive, reference quality manuals. We are giving you all 7 seminars and materials for the price of the 3 seminar package! That is a 45% savings!
There is an incredible wealth of knowledge, years of experience, and 'how to' plans of action in these seminars. As one graduate put it, "I had no idea how little I knew about market direction and the reasons behind it until I took your course." Our graduates over the past year and one-half have made the bear market in stocks their own private second bull market because they learned how to and when to enter the downside and make dramatic profit from what most investors dread. Have the knowledge to take advantage of any kind of market as well as the confidence to act when you see the action unfold. We cover it all from trends, to accumulation/distribution, patterns, stocks, buying and selling options naked, covered, or creating spreads. Go to
http://www.stockseminarsonline.com
and click on the holiday special label.
End Part 1 of 2
|
world stock market
us stock market
|
