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us stock market, trading system
Begin part 2 of 2
FRIDAY
The unemployment report has been moved to next week, so Friday is without any scheduled economic data. As it is a Friday after a holiday, even though it is the first trading session of the new year, we don't expect much in the way of volume. That does not mean no action, just not much volume. With fund managers on holiday still that means there may not be any change in portfolios of note until the following week. At that point we will get a better view as to what fund managers favor near term.
Thus while Friday may be more of a sleeper session, the following week could be very interesting so to speak as more money is put to work and moved around in the market. The recent trends, despite a few sessions of NASDAQ and small cap leadership, still favors the large caps. That is why we are going to be looking at those names mentioned above as well as others to see if money moves into them. It is not a one-session blitz that is then over. We are looking at another year here, and want to keep our investing in somewhat of a longer perspective than the day-to-day noise we are pelted with. For now one of the current strong trends is large cap movement, and we are going to be looking at those in the coming week. At the same time we are going to watch NASDAQ continue to consolidate and provide buying opportunities when those bases are ripe for the breakout.
Getting back to what to expect for the year, we are looking for continued solid economic growth. There is virtually no one talking about this recovery in terms of a long lasting economic expansion. It has mostly been discussed as a flash in the pan due to stimulus that has run out and deficits that are supposedly going to jack up interest rates, choke off recovery, and leave us all with deficits that will hound us to the end of recorded time. Something like that, at least. To those around or listening in the 1980's, that was the prognostication as well. Everyone doubted the power of Art Laffer's supply side theories of lower tax rates and reduced government regulation leading to economic boom. While the Clinton administration can be lauded for not overspending, that is all it took to turn the economic powerhouse created in the 1980's into surplus city. Clinton did nothing proactively, just knew enough to stay out of the way. That in itself was quite sage given the temptations to meddle. Recall that the 1980's Congress spent $1.30 of every $1 brought in. Tax revenues skyrocketed but so did spending. When Clinton and the 1990's Congress controlled their outlays, money was everywhere. They, of course, after beholding their bounty, started new programs that busted the budget when the Fed pooped on the party.
Now we have true tax reform underway. It should be no surprise to anyone that there is more coming in the form of social security reform and in other areas. The big entitlements are just not working and have to be steered toward more market based methods of funding. Government regulation is a mixed bag; some areas are getting better, others worse. If they continue to relax and allow business to do business, the foundation for an extended economic expansion is in place for 2004 and beyond. We still think we are going to see an explosion of job creation in the new year, but not in manufacturing. We still view the rest of this decade with excitement that from the ashes of the collapse another solid expansion rises as it did in the 1980's and again in the 1990's. No one thinks it can happen again, but the same foundations are being put in place.
The market will rally and consolidate in such a situation. No 80% runs straight up; that is good because that just sets up crashes. This past year was great in how the market consolidated its gains and continued to move up in a more orderly manner. The start of 2004 may be rocky after an early surge as the market continues its run but then hits headwinds at those former tops and consolidation levels.
Support and Resistance
NASDAQ: Closed at 2003.37
Resistance: The March/August up trendline (2008) is some potential resistance. The January 2002 double top (2044 to 2099).
Support: December high (2000), November high (1992). The 10 day MVA and the 18 day MVA (1978, 1965). The 50 day MVA (1936). 1875 to 1880 is the bottom of the November range.
S&P 500: Closed at 1111.92
Resistance: Minor resistance at 1115. 1150 to 1175, the early 2002 double top.
Support: 1100 represents some early 2001 lows and 1106 from a May 2002 top. The 10 day MVA and the 18 day MVA (1097, 1087). 1080 from February 2002 lows. November high (1061.40-1064).
Dow: Closed at 10,453.92
Resistance: 10,600 (March 2002 peak).
Support: 10,353 from May 2002 high. The 10 and 18 day MVA (10,321 and 10,211). 10,259 (January 2002 high). The exponential 50 day MVA (9962). The November high (9903).
Economic Calendar
12-30-03
Chicago PMI, December (10:00): 59.2 actual, 62.0 expected, 64.1 November.
