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us stock market, stock watch
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2/11/08 Stock Split Report Update
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Stock Split Report Subscribers:
Full report issues Tuesday.
MARKET ALERTS
Targets hit alerts: None issued
Buy alerts: KWK; MA; RIMM; RTN; GRMN; IWM
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:
- Another volatile session from down to up as market tries to find strength behind energy, materials, big tech, and retail.
- Energy rises on Chavez' threats
- Market remains volatile, but refuses to give in to the downside.
- Ready to follow the leaders even on a test of the prior low.
Market snatches a gain from the downside yet again.
With earnings winding down and nothing on the economic calendar the market was looking for something to get it going one way or the other. Futures were up but backsliding on what could have been the headlines any session of the past week. YHOO rejected the MSFT bid. Surprise! Apple was upgraded after its 200 to 120 (40%) mauling in January. DJ30 announced some changes (BAC, CVX in, MO and HON out). The market gave a big 'whatever' and muddled through the pre-market with basically flat futures.
Materials were up again to start the week, moving higher pre-market with steel stronger and pretty much any energy stronger thanks to Venezuela's Chavez threatening to cut off US exports because XOM won an international court verdict that froze $12B in assets after Venezuela nationalized XOM assets last year (nationalized is political speak for 'stole'). Oil was up again on the news (closed at 93.59, +1.82), but basically anything energy was up, including solar, coal, hamster wheels, etc. While the rest of the news was so-so on the interest scale, at least the ranting of Chavez was back in the news to provide some comic relief. Funny, isn't it? Pat Robertson was excoriated for suggesting the US 'take out' Chavez a couple of years back, but the intervening events have some re-thinking their comments on Robertson's suggestion. Some.
Threats, assassinations or no, the market started flattish but could not hold up. DJ30 turned down and took the other indices with it, marking out a 100+ point loss in the first hour. NASDAQ was again bucking the trend, and it was joined, again, by energy, steel, and retail. Indeed, NASDAQ never really threatened the kind of selling on the NYSE indices as it held positive most of the session. Stocks bottomed after the first hour and then started to recover, just as they did the prior two sessions. They ground higher all afternoon though pretty much topped out over lunch, working laterally the rest of the session. Some late selling was pushed aside and at least DJ30 and SP500 managed to close just off their session highs. Very similar action the sessions to end last week.
TECHNICALLY, it was more of the same, i.e. that refusal to give up even after some early selling, and as seen last week, even with some bad news. Despite that slow open and then the selling, the indices came back once more. Friday they did not all close positive, but Monday they made the comeback to green. Not a lot of power, but again some solid low to high intraday action.
INTERNALS: Volume and breadth certainly did not excite anyone despite the low to high intraday action. Volume cam in roughly 5% the lower levels on Friday, well below average. Breadth barely cracked positive. It wasn't a day to show a lot of inside strength, just sliding sideways, holding on for now as the market tries to consolidate.
CHARTS: Another day of lateral movement as noted with the indices continuing their move below the 10 day EMA. NASDAQ actually went up to tap its 10 day then faded some in the last half hour of trade. As with the internals, there was no show of great strength, but there was firming. They refused to sell off last week (at least to end the week) when there was some more bad news to move it further down. Monday made it three days in a row it has slid sideways on the NYSE indices. Indeed, on the intraday lows they have hit roughly the same low and rebounded. It is trying to set some terra firma to move higher off of.
LEADERSHIP: There is a definite comeback in some leadership as noted over the weekend and in the weekend plays. Steel, agriculture, big tech, energy of all kinds. All of those have a foreign or international flavor to them. US retail was also up once more as well. Most of the market remains in bad shape, needing more time to shape up some bases, but there are early leaders that have put tighter reverse head and shoulders bases and other bases formed in hard selling (e.g. the double bottom) and are breaking higher. POT, MA, RIMM, etc. are bouncing back up from these very patterns. Market is finally getting some leadership, and while it has not managed to break higher, it is trying to firm up.
