Tame Core CPI Data Traps The Bears As Stocks Rally On Heavier Volume; The Incompetent Short Sellers Just Don’t Get It
June 17, 2007 | Leave a Comment
Stocks started Friday off just right as stocks gapped higher thanks to a tame core CPI. The CPI moved up .7% in May–the biggest since September 2005–but the core CPI was up only .1%. That was less than the .2% expected by economist. That also lowered the YOY core CPI to 2.2% which was the smallest in 14 months. The CPI data clearly gave investors the hope that the Fed will scrap its bias to raise rates as the recent economic numbers suggest steady economic growth with mild inflation. A sign that rates and economic growth are starting to come in-line can be seen in the yield curve. It has corrected itself and now has a very positive bullish slope to it compared to where it was just three months ago when the curve was inverted. Read more
Tame Core CPI Data Traps The Bears As Stocks Rally On Heavier Volume; The Incompetent Short Sellers Just Don’t Get It
June 17, 2007 | Leave a Comment
Stocks started Friday off just right as stocks gapped higher thanks to a tame core CPI. The CPI moved up .7% in May–the biggest since September 2005–but the core CPI was up only .1%. That was less than the .2% expected by economist. That also lowered the YOY core CPI to 2.2% which was the smallest in 14 months. The CPI data clearly gave investors the hope that the Fed will scrap its bias to raise rates as the recent economic numbers suggest steady economic growth with mild inflation. A sign that rates and economic growth are starting to come in-line can be seen in the yield curve. It has corrected itself and now has a very positive bullish slope to it compared to where it was just three months ago when the curve was inverted. Read more
Stocks Keep Climbing And The Bond Market Stabilizes, Putting More Pressure On. The Shorts; Milk Cost Almost $9 Now On Maui!
June 15, 2007 | Leave a Comment
Stocks gained ground for the second straight session as an in-line PPI report showed inflation under control–that is if you take out the energy prices that surged 4%. Oh yeah and if you don’t include milk on Maui now costing almost $9 a gallon. Inflation is out of control here, but apparently it is under control as the PPI rose .9% in May. We will see what the CPI brings tomorrow.
As for today’s action, stocks climbed across the board and rose pretty much all day long until the last half hour. The SP 600 led the way with a .74% gain, the Nasdaq followed with a .66% rally, the DJIA rallied .53%, and the SP 500 gained .48%. The best news came from leading stocks as the IBD 100 rallied 1.3%, well outpacing the broad market. This followed yesterday’s 1.8% gain. That is very bullish in the face of all the short selling. Read more
The Trend Is Your Friend; Bears Feel The Pain Of Top Calling, Once Again
June 14, 2007 | Leave a Comment
A 1.4% jump in May retail sales–the highest in 16 months–sent stocks gapping higher in the morning, as stocks started off the day shaking off yesterday’s selling. Then after holding the morning lows, stocks took off on a very broad rally, off the back of a very bullish Beige book report around 2pm EDT. This helped send indexes higher the rest of the day, closing most of them at their HOD.
The SP 500 led the way higher by 1.5%, the NYSE and DJIA followed with 1.4% gains, the Nasdaq and SP 600 gained 1.3%, and the SP 400 rallied 1.1%. Leading stocks outperformed the broad market again, as the IBD 100 and IBD 85-85 both rallied 1.8%. Read more
A Nasty Bearish Reversal Off A Bullish Reversal Sends Stocks Lower On Heavier Volume
June 13, 2007 | Leave a Comment
The 10-year bond sent stocks lower today as yields hit 5.30% which was much higher than yesterdays rise to 5.15% and stoked inflation fears. This put yields at their highest level in five years and sent stocks on a wild ride that I have not seen in months. This move on the bond yields sent stocks on a tizzy as a weak open turned into a very bullish reversal but the weak internals hinted at what was to come as the market sold off the rest of the day sending stocks near their lows of the session. If you look at a chart of the TLT you will understand why stocks are coming under such pressure. That is one ugly chart.
At the close, the SP 600 and NYSE led to the downside losing 1.2%, the SP 400 and SP 500 lost 1.1%, the DJIA lost 1%, and the Nasdaq closed .9% lower. The New America Index lost 1.1%, which was better than the 1.2% losses on the NYSE and SP 600, signaling that leading stocks were doing better than the worst indexes. Read more
Stocks Bide Time Ahead Of PPI And CPI; It Feels Like Summer Time
June 12, 2007 | Leave a Comment
It was a very boring beginning to a week that should pick up more excitement as we move along toward Thursday’s PPI and Friday’s CPI. Today was dead despite a few merger and acquisition deals that show wall street is still flush with cash. BYBI was acquired by a private equity group for $38 mil, IBM acquired Sweden’s Telelogic for $745 mil, and in a reversal of an acquisition, a German steel conglomerate announced that it had no interest in X. This put a hurting on the steel sector, along with NUE warning that Q2 earnings will miss.
