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stock split, stock market report
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10/01/07 Stock Split Report Update
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Stock Split Report Subscribers:
* NOTE **
The report is truncated this evening as Jon Johnson had to make an unexpected trip to the hospital. Thus far things look positive.
Full report issues Tuesday.
MARKET ALERTS
Targets hit alerts: BG; DE; CNH; CMTL; HOLX
Buy alerts: DNR; DKS; MTW; VIP
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.html
SUMMARY:
- Market starts the month soft, then NASDAQ, DJ30 breakout.
- ISM a bit less than expected, but still shows resumed growth.
- New money keeps pushing stocks higher to start the quarter, and next issue is whether the breakouts hold.
NASDAQ, DJ30 lead the breakout but all sectors enjoy gains.
The market did not have a passel of good news to start the new quarter, but it found a way to get over it and rallied. WAG (pharmacy) missed its earnings, citing reduced profits as some key drugs went generic. C (financial) warned but also stated that Q4 would bring recovery. NOK announced an acquisition with NVT, a combination that sent some competitors (e.g. GRMN) lower. Chip sales are up 4.9% in August year/year. A mixed batch.
It seemed to be giving the market some issues as futures were so-so, modestly lower prior to the open. Once the bell rang, however, stocks started higher. The ISM came out at 10ET and was a bit lower than expected (52.0 versus 52.5 expected, 52.9 prior), but stocks did not slow down. That reading shows a continued expansion, a positive, and it was a bit less than expected, another positive in this 'less is better' view in order to keep the Fed active. After a 14 month high in July it has trended lower the past 3 months as the sub-prime and credit issues impacted decisions. Remember, the ISM is more of an opinion survey than hard numbers and thus is influenced by optimism in the manufacturing sector. With the news stories regarding the credit and sub-prime issues it is understandable to see sentiment flag a bit.
In any event, the indices rallied into lunch on the heels of the ISM report, then paused, then rallied higher in the afternoon. Sellers took their shot late in the session and the indices fell off, but buyers re-emerged, closing the indices near their highs.
New money to start the quarter was no doubt at work. There was some concern the market would sell to start the quarter after the tape painting last week. Once that did not pan out there was some short covering as well. On top of that we heard from some brokers that some clients were afraid of missing out on the next run higher. That led to a solid bid through the session.
Technically the action was not bad though not a huge upside power stroke. NASDAQ
NASDAQ and DJ30 broke to new post-2002 highs with the Dow moving to a new all-time high. SP500 posted a nice move itself, but it had lagged a bit behind the other large cap indices thanks to its financial component, but Monday they were moving up as well and pushed SP500 up to the old highs though it could not make the break through. Breadth was great at 3.5:1 NYSE, 2.5:1 NASD. Leadership was solid once again with metals, industrials and technology leading the way. Energy was up, but it was still not making the breakout. Set up well, but as of yet not again joining the fray wholeheartedly.
The rub was again volume. It was up, but it was not indicative of a clear joinder by the entire market. In other words it was higher but still well below average. Ever since the Fed rate cut it has been less than powerful. It was good to see it higher on the gain, the highest since the Fed rate cut on NYSE, but sure would have been better to see some above average trade. As it is there was a breakout and volume was up, but it still was not the kind of power you want to see on a breakout.
THE MARKET
MARKET SENTIMENT
VIX: 17.84; -0.16
VXN: 21.09; +0.08
VXO: 16.67; -1.51
Put/Call Ratio (CBOE): 0.88; -0.21
Bulls: 55.6%. Bulls jumped again , up from 53.9% and topping the 55% level considered bearish. Big jumps the past few weeks from a low of 40.6%, the low for this round. Never made the thirties. Hit 56.7% in June. The market peaked about a month later. For reference it bottomed in the summer 2006 near 36%, and 35% is considered bullish.
Bears: 25.6%. Falling, indicating bears are declining. Down from 27.0% last week and 31.0% the week before. It held at 37.4% for 3 weeks prior to that. Still well off the very low 18% hit 8 weeks back, and it topped the June 2006 peak (36%) on this run. That June peak eclipsed 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: +39.49 points (+1.46%) to close at 2740.99
Volume: 1.961B (+3.39%). Volume was up but still below average as NASDAQ broke to a new post-2002 high. You like to see stronger volume on a move, but thus far it has been enough to have up volume on up sessions and lower on downside sessions following the Fed rate cut.
Up Volume: 1.493B (+617.162M)
Down Volume: 445.941M (-537.731M)
A/D and Hi/Lo: Advancers led 2.5 to 1
Previous Session: Decliners led 1.47 to 1
New Highs: 127 (+99)
New Lows: 36 (-8)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
After a questionable pre-market with a CSCO downgrade, NASDAQ opened higher and never really looked back. There was a half-hearted attempt to take it lower in the last hour but even that was bought into and closed NASDAQ near it session high. The move took it over the July peak and to a new post-2002 high. Solid breadth as NASDAQ overall outpaced the large cap techs that led the last leg higher. Good to see the move spreading out a bit more as it makes a recovery high. A bit of volume would be nice, but that has not slowed it thus far as discussed above.
SOX (1.19%) bounced but it was still the laggard on the session and closed below the 510 resistance level. Even when it moves higher with some authority seems it is a laggard.
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +20.29 points (+1.33%) to close at 1547.04
NYSE Volume: 1.42B (+6.02%). Volume was up and the best since the Fed rate cut, but that left it still well below average. It may be all it gets, and at least it was rising on an upside break.
