SUMMARY:
- An extended rally gets a reason to sell and boy does it sell.
- Geopolitical events overshadow decent GDP and Sentiment news.
- What evil lurks in the shadows of the world? The bond market knows (or at least it knew something was up).
- Weekend will tell more of the world picture but Friday selling likely exaggerated by the uncertainty.
- Despite the overall slaughter, many positions held up very, very well. (more…)
The question I heard over and over again on Friday was if Egypt is likely to be the next big problem for the markets. It seems that the national pastime of U.S. investors these days is to make sure they don’t get fooled again by something that comes out of the blue. However, as I’ve pointed out many times in the past, it isn’t a matter of identifying problems (there are ALWAYS lots of problems in the world) but rather figuring out when an issue might matter to the market. Remember, in the stock market, things don’t matter until they do – and then they matter a lot. (more…)
SUMMARY:
- Early economic data knocks stocks back, but once again they recover to gains.
- Jobless claims tenacious, jump back to 451K.
- Durable Goods look bad, but take out a 99% aircraft drop and you have good growth, solid business investment.
- Good comeback yet again as growth leads with strong individual stock moves, but NASDAQ, SP500, SOX have to take out their recent highs.
- Even with the gains and good leadership there are still concerns about the viability of this last move.
- AMZN disappoints after hours. As of yet earnings hve not stalled the move. That makes Friday quite interesting.
(more…)
Normally, most professionals don’t put much stock in the indices crossing any of the big, round numbers. (Think of it this way, do you believe that the mutual fund managers at Fidelity or Vanguard spend much time worrying about the level of the indices when working their portfolios?) Well, okay, Dow 10,000 was indeed a lot of fun the first ten times or so, and I will admit that a crossing of Dow 14,000 would definitely get my attention. But other than that, I don’t really understand the press’s love affair with each multiple of 1,000 on the DJIA. (more…)
SUMMARY:
- Market refuses to sell as SP500 breaks to new rally high and growth indices log solid advances.
- New home sales rise 17%, topping expectations.
- FOMC unanimously continues the same policies due to low employment, etc., and the market can deal with all of that . . . money.
- State of the Union ‘embraces’ business? Just more big government views.
- Earnings treatment remains mixed stock by stock, but the market continues to rise overall.
- Bonds turn right back down but still in the lateral range. Close to an answer after this action.
- Market renews the upside even as nagging questions remain. The market does what the market does, however.
(more…)
A colleague pinged me yesterday afternoon with what he believed to be an interesting factoid. He wanted to know if I was aware that the S&P 500 had recently closed above its 10-day moving average for more than 30 trading days (34 to be exact, he said). My initial response was something along the lines of “Yea, so?” (Frankly, I tire quickly listening to all the sport-stat-like iterations of market data that are bandied about these days.) So, after my less-than inspired response, I was provided with the punch line – apparently such a streak has never happened before. (more…)
SUMMARY:
- Negative start, choppy session gives way to a late rally. Nice intraday action but the overall character didn’t change.
- Case/Shiller home prices decline sharply yet again. Darkest before the light?
- Shadow Inventory shows a 49 month supply of homes.
- January Consumer Confidence hits 8 month high. Still crappy levels but the trend is turning.
- Bond market trying to rally as it and other market actions still at odds with an improving economy.
- Still a time for individual stocks as the market works through this rough patch.
(more…)
If you find yourself wondering what to make of the current stock market action, you are probably not alone. The leaders have been smacked around pretty good lately while the old guard blue chippers have suddenly come to life. In addition, the gold rush appears to have ended, networkers are so last year, commodities are on the run, the dollar is in decline, and yet the fear of inflation (in the emerging markets, that is) is cited daily as a reason for market weakness. (more…)
It is said that Ms. Market can and will do whatever it takes in order to make the largest number of people possible look foolish. In short, this was definitely the case on Monday. You see, there are any number of indicators suggesting that the bulls are due to take a break. There are the A/D and New High divergences. There is the splintered action between the leaders and the blue chips. There is the overbought condition. There is the over exuberant investor sentiment. All of which traditionally lead to a pullback in the stock market. Heck, I even went so far as to suggest that it just might be time for the bulls to finally take a break from their relentless march higher in the title of yesterday’s morning missive. (more…)
SUMMARY:
- Market not ready to roll over just yet as DJ30 leads higher on IBM’s back.
- Other indices rebound, but they still have issues and the question is whether they follow the Dow or this was just a relief bounce.
- SOX bounces nicely thanks to INTC increasing its buyback while NASDAQ rebounds, thanks to AAPL and other large cap tech.
- Earnings remain the headline story, but they are not really changing the day to day dynamics.
- Some really great individual setups and moves continue, and if money keeps moving into new sectors the market continues to hold its own and advance.
- Still watching SP500′s bounce as the key to the market action. (more…)
SUMMARY:
- Market continues its bifurcation and still looks ‘November-like’ even as analysts and financial stations gush over GE’s earnings.
- GE the affirmation of economic recovery? Please.
- Money rotates out of techs as fast as it rotated into them, threatening breakdowns in tech leadership.
- If growth sectors are on the wane then the recovery is over before it ever really got started.
- Still expecting more downside, and if the NYSE large caps follow as in November we will get some more downside plays and then some good upside entries as well.
(more…)
Although the DJIA powered on to its 8th straight weekly gain (thanks primarily to IBM, GE, HD, and WMT), the rest of the market indices went the other way with the Russell 2000, Midcaps, and the NASDAQ notably weak. And for the most part, Friday’s action continued the trend as the Dow finished up +49 while the NASDAQ, Russell and Midcaps all declined. So what do we take away from this divergent behavior? Perhaps a review of the big picture will help, so let’s see where we’re at. (more…)
SUMMARY:
- Does the news matter? Earnings were great, jobless claims lower, but after solid run stocks were extended. One bad story trumped the good, providing a sell trigger. At least for NASDAQ.
