A Quick Look At Today’s Open
July 30, 2010 | Comments Off
US GDP reading at 2.4% comes in lower than 2.6% expectations
Market pundits have been squawking about a slowing economy, but many have disagreed by how much. Goldman Sachs last week set their expectations to 2% while Briefing.com pinned the figure at 3%. Lower growth translate into lower growth in revenues for many companies giving earnings top line pressure. This pressure will continue to place a heavy emphasis on controlling the bottom line. However, the important indicator will be how the stock market reacts to the news throughout the day.
We can sit here and speculate the market’s reaction, but ultimately no one really knows where we are headed. Futures are pointing to a lower open, but a swift rebound with volume will settle where this market will ultimately will want to go. The negative side here is yesterday’s action where the market was able to find footing get into positive territory only to sell off in the final 45 minutes of trading. If this market was strong we would have been able to finish in the green, but we finished the day with distribution.
The NASDAQ now has 3 days of distribution and one day of stalling in the past 4 weeks. This is a red flag for those who are long and why it is ok to take some profits along the way. Always cut your losses.
A Quick Apology About The Web Site Today
July 30, 2010 | Comments Off
I apologize for the problem that we all experienced today when the site failed to load. This is part of the message I received during the day:
“Good news, just got the owner of my host on his personal cell phone.
The problem is 2 transformers on roof of datacenter in New Jersey, even the backup power must go through them. They have the best people they can get working around the clock. My guy is getting same thing his recording says, will be up within an hour.”
So our hosting company had some issues today. The bad news is that it was an all day problem, including some problems the day before. The good news is that I can not remember the last time something like this happened. I know its been at least a year. Things like this are bound to happen from time to time but it is still no excuse and we are working on other possible options to prevent this from happening again.
Take this in to account, and Maui losing Internet access all-day on Tuesday, and you can be sure it has been a rough week. I appreciate everyone being so understanding and I’ll make sure to fix the problems to make sure this does not happen in the future.
Stocks Erase Losses as July Comes to a Close
July 30, 2010 | Comments Off
Volume Eases, but Stocks Come Well off Lows
The end of the month trading is usually described as window dressing and today could be viewed as such. GDP readings of 2.4% kicked off early selling as futures indicated a big drop at the open. By the opening bell the Dow and S&P 500 opened well above where futures had indicated. However, it wasn’t long before sellers took over and punished stocks prior to releases of the PMI and University of Michigan Consumer Sentiment figures. Better than expected readings helped move stocks into positive territory erasing hefty losses from the first half hour of trading. From there it was whipsaw action on light volume. Stocks did move higher in the final hour, but were unable to hold the nice gains finishing near flat on the day. NYSE volume did see a surge in volume at the close as prices fell, but failed to push it above yesterday’s level. Solid price gains, but we lacked the power of institutional backing.
Stocks Extend Gains as Volume Slips From Friday’s Levels
July 27, 2010 | Comments Off
The market took the new home sales data and ran higher with the readings. New Home sales jumped from last months dismal numbers as inventories remain at record lows. Volume ran into tough comparisons from Friday after the Europeans released their stress test. At the end of the day volume ran just over 10% across the board. However, the NASDAQ was just about average volume while the S&P 500 continues to be well below average. At the close, the market pushed the S&P 500 back above its 200dma as the market closed. Again, another nice day of positive gains with plenty of breakouts.
Volume Ends Mixed as Stocks Pause
July 27, 2010 | Comments Off
Volume exploded at the open as traders pushed the market to its highs. NYSE volume was running higher about 70% over Monday’s levels while the NASDAQ saw an increase of 20%. Consumer sentiment came in slightly lower than expected at 50.4 (expected reading 51). The morning highs weren’t to be seen again, but volume faded across the board ending higher on the NYSE and lower on the NASDAQ. Catching the attention was the drop in commodity prices with Gold and Silver leading the charge lower. Crude oil pulled back failing to clip the $80 dollar level. The S&P 500 did stall out today, but avoided distribution. All in all not a bad day in the market.
