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stock prices, stock market today
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11/28/05 Investment House Alerts Report
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IH Alert Subscribers:
MARKET ALERTS:
Target hit alerts: AKAM
Buy alerts: None issued
Trailing stops: HOLX; IRIS; UNH; WBSN; GENZ; BRCM
Stop alerts: VTIV; GME
SUMMARY:
- Retail sales try to spur a further rally, but stocks were ready to sell.
- Retail sales results suggest solid holiday season but many doubt the numbers.
- Downside not likely over after just one day of profit taking.
Early rally gets turned over on profit taking.
Reports of a strong retail weekend countered other reports that 'black Friday' sales were almost one percent lower than 2004. Initially the stronger report, coupled with some lower oil prices, won out as stock futures jumped and the market started the session stronger. The high was hit on the open, however, and stocks spent the rest of the session trying to find the bottom.
They never did find bottom, selling lower and lower into the close as each consolidation attempt failed. Despite the upbeat news, seven straight up sessions proved too much as the market was top heavy. It showed indications last week it was running out of gas, and after an early upside flash it was finished with this leg of the run.
The leaders on the upside (e.g. tech, medical appliances) were the downside leaders in the Monday selling. The selling was not limited to just the leadership areas, however, as breadth was strong and most sectors sold off. Overall volume remained contained; higher after the half session Friday, but overall below average and modest. That indicates there was no heavy institutional selling, just some profit taking after over a week of gains. Further, NASDAQ, SP500, SOX and DJ30 all easily held above near support at the 10 day EMA. In short, basically a profit taking pullback as discussed last week as the probable direction of the market near term. The market finished near the session low and the profit taking is likely to continue Tuesday as the market digests and consolidates the recent gains.
THE ECONOMY
Weekend sales reports mixed, sparking more debate about the holiday season to come.
Over the weekend retail results for 'Black Friday' were reported to have risen 8%, less than the 8.9% gained on the 2004 retail binge day. Monday, however, the National Retail Federation reported a 22% increase in sales for the weekend, putting the season on pace for its second best since 1999. Good news indeed for a season that has been, once again, maligned by just about anyone who has access to pen, keyboard, or the airwaves.
The numbers had no sooner hit the air than the detractors were out in full force, declaring the season a dud. The same economic naysayers for the past three years (about as long as the economy has expanded) are calling for the consumer to collapse. Too much debt is the number one complaint (again, as it has been for three years), now joined by too much mortgage debt as mortgage rates rise and the housing market slides off of its highs. This could be true just as it could have been true in 2003, 2004 and most of 2005 as some prominent bears have written about week after week. Nonetheless the economy has expanded and consumption has remained strong. Bears are always bears whether on the market or the economy, and at some point they will be correct. It has been a tough three years if you are adamant the consumer is about to roll over any minute. Of course they will forget that when it happens and sing out in unison a big 'I told you so' when it does finally occur. Well, I guess we can't say they didn't warn us.
The holiday bears (and not the Coca Cola variety) also pointed to the nature of the NRA figures, i.e. that they are not hard numbers tracking actual sales. As such they are more like a sentiment survey and as always you have to take sentiment polls with some skepticism. They do, however, track the strong sales leading up to Black Friday, sales encouraged by some early discounts to 'prime the pump' and avoid last year's game of chicken with the consumer. Retailers have reported excellent same store sales and monthly chain sales results. The consumer appears to be building in strength toward the holidays, at least by the numbers.
As we reported a couple of months back, however, the so-called quality of the sales has to be considered. Wal-Mart was moaning about high gasoline prices just as its sales turned higher. Indeed, WMT again reported a strong week of sales this past week and a huge opening holiday weekend. WMT was not alone, but it and its peer group far outpaced the other retailers. Discounters scored 61% of the business over the weekend, bolstered by electronics and home furnishings sales. Department stores were second at 47%. Specialty retailers were third at 41%. As noted in September, the consumer is swinging back to the discount stores just as in the 2000 and 2001 recession.
High gasoline prices and talk of a housing 'crash' to come are having their impact, at least as to WHERE the consumer is shopping. A reported $27.9B was spent over the weekend, one of the top 'black Friday' weekends with an average $303 spent per shopper. Those numbers indicate sellers are not spending less, they are, just as in other parts of their lives, allocating their dollars differently to stretch them further.
