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us stock market, trade stock
Begin part 2 of 3
NASDAQ
Slightly undercut the 18 day MVA and up trendline but on very low volume.
Stats: -30.98 points (-1.57%) to close at 1937.82
Volume: 1.676B (-20.74%). Volume fell off the table as Nasdaq slid lower all session. It broke the 18 day MVA and the up trendline, but marginally, and the low volume indicates it was not much of a horrid event.
Up Volume: 337M (-753M)
Down Volume: 1.315B (+327M)
A/D and Hi/Lo: Decliners led 1.91 to 1. Poor breadth, but not an out and out rout.
Previous Session: Decliners led 1.15 to 1
New Highs: 102 (-50)
New Lows: 10 (+3)
The Chart: http://www.investmenthouse.com/cd/^ixq.html
An early comeback attempt from the gap lower was over early as well. After that stretch higher the techs sold all session. A rally with 1.5 hours let ran out of steam and Nasdaq closed just off its low thanks to a last minute uptick. Absolutely no upside interest given the INTC news. On the other hand, there was no real selling either as volume was the lightest of the week. A lack of bids and just a few sellers sent it lower.
It closed below the 18 day MVA (1945) and the March/August up trendline (now at 1948). Those are key levels, and while closing below them they did so just barely and on very low trade. A low volume, lazy move just below those levels is not a major breakdown. It can still hold here, even hit the 50 day MVA (1913), and still make a higher low. It made a higher high, just barely, on the move higher, not the strong moves up off tests of the uptrend prior in the rally. It is long in the tooth, and about the only thing that keeps it going here is the year end, holiday move.
S&P 500/NYSE
Gave back the breakout by a hair, but the low volume makes that like splitting hairs, and it held the 10 day MVA to boot.
Stats: -8.22 points (-0.77%) to close at 1061.5
NYSE Volume: 1.217B (-17.23%). Volume dropped off on NYSE to the lowest of the week as well, indeed lower than most of the November volume that was below average. Thus the slight dip below the breakout over the November high was not that horrendous.
Up Volume: 370M (-368M)
Down Volume: 830M (+111M)
A/D and Hi/Lo: Decliners led 1.24 to 1. Very modest.
Previous Session: Decliners led 1 to 1
New Highs: 212 (-23)
New Lows: 2 (-3)
The Chart: http://www.investmenthouse.com/cd/^spx.html
A rally attempt failed early and the large cap index sold all session. It broke below the November highs (1064-1062) and managed to rebound late to just hold the early November intraday high, using the 10 day MVA (1060) as support. All in all not a bad session, just a session without buyers willing to step in. This is where the rubber meets the road. May test the 18 day MVA (1056) intraday before making the move.
DJ30
Stats: -68.14 points (-0.69%) to close at 9862.68
Volume: 201M versus 217M
After making that new closing high Thursday the blue chips turned right back, gave it all up, failing at the up trendline (9929). It slid back, testing the 10 day MVA (9831) on the low and rebounding slightly to close. It is still holding over the November closing highs (9850), a good position to rally. It certainly had no help from INTC Friday and it still held the near term support. Again, a good position to rally.
THIS WEEK
The Fed meets Tuesday, and retail sales Thursday is the other big economic event. Many are worried that WMT is not selling enough goods to ensure a successful holiday season. It is an important part of retail sales, but this year it is not the end all. Thus the overall retail sales will be closely watched.
The economic data will continue to be watched, but this week's reports mostly likely won't drive the market up or down. The small cap, mid-cap, and semiconductor indices are making typical pullbacks in their uptrends. The smaller cap indexes are at the 18 day MVA, the SOX is just over the 50 day MVA and moving down to test it. SOX and DJ30 are holding their breakouts over the November highs. Nasdaq is at its up trendline, but it is struggling. Not many breakdowns in stocks, and many are set up to rebound. That action with the low volume led us to let those plays holding support ride another day. That all looks good, and we will be looking at several of these for rebound plays if the indexes make that move.
