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trend trading stock, stock trading site
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11/26/03 Technical Traders Report
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Technical Traders Report Subscribers:
Happy Thanksgiving!
Thanksgiving Holiday Schedule:
The stock market will be closed Thursday November 27 and will close at 1:00ET Friday November 28. Reports will issue as usual Monday and Tuesday. Barring any major market event, the following is the report schedule for that week:
Monday and Tuesday: Normal reports issue
Wednesday: Market update, play tables
Saturday: Market update, highlight best plays for Monday, play tables
Alerts: Will issue as normal.
MARKET ALERTS
Targets hit alerts issued Wednesday: None issued
Buy alerts issued: TRFX; NANO (bonus)
Trailing stops issued: None issued
Stop alerts issued: QADI
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 Daily alert service you can sign up at the following link:
http://www.investmenthouse.com/alertttr.htm
SUMMARY:
- Gentle drift higher on low volume.
- Superb economic data yet again.
- On tap for another gentle rise on Friday.
A test lower and a drift higher, right on script.
The market performed in a typical pre-Thanksgiving fashion with a gentle rise, though less than we anticipated. It was muted by a test lower toward the 18 day MVA, something we also expected but the rally off that level was not that strong. Low volume, decent breadth, modest rise trading within near support and resistance and in line with the ongoing uptrend.
THE ECONOMY
There could have been reason for more celebration. Jobless claims were their lowest since January 2001, durable goods orders surged, the Chicago PMI raced higher, and Michigan sentiment was solid. That news certainly did not hurt, but it did not induce a starry eyed buying frenzy.
Jobless claims continue the solid trend lower.
351K, the lowest since the week of January 20, 2001, better than the 360K expected and the 362K the prior week. The 4 week average was down as well at 358K. As we stated back in August, that level would engender significant job creation. That creation has already started, and we should see the 'significant' portion start to show in next Friday's employment report. Continuing claims were also positive, showing a drop to 3.36M, a significant drop off.
Durable goods orders surge.
October orders jumped 3.3%, easily topping the measly 0.7% expected. Moreover, September orders were revised upward to a 2.1% gain from 1.1%. Those upward revisions show the strengthening trend. The increases were the biggest in 16 months (8.1% in July 2002). Communications equipment jumped 25% after a 15% rise in September. After a long drought communications are now a growth area again. Non-defense capital spending rose 1.7%, down from the 5.8% in October. That was disappointing, but it is still clear that businesses are just starting to ramp up their spending again.
November Chicago PMI leaps ahead.
64.1 versus the 56.5 expected and 55 in October. New orders surged to 73.3 from 59. Backlog of orders jumped to 59 from 47. Production hit 62 versus 62. Solid, solid, solid, and solid. The only disappointment was the employment sub-index that fell to 48 from 53. Employment will come. With this kind of growth, employment is just around the corner.
Spending and income match estimates, but that is not that great.
Despite all the other data, many harped on the problem with the consumer. Spending was flat. Incomes were up 0.3%. Both in line. That had some economists worrying about 'sustainability. First, business spending is really ramping up after being gone for three years. That was the missing link in the economy. Second, consumption was flat in a historically slow month. So it was flat with levels that have turned in big gains in consumption by the consumer, consumption that contributed to an 8.2% GDP rise in Q3. We don't see that as necessarily bad, particularly given the typically slower October. Moreover, September spending was revised higher to 0.0% from -0.3%. Again, that was part of the spending that was so robust in Q3. Third, personal spending rose a solid 0.4% and September was revised to a 0.4% gain as well, up from 0.3%. These don't look like the harbinger of slack times ahead as some attributed them to. Of course, many view things in a textbook, clinical fashion without any real world, common sense considerations.
Beige Book positive.
And by the way, the Fed notes that things are improving across all areas of the economy. Thanks for the heads up guys.
THE MARKET
A tap toward the 18 day MVA in the morning session led to a drift higher in the afternoon. SP500 actually closed on a session high as all indexes were well off their intraday lows to close. No breakouts to a new high, just a drift higher within the near support and resistance levels, but that is about what you expect on such a day. Actually we expected a bit more, but the script went pretty much according to plan. The missing link were the small caps. We expected they would provide more leadership, but they were up just 0.1%, bringing up the rear. Looks as if the drift is mainly larger cap, but that leaves the small caps in position to lead when the early 'January' effect takes hold.