THE MARKET
MARKET SENTIMENT
VIX: 27.6; -0.41
VXN: 29.09; -0.99
VXO: 28.69; -1.73
Put/Call Ratio (CBOE): 0.97; -0.18. Back below 1.0 on the close for the first time in a week. The last bounce
Bulls: 41.6%. Up from 40.2% as the rebound last week buoyed spirits some. Down from 56.5 seven weeks back. Fell below the 40.6% hit on the last significant round of selling but has bounced. A move into the lower 40's is a decline of significance, but it needs a bigger move is to 35% which is a big bullish indication. If bulls and bears kiss or better yet cross, that is very bullish. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.
Bears: 32.6%. Bears continued to rise, albeit modestly from 32.2%. Up from 31.5% three weeks back after the massive jump higher from 26.7% the prior week. It is over 30%, meaning it is in the range that means business. Big move after falling to a low of 19.6% on this round. Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that 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). Still a bit more work to do to really set a bottom, and that means more selling before it gets there.
NASDAQ
Stats: +15.21 points (+0.66%) to close at 2320.06
Volume: 2.119B (-6.27%). Volume fell further below average as NASDAQ bounced up to tap near resistance and faded back. If NASDAQ were all by itself this looks like weak action. The NYSE indices look a bit better, however, and NASDAQ may hitch a ride along with them.
Up Volume: 1.212B (-250.631M)
Down Volume: 819M (+84.841M)
A/D and Hi/Lo: Advancers led 1.03 to 1. Flat. It was a large cap tech day.
Previous Session: Decliners led 1.33 to 1
New Highs: 25 (-21)
New Lows: 133 (+4)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
As noted, NASDAQ bounced up to tap at the 10 day EMA (2331) on the high before fading some to end the session. A three session move by NASDAQ with Thursday the only solid session on volume. The last two sessions saw declining, below average volume. Not much buying there. Some large cap techs are performing nicely though many remain in beaten up positions, bouncing back from their downtrends and still below resistance, much as with NASDAQ overall. Made a higher low last week and this is a key point of NASDAQ to try and make a breakthrough or continue the third leg lower.
NASDAQ 100 (1.09%) gapped higher and rallied right up to its 10 day EMA. It stalled there and closed there. Unlike NASDAQ, the 100 series looks a bit more interesting here with a double bottom where the February low more or less matched the January intraday lows. We will watch it; it could prove to be an interesting play to the upside.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +7.84 points (+0.59%) to close at 1339.13
NYSE Volume: 1.393B (-4.08%). More low volume on NYSE, fading below the Friday level that was already well below average. Only 3 of 7 sessions this month enjoyed above average volume. The interesting thing about the volume is that the SP500 is moving laterally the past four sessions on its closes. Thus the lower volume is not as critical on the Monday upside move as SP500 is attempting to consolidate here.
A/D and Hi/Lo: Advancers led 1.13 to 1
Previous Session: Decliners led 1.5 to 1
New Highs: 41 (+10)
New Lows: 119 (+23)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Sold off again but then came back again, posting a gain as on Wednesday. Low volume but as noted above, low volume with a lateral move is not bad as an index consolidates. SP500 is trying to make a higher low here below the 10 day EMA (1347), and the lateral action suggests it is finding some footing. Financials were down and it was still up; there is something there. The 10 and 18 day EMA will be key as the index is still in the downtrend and has yet to make the break higher.
SP600 (0.25%) is also moving laterally right below the 10 day EMA, trying to set up and make a break higher through the 50 day EMA. It failed at that level to start the month, and if it cannot make the break higher from here it is heading sharply lower.
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Similar action on DJ30 as the other indies with another test intraday and a recovery, this time to positive. Volume was up but still below average. It is at 12,250 where there is some resistance, sliding laterally as it tries to set up for a break higher. This is similar action to what it showed in early January before ripping lower again, but the pattern is a little tighter here. A very important test of the 10 day EMA is coming.
Stats: +57.88 points (+0.48%) to close at 12240.01
Volume: 268M Monday versus 262M shares Friday. A bit higher but still below average as DJ30 continues its sideways move.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
TUESDAY
Still not a lot of economic data out on Tuesday as earnings wind down, the Fed has acted, and Congress has passed a money giveaway bill. Despite the lack of any good economic data, some former leaders are setting up and some are already breaking higher. The market anticipates economic recovery ahead of time, and when you see solid stocks set up and break higher you take note. We took positions as well.
