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12/30/05 Stock Split Report
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Stock Split Report Subscribers:
New Year's Schedule:
Friday: Alerts, Market summary & Play Table Summary
No weekend report.
Report resumes Tuesday.
MARKET ALERTS
Targets hit alerts: None issued
Buy alerts: COHR; PPDI; HITK
Trailing stops: ESRX; MSCC
Stop alerts issued: PNRA; TSCO; ANSS; WBSN; LM; HRS
SUMMARY:
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 SSR alert service you can sign up at the following link:
http://www.investmenthouse.com/alertssr.htm
Stocks were under pressure from the open with NASDAQ gapping below the 50 day EMA. NASDAQ never recovered that level. SP500 sold as well, managing to hold the 50 day EMA on the close. It rebounded intraday and the indices were at their highs in the last hour. Then more selling in the last hour ahead of the close kept things down to end the year.
The up and down action highlighted the two currents of though heading into 2006: those fearing a meltdown similar to early 2005 and those thinking the gloom is a bit overdone about next year. That helped bounce stocks in the afternoon after the morning weakness (though they never turned positive), but in the last half hour of trade the concern re-emerged and stocks sold back toward session lows.
That leaves stocks with a disappointing close to 2005, but still in position to move higher if the buyers return after the late year skittishness. They are in position to move back up, but their patterns are not nearly what they were before the rocky action the past two weeks. Many leaders are still in fine shape, and that lends support to the market. Overall, however, stocks will be under pressure, having to recover in order to continue higher, particularly on NASDAQ that is below its 50 day EMA. SOX is decent as it held its 50 day EMA with a nice, big doji with tail Friday. SP600 managed to hold its 50 day SMA on the low, also in decent position to bounce but needing to rebound to shake off a head and shoulders pattern.
In short, there was no major breakdown to close out the year, but a sag to next support with patterns that are turning toppy. Leadership remains solid; it will need to provide that leadership this week if the market is going to salvage late 2005 breakouts. That will be up to buyers and whether they come back to the trough in the coming week.
We closed several positions in any event, taking some additional gain off the table and taking some modest losses on some positions to offset some of this year's gains. That also further reduced our exposure to next year if there is any early selling. We are left primarily with positions that are exhibiting solid relative strength and in position to move higher and lead.
THE MARKET
MARKET SENTIMENT
VIX: 12.07; +0.46
VXN: 14.26; -0.36
VXO: 11.77; +0.46
Put/Call Ratio (CBOE): 0.8; -0.11
Bulls versus Bears:
Bulls: 60.4%, up from 58.8%. No drop off in the climb higher and there are way too many bulls at this point for the market's good. Four straight weeks bullishness has exceeded the 55% benchmark considered bearish. The theory behind this reading is that when too many investors are bullish, then most of the money is in the market and it has a hard time sustaining itself. The market is struggling to move higher, more leaders are balking, and the small caps are on a bumpy road. The rally needs to resume this week. Hit 44.8% on the low on this leg, just above the 43.5% low in May.
Bears: 20.88%, down from 21.6%. Continues to slide lower as bulls rise. Bad combination. Still above 20% that is considered a bearish reading, but close enough for horse shoes. 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: -12.84 points (-0.58%) to close at 2205.32
Volume: 1.318B (+7.56%)
Up Volume: 351M (-70M)
Down Volume: 928M (+157M)
A/D and Hi/Lo: Decliners led 1.32 to 1
Previous Session: Decliners led 1.23 to 1
New Highs: 75 (+2)
New Lows: 77 (+21)
The Chart: The Chart: http://www.investmenthouse.com/cd/^ixq.html
SP500/NYSE
Stats: -6.13 points (-0.49%) to close at 1248.29
NYSE Volume: 1.105B (+7.37%)
A/D and Hi/Lo: Decliners led 1.42 to 1
Previous Session: Decliners led 1.04 to 1
New Highs: 66 (-14)
New Lows: 104 (+18)
The Chart: http://www.investmenthouse.com/cd/^gspc.html
DJ30
Stats: -67.32 points (-0.62%) to close at 10717.5
Volume: 191M shares Friday versus 160M shares Thursday.
The chart: http://www.investmenthouse.com/cd/^dji.html
Support and Resistance
NASDAQ: Closed at 2205.32
Resistance:
The 50 day EMA at 2210
2220 (2218 intraday) is the August high
The 10 day EMA at 2230
The 18 day EMA at 2233
2251 is the January 2001 low
2264 from the June 2001 peak
2273 is the January 2001 closing low
2288 from December 2000 low.
2328 from the May 2001 peak
3015 is the December 2000 peak and the October 2000 low
Support:
2192 from the January intraday high and the mid-July high.
2187 is the September high.
2178 is the January closing high
S&P 500: Closed at 1248.29
Resistance:
The 10 day EMA at 1258.61
The 18 day EMA at 1258.66
1264 from the December 2000 lows
The recent highs at 1275
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, but it did not hold Friday.
The August high at 1246
The 50 day EMA at 1246
The September high at 1243
March 2005 closing high at 1225 and intraday high at 1229.11
December 2004 high at 1219 and June high at 1220
1210 held in late September on the close.
Dow: Closed at 10,717.50
Resistance:
The 50 day EMA at 10,724
10,754 is the February high
The 18 day EMA at 10,807
The 10 day EMA at 10,803
10,868 is the December 2004 high
10,952 - 10,965 from Q4 2000 and late November 2005
10,985 is the March high
11,176 - 11,186 from April 2000
Support:
10,720 is the high in the recent lateral move
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.
January 03
Construction Spending, November (10:00): 0.5% expected and 0.7% prior
ISM Index, December (10:00): 57.0 expected and 58.1 prior
FOMC Minutes, December 13 (14:00)
January 04
Auto Sales, December: 5.7M expected and 5.5M prior
Truck Sales, December: 7.5M expected and 7.0M prior
Factory Orders, November (10:00): 1.8% expected and 2.2% prior
January 05
Initial Jobless Claims, 12/31 (08:30): 322K prior
ISM Services, December (10:00): 59.0 expected and 58.5 prior
Crude Inventories, 12/30 (10:30)
January 06
Non-farm Payrolls, December (08:30): 200K expected and 215K prior
Unemployment Rate, December (08:30): 5.0% expected and 5.0% prior
Hourly Earnings, December (08:30): 0.2% expected and 0.2% prior
Average Workweek, December (08:30): 33.7 expected and 33.7 prior
End part 1 of 2
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