Market Sentiment
VIX: 16.23; -0.48
VXN: 25.63; -0.36
VXO: 15.91; -0.38
Put/Call Ratio (CBOE): 0.72; +0.10. Crept higher on an up session, an indication of not a lot of faith in the move. That is fine.
NASDAQ
Modest gain after a tap of the 18 day MVA (1928) on the low. Low volume and nothing spectacular, just a rise within the uptrend as Nasdaq comes off of a test of the bottom of the trading range.
Stats: +10.27 points (+0.53%) to close at 1953.31
Volume: 1.525B (-17.95%)
Up Volume: 1.045B (-35M)
Down Volume: 438M (-303M)
A/D and Hi/Lo: Advancers led 1.36 to 1. Pretty weak breadth, but it was a pretty weak session.
Previous Session: Advancers led 1.44 to 1
New Highs: 286 (-31)
New Lows: 5 (-11)
The Chart: http://www.investmenthouse.com/cd/^ixq.html
S&P 500/NYSE
The best performance of the indexes other than SOX (0.5%), testing the 10 day MVA (1048) on the low and rallying in the afternoon to close at a session high. No volume of course, but a decent gain after providing the anchor at support for the rest of the market. Approaching the November highs at 1064, the next important test for the index. That may be all it can get before the market resumes in more force on Monday and volume returns.
Stats: +4.56 points (+0.43%) to close at 1058.45
NYSE Volume: 1.105B (-16.5%)
Up Volume: 798M (-120M)
Down Volume: 295M (-104M)
A/D and Hi/Lo: Advancers led 2.02 to 1. Very nice breadth even with the small caps lagging.
Previous Session: Advancers led 2.15 to 1
New Highs: 350 (+30)
New Lows: 5 (-2)
The Chart: http://www.investmenthouse.com/cd/^spx.html
DJ30:
Stats: +15.63 points (+0.16%) to close at 9779.57
Volume: 162M versus 174M.
Continued the move up off of the 50 day MVA test, managing another very modest gain. It too tested lower, undercutting the 18 day MVA (9732) before rallying back for that modest gain. It still has the uptrend to retake that is now near the November highs (9903). Nothing special about the move, just a drift higher along with the rest of the market.
FRIDAY
No economic data and just a half session of trading. Typically the Friday after Thanksgiving is a rise, and with the uptrend that is something we anticipate. As SP500 is near its November highs that might put a cap on the action, yielding another session of gains similar to Wednesday. We will be watching that resistance level and also how the small caps perform. They were laggards Wednesday and we are looking for them to assume a leadership as the market moves toward Christmas.
Friday we are looking for a continued rise within the range and will focus on those plays in good patterns that make solid moves. That does not mean necessarily strong volume given the half day; we will extrapolate the volume and make decisions based on that. We were doing that today, and we also still saw good volume breaks higher.
Support and Resistance
Nasdaq: Closed at 1953.31
Resistance: 1975 is some resistance. November high (1992). The January 2002 double top (2044 to 2099).
Support: The 18 day MVA (1928). The March/August up trendline (1924). The September high (1913). The 50 day MVA (1899). 1875 to 1880 is the bottom of the week's range.
S&P 500: Closed at 1058.45
Resistance: November high (1062-1064). The December to June upper channel line at 1080. 1080 from February 2002 lows. 1100 represents some early 2001 lows. 1150 to 1175, the early 2002 double top.
Support: The 18 day MVA (1047) and the 10 day MVA (1048). The exponential 50 day MVA (1037). 1030 to 1032 (early September highs). The top of the summer range at 1015. 1010 the early September highs. 975 (December 1997 peak).
Dow: Closed at 9779.57
Resistance: The October high (9850). The November high (9903). The March/September up trendline (9900). 10,000.
Support: The 18 day MVA (9732). 9686 (September high; 9659 intraday). The exponential 50 day MVA (9657). 9588 the early September highs. 9500 (June 2002 lows) is the top of the summer range.
Economic Calendar
11-25-03
GDP, 1st revision Q3 (8:30): 8.2% actual, 7.6% expected, 7.2% prior.
Consumer confidence, October (10:00): 91.7 actual, 85.0 expected, 81.7 September.
