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yahoo stock, us stock market
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5/14/08 Stock Split Report Update
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Stock Split Report Subscribers:
MARKET ALERTS
Targets hit alerts: CE; DRYS; NUE
Buy alerts: JASO; KSU; SNDA; TTEK; V
Trailing stops: None issued
Stop alerts: CELG; RIG
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:
- Early rally pushes NASDAQ over its 200 day SMA, but a late afternoon selloff turns a nice move into another also ran.
- CPI better than expected, but once more not all of the numbers add up.
- Polar bears, stone knives and bear skins (see discussion of NASDAQ 100 in 'The Market' section)
- Starting over again: after a failed run at resistance, indices have to try and reload again.
Promising rally frittered away.
Stocks were milling around until the CPI came in less than expected overall (0.2%) and on the core (0.1%). That pushed them positive, helped by Macy's earnings beat (yet another retailer posting better results) and FRE's not as horrid as expected loss. That offset a spike in April foreclosures (+4% over March and +65% year over year), Deere's earnings miss, and another big decline in gasoline inventories (-1.7M bbl).
A nice rally ensued, pushing NASDAQ past the 200 day SMA in the first hour. It tested that level twice through lunch and then headed back north, logging more gains into mid-afternoon. SP500 rallied up to its early March highs and DJ30 moved up to the 200 day SMA.
Then it was announced that polar bears were placed on the endangered species list, and NASDAQ knifed lower. May be just coincidence, but that was the top of the rally. All indices sold off and all sectors were touched by the sellers to some extent. The indices managed to close positive on rising trade, but it certainly was not the 'win' it was mid-afternoon. It was not a rout, but it was a failed attempt at resistance. What it means is more work has to be done for an upside move after another try at resistance that failed, polar bears or not.
TECHNICAL: Market started higher then gave back the gains. No slam down to negative, but a definitely a giveback of a solid price move. Intraday reversals from high to low are never a positive for the upside.
INTERNALS: Breadth was solidly above 2:1 on NYSE but was pushed to a meager 1.5:1 by the close with NASDAQ hanging onto a flat market. Volume jumped on NASDAQ as the large cap techs were sold. High to low with rising volume to close flat. After a move higher that is called churning, i.e. the stock market's version of hot potato with stocks changing hands rapidly. Not a positive either.
CHARTS: Cleared resistance but then gave it up on NASDAQ. Bummer. SP500 moved to its prior March highs, looking good, looking solid, then walked away. The blue chips moved up to within spitting distance of the 200 day SMA but ran out of spit. All fell back in a textbook display of weakness. The mid-cap 400, the market leader, even looks to need a rest after a nice run and then a tombstone doji on the candlestick chart. The name says it all: dead on arrival.
LEADERSHIP: The transports were on fire. Hard to say there is a further recession ahead with the transports firing higher whether trucks, rails or ships. Either a lot of people are stupid or there is less economic angst in the future than the daily news shows and election year politics suggest. Solar was up again but closed well off its highs. Energy, metals and commodities were mixed, some up, some down. That is the norm of late. Some overlooked techs moved up while many in the limelight (AAPL) faded after a long run. That is rather normal, and indeed many of the leaders to the upside came back on Wednesday.
SUM: It was a disappointing day. I don't, however, want to make it sound as if it was a horribly negative session. Stocks blew a big lead that had NASDAQ through resistance free and clear. It is always frustrating to blow a lead no matter what the situation. It leaves the indices back in the same old range, still holding support, still eying resistance. It does, however, start a new rebuilding process, and historically you have to move through resistance after a couple of tries or else you have to go back into a continued basing situation.
THE ECONOMY
CPI lower than expected but still in its climb.
Not many believed prices were lower given that gasoline was reported down 2% in the CPI, but even if it requires you to suspend credulity, a better than expected inflation number is good for a few points on the futures.
The overall CPI at 0.2% beat the 0.3% expected and put the annual gain at 3.9%. The core rose 0.1% (0.2% expected), up 2.3% year/year. Outside of the 2.0% the Fed likes but it is not moving higher.
As noted, gasoline fell 2% while food rose 0.9%. No surprise for the latter as many factors push what we eat higher, one being ethanol whether our President likes to admit it or not. Clothing rose 0.5% while medical posted a rather moderate, at least for medical, gain at 0.2%.
Obviously prices are still higher, they are moderating modestly however, somewhere along the lines of what the Fed said would happen. Again, no one seems to believe these numbers given the increases in most things we buy day to day versus flat screen televisions we, hopefully, don't buy weekly. Still, there is moderation in the price increases; that is a fact regardless of what the actual number is. That is the positive the market picked up on Wednesday.
