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us stock market, trend trading stock
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11/22/06 Stock Split Report Update
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Stock Split Report Subscribers:
***Holiday Week Schedule****
Market closed Thursday, open one-half day Friday.
Normal report schedule Monday and Tuesday
Wednesday: Market summary, continuing play tables, note plays ready to move.
Regular schedule resumes Monday.
Alerts issues as usual during market hours.
MARKET ALERTS
Targets hit alerts: FFIV; MA
Buy alerts: None issued
Trailing stops: None issued
Stop alerts issued: None issued
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
SUMMARY:
- Holiday drift higher holds as growth indices take the point once more.
- Michigan final November sentiment slips, but at this level it is splitting hairs.
- Looking for a continued drift higher on Friday's half session to let us take some gain and even some new positions.
Growth sectors take back the leadership on a nice Thanksgiving rise.
There is an 80% probability the Wednesday before Thanksgiving will post a gain, and this year the market followed the odds with all indices posting gains. Some solid Dell earnings helped lift technology stocks while strong earnings in retail from CJG and PSS gave the retailers some reason for holiday cheer despite a report stating consumers had less buying power. They certainly have not shown any propensity to curtail spending, and the final Michigan sentiment reading for November was still in the range that suggests a consuming consumer. In addition, AA announced 6700 job cuts and rallied on strong. Solid earnings, cost-cutting moves, a steady consumer, and dipping oil prices (59.24, -0.93). Ah those are some of our favorite holiday memories.
With the earnings and general holiday good cheer, the growth indices took back over with SOX, NASDAQ and the mid-caps pacing the advance. After that Tuesday day off they came back with a vengeance. Not a lot of volume, but some solid moves and a general lift higher. We took some money off the table, but with the solid moves in many positions, we decided to wait and see what the Friday half session brings. Often Friday is up as well after a good Thursday, and if we get upside we will look to take some off the table at that point.
Technically there was nothing really strong with the session as volume was expectedly lower and breadth was as bland as Aunt Martha's Turkey Day stuffing. It was a melt higher in line with the current trend, but it also showed the same theme we really like about this move of late: leadership in the growth areas. Some stocks moved higher on stronger volume, most did not. Nonetheless we liked what we saw with the drift higher.
THE ECONOMY
Michigan final sentiment grazes below expectations. Lions, tigers, and bears. Oh my.
There is always so much made out of consumer sentiment. The financial stations either moan in agony or trumpet jubilantly if sentiment edges lower or higher. That misses the entire point with respect to sentiment. Minor fluctuations in the readings mean nothing. It is the overall sentiment level that holds significance. If it is in the fifties and sixties it is bad; at those levels the consumer closes off buying. These levels often correspond to recession.
With the November reading at 92.1, lower than the 93.0 expected, the 93.6 in August and the 92.3 preliminary there is no fear of a consumer drop off. Then you look at the trend and see where it is heading. Sentiment is not at levels seen in 1998 through 2001, but the trend remains steady. Thus there is no fear the consumer is going to bottle up any time soon.
THE MARKET
MARKET SENTIMENT
VIX: 10.14; +0.24
VXN: 14.95; -0.07
VXO: 9.4; +0.04
Put/Call Ratio (CBOE): 0.89; -0.16
Bulls versus Bears: Bulls have moved above the key 55% but this is not the best timing indicator. It is a warning to watch for distribution, failing leadership and the like.
Bulls: 56.4%. Bullish advisors have finally topped 55%, the level where the yee ha view of the market is overdone and some corrective activity can enter. A sharp jump from 52.1% the week before and closing in on the January peak at just above 60%.
Bears: 22.3%. Sharp drop from 26.0% and flirting with the 20% level considered bearish. Well off the 37.1% hit in July (the highest level in this entire cycle). Hit a new post-2002 high in that late June move, eclipsing the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005).
NASDAQ
Stats: +11.14 points (+0.45%) to close at 2465.98
Volume: 1.593B (-9.12%). Volume remained in the cellar, coming in lower and marking the fourth consecutive session below of below average trade. NASDAQ has edged higher on this lower trade, not exactly the best action, but the move kicked off on stronger trade and this drift higher ahead of the holiday on lower volume is nothing we are getting worked up over. If it continues there will be the piper to pay, but for now we enjoy the move.
Up Volume: 1.17B (+269.582M)
Down Volume: 345.277M (-451.723M)
A/D and Hi/Lo: Decliners led 1 to 1
Previous Session: Advancers led 1.01 to 1
New Highs: 160 (+12)
New Lows: 30 (-12)
The Chart: http://www.investmenthouse.com/cd/^ixic.html
NASDAQ gapped modestly higher on the DELL news and general good cheer. It fill the gap intraday and then rebounded to close near the session high. Good intraday action but on that low trade so you don't want to read too much into it. It is basically a continuation of the trend higher that got a good start two weeks back with a strong volume upside breakout. After the holidays there could be some giveback near term, but the foundation is set for a good holiday season.
SOX (+1.24%) was back in the leadership saddle Wednesday, recovering the losses on the Tuesday slump and hitting a new post 200 day SMA breakout high. Surprised the financial stations did not style it as such in their desperation to look for new records each session. No complaints at all as the chips remain one of our focus areas as this rally spreads out.
