|
|
us stock market, trade stock
* * * *
3/25/08 Stock Split Report
* * *
Stock Split Report Subscribers:
MARKET ALERTS
Targets hit alerts: Took some interim gain after several days of upside: AAPL; HCBK; ODFL
Buy alerts: AIRM; CELG; NBR
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 weaker, suffers through terrible confidence, recovers to post a good consolidation session.
- Consumer confidence, or lack thereof.
- Decent consolidation session looking for another, and maybe another before it tries again.
Market takes some more bad news, shrugs it off.
Mushy as hell to start (there I go again) with analysts downgraded a series of financial stocks (STI, BAC, PNC) along with GOOG. Down from just over $700 in late December to $460 on the Monday close; at least they waited for GOOG to bottom and bounce some before pulling the cord. Indeed, looking at GOOG, it certainly appears to have more upside near term than downside as it looks to fill that February gap and test the 50 day EMA. Hmmmm.
Anyway, things were mushy as hell and the news wasn't all that great. The Case/Schiller housing survey was out and it showed a 10.7% year/year price loss, a bit more than expected but also a record for the rather young index. Cool. Prices need to thump to the pavement, and this is getting it there. Nonetheless, futures hung in there and the market opened flat to higher, and actually bounced some early on. Didn't last, however, as the indices turned negative after an initial run attempt.
They were heading lower pretty fast even before the 10ET release of consumer confidence that was rather light on the confidence at 64.5. The market, however, bottomed for the session on the release of this data, rebounding from the initial drop on the news, then posting a long, steady rebound throughout the session. Interestingly stocks rallied even as oil (101.44, +0.58) and gold (935, +20) rose and the dollar fell. That combination had wrecked equities outside of energy and commodities prior to last week, but it didn't tear equities apart Tuesday. Didn't help much, but didn't tear them up either, and stocks recovered to close basically flat to modestly higher in a continued show of its rejuvenated strength, albeit on a more subdued tone Tuesday.
TECHNICALLY the action again showed the market still has some backbone even though it could not race higher once more. After the run higher Monday it started weak but then bottomed when some bad news hit and steadily recovered through the rest of the session. Modest test lower to shake out and consolidate, then moving higher to the close. Not bad after a good move.
INTERNALS: Breadth was solid but rather modest compared to the impressive numbers of late. 1.9:1 NYSE, 1.7:1 NASDAQ. Volume was low again, coming in much lower than Mondays lower trade. On this kind of session, however, that is not a bad thing. A little consolidation, a little volume, holding the gains.
CHARTS: NASDAQ moved through its 50 day EMA, barely, while SP500 bumped at that resistance again and closed flat on it. With the light trade and modest move by NASDAQ that was hardly a watershed move. DJ30 closed modestly lower, just hanging around the 12,500 resistance, resting to get enough muscle back to take on key resistance at 12,570.
LEADERSHIP: Techs, transports, and now industrials showed some leadership though most of the market took a breather as evidenced by the decline in breadth from really strong to pretty strong. Don't let those technical terms throw you. While the market stepped back some energy and commodities rebounded some more from their hard selling. The rebound has not rejuvenated the stocks though some are strong once more. The interesting point was the overall market held up even as the dollar faded and energy and commodities rose, a combination that was castor oil for the market just recently.
THE ECONOMY
Consumer confidence starts heading to uncomfortable levels.
The rate of change in confidence over the past several months was the real warning of trouble for the consumer, and now the actual numbers are showing up. Confidence in March fell to 64.5 versus the 73.4 expected and the 75 in February. To put the decline in perspective, confidence was at 90.6 in December, on the decline since July 2007. Ouch.
At 75 in February confidence was lower, but still in the safety zone as far as indicating whether the consumer was shutting down. At 64.5 it is in that range where you worry about the consumer deciding not to buy.
It is the lowest reading since a 61.4 reading in March 2003, just before the Iraq invasion. At that time the US economy was also coming out of recession and confidence was heading out of a trough. Right now it is heading toward the trough.
That begs the age old (or at least month old) question of whether the market is bottoming here in anticipation of the economy doing the same down the road or if this is just a bear market rally that is setting up more downside as the economy continues to weaken and thus take earnings lower. The economic data is crappy; the key is what the market does with it, and we are waiting on the indices to test and try another break and more leadership to develop.