Up Volume: 1.142B (+624.199M)
Down Volume: 271.185M (-532.481M)
A/D and Hi/Lo: Advancers led 3.48 to 1
Previous Session: Decliners led 1.26 to 1
New Highs: 212 (+140)
New Lows: 9 (-19)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Cleared the 8 session lateral consolidation, moved past the June peaks, and moved up to tap toward the July high at 1556. It was a solid move with the financials contributing, but it did not make the break along with the other large cap indices. It has lagged because of the financials, but if they keep pitching in as they did Monday, SP500 should clear that high and post a new high of its own.
SP600 (2.28%) enjoyed the best relative move of the session, and that took it to the intraday high hit the day after the Fed rate cut. That still leaves the small caps in a laggard position, needing to clear 445 (closed at 433) to make a new high of their own. Can make a run at that level but likely won't make that new high on this move.
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Cleared the prior July peak just over 14,000 and closed at a new all-time high. Volume scratched higher but just barely, coming well below average as the blue chips broke higher. Thus the same caveat to the move as with the other indices, but at this stage you can cry over it or just be cognizant of it as the index moves higher.
Stats: +191.92 points (+1.38%) to close at 14087.55
Volume: 205M shares Monday versus 203M shares Friday. Not much of a jump to accompany the breakout.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
TUESDAY
Pending home sales is the only scheduled economic report. After the close Monday PALM reported some decent results but its guidance was not as expected and it was down though not much was down in sympathy with it. With earnings starting in earnest shortly, there will be some more warnings, but we note that the warnings are down so far this season.
As for the market overall, we now have NASDAQ and DJ30 with new post-2002 highs and SP500 running up toward highs of its own, the question turns to staying power. There was some new money, short covering, and fear of getting left behind that pushed the Monday action. We anticipated the new money push; now the question is whether it holds.
As noted above, the volume was not huge on the move higher. It was up but still below average. That indicates there was no across the board run on stocks, just the same steady climb on relatively low volume shown since the July and August selling ended. There have been some sharp volume spikes here and there but no consistent volume gains.
As for individual stocks you can see strong volume surges as money chases performance in certain stocks and sectors, but again, overall the volume is just not that strong and that remains the Achilles Heel for the market . . . just as it has been for quite some time now and of course through a significant market rise.
That always leaves open the possibility that the sellers return and take it down again. You have to be somewhat wary once the new quarter money is spent, but thus far it has not paid to sit on the sidelines and watch. Thus we are going to continue looking for opportunity in solid stocks breaking higher and take advantage of their moves higher while keeping an eye on the action as the first of month & quarter is no longer so fresh.
Support and Resistance
NASDAQ: Closed at 2740.99
Resistance:
2778 from a July 1999 peak
2887 from a September 1999 peak
2920 from an October 1999 peak
Support:
2735 is the November/February up trendline
2725 is the July high
2700 is the November/December/February up trendline
2673 is the early July high
2634.60 is the June peak
The 10 day EMA at 2684
The 50 day EMA at 2613
The 90 day SMA at 2603
2531.42 is the February high (post-2002 high); 2525 intraday
The 200 day SMA at 2530
2509 is the January 2007 high
2450 is some price support from November and December 2006
2425 is that old trendline from August 2004 to May 2005
2400 is price support
2386 is the August intraday low
S&P 500: Closed at 1547.04
Resistance:
1553 intraday high from March 2000 is the all-time index peak
Support:
1541 is the early June high.
1539 is the mid-June intraday high
1534 is the early July high
The 10 day EMA is at 1522
1504 is the July 2006/March 2007 up trendline
The 90 day SMA is at 1497
1490.72 is the early June closing low and early August peak.
The 50 day EMA at 1492
1475 from peaks in December 1999 and January 2000
The 200 day SMA at 1468
1461.57 is the February 2007 high.
1440 is the mid-January high
1427 represents some interim peaks from December 2006 and the early August low
1406 - 1407 from March 2007 and November 2006 interim peaks
1389 from October 2006 interim peak
1375 - 70 from March 2007 low
1370 is the August intraday low
Dow: Closed at 14,087.55
Resistance:
New high!
Support:
The July high at 14,022
13,975 is the old channel line
The 10 day EMA at 13,819
The August high at 13,696
The mid-June high at 13,689
The early June high at 13,676 (closing), 13,692 (intraday)
The early July peak at 13,671
The mid-May peak at 13,556
The 90 day SMA at 13,491
The 50 day EMA at 13,507
13,248 is the July 2006/March 2007 up trendline
13,121 is minor support from the April peak
The 200 day SMA at 13,030
12,845 is July closing low
12,796 at the February 2007 high
12,518 is the August intraday low
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
October 1
ISM index, September (10:00): 52.0 actual versus 52.5 expected, 52.9 prior
October 2
Pending home sales, August (10:00): -12.2% prior
October 3
ISM Services, September (10:00): 55.0 expected, 55.8 prior
Crude oil inventories
October 4
Initial jobless claims (8:30): 298K prior
Factory orders, August (10:00): -2.5% expected, 3.7% prior
October 5
Non-farm payrolls, September (8:30): 100K expected, -4K prior
Unemployment rate (8:30): 4.7% expected versus 4.6% prior
Hourly earnings (8:30): 0.3% expected, 0.3% prior
Average workweek (8:30): 33.8 expected, 33.8 prior
Consumer Credit, August (3:00): $9.0B expected, $7.5B prior
End part 1 of 3
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stock split
stock market report
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