Existing home sales, October (10:00): -4.6% (6.35M) actual, 6.53M expected, 6.68M September.
11-26-03
Personal income, October (8:30): 0.4% actual, 0.4% expected, 0.4% September (revised from 0.3%).
Personal spending, October (8:30): 0.0% actual, 0.0% expected, 0.0% September (revised from -0.3%).
Durable goods orders, October, (8:30): 3.3% actual, 0.7% expected, 2.1% September (revised from 08.%).
Initial jobless claims (8:30): 351K actual, 360K expected, 362K prior (revised from 355K).
Michigan sentiment revised (9:45): 93.7 actual, 94.0 expected, 93.5 prior.
New home sales, October (10:00): 1.105 (-3.5%) actual, 1.13M expected, 1.15M September.
Chicago PMI, November (10:00): 64.1 actual, 56.5 expected, 55.0 October.
Fed Beige Book (12:00)
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
WATCHLIST/ CONTINUING:
LEGEND
DATE: date play first appeared on report.
PLAY: Denotes the type of pattern or play.
Upside play types: A Wedge=Ascending triangle/wedge; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.)
Downside play types: CCall=Covered Call; DWedge=Descending triangle/wedge; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);
PIVOT=Buy point
Tgt=Target stock price for the play. Applies to stock and options.
Vol=Volume for the most recent session.
TgtV=Target volume to enter the play.
Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon market conditions.
Upside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
^OEX 11/06 A Wedge 66.8 +1.67 523.15 545 211K 650K 518.55
Current.
ADVP 10/25 A Wedge 54.68 -0.56 49.59 59.38 857K 3.1M 52.21
Current.
AMXC 11/05 Cup hdl 6.54 +0.52 6.27 8.12 314K 151K 5.91
Current.
ANT 11/10 A Wedge 37.79 +0.42 35.58 42.45 151K 561K 34.85
Current.
AOT 11/24 Flat 23.31 +0.18 23.28 27.95 230K 405K 22.32
Buy Not Hit.
ASF 11/17 Test BO 14.98 +0.04 14.52 17.85 368K 400K 13.72
Buy Not Issued.
ATML 11/25 Flat 6.67 +0.07 6.78 8.48 6M 11M 6.29
Buy Not Issued.
BRCM 10/04 Cup hdl 35.88 +0.3 29.91 35.88 7M 20M 35.15
Current.
CAI 11/09 Test BO 50.43 +0.51 50.88 51 111K 581K 49.08
Buy Not Issued.
CASY 11/06 Rv H&S 17.39 +0.16 16.37 20.12 54K 200K 16.22
Current.
CKSW 10/25 Test BO 4.4 -0.1 3.61 4.58 339K 300K 4.02
Current.
CPHD 11/05 A Wedge 7.35 +0.67 6.15 7.52 799K 338K 6.34
Current.
CRA 11/24 Cup hdl 13.61 -0.04 14.12 16.95 274K 809K 13.13
Buy Not Hit.
CYD 11/24 Test 50 29.3 +0.47 30.58 38 2.3M 3.5M 28.22
Current.
EGHT 10/30 Cup 6.76 +2.98 2.15 2.91 25M 823K 3.06
Current.
EMBT 10/06 Flat 14.41 -0.2 11.24 13.38 277K 350K 14.27
Current.
EMBT 07/26 Cup hdl 14.41 -0.2 9.33 11.12 277K 400K 14.27
Current.
EQIX 11/20 Cup hdl 26.05 +0.57 23.12 27.75 124K 200K 20.79
Buy Not Hit.
EVCI 10/20 Cup hdl 5.25 -0.27 3.4 4.38 63K 125K 5.05
Current.
FALC 10/30 Cup hdl 7.99 -0.09 8.04 9.65 136K 230K 7.81
Current.
FLDR 11/25 DB hdl 5.59 -0.08 6.05 7.85 76K 150K 5.57
Buy Not Hit.
GBN 10/22 Cup 2.31 +0.01 1.86 2.42 540K 300K 2.14
Current.
GGAL 11/22 Test 50 6.09 -0.1 6.25 8 175K 424K 5.81
Buy Not Hit.
GISX 10/25 Cup hdl 29.56 +0.89 27.88 33.32 206K 302K 28.32
Current.