THE MARKET
MARKET SENTIMENT
VIX: 25.72; -0.01
VXN: 29.07; +0.38
VXO: 26.3; 0
Put/Call Ratio (CBOE): 0.96; +0.14. The ratio did not jump right back up as the market more or less stalled out for a session. Second day below 1.0 on the close after 20 over that level. Plenty of backlog of 1.0 and above closes to show the kind of downside worry a sentiment indicator needs.
Bulls: 30.9%. Bulls continue to fall as bears continue to rise, down from 31.1% last week. That week saw the bulls and bears cross paths, a very bullish indication. This reading follows a massive decline from 41.9%, one of the largest declines we have ever seen. The bulls and bears were eye to eye in mid-February and have crossed. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. 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: 44.7%. Bears are rising still, up from an already freakishly strong 43.3% last week. That was a surge from an already high 36.6% the prior week. Up sharply from a low of 19.6% on the last rally. It is over 30% and indeed over 35% the prior week, meaning it has blown past 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). This is a huge turn, unlike any seen in recent history.
NASDAQ
Stats: +14.3 points (+0.61%) to close at 2341.05
Volume: 2.082B (-9.11%). Volume was puny, the lowest of the month and up in the running for lowest of the year. Not bad for a day where the market rests after a surge. Of course Monday volume was weak as well, and that was a solid price move. Buyers did not race back in as NASDAQ broke higher, at least not yet.
Up Volume: 1.32B (-720.726M)
Down Volume: 733.476M (+490.765M)
A/D and Hi/Lo: Advancers led 1.68 to 1
Previous Session: Advancers led 2.79 to 1
New Highs: 35 (-18)
New Lows: 92 (-24)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Opened modestly higher, moving through the 50 day EMA (2335) early on. It bounced around some early in the session, but came back to post a higher high on the session and hold the move past the 50 day. It was not much of a move, however, and NASDAQ needs some more consolidation time to let the move catch up and then make the next break higher. It also needs more volume when it does resume the move higher. Thus far the pattern is fine. Leadership from tech is perking up. After another session or two of rest some upside volume would be nice.
NASDAQ 100 (+0.56%) did not lead NASDAQ Tuesday. It did test its 50 day EMA on the low and rebounded for a gain, showing continued strength above that level. It did not blast through with a lot of volume, but the big names are moving well. A lateral move along the 50 day for a few sessions is a good launch pad for a move higher.
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +3.11 points (+0.23%) to close at 1352.99
NYSE Volume: 1.479B (-5.8%). Volume was a loser on NYSE as well as it too showed weak trade for the week after some very solid and volume as it put in the low two weeks back. Okay to pause here on low volume as long as it can hold its gains.
Up Volume: 902.179M (-353.807M)
Down Volume: 569.868M (+262.551M)
A/D and Hi/Lo: Advancers led 1.92 to 1
Previous Session: Advancers led 4.27 to 1
New Highs: 33 (-4)
New Lows: 21 (-17)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Rallied through the 50 day EMA (1352) Monday but then faded. Tuesday the large caps did the same, managing to close right on the 50 day. The volume is so low it is not going to punch through. It needs to hold onto most of the gain from Monday as it tests, then find some strength to (in the form of volume) to break on through with some authority.
SP600 (0.56%) posted its fourth gain in five sessions, modestly adding to the Monday break over that resistance that stopped it ever since November. It has made 2-day moves past that level during the selloff before crashing back, however, and the low volume on NYSE on this move is not heart warming. Needs to continue to test and hold this level, then resume the move.
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
Moved through the 50 day EMA (12,423) Monday on no volume and held a tap of that level on the Tuesday low on no volume. It is at 12,500 resistance, taking a breather after the 750 point move off the March lows. As with the other indices it needs to hold the 50 day on this test and then make the next move toward 12,750 with some more strength or it is not going to make it.
Stats: -16.04 points (-0.13%) to close at 12532.6
Volume: 237M shares Tuesday versus 264M shares Monday. Hard to imagine lower volume than Monday, but it did was. As noted above, however, that is no problem with DJ30 taking a breather after that strong run off the lows.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
WEDNESDAY
Durable goods orders, new home sales, and oil inventories are out Wednesday. None of them are likely to be all that great though most are watching new home sales to see if they show the kind of rebound existing sales displayed and thus more bottoming action in the housing market. Durable goods may still show some life, but the slide in expenditures on major items continues, and with the confidence numbers it is likely to head lower before durables recover.