SP500/NYSE
Stats: +3.28 points (+0.23%) to close at 1406.09
NYSE Volume: 1.337B (-12.88%). Very low trade of course as the NYSE indices moved higher, continuing their trend. Again, not much you can draw from this given the holiday other than enjoy it.
Up Volume: 869.969M (+869.969M)
Down Volume: 465.898M (+465.898M)
A/D and Hi/Lo: Advancers led 1.58 to 1. Almost identical breadth as the small caps took the back seat after leading Tuesday. The mid-caps stepped in and provided the leadership.
Previous Session: Advancers led 1.57 to 1
New Highs: 345 (+77). Nice reading, but still looking for it to pop through 400.
New Lows: 13 (-7)
The Chart: http://investmenthouse.com/cd/^gspc.html
Continuing the advance after the break higher last week that took SP500 out of its toppish pattern. Another break higher Wednesday from three days of lateral move looks good though the low pre-holiday volume marks the session as simply a continued drift higher in the overall bullish trend.
SP600 (+0.08%) edged higher, taking the day off of the point after leading the way Tuesday when NASDAQ and SOX were struggling. Still heading toward that all-time high at 405.94, now just 3.23 points off that intraday mark. Solid breakout last week and a good test have set SP600 up for the break through that old high.
DJ30
The blue chips continue the flat line of the past three sessions on low, below average volume. Not bad action at all given the lower trade and the solid break higher a week back and the leadership coming from other areas such as tech and semiconductors. Holding its gains as the money spreads out is pretty darn good action. Still extended but at 8.4% above the 200 day SMA it still has some room upside.
Stats: +5.36 points (+0.04%) to close at 12326.95
Volume: 177M shares Wednesday versus 216M shares Tuesday.
The chart: http://www.investmenthouse.com/cd/^dji.html
FRIDAY
Half day session Friday is typically a decent one though stocks hardly have time to get their legs stretched before the bell is ready to ring. It is often a positive session as well with some weakness just before the close. Several of our positions were running so well Wednesday that we decided to let them run for us some more Friday if they will and then bank some more gain. We still anticipate a further holiday run, but after a three week move higher this last push gives sellers an opening to move in when the post-holiday week begins. With the solid moves in many positions, banking some gain is not a bad idea.
Initiating new positions is problematical. You will hardly get a sense of the strength of any move given then half session and the ultra light holiday volume. There are some stocks moving well on solid trade, however, and if they continue the move higher Friday, given the volume and the break higher from good patterns, there is no reason to shy away from a few positions here and there in anticipation of a further move higher in the holiday season. If they move higher Monday as well, all the better; we can buy into a continued move then as well.
A good move thus far and again we will look to bank some of that on Friday if the gains continue. Then we look for some possible weakness early next week, but that will be viewed as an opportunity to get some of these strong stocks that moved higher and are taking a breather with that pullback.
Have a wonderful Thanksgiving, and may we contemplate the many gifts in our lives.
Support and Resistance
NASDAQ: Closed at 2465.98
Resistance:
2477 from January 1999
2493 is an interim peak from February 1999
Support:
The 10 day EMA at 2433
2412 from June 1999 low
The 18 day EMA at 2409
2384 is an interim peak from January 1999
2379 is the October high.
2376 is the April high, the former post-2002 high
2368 is the early October handle high.
The 50 day EMA at 2338
2333 is the top of the Q1 2006 trading range (the January and mid-March 2006 highs)
2316 from interim tops in January and March 2006 trading range
2300 represents some price support
S&P 500: Closed at 1406.09
Resistance:
1410 is an interim high from March 2000
1420 is a July 2000 low
1425 is an interim high from November 1999
1444 from February 2000
1475 from peaks in December 1999 and January 2000
Support:
1401 is a low from April 2000
The 10 day EMA at 1396
1390 is the October high.
1389 is a low from November 1999
The 18 day EMA at 1388
1378 is a low from May 2000
1371 to 1373 is the December 2000 peak and the January 2001 peak
1358 to 1362 mark a series of peaks from April 1999 to August 1999 high and the February The 50 day EMA at 1363
2002 low at 1360.
1354 from the early October consolidation
1339 is the late September closing high
1334 is an October 1999 peak
1326.70 is the May 2006 high
1324 to 1329 from the October 2000 lows.
Dow: Closed at 12,326.95
Resistance:
8.4% above its 200 day SMA. Struggled since it hit near 8% above that level previously in late October before this last break higher. Tends to start about 10%, so this is a bit early but it has been a long run.
Support:
The 10 day EMA at 12,258
The 18 day EMA at 12,194
October high is 12,167
11,986 is price support from mid-October and the early November low.
The 50 day EMA at 11,960
11,865 from the early October consolidation
11,750.28 is the prior all-time high
11,723 is the January 2000 closing high
11,670 is the May intraday high
11,642 is the May 2006 closing high
11,488 is the early September high.
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
November 20
Leading economic indicators, October (10:00): 0.2% actual versus 0.2% expected, 0.4% prior (revised from 0.1%).
November 22
Initial jobless claims (8:30): 321K versus 310K expected versus 309K prior (revised from 310K)
Michigan Sentiment, revised November (10:00): 92.1 actual versus 93.0 expected, 92.3 prior
Crude oil inventories (10:30): +5.15M; +1.283M prior
End part 1 of 2
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us stock market
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