THE MARKET
MARKET SENTIMENT
Now that the Fed has entered the game with its credit facilities that actually work, the correlation with VIX that set up during the correction is broken. Volatility and hence VIX can decline and hold at low levels for a very long time and have no bearing on any continued rally.
VIX: 17.66; -0.32
VXN: 21.47; -0.03
VXO: 18.28; -0.71
Put/Call Ratio (CBOE): 0.81; +0.02
Bulls versus Bears:
This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.
Bulls: 44.4%. Bulls continue to rise, posting the sharpest increase in a month, rising from 40.9%. The rally is having its impact, pushing bulls higher, up from 39.1% and 37.8% where it held for a few weeks. Crossed back above bears last week, the usual positioning of the two. Fell to 30.9% in mid-March as the low. The indicator did its job with the dive below 35% and the crossover with the 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: 32.3%. Interestingly, bears rose from 31.8% even with the market rising overall. Down from 35.6% the prior week and 38.9% the weeks before. As with the bulls the jump in bears did its job after hitting 44.7% in the third week of March 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: +1.58 points (+0.06%) to close at 2496.7
Volume: 2.117B (+12.74%). Volume was decent on the upside but it ramped more as tech stocks sold off in the late afternoon. Higher reversal volume shows unloading stocks, in this case the large cap leaders given their runs to this point.
Up Volume: 1.185B (+76.389M)
Down Volume: 911.708M (+182.815M)
A/D and Hi/Lo: Advancers led 1.02 to 1. Was solid during the day, but no use crying over spilled milk.
Previous Session: Advancers led 1.09 to 1
New Highs: 69 (-22)
New Lows: 72 (+17)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Cleared 2500 and the 200 day SMA (2516) on the high (2528), was looking solid, then gave it up and just barely hung onto a gain. Volume was up, cracking above average on the turn from the highs. NASDAQ made the move, but it couldn't handle the move. It remains in its range for May, still below resistance, still above near support, but likely to test back some before it makes another run at it. I guess Yahoo can only provide so much excitement for the index these days. A long way from those days when it would announce a split and surge $75.
NASDAQ 100 (-0.17%) was the lone loser on the session. It surged higher early but it ran out of gas after crossing into the November and December range from 2000 to 2150. It just got into that zone and was pushed back to close just below it. The large cap leaders were taking a rest on Wednesday, and it got a bit out of hand in the afternoon in the sense that volume moved up. No breakdowns, no threats to support, just got extended and with the polar bears requiring us to cease and desist activities that would contribute to the ice melt they rely on that pretty much left the economy looking at going back to stone knives and bear skins. That is not conductive to tech buying.
SOX (1.23%) surged to its 200 day SMA and there it stopped. It also fell back, giving up more points than it held on the close. Nice run for the chips and as with NASDAQ and its brush with the 200 day SMA, it likely needs to come back and regroup and think this thing through again.
SP500/NYSE
Stats: +5.62 points (+0.4%) to close at 1408.66
NYSE Volume: 1.189B (-1.59%). Volume was . . . down as the NYSE indices tested up toward resistance and then fell back. No dumping here, just no interest as has bene the case for several weeks.
Up Volume: 740.116M (+92.991M)
Down Volume: 414.17M (-138.521M)
A/D and Hi/Lo: Advancers led 1.48 to 1. From 2.2:1 to mediocrity in 1.5 hours. Did anyone notice? Did anyone care? Not according to the volume.
Previous Session: Advancers led 1.15 to 1
New Highs: 67 (-33)
New Lows: 32 (0)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Rallied well, moving up just short of the early May highs hit on the last bounce (1423) and then fading for a modest gain. Still over the 10 day EMA, but still below the 2003/2004 trendline and the 200 day SMA at 1428. Still moving laterally in its range after breaking over the February highs this month, but has yet to prove it has the stomach to get into the November to December range with the first threshold at the 200 day.
SP400 mid-caps (+0.2%) posted a modest gain but it gave back a lot of ground after bumping the late December peak and falling back. Showing a tombstone doji on the candlestick chart; as noted above, the name says it all. Still in a nice trend higher above the 10 day EMA, but also likely to rest some after a 4 week steady upside move.
SP600 (+0.03%) rallied to its 200 day SMA as well, tapping it on the high. That is all it did. The old tap and crap. It gave it all back. Will likely test back some before it can make another move.
SP600 Chart: http://investmenthouse.com/ihmedia/SP600.jpeg
SP400 CHART: http://investmenthouse.com/ihmedia/SP400.jpeg
DJ30
Similar theme: out of the gates nicely, tapping at the 200 day SMA, then fading back, giving up most of the gain. Didn't make the prior may high (13,133) before fading. Does not mean it is overcooked, just that it is still in its lateral range, and after this try it can regroup here and make a new run at it.