Consumer confidence, December (10:00): 91.3 actual, 91.8 expected, 92.5 November (revised from 91.7).
Existing home sales, November (10:00): 6.06M actual (-4.6%), 6.33M expected, 6.35M October.
12-31-03
Initial jobless claims (8:30): 339K actual, 350K expected, 354K prior (revised from 353K).
THE PLAYS
No new plays for Friday. Several current plays look ready to make moves.
Current ready to move: ALTI; AXV; CHL; CORV; CYH; EMBT; HRLY; MRBA; MXIM; OTE; RFMI; VNWK
CONTINUING:
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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
ALTI 12/01 Dbl btm 2.63 +0.11 2.05 2.74 2M 1.2M 2.35
Current.
AMXC 12/29 A Wedge 7.97 -0.35 7.98 9.98 99K 134K 7.39
Current.
AOT 11/24 Flat 23.04 -0.04 23.37 27.95 204K 405K 22.88
Current.
ATVI 12/17 Dbl btm 18.21 -0.22 18.52 22.22 747K 2.5M 17.88
Current.
AVX 12/11 Flat 16.62 -0.03 16.25 19.55 196K 450K 15.89
Current.
BJS 12/18 Test BO 35.9 -0.62 36.74 40.55 1.6M 3.6M 35.42
Buy Not Issued.
BWC 12/01 Rv H&S 21.09 -0.7 20.74 24.88 68K 155K 20.65
Current.
CEVA 12/16 Rv H&S 10.41 +0.03 9.92 11.92 88K 128K 9.23
Buy Not Issued.
CHL 12/17 Rv H&S 15.53 +0.1 15.48 18.58 258K 790K 14.78
Current.
CHRD 12/20 A Wedge 5.45 +0.03 5.23 6.28 302K 1M 4.68
Current.
CORV 12/04 Flat 1.7 +0.09 1.65 2.12 25M 8M 1.54
Current.
CPHD 11/05 A Wedge 9.58 -0.47 6.15 7.52 674K 338K 8.92
Current.
CVNS 12/16 Flat 11 +0.53 10.48 12.55 769K 145K 9.75
Current.
CYH 12/27 DB hdl 26.58 -0.13 27.25 32 351K 550K 26.42
Buy Not Hit.
DTPI 12/17 A Wedge 10.2 -0.2 10.23 12.35 242K 577K 9.53
Current.
EMBT 10/06 Flat 15.95 -0.03 11.24 13.38 184K 350K 15.24
Current.
EMBT 07/26 Cup hdl 15.95 -0.03 9.33 11.12 184K 400K 15.24
Current.
ENMC 12/20 Flat 8.16 -0.24 8.2 9.88 171K 417K 7.48
Current.
FLDR 12/12 Cup hdl 6.58 -0.22 6.64 8 94K 150K 6.48
Current.
FLDR 11/25 DB hdl 6.58 -0.22 6.19 7.85 94K 150K 6.48
Current.
GTI 12/15 A Wedge 13.5 0 12.66 15.22 506K 1.2M 12.76
Current.
HOMS 12/11 A Wedge 4.73 -0.06 4.32 5.35 1.7M 1.5M 3.97
Current.
HRLY 12/22 Cup hdl 20.7 +0.36 20.86 24.92 73K 135K 19.98
Current.
IMOS 12/26 A Wedge 9.39 +0.5 8.75 10.68 1.5M 552K 7.94
Current.
KEA 12/27 DB hdl 14.64 -0.34 15.22 18.25 181K 500K 14.32
Buy Not Hit.
MAXM 12/01 Rv H&S 8.9 +0.2 8.09 9.88 39K 227K 8.36
Current.
MICU 12/13 Flat 18.65 -0.34 19.12 22.95 209K 488K 17.98
Buy Not Issued.
MOLX 12/08 Test 50 34.89 -0.1 33.21 38 620K 850K 33.25
Current.
MRBA 12/30 Test 50 5.5 +0.04 5.62 7.05 111K 227K 5.23
Buy Not Hit.
