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us stock market, trade stock
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4/02/08 Stock Split Report Update
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Stock Split Report Subscribers:
MARKET ALERTS
Targets hit alerts: CLF; FSLR
Buy alerts: GTLS; JASO; SOHU
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 takes a powder after the Tuesday rush hour.
- Samsung says it will raise prices on DRAM chips.
- RIMM starts off tech earnings with a shot to the power alley.
- Market taking a breather ahead of taking on next resistance. Will the money boys and girls come to play now?
Big move up, big lazy day.
Futures were lower in the early hours even though foreign markets were rampaging on the coattails of the 3+% US gains. If you party harder than you should you tend to have a tough time the next session. The market suffered from a hangover early, but got a B-12 shot with the ADP jobs report that saw an 8K gain versus an expected 45K loss. In addition BBY beat earnings guesses by $0.06. That managed to turn futures from negative to positive and the market started positive. Even when factory orders came out at 10ET and were crappy stocks moved higher. Of course Bernanke's address to Congress hit the presses at that time and it was viewed as staying the course with respect to providing enough liquidity so that it would leak out of every crevice in the economy. He even threw in some positive comments about the impact of the stimulus package.
Investors liked it and the market rallied nicely to midmorning. DJ30 came within spitting distance of 12,700. Then oil inventories were released and oil took off (closed at 104.87, +3.69/bbl). The market slumped a bit, tried to rally, hit the same early morning peak and failed. An intraday double top and it was onward and downward into lunch and into mid-afternoon after a modest bounce attempt failed. A last hour bounce kept the indices near flat on the day. Indeed the small and mid-caps managed a gain as tame as the selling in the large cap indices. The market was never in trouble. It just had a headache from the Tuesday party.
TECHNICALLY the action was tame and that was just what you want on a session where there was no hope of really moving higher even from the get go. The action was high to low on the session, but that kept the indices flat and the range was quite narrow anyway. Nothing nefarious here, just boring.
INTERNALS: Even with the losses in the large cap indices market breadth was positive (1.4:1 NYSE, 1.1:1 NASDAQ) as the small and mid-caps posted modest gains. More of them, so when they swarm they can skew breadth. Volume was lower, substantially so on NYSE (-15%). Of course it was stronger on that index Tuesday, and in another proof of Newton's theory, what went up more came down more. Something like that. I never did like apples. Suffice it to say that low volume was okay on a day where stocks went nowhere. Unfortunately, the market seems to think it is okay when stocks try to post gains.
CHARTS: A big nothing here as well. DJ30 moved up to 12,700, just missing that level, but the key point is at 12,750ish. Didn't even scare that though early on it looked as if it could make a try for it. Still has that critical test to make. NASDAQ and SP500 didn't threaten resistance or anything else other than putting everyone to sleep. Again, after such a big surge that is not a bad thing.
LEADERSHIP: Most took a breather but there was new life in energy, and not just oil. Solar is back in play with commentary coming out of a meeting in Europe that solar will be as efficient as natural gas in producing electricity by as early as next year. Yes, but where do the vast arrays of collectors sit? Of course that is just one part of the solution; the new 'ink jet' solar panel film that can be molded into roofing materials, siding, etc. is going to be the game-changer for solar power. Put on a roof, power your house. Commodities, especially industrial metals (steel, copper) were back at it as well. As the leaders of late took a breather, the leaders of yore took the floor. Like to see that kind of rotation. Healthy.
In sum it was a day that did no damage and even found some winners as the overall market took a breather. After this rest it needs to find the money again and make a run, and break, that 12,750 resistance on DJ30.
THE MARKET
MARKET SENTIMENT
VIX: 23.43; +0.75. Bouncing off the 200 day SMA as it did in October, December and February. Just a modest bounce for now.
VXN: 27.27; +0.71
VXO: 24.23; +0.62
Put/Call Ratio (CBOE): 1.05; +0.15. Right back over 1.0 on the close with just a little opposition. Buying into the downside in anticipation of more selling. A good contrary indication.
Bulls: 36.7%. Well you knew it could not last with the rally off the March lows. Bulls jumped from 30.9% after a steady decline since January. Not really worried about it; the indicator did its job with the dive below 35% and the crossover with the bears. They are still in crossover mode even with the rise in bulls and the decline in bears. 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: 41.1%. Bears were fewer in number thanks to the rally, falling from a very high 44.7% that was up from an already freakishly strong 43.3% the week before. 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: -1.35 points (-0.06%) to close at 2361.4
Volume: 2.027B (-5.54%). Lighter volume than Tuesday, still well below average. Will need to see some real upside trade at some point in this move.
Up Volume: 929.463M (-1.004B)
Down Volume: 1.058B (+858.641M)
A/D and Hi/Lo: Advancers led 1.17 to 1
Previous Session: Advancers led 3.01 to 1
New Highs: 52 (+4)
New Lows: 89 (-10)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
A half-hearted early move but it didn't scare any resistance on this move, stalling out at 2381, just over the mid-February peak. The more serious stuff is up at 2400 to 2419 and the 90 day SMA at 2429. Thus far the move off the March low is showing good promise and techs are showing some leadership though it is concentrated in the largest ones. Another day or two of rest, however, and NASDAQ will be well positions to make the move and take on the next resistance.
SOX (+0.77%) continued its move though it gave back as much as it made on the close. Still it managed to hold over the 50 day EMA for another session so it was no 1-day wonder on Tuesday. Didn't hurt that Samsung says it thinks it can raise its DRAM prices.
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -2.65 points (-0.19%) to close at 1367.53
NYSE Volume: 1.444B (-15.23%). From average back to basically no trade. Not bad on a day of rest.