There is still a lot to prove, but the market leaders are called leaders because they are out in front. The indices are trying to hold the line and find some footing with this lateral move. They look as if they are going to make a try higher given their action and some of those leaders moving higher.
The test of near support will be the key over the next few sessions. The indices are still in downtrends and this lateral move has not erased the high volume selling early last week that started the next move lower. Remember, even if the January lows were the bottom, they will at least be tested once more. If the market bounces from here we still anticipate it stalling out at one of the near resistance levels and then making that test.
In this situation we are going to continue looking at those strong stocks that are setting up to move higher once more. Even when the market tests that prior low these should still hold up, at worst testing their breaks higher. If that low doesn't hold, then the game for those stocks may change. For now we see them making good moves and we are putting some money to work in them. We are also going to continue watching for that turn back down; our goal or target on many of the downside plays is that January low. Thus if the indices bounce higher we will look for a failure at near support and on a roll back over we will use that to pick up some more downside positions to play that test.
Support and Resistance
NASDAQ: Closed at 2320.06
Resistance:
The 10 day EMA at 2331
2340 from the March 2007 low
The 18 day EMA at 2361
2370 from the April 2006 peak
2379 from the October 2006 peak
2386 is the August intraday low
2451 is the August closing low
The 50 day EMA at 2471
Some modest resistance at 2500 from interim August lows.
2540 is the November closing low
2550 to 2540 from May/June consolidation and the November lows
2555 is the August 2004/April 2005/October 2005/March 2007 up trendline
Support:
2315 to 2300 from old peaks
2275 is the trendline from the summer 2004/July 2006 lows, Q4 2005 consolidation
2216 from August 2005 peak
2202 is the January intraday low
2175 from the December 2004 peak
S&P 500: Closed at 1339.13
Resistance:
1347 is the 10 day EMA
1359 is the 18 day EMA.
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
The 50 day EMA at 1402
1406 is the August and November 2007 closing low
1414 is a longer term trendline from the August 2003/September 2004 lows
1430 from the August interim lows
1440 - 1437 from January and March peaks
1459 is the February peak
1467 is the June/July 2006 up trendline
1475 from peaks in December 1999 and January 2000
The 200 day SMA at 1480
Support:
1325 from May 2006 peak prior to the summer 2006 correction
1314 is an ancient trendline
1305 to 1302 from an August 2006 peak and matches a range of support from March and April 2006.
1294 from the January 2006 peak
1288 from June 2006
1280 from June and August 2006
1270 is the January intraday low
1255 from June 2006 lows
Dow: Closed at 12,240.01
Resistance:
12,250 from late March 2007 lows
The 10 day EMA at 12,334
The 18 day EMA at 12,420
12,518 is the August intraday low
12,743 is the November low
12,786 is the February 2007 peak
The 50 day EMA at 12,754
12,845 is the August closing low
13,050 to 13,000 range
13,092 is the December low
13,250 from price points from June through December 2007
13,342 is the 200 day SMA
Support:
12,050 from the March 2007 low is trying to hold.
11,670 is the May 2006 intraday high; 11,642 closing
11,634 is the January intraday low
11,317 is the March 2006 peak
11,228 from a July 2006 peak
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
February 12
Treasury Budget, January (2:00): $20.0B expected, $38.2B prior
February 13
Retail sales, January (8:30): -0.3% expected, -0.4% prior
Retail ex-Auto (8:30): 0.2% expected, -0.4% prior
Business Inventories, December (10:00): 0.5% expected, 0.4% prior
Crude inventories (10:30): 7.05M prior
February 14
Weekly jobless claims (8:30): 350K expected, 356K prior
Trade balance, December (8:30): -$61.5B expected, -$63.1B prior
February 15
New York PMI, February (8:30): 7.0 expected, 9.0 prior
Net foreign purchases, December (9:00): $90.0B
Industrial production, January (9:15): 0.1% expected, 0.0% prior
Capacity utilization, January (9:15): 81.4% expected, 81.4% prior
Michigan sentiment, preliminary, February (10:00): 76.5 expected, 78.4 prior.
End part 1 of 3
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