Besides the M&A deals, the only other news of interest was that the 10-yr yield rallied to 5.15% and the 30-yr yield rallied to 5.26%. As bonds fell, the summer time trading blues hit wall street as stocks went nowhere and volume fell off the cliff. Read more
This Was Posted Saturday On The Daily Stock Market Analysis
June 11, 2007 | Leave a Comment
Stocks Bounce Back From Thursday’s Selloff On Lower Volume; Indexes Still Holding Their 50 Day Moving Average
By MauiTrader
Stocks rebounded nicely from Thursday’s selloff, on the back of the trade deficit shrinking in April by 6.2% to $58.5 billion and oil falling 3% to $64.76, on lower volume. At the close the Nasdaq led the way higher by 1.3%, the DJIA followed with a 1.2% gain, and the NYSE, SP 500, and SP 600 came in with 1.1% gains. Leading stocks couldn’t quite do as well as the broad market, with the IBD 100 only gaining 1.1%, after yesterday’s 2.8% chop. The top index of the day, however, was the Philadelphia Semiconductor index. The SOX rallied 3.1% off the back of a huge rally in shares of NSM. This made it the eleventh Friday in a row that stocks have decided to finish higher. I wonder when the last time was that that happened. Read more
Stocks Bounce Back From Thursday’s Selloff On Lower Volume; Indexes Still Holding Their 50 Day Moving Average
June 10, 2007 | Leave a Comment
Stocks rebounded nicely from Thursday’s selloff, on the back of the trade deficit shrinking in April by 6.2% to $58.5 billion and oil falling 3% to $64.76, on lower volume. At the close the Nasdaq led the way higher by 1.3%, the DJIA followed with a 1.2% gain, and the NYSE, SP 500, and SP 600 came in with 1.1% gains. Leading stocks couldn’t quite do as well as the broad market, with the IBD 100 only gaining 1.1%, after yesterday’s 2.8% chop. The top index of the day, however, was the Philadelphia Semiconductor index. The SOX rallied 3.1% off the back of a huge rally in shares of NSM. This made it the eleventh Friday in a row that stocks have decided to finish higher. I wonder when the last time was that that happened.
Today’s rally looked wonderful on the outside. However, on the inside, there were some minor problems. While it was good to see a bounce right after the past three days of distribution, right at the 50 dma, it was not good that volume came in 19% lower on the Nasdaq and 18% lower on the NYSE. This is the opposite of what you would like to see from the big institutional investors. You want to see higher volume come in to support stocks after such a selloff. We did not get that, obviously. And that has to be taken as a caution flag, despite the indexes holding the 50 dma. To me it means, if your longs are holding keep holding. But if you are looking to buy, I would hold off, until I saw some volume come in to the market on the upside. Read more
Inflation Worries Send Stocks Lower, Closing At Their LOD, On Heavy Volume; Caution Is Best Advised Here
June 8, 2007 | Leave a Comment
Dip buyers were severely punished today as stocks sold off hard after bonds fell and yields rose. During the trading day, bond yields on the 10 and 30 year note crossed 5% for the first time in eleven months to close at 5.12% and 5.22%. This led Bill Gross to go bearish on bonds for the first time twenty-five years. And if that wasn’t bad enough for inflation angst, crude oil rose to near $67 a barrel on a bad refinery report from the EIA. This was enough to spooks traders, all day long, and convince some traders that Ben might have to hike rates this year. That is a quick turnabout off the hopes of a rate cut later this year.
There was some good news out there, with the jobless claims coming in at its lowest level in three weeks, lower by 1,000 to 309,000. Also retailers reported a strong month of sales for May and April merchandise wholesale sells rose faster than inventories. However, obviously, this did not matter with the fears of higher inflation. Read more
In A Shocking Twist Of Events, Stock Indexes Pullback; NYSE Picks Up A Distribution Day
June 7, 2007 | Leave a Comment
Stocks pulled back for the second day in a row, after a bunch of bearish headlines crossed the market. Early on, the European Central Bank ranks interest rates to 4%, the Labor Department’s non-farm productivity rose 1% in Q1 below estimates of 1.7%, and the labor cost rose 1.8% above estimates of .6%. All of this can be summed up in one word: inflation. And that is what traders focused on today.
However, stocks did not close at their lows, after an early afternoon rally helped bring the indexes up before a last hour pullback. At the close the SP 400 lost 1.2%, the NYSE and SP 600 lost 1.1%, the DJIA lost 1%, and the Nasdaq and SP 500 lost .9%. The seven day streak of leading stocks outperforming the market came to an end today. The IBD 100 lost 1.2% and the IBD 85-85 lost 1.5%. At least it was only one index and not both. The IBD 100 kept pace with the SP 400. Read more