- Jobless claims drop, earnings solid, existing home sales perky, but China GDP remains strong and Philly weakens.
- Bonds sell hard: if they break the range to the downside then gold, bonds come back into line, answering the questions the bond market was presenting.
- Techs, commodities struggling while energy, financials hold up well.
- Market dichotomy: NYSE large caps just fine, growth correcting and looks to have more to go.
(more…)
After the last two sessions, during which time the stock market has moved in a southerly direction (something it hasn’t done in quite some time, I might add) the key question on the minds of investors just might be: What does it mean (if anything)? (more…)
SUMMARY:
- Not enough good news from AAPL, IBM to withstand financial sector results and a sense that this second leg of the rally may have run its course.
- December housing starts sag but permits rally: builders may be a bit too excited a bit too early.
- Late bounce provided a bit of positive tone after the indices test the 127% extension breakout, but after Wednesday, the action very much resembles the market in early November.
- Market bracing for more tech downside as after hours earnings snowball downhill.
(more…)
The popular press was all over Wednesday’s decline as the U.S. stock market put up its biggest one-day decline in nearly two months. Although I am not entirely sure that you can actually call a drop of -1.01% “big,” Wednesday’s bout of selling did manage to produce the worst batch of red numbers investors have had to deal with since November 23rd. And for those of you keeping score at home, the market-leading Russell 2000 small cap index was tagged for a loss of -2.56% on Wednesday, which might indeed be considered a “big” drop. (more…)
SUMMARY:
- Apple s Jobs, earnings threaten to upside the advance, but stocks recover again from a lower open.
- New York PMI solid, almost in line with expectations
- China blustering ahead of US visit, says yuan should be the reserve currency. Hell, it doesn t even float on its own.
- Fed ready for more bond purchases despite signs of economic improvement.
- After hours earnings solid as IBM and AAPL stroke the long ball. (more…)
Yesterday, we wondered if the news of Steve Jobs’ medical leave from the maker of all things cool might be ‘that something’ the bears have been searching for in order to get back in the game (if only for a day or three). In short, the answer is no. While the market in general and Apple (AAPL) in particular started off in the red, it wasn’t long before the dip-buyers began falling all over each other trying to snatch up a bargain. (more…)
Having been at this game for some time now, I always get concerned when the masses are ALL singing the same song at the same time. And the bottom line is if you’ve been listening to what people have to say about 2011, the song is almost uniformly positive. The U.S. offers better valuations than the emerging markets, earnings will continue to grow, the economy is improving, inflation isn’t a problem, and the Fed is bound and determined to err on the side of growth/inflation. Thus, the conclusion is clear: U.S. stocks are projected to be THE place to be this year. (more…)
SUMMARY:
- China clouds once again form over the market, but buyers use the dip to buy on volume.
- Economic data not as good as hoped, better than thought on Friday, but the movement still points to improvement.
- Michigan Preliminary Sentiment disappoints but Capacity and Production are solid.
- Leadership across the market jumps with chips leading the way.
- Market shows every intention to continue to rally to next resistance. Perfect. Just be skeptical.
(more…)
With about an hour to go in yesterday’s trading session and the Dow off about 50 points or so, I took a call from a colleague who sounded rattled. The questions came in rapid fire fashion… “Is this it? Is it over? Should I start selling now? What if this keeps going? Whadda ya think?” (more…)
SUMMARY:
- Sluggish session following the new SP500 resistance break.
- Jobless claims, PPI don’t help stocks, but the Philly Fed revision seems to have hit the market hardest.
- South Korea raises interest rates and Bernanke says US higher rates reflect an improved economic outlook. Or inflation perhaps?
- Signs of sellers show up in the afternoon session though the market gamely recovers.
- Will there be follow through to the next resistance: SP500 has cushion to rally, money is still moving around, and there is some time before the earnings trend shifts.
(more…)
SUMMARY:
- European bond auctions perk up world markets, send commodities and stocks higher.
- SP500, NASDAQ move through the 127% extension.
- Import prices rise mostly on fuel costs.
- Fed Beige book again notes improvement, but it is the same old very slow improvement.
- Stocks continue the rally, moving higher into earnings . . . and the next resistance. (more…)
Long time readers know that I tend to favor the idea that there is a Wall Street cliché for just about every situation. So, if there is anyone out there still wondering why stocks are continuing to march steadily higher right now, please repeat after me: “Don’t Fight the Fed (of any country) – Especially when they are on a mission!” (more…)
January 12, 2011 Eric Aafedt
Trades
Our Success Trading Group currently has a position in Altria Group, Inc. (Ticker: MO). We like MO for new positions at $23.98.
SUMMARY:
- Japan Euro-aid, US earnings help stocks to an across the board gain.
- Businesses still lacking any serious positive sentiment even with 4 months of gains.
- Diesel consumption spikes in December.
- Fed’s Plosser warns overly aggressive monetary policy could ‘backfire.’
- November wholesale inventories fall, but it is a glass half full: sales are rallying driving inventories lower.
- SP500 bumping against the 127% extension as NASDAQ rallies toward that level as well.
(more…)
Assuming you don’t spend your days focusing all of your energy and attention on the NASDAQ or the NASDAQ 100 Indices (both of which hit another new high for this bull market cycle on Tuesday), you will probably agree that stocks haven’t done much since the opening minutes of 2011. One glance at the chart of the S&P 500 shows that the market has effectively been moving sideways for the past six trading sessions. While this may be disconcerting to some, we do have to remember that so far at least, the market is sticking to the traditional January script. (more…)