At the same time we will watch how Nasdaq holds at this level in light of that modest high on the last trendline bounce and the increased day to day volatility last week. While not the wild volatility that marked the early 2000 top, there is volatility here after a long run that we cannot ignore. Nasdaq could still sell to the 50 day MVA and make a higher low. We don't want to bail out just as stocks are bottoming, and it looks as if they are trying to do so. We may see a test, intraday or otherwise, toward the 50 day MVA on Nasdaq and SOX. As long as it is on low volume or reverses off of that level on strong volume the market is still set to make a move up in the holiday rally before Christmas.
Support and Resistance
Nasdaq: Closed at 1937.82
Resistance: The 10 and 18 day MVA (1952, 1945). The March/August up trendline (1950). November high (1992). The January 2002 double top (2044 to 2099).
Support: The September high (1913). The 50 day MVA (1913). 1875 to 1880 is the bottom of the week's range.
S&P 500: Closed at 1061.50
Resistance: 1080 from February 2002 lows. The December to June upper channel line at 1084. 1100 represents some early 2001 lows. 1150 to 1175, the early 2002 double top.
Support: November high (1061.40-1064) is still holding. The 10 and 18 day MVA (1060 and 1056). The exponential 50 day MVA (1043). 1030 to 1032 (early September highs).
Dow: Closed at 9862.68
Resistance: The November high (9903). The March/September up trendline (9929). 10,000. 10,259 (January 2002 high).
Support: The October high (9850). The 10 and 18 day MVA (9831 and 9800). The exponential 50 day MVA (9702). 9686 (September high; 9659 intraday). 9588 the early September highs. 9500 (June 2002 lows) is the top of the summer range.
Economic Calendar
12-09-03
Wholesale inventories, October (10:00): 0.1% expected, 0.4% September.
FOMC meeting results (2:15): Expecting no change.
12-11-03
Business inventories, October (8:30): 0.1% expected, 0.3% September.
Retail sales, November (8:30): 0.5% expected, -0.3% October.
Retail sales ex-autos (8:30): 0.3% expected, 0.2% October.
Initial jobless claims (8:30): 355K expected, 365K prior.
FOMC minutes (2:00)
12-12-03
PPI, November (8:30): 0.1% expected, 0.8% October.
Core PPI (8:30): 0.0% expected, 0.5% October.
Trade balance, October (8:30): -$41.2B expected, -$41.3B September.
Preliminary Michigan Sentiment, December (9:45): 96.4 expected, 93.7 November.
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.
PLAYS:
Good movers Friday: AIRN; ALTI; GBN; NOOF; TRPH
New plays:
Upside:
Play Date: 12/06/2003
CDIC (Cardiodynamics--$6.05; -0.22; no options): Medical appliances
http://biz.yahoo.com/p/c/cdic.html
STATUS: Breakout test. Made us some money earlier in the year, and is setting up to make us money again. After breaking out of an 11 week triangle to end November, CDIC is coming back to test the breakout, holding just over the 18 day MVA (5.93). Volume has moved much lower and below average on the test. Positive 3 to 1 accumulation in the base (3 up weeks on rising volume to 1 down week on rising volume) set the foundation for the breakout and the run to come. Money flow is excellent and relative strength broke out on the move. The low volume is what you want to see on the test. Now it just needs to bounce on some rising, above average trade to make it successful. Looks good.
Volume: 246.911K Avg Volume: 401.09K
BUY POINT: $6.24 Volume=400K Target=$7.82 Stop=$5.92
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/cdic.html
Play Date: 12/06/2003
IBIS (Ibis Technology--$16.12; +0.11; optionable): Semiconductor integrated circuit
http://biz.yahoo.com/p/i/ibis.html
STATUS: Testing the breakout. IBIS is pulling back to test the the break from a nice short 7 week base that formed more or less over the 50 day MVA (13.73). Accumulation in the pattern is solid at 3 to 1 (3 up price weeks on rising volume to 1 down price week on rising volume). Friday it edged back to the 10 day MVA (15.81), held and posted a slight gain. Money flow is already surging up ahead of the price as it pulls back, and relative strength broke out with thes the stock two weeks back. It is holding over the left side of the pattern, a very good sign. Looking for volume to rise again on the move back up to show the test was successful. That is one of our favorite entry points as it shows the base and the breakout were solid.
