Archive | April, 2009

Wk17: Market Recap

27 Apr

A slew of earnings announcements came out this week however many at which were less weak than estimates predicted. The NASDAQ internals showed a mixed reading on Thursday where advancing stocks to decliners was negative 624, yet stocks rose 1.3 to 1.

The strength in the market is being lead by the NASDAQ, followed by the S&P and then the Dow. The NASDAQ tends to usually lead the market, therefore with many of the big names already reporting earnings; a slightly bullish bias could be expected in the following week.

Looking at the weekly chart we are in an area of high resistance so we may see more of a tug of war between bulls and bears in the short term which would hold prices steady.
Las week the S&P and Dow both violated the prior week’s low and failed to make a new high after 6 weeks of progressively higher movement. The NSADAQ however, did make a new high and did not violate the prior week’s low.

Wk18: Market Forecast

27 Apr

Market movers in the week to come are…
· Tues: Consumer Confidence 10:00 AM ET
· Weds: GDP 8:30 AM ET
· Weds: FOMC Meeting Announcement 2:15 PM ET
· Thurs: Personal Income and Outlays 8:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Fri: Consumer Sentiment 9:55 AM ET
· Fri: ISM Manufacturing Index 10:00 AM ET

Also note…
· Paul Volcker Speaks Thursday at 3:45 PM ET
· Tim Geithner Speaks Friday at 8:00 AM ET
· James Bullard Speaks Friday at 9:45 AM ET

We remain cautiously bullish. Staying delta neutral is a great way to remain hedged in times like these. The key is to balance relatively strong stocks with relatively weak stocks (relative in terms of the broad market), thus allowing the highest probability for both the position and the hedge to be profitable.
Watch for the top line figures (S&P, Dow, NASDAQ, and Russell) to continue moving between their rising channels. As we said before the NASDAQ tends to lead the market so watch for a break of the NASDAQ’s channel to be a leading indicator. For now the upper and lower ranges can be looked at as daily support and resistant areas. Keep in mind the weekly’s are at a heavy congestion zone.

Wk18: Stocks to Watch

27 Apr

Long ideas for the week are ARST and QSII as they continue to break out to all-time highs. We are also watching CPSI, DRI, and PNRA to consolidate and make another push higher if the broad market chooses to do so as well.

Shorting into resistance we have FWRD, HRS, and VIVO.

A big week filled with economic news and earnings ahead, tread lightly. Preserving capital should be your #1 goal.

Wk16: Market Recap

20 Apr

Regardless of the earnings announcements last week, we continue to push higher. The weekly candle ranges are becoming smaller as bears are stepping in to hold prices at these levels. We touched the 875 level on the S&P which was our target in last week’s forecast. We should see resistance at these levels so a pullback in the form of a gap down Monday would be expected.
The S&P has held a close relation with the 10-Day Moving Average and can be used as an initial target for any pullback that may occur. Notice how we tracked along the lower side of the 10-Day Moving Average on the move lower and once we closed above it, began tracking on the upper side.With the big names like Google, Citigroup, Intel and Goldman Sachs reporting earnings last week, we can assume those prices are factored into the market already leaving the market in need of some other catalyst to drive prices higher.

Wk17: Market Forecast

20 Apr

Potential market movers in the week to come…
· Mon: Leading Indicators 10:00 AM ET
· Tues: Redbook 8:55 AM ET
· Weds: EIA Petroleum Status Report 10:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: Existing Home Sales 10:00 AM ET
· Fri: Durable Goods 8:30 AM ET
· Fri: New Home Sales 10:00 AM ET

Earnings announcements for the week can be found here.

The next logical target on the S&P would be 910, but before that happens, a pullback should be in store. A move down to 840-845 would be healthy. We will watch for a break and close below the previous swing low of 835 before becoming increasingly bearish as that would confirm the trend of higher highs and high lows broken.

Wk17: Stocks to Watch

20 Apr

As we are expecting a gap down on Monday we are looking at a few select longs to buy early in the week those names are ADBE, CTRP, ESRX, LFT, MYGN, and SMG. We will follow up later in the week once a market sentiment is established. Remember we are still in earnings season so expect whipsaw action.

Wk15: Market Recap

13 Apr

Last week’s internals split the market in half. Notice how the Breadth and A/D Lines were stronger on the up days. This strength in the market was confirmed by a declining VIX that broke down and closed at the lows.
Back in week 11 we reported that a buy signal was printed on the Bullish Percent Index Point and Figure charts. That rally has continued nicely up to this current congestion zone of 805-875 on the S&P.

Wk16: Market Forecast

13 Apr

The week is filled with economic news, Alcoa kicked off earnings season last Tuesday with a Q1 loss of $0.59 per share and revenues declining 36%. We have some big names reporting this week including Goldman Sachs (GS) Monday, Intel (INTC) Tuesday, and Google, (GOOG) Thursday. Economic news for the week is as follows…
· Tues: Producer Price Index 8:30 AM ET
· Tues:
Retail Sales 8:30 AM ET
· Weds:
Consumer Price Index 8:30 AM ET
· Weds:
Empire State Manufacturing Survey 8:30 AM ET
· Weds:
Industrial Production 9:15 AM ET
· Weds:
Housing Market Index 1:00 PM ET
· Thurs:
Housing Starts 8:30 AM ET
· Thurs:
Jobless Claims 8:30 AM ET
· Fri: Ben Bernanke Speaks 12:00 PM ET

OPTIONS EXPIRY 4-17-09!

You can find the list of earnings announcements here.

We have a target of 875 on the S&P at which a pause or pullback should occur. If we do pull back, we will watch for the pattern of higher highs and higher lows to be broken before becoming increasingly bearish. There are a lot of earnings announcements over the next few weeks so we should expect to see some whip saw action from day to day.