Top Current Holdings And Total Returns Since Purchase
July 25, 2010 | Comments Off
Currently long 12 stocks and short 7 stocks with 80-85% cash on hand.
stock symbol – % return since purchase – date of purchase
longs:
LCUT 138% 11/2/09
AKRX 28% 5/25/10
PWER 27% 7/7/10
RES 15% 7/13/10
JKS 11% 7/13/10
shorts:
SFD 12% 6/17/10
KSS 10% 5/13/10
NOV 7% 5/11/10
THO 5% 5/20/10
Top Current Holdings And Total Returns Since Purchase
Trade Slows As Stocks Soar
July 23, 2010 | Comments Off
Europeans got the market started with a jolt from their latest PMI report showing a better expected jump. The index showed a reading of 56 when the market expected 55 as the reading. It was all the market needed to push higher. US futures jumped and held through an unexpected rise in jobless claims as the market jumped at the open. Existing Homes sales were expected to drop over 9%, but were only down 5% month over month. This was all the fuel the market needed to push up and over the 50dma. Last Thursday’s high acted as a barrier for the market, but we did close in the upper end of the range with volume slightly lower on the NASDAQ and lower on the NYSE. Overall, a great day of price gains with little conviction behind the move.
“Unusually Uncertain” Rips Through the Market Sending Stocks Lower in Fast Trade
July 22, 2010 | Comments Off
The market got a jolt of good news from Apple Computer and set up stocks to open higher from the get go. Traders were falling over themselves to get a piece of the action as volume soared at the open. Unfortunately, the highs of the day were set at the open and the market would fail to see those highs again. Sellers took to the market, but not at a high rate allowing dip buyers to push the market back to the mid point of the trading range. The action got going with Ben Bernanke’s comments the economy was “unusually uncertain” it was all sellers needed. Volume picked up pace and traders sent the market lower. Crude oil went lower and the dollar raced higher with bond yields diving. Fear certainly appeared as the market closed just off its low with volume moving higher.
The Market Stages a Big Reversal as Volume Jumps
July 21, 2010 | Comments Off
Earnings headlines certainly spooked the market as well as housing data from the start. Traders crushed the open sending shares down to their lows of the day before rebounding. Volume rose on the day showing some support for stocks, but still lacked the thunder normally seen when big institutions step up to the plate. Price gains were hefty as Google and Apple Computer led the NASDAQ higher as well as Goldman Sachs. Stocks just finished off their highs of the day capping off quite a rally leading into some big earnings reports.
Apple Computer was the most notable release and as usual it crushed estimates. If you don’t know by now, this is how they play with earnings: beat then guide lower than the street. Quite a simple recipe for success! However, looking at where the stock ended the day on its earnings in April the stock closed at 259.22 and in after-hours trading today it closed at 259.20. In a span of a month in back to back “Best Quarter” ever the stock hasn’t moved more than two pennies. I would think having back to back “Best Quarter” ever the stock would be much higher than where we see it today. Value folks will say its a steal and those looking for price confirmation will say it is weak. Thus, we have a market for the stock. And with it coming under distribution as of late we’ll need to see the stock move higher with conviction.
The market shrugged off housing start data showing the lowest level since October of 2009. It is no secret the housing market will remain in trouble until the supply and demand picture becomes more clear. As long as prices stay high demand will simply not meet supply. We saw this scenario play out as the tax credit expired. But, the stock market has been able to shrug off negative data and today showed once again it simply isn’t looking at the housing market.
Stocks Rebound From Friday’s Sell-off
July 20, 2010 | Comments Off
Earnings season is now in full swing and the market rebounded today. It is quite common for the market to have a natural reaction to heavy volume selling and today wasn’t a surprise. Early in the session sellers took over shortly after the opening sending stocks much lower. Volume lagged Friday’s option expiry pace, but the market did find its footing. The day resembled Thursday’s action as the market moved higher volume really didn’t jump. Buyers didn’t come out with vigor, but with more timidness. At the close we saw the market close just off the close awaiting earnings reports.
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