This all means that there is a change ongoing in consumption, and it remains to be seen if it is a change that results in lower consumption as some are predicting. To hear some of the froth-mouthed diatribes today about the 'dead consumer' to come, you would have thought we were in a horrible recession as opposed to just posting the eleventh quarter of 3+% GDP growth. It is a bit too early to pronounce the consumer dead. If the consumer was not going to spend we would not have seen the strong sales ahead of the season nor the strong sales over the weekend. The idea as some put it that the consumer ran out to take advantage of the early sales on Friday because that was all the money they had to spend is absurd. The season is young and it may be a flop, but the pre-season sales and the early turnout do not suggest a dud.
THE MARKET
MARKET SENTIMENT
VIX: 11.84; +0.96
VXN: 14.78; +0.89
VXO: 11.42; +0.72
Put/Call Ratio (CBOE): 1.01; +0.1. Jumped over 1.0 on the close in the first round of selling following the last leg higher in the rally. The high numbers suggest a lot of call selling on long positions in addition to buying back puts sold in anticipation of further gains. All signs of frothy action after a strong leg higher ran out of steam.
Bulls versus Bears:
Bulls: 53.6%. After surging the past three weeks, bulls started to flatten a bit, rising just a bit higher than last week's 53.1%. Flattening out just below the 55% level that indicates an excess number of bulls. Hit 44.8% on the low on this leg, just above the 43.5% low in May.
Bears: 23.2%. Bears actually rose from the 22.9% low on this leg hit last week. They easily held above the 20% level that is considered bearish. It hit 29.2% on the high this cycle, just below the 30% level hit in May when the market bottomed at that time as well.
NASDAQ
Stats: -23.64 points (-1.04%) to close at 2239.37
Volume: 1.614B (+147.07%). Volume jumped given the half session Friday, but it was still well below average on the session, indicating no dumping of stocks. Instead it was the first pullback in a week and it occurred on low volume relative to the volume on the move higher the past week. This is what you want to see as the index fades back to near support to digest the recent gains.
Up Volume: 472M (+149M)
Down Volume: 1.133B (+873M)
A/D and Hi/Lo: Decliners led 2.38 to 1. Techs were hit hardest as far as breadth as the market sold the strongest gainers in the last part of the rally. Nothing new there.
Previous Session: Advancers led 1.06 to 1
New Highs: 115 (+20)
New Lows: 50 (+35)
The Chart: The Chart: http://www.investmenthouse.com/cd/^ixq.html
NASDAQ opened slightly higher, managed to 'rally' another point higher, and then turned lower for the session, selling into the close. Two consolidation attempts during the session failed, the latter breaking down in the last hour. That closed NASDAQ out at session lows, but it is also still well above the 10 day EMA (2230) it has held above since moving back through that level on the last session in October. Strong move that needs some rest. The breadth was weak but the volume was light. It is likely to find the 10 day EMA and even the August high (2220 intraday, 2218 close) to test the breakout and consolidate the move thus far. As long as volume remains in control and leaders don't break down the rally remains intact.
SOX (-1.21%) was unable to take out the 2005 highs last week (486.34) after trying on three sessions. Monday it started to roll back. It is still above the 10 day EMA (474.23) as near support; it would be nice to see that hold but it may try to fill the gap from a week back down at 468.
SP500/NYSE
Stats: -10.79 points (-0.85%) to close at 1257.46
NYSE Volume: 1.493B (+176.57%). As with NASDAQ, a big gain in volume but it was over a half session Friday. Also similar to NASDAQ, the volume was well below average and lower than the upside volume as SP500 climbed higher and made its breakout to 2005 highs. Thus the session was profit taking after a strong move higher.
A/D and Hi/Lo: Decliners led 1.92 to 1. Stronger than the upside breadth after the breakout move, but nothing ugly yet.
Previous Session: Advancers led 1.5 to 1
New Highs: 131 (+16)
New Lows: 96 (+49)
The Chart: http://www.investmenthouse.com/cd/^gspc.html
SP500 managed a very slight gain in the opening moments, then it tool rolled lower and closed at session lows. Two intraday consolidation attempts failed as the large caps found no buyers. There were not a lot of sellers either, however, as the overall low volume indicates. SP500 looks ready to test its 10 day EMA (1250.75) and perhaps the August 2005 high (1245.86) to test the breakout before it is done with the test of its strong run higher.
The small cap SP600 (-1.85%) was whacked Monday. Last week it probed the 2005 high (357.86), but similar to SOX it could not make the breakout move after running so far and hard to that point. SP600 fell through the 10 day EMA (351.81); it was a hard move for just one session. SP600 will have to check up relatively quick. The 18 day EMA (348.81) and the mid-November high (348.50) need to step up and hold SP600 from further selling.