Volume: 245.448K Avg Volume: 198.272K
BUY POINT: $16.42 Volume=297K Target=$19.75 Stop=$15.27
POSITION: UIB DC - Apr. $15c (66 delta) &/or Stock
http://www.investmenthouse.com/ci/ibis.html
Play Date: 12/06/2003
IMOS (Chipmos Technologies--$8.21; +0.76; no options): Chip equipment
http://biz.yahoo.com/p/i/imos.html
STATUS: Testing the breakout. IMOS broke out of a long 21 month base in October, kicking off the rally to 8. After that initial surge it has moved laterally the past four weeks, building a nice lateral pattern showing 2 to 0 accumulaiton. Investors are using this nice lateral move as another point to build some positions. Friday it was up on strong volume, nearing the next breakout point. Ready to step in as it continuest the move this week.
Volume: 941.974K Avg Volume: 368.272K
BUY POINT: $8.38 Volume=552K Target=$10.28 Stop=$7.52
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/imos.html
Play Date: 12/06/2003
NTST (Netsmart Technologies--$14.1; -0.14; no options): Business software
http://biz.yahoo.com/p/n/ntst.html
STATUS: Testing the breakout. Broke out of a 7 month base in August, ralied to 14, and then formed the next base, a 6 week flat pattern over the 50 day MVA (11.51). It broke out last week, rallied to 15, and then tested the move Thursday and Friday. It may snug up a bit further toward the 10 day MVA (13.10) on this test, but when it bounces we want to be in it. Love breakout tests as they show the base is solid an we don't have to worry about breakout failure nearly as much.
Volume: 192.413K Avg Volume: 134.136K
BUY POINT: $14.32 Volume=215K Target=$17.18 Stop=$13.08
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/ntst.html
Continuing plays ready to move: AOT; DJO; JNPR; RCRC; OBAS; SCON; ULGX; HOTT; CYD
Play Date: 11/24/2003
AOT (Apogent Tech--$23.01; -0.16; optionable): Medical instruments
http://biz.yahoo.com/p/a/aot.html
STATUS: Testing the breakout. Nice surge off the 50 day MVA to end November and breakout from the 3.5 month flat base. Now AOT is coming back to test that move, easing back to the 18 day MVA (22.84) on lower, below average volume. Friday it showed a doji at that level, indicating that the test is ending. Now we want to see it rally back up on strong, above average volume. Excellent money flow to go along with the accumulation.
Volume: 148.6K Avg Volume: 289.818K
BUY POINT: New: $23.28 Volume=405K Target=$27.95 Stop=$22.32
POSITION: AOT DX - Apr. $22.50c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/aot.html
Play Date: 11/22/2003
JNPR (Juniper Networks--$17.9; -0.24; optionable): PC networking and communication
http://biz.yahoo.com/p/j/jnpr.html
STATUS: Ascending triangle. JNPR continues to tantalize, easing back in the 13 week base, holding over the 50 day MVA (17.59) Friday with a nice, tight doji. The stock has shown a doji just over the 50 day MVA each time it has bounced in the pattern. It is making a higher low again and building the pressure for a breakout. It is a very nice pattern, but for us to take new positions we are going to have to see a breakout on strong volume.
Volume: 3.192M Avg Volume: 9.072M
BUY POINT: New aggressive: $18.23 Breakout: $19.18 Volume=12M Target=$21.85 Stop=$17.99
POSITION: JUX DR - Apr. $17.00c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/jnpr.html
Play Date: 12/01/2003
OBAS (Optibase--$8.05; +0.25; no options): Telecom
http://biz.yahoo.com/p/o/obas.html
STATUS: Testing the breakout. After exploding higher Monday in a breakout from its 12 week flat base, OBAS spent the week making a low volume test of theat move. Thursday and Friday it tapped the 10 day MVA (7.67) on the lows and rebounded. It is ready to make the next move up.
Volume: 80.201K Avg Volume: 139.681K
BUY POINT: New: 8.28 (orig. $8.14) Volume=250K Target=$9.94 Stop=$7.49
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/obas.html
End part 2 of 3
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