Up Volume: 835.751M (-700.601M)
Down Volume: 592.935M (+437.326M)
A/D and Hi/Lo: Advancers led 1.44 to 1. The large cap NYSE indices were lower but breadth was positive as the small and mid-caps scored some gains. Even milder selling than the modest point losses suggest.
Previous Session: Advancers led 5.3 to 1
New Highs: 52 (+22)
New Lows: 22 (+1)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
The large caps waved at the late February peak (1388) and the 90 day SMA (1387) but really made no attempt to take them out. SP500 faded back to close basically flat on no volume. Small trading range, low volume, just taking the day off. As with NASDAQ, another day or two of rest and it is ready to try that resistance at 1400ish.
SP600 (+0.42%) added a modest gain to its move over the 90 day SMA hitting close to 381 on the high. It has its major resistance from 382 to 385, and if the market wants to take a breather for a day or two that will help the small caps better set up for that move.
SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg
DJ30
The blue chips came within 54 points of the key 12,750 level, but there was no excitement in the move and you knew it was going to fail. Surge enough after a short move over the 90 day SMA (12,672) it faded back on the close. No volume, nothing to push it, and it took a break. Set up well, and another day or two gives it a good ramp to make the next break and try that key resistance. As noted last night, this will show us what kind of guts this move has.
Stats: -48.53 points (-0.38%) to close at 12605.83
Volume: 232M shares Wednesday versus 295M shares Tuesday. Volume never has picked up the pace significantly, not even to the extent of SP500 on Tuesday. Will need a bit of trade as it makes the move on 12,750.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
THURSDAY
Initial jobless claims and ISM Services are on tap. It would be big if services, languishing below 50 along with manufacturing, pulled off a surprise 50+ reading. That could trigger a new break higher and run at next resistance. That is a stretch, however; there is not much anecdotal information we have that says services will do that. There is still a lot of caution among those we are talking to in the service sector. Not negativity, just caution.
That is the prelude to the Friday jobs report. The market might wait for that data point, but there are other catalysts that could turn things first. After hours Wednesday RIMM kicked off tech earning nicely, beating on earnings, revenues, and providing a positive outlook. It was up 5 to 6 points after hours. Not the kind of move seen from RIMM in the past, however, when it beat expectations. How the move holds up Thursday will be instructive. We will look to take some gain, at least some option gain, early on if it jumps higher but cannot extend the gap.
Maybe the market is ready to continue the run higher to try resistance. It looks as if it could use another day of rest, however, but we will see how the RIMM news drives NASDAQ and NASDAQ 100. Though NASDAQ's pattern was struggling the most at the March lows, it has emerged as a recent leader, particularly NASDAQ 100. RIMM will demonstrate if it is ready to continue or not. We have a feeling it is not quite ready; the move higher lacked volume, and it needs to gather itself, along with the rest of the market, for another run.
If we get a fade we are going to watch for opportunity on stocks that broke higher on the Tuesday move and are testing. We can use that test to move in when we see it hold and then start to move back up. Love to move in on the bounce from the test as it shows us the buyers are moving back in even after the breakout. That is confirmation and just about the best buy point you can get. We will see what the market turns up in that respect as we are still looking for this move to continue, though it sure will need some more volume to indicate it is something longer term and not just an interim rally in a bear market.
Sounds pretty lukewarm as far as a true, long-term bottom being put in, but the volume just has not been there. There is plenty of good indications of a rally with some staying power from the action of bottoming and testing to the very nice development in leadership. It will have to put together a strong move after this pause, however, to show that the leadership has the backing to pull off a good sustained upside run.
Support and Resistance
NASDAQ: Closed at 2361.40
Resistance:
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.
The 200 day SMA at 2553
Support:
2340 from the March 2007 low
The 50 day EMA at 2330
The 18 day EMA at 2292
2289 is the trendline from the summer 2004/July 2006 lows, Q4 2005 consolidation
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
S&P 500: Closed at 1367.53
Resistance:
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
1419 is a longer term trendline from the August 2003/September 2004 lows
Support:
The 50 day EMA at 1349 is key resistance on a rebound
The 18 day EMA at 1330
1325 from May 2006 peak prior to the summer 2006 correction
1323 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 12,605.83
Resistance:
The 90 day SMA at 12,672
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
The 200 day SMA at 13,149
Support:
12,573 is the mid-February high
12,518 is the August intraday low
The 50 day EMA at 12,421
The 18 day EMA at 12,347
12,250 from late March 2007 lows
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
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
March 31
Chicago PMI, March (9:45): 47.0 actual versus 46.7 expected, 44.5 prior
April 1
Construction spending, February (10:00): -0.3% actual versus -0.9% expected, -0.1% prior (revised from -1.7%)
ISM Index, March (10:00): 48.6 actual versus 47.5 (lowered from 48.2) expected, 48.3 prior
April 2
ADP Employment, March (8:15): +8K actual versus -45K expected, -23K prior
Factory orders, February (10:00): -1.3% actual versus -0.8% expected, -2.3% prior (revised from -2.5%)
Crude oil inventories (10:30): +7.3M actual versus 3.2M expected, 88K prior
April 3
Initial jobless claims (8:30): 365K expected, 366K prior
ISM Services, March (8:30): 48.5 (revised from 49.2) expected, 49.3 prior
April 4
Non-Farm payrolls, March (8:30): -50K expected, -63K prior
Unemployment rate, March (8:30): 5.0% expected, 4.8% prior
Hourly earnings, March (8:30): 0.3% expected, 0.3% prior
Average hourly workweek, March (8:30): 33.7 expected, 33.7 prior
End part 1 of 3
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