DJ30
DJ30 and 11,000 were all the talk last week, and that talk or hype about the rally was one of the indications we noted last week that this leg up was ready to test. DJ30 did not make it to 11,000 yet again, nor did it break the 2005 highs at 10,940. It tapped at that level three sessions and then sold back quite modestly Monday, 'leading' the market as far as the smallest percentage loss. A very modest pullback though on some relatively strong volume, coming in just below average. DJ30 is still well above its 10 day EMA (10,805), the point we expect it to hold on the test.
Stats: -40.9 points (-0.37%) to close at 10890.72
Volume: 259M shares Monday versus 119M shares Friday and 236M shares Wednesday. Volume was relatively strong though lower than most of the upside sessions during the latest leg of the rally.
The chart: http://www.investmenthouse.com/cd/^dji.html
TUESDAY
A big week of economic data gets a real start Tuesday with durable goods orders and consumer confidence. Confidence as usual will be watched, and it will have even more weight given the start of the holiday shopping season.
Confidence might have some impact, but just as the market tends to ignore bad news when it is rallying, it tends to ignore good news when it needs to sit down and take a breather. Last week the market needed good news to keep the rally going, and it got it. Monday the good news started it stronger, but it was not enough to hold it. That means there is likely more downside ahead to consolidate the move higher. While we exited some plays as a precaution, we are seeing many stocks holding well and setting up above near support. If the volume remains light on this test, we will have opportunity to enter some solid stocks when they complete this test of near support and resume the year end rally.
Support and Resistance
NASDAQ: Closed at 2239.37
Resistance:
2251 is the January 2001 low (2273 is the closing low)
2264 from the June 2001 peak
2288 from December 2000 low.
2328 from the May 2001 peak
3015 is the December 2000 peak and the October 2000 low
Support:
The 10 day EMA at 2229.76
2220 is the August high
2205 was intraday resistance last week 2192 from the January intraday high and the mid-July high.
2187 is the September high.
2178 is the January closing high
The 18 day EMA at 2205
The 50 day EMA at 2161
The January 2004 high at 2154
2144 is the October gap up point.
2100 was key resistance and support in the past
S&P 500: Closed at 1257.46
Resistance:
1264 from the December 2000 lows.
1267 to 1273 is the May and May 2001 peaks (1315 intraday)
1324 to 1329 from the October 2000 lows.
Support:
1250 may prove to be some psychological support.
The August high at 1246
The 10 day EMA at 1250.75
The September high at 1243
The 18 day EMA at 1239
March 2005 closing high at 1225 and intraday high at 1229.11
December 2004 high at 1219 and June high at 1220
The 50 day EMA at 1223
1210 held in late September on the close.
Dow: Closed at 10,890.72
Resistance:
10,952 - 10,965 from Q4 2000
10,985 is the March high
11,176 - 11,186 from April 2000
Support:
10,868 is the December 2004 high
The 10 day EMA at 10,805
10,754 is the February high
10,720 is the high in the recent lateral move
The 18 day EMA at 10,715
The June highs at 10,646 to 10,656
Price consolidation at 10,600
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
November 28
Existing Home Sales, October (10:00): 7.09M actual versus 7.20M expected and 7.29M prior (revised from 7.28M)
November 29
Durable Goods Orders, October (08:30): 1.5% expected and -2.4% prior
Consumer Confidence, November (10:00): 90.0 expected and 85.0 prior
New Home Sales, October (10:00): 1200K expected and 1222K prior
November 30
GDP-Prelim., Q3 (08:30): 4.0% expected and 3.8% prior
Chain Deflator-Prelim., Q3 (08:30): 3.1% expected and 3.1% prior
Chicago PMI, November (10:00): 60.0 expected and 62.9 prior
Crude Inventories, 11/25 (10:30)
Dec 01
Auto Sales, November: 5.3M expected and 5.2M prior
Truck Sales, November: 7.1M expected and 6.2M prior
Initial Jobless Claims, 11/26 (8:30): 325K expected and 335K prior
Personal Income, October (8:30): 0.5% expected and 1.7% prior
Personal Spending, October (8:30): 0.2% expected and 0.5% prior
Construction Spending, October (10:00): 0.5% expected and 0.5% prior
ISM Index, November (10:00): 58.0 expected and 59.1 prior
Dec 02
Non-farm Payrolls, November (08:30): 210K expected and 56K prior
Unemployment Rate, November (08:30): 5.0% expected and 5.0% prior
Hourly Earnings, November (08:30): 0.2% expected and 0.5% prior
Average Workweek, November (08:30): 33.8 expected and 33.8 prior
End part 1 of 3
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stock prices
stock market today
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