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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
Tuesday night play results:
CAMD: Edging higher on rising though still light trade.
VYYO: Gapped higher but could not hold the gain.
No new plays for Friday. Several current plays look ready to make moves.
Current ready to move: There are plenty. ADCT; ALTI; CAMD; INAP; LCAV; ONNN; PTNR; SBUX; TRPH; TXN
CONTINUING:
* * SPREADSHEET DOWNLOAD * * *
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http://investmenthouse.com/daily/table.php
(You will need your password ... if you need help click on this link and our automated system will email it to you immediately once you fill in your email address:
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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
ACO 12/29 Cup hdl 20.3 -2.06 19.99 23.85 869K 500K 18.32
Current.
ADCT 12/22 DB hdl 2.97 +0.18 3.01 3.88 33M 26M 2.78
Current. Excellent volume breakout. Excellent.
AIR 12/15 BO 14.95 -1.19 12.04 14.55 313K 150K 14.94
Current.
AIRN 12/04 Test BO 3.5 +0.13 3.22 4.18 691K 537K 3.25
Current.
ALTI 12/01 Dbl btm 2.63 +0.11 2.05 2.74 2M 1.2M 2.35
Current.
AMSC 12/29 Cup hdl 13.86 -0.58 13.37 16.22 301K 500K 12.32
Current.
AZPN 12/18 Flat 10.26 +0.06 9.17 11.12 911K 1M 9.32
Current.
CAMD 12/30 Cup hdl 9.13 +0.25 9.24 11.12 115K 456K 8.59
Buy Not Hit.
CTRA 12/10 Cup hdl 3.95 -0.06 4.25 5.44 126K 500K 3.95
Buy Not Hit.
DIS 08/09 Test 50 23.33 +0.03 22.06 26.48 4.7M 9M 22.05
EBAY 12/12 Test 18 64.61 +0.33 34.72 46 5.4M 12M 61.22
Current.
EBAY 10/15 Test 50 64.61 +0.33 31.22 46 5.4M 12M 61.22
Current.
FDRY 12/29 Flat 27.33 -0.35 26.65 32 1.2M 3.5M 25.72
Current.
FDRY 11/24 Flat 27.33 -0.35 24.72 29.72 1.2M 3.5M 25.28
Current.
FL 10/11 A Wedge 23.45 -0.02 17.38 20.88 815K 1.4M 22.74
Current.
FSII 11/25 Flat 7.38 -0.12 6.54 7.98 102K 400K 6.99
Current.
GMR 12/04 Test 18 17.6 -0.15 14.77 17.78 60K 207K 16.82
Current.
GNLB 12/20 Cup hdl 2.83 +0.25 2.43 3.12 1.5M 786K 2.26
Current.
HL 12/29 DB hdl 8.29 -0.17 8.52 10.65 1.4M 2.5M 7.81
Current.
IBPI 11/09 A Wedge 16.1 -0.22 16.12 19.38 17K 358K 15.58
Buy Not Issued.
IDT 12/09 Rv H&S 23.13 -0.59 19.79 23.82 353K 200K 22.42
Current.
INAP 12/08 Test BO 2.45 +0.06 2.47 3.05 5.1M 5.2M 2.18
Current.
INAP 11/25 Test BO 2.45 +0.06 1.95 2.58 5.1M 5.7M 2.18
Current.
IONA 12/20 Test BO 5.01 -0.23 5.72 7.15 357K 600K 5.29
Buy Not Hit.
IVIL 12/23 Flat 3.58 -0.16 3.59 4.52 136K 340K 3.48
Current.
KEI 12/29 A Wedge 18.3 -0.53 18.73 22.78 89K 150K 17.59
Current.
LCAV 12/13 DB hdl 21.17 +0.07 19.82 23.75 116K 206K 20.04
Current.
LPNT 08/09 Rv H&S 29.45 -0.1 0 0 333K 1.3M 27.88
Buy Not Issued.