After a 100 point SP500 move off the March low, 875 points on DJ30 and 190 points on NASDAQ, the market is taking a breather after bumping up to next resistance. NASDAQ still posted a gain along with SP500, but they were modest and on light trade, prone to come back some more before they move higher. DJ30 was already taking a breather. Want NASDAQ and SP500 to do the same. That will help get worries about a failure up, shake out the easy sellers, and set up the next move in the rally.
The market has to avoid higher volume selling before then, though with such light upside trade thus far, avoiding that will be as easy as keeping healthy after volunteering at the pneumonia ward. It is the high volume selling, the clear return of the sellers, that the market needs to avoid. Hate low volume rallies, but the market was due for a breather here, and if it holds most of the recent gains it is in great shape to continue the move.
Bear market rally or a new bottom to build a new bull on? Many theories about how long it could last. What we are interested in is playing the strong stocks in good position when they start to move. If the rally continues that will take care of itself. At this juncture you still take gains when presented, thus we took some on AAPL and HCBK for example even though they are in good shape and still ready to move higher. A low volume gain does not instill the most confidence, so when there is some nice gain in short order, take it and let the rest work for you. As the market rises we will continue to pick off some gain as the leaders race higher.
At the same time this little shakeout that looks to be forming will give us a good look at some stocks that surged higher and need a bit of a test. We will move into those as we get the opportunity, let them make their next run, take some gain, and do it again . . . or at least as long as the rally lets us, whether a bear market rally or a new sustained upside run.
Support and Resistance
NASDAQ: Closed at 2341.05
Resistance:
2340 from the March 2007 low
2370 from the April 2006 peak
2378 is the mid-February peak
2379 from the October 2006 peak
2386 is the August intraday low
2419 is the January 2008 peak
2451 is the August closing low
Some modest resistance at 2500 from interim August lows.
Support:
The 50 day EMA at 2335
2285 is the trendline from the summer 2004/July 2006 lows, Q4 2005 consolidation
The 18 day EMA at 2269
2252 is the early February low
2221 is March low
2216 from August 2005 peak
2202 is the January intraday low
2175 from the December 2004 peak
2168 is the March 2008 low
2158 from May 2006
2164 From August 2006
2134 from August, September 2006
2100 from June 2006
S&P 500: Closed at 1352.99
Resistance:
The 50 day EMA at 1352
1368 is the high in this recent lateral consolidation
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
1396 is the January 2008 peak
1406 is the August and November 2007 closing low
1417 is a longer term trendline from the August 2003/September 2004 lows
Support:
1325 from May 2006 peak prior to the summer 2006 correction
The 18 day EMA at 1325
1322 is an ancient trendline
1317 is the early February low
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
1272.66 is the March 2008 low
1270 is the January intraday low
1260 from July 2006
1258 to 1255 from May and June 2006 lows
Dow: Closed at 12,532.60
Resistance:
12,573 is the mid-February high
12,743 is the November low
12,750 to 12,768 is the February 2008 peak and a series of lows and highs from August 2007
12,786 is the February 2007 peak
12,845 is the August closing low
Support:
12,518 is the August intraday low
The 50 day EMA at 12,423
12,250 from late March 2007 lows
The 18 day EMA at 12,268
12,070 from the early February 2008 lows
12,050 from the March 2007
11,731 is the March 2008 low
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.
March 24
Existing home sales, February (10:00): 5.03M actual versus 4.86M expected, 4.89M prior
March 25
Consumer confidence, March (10:00): 64.5 actual versus 73.4 expected, 75.0 prior
March 26
Durable goods orders, February (8:30): 0.8% expected, -5.3% prior
New home sales, February (10:00): 580K expected, 588K prior
Crude oil inventories (10:30): 133K prior
March 27
Q4 GDP final revision (8:30): 0.6% expected, 0.6% last Q4 iteration
Initial jobless claims (8:30): 371K expected, 378K prior
March 28
Personal income, February (8:30): 0.3% expected, 0.3% prior
Personal spending, February (8:30): 0.1% expected. 0.4% prior
Core PCE inflation, February (8:30): 0.1% expected, 0.3% prior
Michigan sentiment, March revised (10:00): 70.0 expected, 70.5 prior
End part 1 of 3
|
us stock market
trade stock
|