MROI 12/29 Dbl btm 13.49 -0.94 14.86 17.95 95K 112K 13.82
Buy Not Hit.
MSPD 12/15 A Wedge 6.85 -0.26 7.15 8.65 417K 1.1M 6.65
Buy Not Issued.
MTMD 12/03 Cup 5 -0.05 4.64 6 153K 312K 4.68
Current.
MTX 12/09 Cup hdl 59.25 -1.5 55.82 59.94 109K 150K 58.64
MVSN 11/24 Cup hdl 22.59 -0.4 23.33 27.69 260K 891K 22.32
Current.
MXIM 12/29 Test 50 49.58 +0.18 50.15 54.15 3.6M 5M 49.21
Buy Not Issued.
NOVL 11/22 Test BO 10.53 +0.04 8.88 10.68 4M 10M 9.88
Current.
NPSP 12/06 Cup hdl 30.68 -0.11 31.88 38.25 406K 1.3M 30.22
Buy Not Issued.
OCLR 12/22 Flat 28.71 -0.79 29.51 35 82K 135K 28.08
Current.
OMCL 12/10 Cup hdl 16.2 +0.05 16.95 20.25 157K 300K 15.85
Current.
OTE 12/20 Cup hdl 6.69 +0.21 6.52 8.15 86K 135K 6.19
Buy Not Issued.
PTNR 12/24 Cup hdl 7.84 +0.03 7.41 9.35 59K 135K 7.24
Current.
QGENF 12/29 Cup 11.96 -0.18 12.33 14.88 444K 300K 11.68
Current.
RFMI 12/15 Test BO 9.83 -0.04 10.12 12.22 64K 129K 9.32
Buy Not Hit.
TEK 12/13 Test 50 31.6 -0.51 30.35 35.88 326K 450K 30.38
Current.
TELK 12/29 Rv H&S 23 +0.69 22.86 26.25 726K 650K 21.68
Current. Solid volume move in a sea of lower volume moves.
THER 12/29 Flat 20.18 +0.18 19.65 23.55 1.7M 1.3M 18.24
Current.
TRPH 12/11 Test BO 6.99 -0.03 6.49 7.68 306K 1.7M 6.48
Current.
TRPH 12/01 Test 50 6.99 -0.03 5.58 6.94 306K 1.7M 6.48
Current.
USPI 12/22 Flat 33.48 -0.62 33.88 40.65 114K 350K 32.32
Buy Not Issued.
VNWK 12/30 DB hdl 2.24 +0.05 2.34 3.05 201K 271K 2.18
Buy Not Hit.
VSH 11/12 Flat 22.9 +0.09 20.78 24.88 1.4M 3.2M 21.47
Current.
WMS 11/21 Dbl btm 26.2 -0.42 25.83 31.22 123K 650K 25.68
Current.
Downside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ADI 12/20 Put 45.65 -0.04 43.85 39.75 2.4M 4M 45.32
Buy Not Hit.
AV 12/08 Put 12.94 +0.03 11.75 10 4.1M 6.8M 11.85
Current.
BBY 12/22 Put 52.24 -0.41 49.54 46.45 2.1M 5M 51.82
Current.
CLE 12/20 Put 18.84 +0.21 19.31 18 768K 679K 20.24
Buy Not Issued.
JBLU 12/15 Put 26.52 +0.37 26.55 23.15 1.3M 3M 28.02
Current.
LOW 12/10 Put 55.39 +0.44 53.42 50.45 2.3M 4M 54.75
Current.
RTH 12/17 Put 90.32 +0.13 87.98 84.02 642K 2.5M 89.44
Buy Not Hit.
SLAB 12/09 Put 43.28 -0.58 42.6 37.65 851K 1.3M 43.72
Current.
SLVN 12/10 Put 28.79 -0.35 28.05 25.02 273K 484K 28.19
Current.
SMTC 12/13 Put 22.76 -0.2 21.25 18.54 747K 1.2M 22.18
Current.
VSEA 12/18 Put 43.8 -0.38 41.62 38 293K 1M 42.94
Buy Not Hit.
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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us stock market
trading system
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