MNDO 12/29 Test BO 6 +0.02 6.18 7.81 256K 350K 5.74
Current.
MTZ 12/26 Flat 14.81 -0.44 14.81 19.32 178K 300K 13.77
Current.
NGAS 12/16 Cup hdl 5.22 -0.11 5.74 7.25 338K 195K 5.11
Current.
NOOF 11/01 Cup hdl 9.3 +0.08 5.27 6.32 113K 319K 8.62
Current.
NOOF 10/25 Cup hdl 9.3 +0.08 4.78 6.21 113K 280K 8.62
Current.
OHI 12/08 Flat 9.33 +0.05 8.71 10.48 174K 200K 8.55
Current.
ONNN 12/16 Test BO 6.48 +0.03 6.78 8.18 764K 3.4M 6.22
Buy Not Hit.
PAL 12/29 Test 50 7.93 -0.02 7.96 9.54 200K 314K 7.38
Current.
PROX 12/17 Cup hdl 1.67 -0.06 1.96 2.62 1.5M 3.8M 1.82
Buy Not Hit.
PTNR 12/24 Cup hdl 7.84 +0.03 7.41 9.35 59K 135K 7.24
Current.
RHAT 12/18 DB hdl 18.77 -0.11 16.51 19.58 2.7M 5.5M 17.88
Current.
RWY 11/04 Cup hdl 8.19 +0.04 6.24 7.85 115K 146K 7.52
Current.
SBUX 07/30 Cup 33.16 +0.45 30.35 36.75 2.9M 6M 31.32
Current.
SBUX 07/01 Cup 33.16 +0.45 26.3 30.94 2.9M 6M 31.32
Current.
TGA 12/08 A Wedge 2.43 -0.11 2.12 2.78 366K 305K 2.36
Current.
TGT 08/09 Flat 38.4 +0.02 41.45 50 2.6M 5.7M 38.74
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.
TSAI 12/13 Flat 22.27 -0.15 22.95 27 292K 629K 21.55
Current. Was making a nice move on volume when it dropped off
the table late in teh session. Still a very nice test
of the 10 day MVA so we like it and will look at more
when it rebounds off the 10 day.
TSCO 07/29 Test BO 38.99 -0.55 28.06 31.44 343K 494K 37.94
Current.
TSCO 06/03 Rv H&S 38.99 -0.55 23.42 27.62 343K 603K 37.94
Current.
TSCO 04/24 Cup hdl 38.99 -0.55 21.88 26 343K 603K 37.94
Current.
TSCO 04/03 Rv H&S 38.99 -0.55 19.3 22.19 343K 577K 37.94
Current.
TXN 12/18 Test 50 29.38 -0.09 29.15 35 6.1M 18M 28.22
Buy Not Issued.
VLGC 12/12 Test BO 3.76 +0.02 3.24 3.92 307K 1.3M 3.32
Current.
VLGC 11/10 Cup 3.76 +0.02 2.14 2.82 307K 1.3M 3.32
Current.
VOD 10/28 Cup hdl 25.04 +0.29 21.45 25.75 1.8M 2.8M 23.96
Current.
VYYO 12/30 Cup 8.53 -0.03 8.88 10.65 489K 392K 8.26
Buy Not Issued.
WMS 11/21 Dbl btm 26.2 -0.42 25.83 31.22 123K 650K 25.68
Current.
YHOO 12/11 Rv H&S 45.03 +0.1 44.65 53.35 9.4M 17M 42.26
Current.
Downside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
LEXR 12/22 Put 17.42 +0.03 15.97 13.95 2.8M 4M 16.68
Buy Not Hit.
LNCR 12/10 Put 30.08 -0.21 30.89 28.04 1.1M 2.5M 31.38
Current.
SMH 12/13 Put 41.49 -0.24 40.3 37.85 8.5M 16M 41.02
Current.
SSTI 12/09 Put 11 -0.13 10.56 8.55 977K 2.4M 11.55
Current.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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
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