Stats: +66.2 points (+0.52%) to close at 12898.38
Volume: 206M shares Wednesday versus 236M shares Tuesday. Not enough volume to push it through resistance, but not a bad volume session . . . considering all of the other low, below average volume sessions the past month.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
THURSDAY
Initial jobless claims, New York and Philly PMI, capacity and production; a loaded calendar. After hours GE said it was going to unload its appliance segment and Icahn said he was serious about replacing all dozen board members at Yahoo. GE without GE appliances; man, you can't go home, can you? Does this mean GE won't bring good things to life anymore?
There is plenty of news to drive the market after it tried resistance and waffled, leaving it looking for direction. It was not a rout or a reversal, but it was a rejection of a new breakout, and that leaves the indices back to working on a consolidation and setting up for another try. How they respond Thursday and indeed to close out the week is important in that respect: they need to hold near support again with strong stocks doing the same and still in position to move higher.
Wednesdays close still left those stocks in good shape even if some gave back some gain after strong moves early on. We will watch for a further test and consolidation, and keep our eyes on those stocks still ready to make the break higher. The market didn't do anyone any favors Wednesday (though we did take some more nice gain on the early surge), but it didn't wreck it and with all of these solid leaders in good shape we are going to continue to look for upside opportunity. At the same time we will see stocks such as AAPL give up some ground and test, preparing for that run to 200.
Support and Resistance
NASDAQ: Closed at 2496.70
Resistance:
Some modest resistance at 2500 from interim August lows.
The 200 day SMA at 2517
2610 is an old trendline from summer 2004/summer 2005
Support:
2451 is the August closing low
The 10 day EMA at 2466
The 18 day EMA at 2443
2419 is the January 2008 peak and the early February peak
The 50 day EMA at 2394
2392 is the April 2008 peak
2386 is the August intraday low
2378 is the mid-February peak; 2379 from the October 2006 peak
2370 from the April 2006 peak
The 90 day SMA at 2350
2340 from the March 2007 low
2302 is the trendline from the summer 2004/July 2006 lows, Q4 2005 consolidation
2261 is late March higher low
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 1408.66
Resistance:
1428 is a longer term trendline from the August 2003/September 2004 lows
The 200 day SMA at 1429
1433 from a pair of August 2007 lows and December mid-month intraday low
1446 from the December low
Support:
1406 is the August and November 2007 closing low
The 10 day EMA at 1400
The 18 day EMA at 1394 held Thursday, Friday and Monday
1396 is the February 2008 peak
1387 is the April 2008 intraday high
The 50 day EMA at 1376
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
The 90 day SMA at 1359
1337 is an ancient trendline
1325 from May 2006 peak prior to the summer 2006 correction
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
Dow: Closed at 12,898.38
Resistance:
The 200 day SMA at 13,018
13,092 is the December 2007 intraday low
13,250 from price points in second half of 2007
13,563 is the late December peak
13,780 is the early December 2007 peak
Support:
12,845 is the August closing low
The 18 day EMA at 12,826
12,786 is the February 2007 peak
12,750 to 12,768 is the February 2008 peak and a series of lows and highs from August 2007
12,743 is the November low
The 50 day EMA at 12,678
12,573 is the mid-February high
12,518 is the August intraday low
The 90 day SMA at 12,491
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.
May 12
Treasury Budget, April (2:00): $159.3B actual versus $157.5B expected, $177.7B prior
May 13
Export prices, April (8:30): 0.6% actual, 1.2% prior
Import prices, April (8:30): 1.1% actual, 1.1% prior
Retail sales, April (8:30): -0.2% actual, -0.2% expected, 0.2% prior
Retail ex-autos, April (8:30): 0.5% actual versus 0.2% expected, 0.4% prior (revised from 0.1%)
Business inventories, March (10:00): 0.1% actual versus 0.4% expected, 0.5% prior (revised from 0.6%)
May 14
CPI, April (8:30): 0.2% actual versus 0.3% expected, 0.3% prior
Core CPI (8:30): 0.1% actual versus 0.2% expected, 0.2% prior
Crude oil inventories (10:30): +200K actual versus +5.6M prior
May 15
Initial jobless claims (8:30): 370K expected, 365K prior
NY Empire State Index, May (8:30): 0.0 expected, 0.6% prior
Net foreign purchases, March (9:00): $62.5B prior
Capacity utilization, April (9:15): 80.2% expected, 80.3% prior
Industrial production, April (9:15): -0.3% expected, 0.3% prior
Philly Fed, May (10:00): -19.0 expected, -24.9 prior
May 16
Building permits, April (8:30): 912K expected, 927K prior
Housing starts, April (8:30): 940K expected, 947K prior
Michigan sentiment, preliminary May (10:00): 62.0 expected
End part 1 of 3
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