IDTI 10/29 Rv H&S 18.54 +0.14 16.45 19.75 1.4M 3.3M 17
Current.
JNPR 11/22 A Wedge 18.67 +0.04 18.23 21.85 5.6M 12M 17.22
Current.
KEYN 11/17 Flat 12.26 -0.04 12.52 15 228K 200K 11.65
Current.
KVHI 11/15 DB hdl 30.53 -2.47 33 40 517K 536K 30.42
Current.
LTXX 11/11 DB hdl 16.46 +0.23 16.68 19.85 939K 1.2M 14.92
Current.
MANU 10/11 Test BO 6.65 +0.1 6.77 8.15 410K 1.4M 6.44
Current.
MCLD 11/12 DB hdl 1.6 -0.02 1.78 2.32 1.3M 3M 1.57
Buy Not Hit.
NANO 11/26 Pennant 14.5 +1.74 13.93 16.75 653K 450K 12.88
Current. Saw the strong volume move off the 50 day MVA in the
10 week base showing soild 3 to 0 accumulation so issued
the alert and moved in.
NEOF 11/03 A Wedge 15.71 +0.3 16.58 19.95 72K 151K 15.42
Buy Not Hit.
NKE 11/22 Cup hdl 67.35 +0.18 64.55 75 1.4M 2M 62.22
Current.
NOVL 11/22 Test BO 9.46 +0.36 8.88 10.68 6.3M 10M 8.42
Current.
NVLS 11/19 Test BO 43.3 -0.69 44.44 52 7.6M 10M 42.28
Current.
PLXS 11/03 DB hdl 18.16 +0.66 19.06 22.75 277K 528K 17.38
Current.
PTSX 11/15 A Wedge 4.99 -0.08 5.22 6.55 18K 144K 4.85
Buy Not Hit.
QADI 11/12 Flat 12.21 -1.09 13.54 16.22 818K 298K 12.98
Exited.
RBK 09/24 DB hdl 40.07 +0.22 34.46 41.35 717K 1.1M 39.05
Exited.
SCKT 11/03 Cup hdl 3.88 +0.06 3.61 4.55 119K 526K 3.66
Current.
SERO 11/22 Cup hdl 17.27 -0.02 17.72 21.25 147K 700K 16.32
Buy Not Issued.
SNDK 11/24 Test 50 79.8 +0.83 81.2 93.35 3.1M 3.5M 77.88
Current.
SOHU 10/24 Dbl btm 34.4 -0.01 37.69 45 1.9M 9M 34.85
Current.
SQNM 11/18 Cup hdl 3.56 -0.04 3.88 4.95 111K 561K 3.58
Buy Not Hit.
TEO 10/27 Cup hdl 8 +0.02 7.26 9 89K 511K 7.76
Current.
TLAB 11/10 DB hdl 8.15 +0.03 8.27 9.88 2.7M 6M 7.86
Current.
TMWD 11/19 BO 8.2 -0.37 8.15 8.78 504K 900K 7.41
Current.
TQNT 11/19 Test 18 8.12 -0.14 8.04 9.75 2.7M 3M 7.68
Buy Not Issued.
TRFX 11/19 Test BO 5 -0.06 5.19 6.54 73K 135K 4.83
Current.
TTEC 11/19 Test BO 10.07 -0.26 10.25 12.27 608K 660K 9.28
Current.
VSH 11/12 Flat 20.86 +0.06 20.78 24.88 1.1M 3.2M 19.78
Current.
WMS 11/21 Dbl btm 26.87 +0.07 25.83 31.22 210K 650K 24.66
Current.
ZILA 11/15 Cup hdl 3.95 -0.08 4.19 5.35 69K 185K 3.87
Buy Not Hit.
Downside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ARDI 11/10 Put 12.63 +0.2 11.95 10.06 227K 1M 12.62
Current.
ASKJ 11/10 Put 18.99 +0.56 18.22 16 1.6M 2.5M 18.32
PFGC 11/15 Put 39.28 +0.48 38.58 36.05 470K 450K 38.88
Buy Not Issued.
SFNT 11/11 Put 33.21 +0.12 34.05 30.55 232K 461K 33.22
Good Investing!
Jon L. Johnson and your Technical Traders Report Team
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP. or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners in Online Investment Services, LP. or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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