Stressed Out And Tired; Stocks End The Week With A Boring Session, Leaving The Indexes Mixed And Flat
April 1, 2007 | Leave a Comment
Another wild-yet-boring intraday session came to an end, with stocks going nowhere. The lack of action today is a bit of a surprise, considering all the news items we had to digest. First, we got off to a positive start and continued higher early on, on the back of a bunch of macro news. The core personal consumption index rose .3% in Feb (biggest jump since August) and personal income and spending rose .6%, contributing to the fact that core inflation is now at 2.4% which is outside the Fed comfort zone of 1%-2%. This data should make it clear that the Fed will not be cutting interest rates anytime soon.
There were two more headlines of interest: The University of Michigan consumer confidence survey was revised down to 88.4 from 88.8 and the Chicago Purchasing Managers index rose to 61.7 in March from 47.9 in February. Anything over 50 on the CPMI indicates expansion.
Stressed Out And Tired; Stocks End The Week With A Boring Session, Leaving The Indexes Mixed And Flat
April 1, 2007 | Leave a Comment
Another wild-yet-boring intraday session came to an end, with stocks going nowhere. The lack of action today is a bit of a surprise, considering all the news items we had to digest. First, we got off to a positive start and continued higher early on, on the back of a bunch of macro news. The core personal consumption index rose .3% in Feb (biggest jump since August) and personal income and spending rose .6%, contributing to the fact that core inflation is now at 2.4% which is outside the Fed comfort zone of 1%-2%. This data should make it clear that the Fed will not be cutting interest rates anytime soon. Read more
Bullish Intraday Reversal, Helps Stocks Avoid Another Possible Ugly Day; Stock Indexes Close Higher On Lower Volume
March 29, 2007 | Leave a Comment
A bullish Q4 GDP final revision higher to 2.5% from 2.2%, along with jobless claims falling for the fourth week in a row, helped start stocks off on a very bullish foot before the opening bell. But soon after the opening bell, stocks trended lower all day until a strong late afternoon rally sent stocks up into the closing bell with the SP 500 even closing near its HOD. This reversal in the face of rising oil to six-month highs of over $66 a barrel and gasoline future to eight month highs at $2.1355, due to the tension between Iran and the free-world, has to be considered very impressive. Read more
Stock Indexes Close Lower On Higher Volume, Producing The First Distribution Day Since The Follow-Through On Wednesday; Is This Rally Done Already?
March 29, 2007 | Leave a Comment
Stocks turned tail Wednesday and for the second day in a row dip-buyers did not show up as stocks moved lower, with an intraday roller-coaster ride mid-day after a speech by Ben to a Congressional panel, closing near the lows of the day. Things got off to a bad start, after the February durable good came out below expectations of a 3.5% gain with an actual 2.5% gain. That might have been bad but the ex-transportation numbers hitting YOY growth lows not seen since 2003 and capital goods coming in 1.2% lower and at lows not seen since 2004 were probably what really gave traders a scare. On top of that, add oil hitting six-month highs of $68 after-hours and settling in at $64.08 after weekly inventories were announced falling by 900k, comments by Ben that inflation is still a worry, and the tensions between Britain and Iran over the naval incident and you have plenty of reasons for stocks to go lower; and lower they went. Read more
The Bad News From The Housing Sector Just Doesn’t Stop; Stocks End Lower But On Lower Volume
March 27, 2007 | Leave a Comment
It was a day of bad news all around, as rising oil prices, more bad news from the housing market, and a drop in consumer confidence rocked stocks early. After the early morning rock, stocks basically spent the rest of the day boring everyone as all of the action was before the bell.
Before the bell, the Conference Board consumer confidence index fell to 107.2 in March, from a downward revised 111.2 in February. This was the first decline in five month and below estimates, after the index hit a 5 1/2 year high in February. Then we had the bad news from LEN’s Q1 report. The stock said this quarter EPS came in 72% lower and withdrew 2007 earnings estimates. The combination of these two news events, with oil making gains helped send all stock indexes lower. The bad news continued, after-hours, for the homebuilders, but we will get to that later.
At the close, the Nasdaq and SP 600 led to the downside with .7% declines, the SP 500, the DJIA and NYSE lost .6%, and the SP 400 held up the best with only a .5% loss. Leading stocks kept pace with the market, with the IBD 100 falling .7%. Even with the leading stocks keeping pace with the Nassy to the downside, there still was virtually no selling in the stocks that make up this current index.
Stocks Reverse Intraday Losses, With Most Indexes Closing Higher On A Slight Uptick In Volume; Housing Market Continues To Swoon
March 26, 2007 | Leave a Comment
Stocks started the day pretty drift-less the first half hour, but soon the excitement started. After a report on new-homes sales falling 3.9% to 848k in February to new seven year lows (June 2000), a report on the months supply of homes on the market rising to 8.1 months which is a 16 yr high (January 1991), and a revision of new-home sales being lowered in November, December, and January, stocks were slammed. On top of that, Citigroup announced plans to cut 15k jobs and take a $1 billion charge to earnings, and oil rose to over $63 a barrel, closing at $63.30. Despite all of this, after the selling was over in the morning, stocks rose the rest of the day closing near their highs. This was a very positive bullish intraday reversal. Read more
A Boring Day Of Trading Ends With Stocks Mixed On Lower Volume; Best Week For Stocks In Six Months
March 24, 2007 | Leave a Comment
A boring, erratic, and overall lame session came to end Friday, after a week of surprises on many fronts. The only thing not boring today was the post-1pm EST action in the Nasdaq; up, wedge up, down, wedge down, and up. Still, that only led to a flat close. Today’s headlines were much more subdued than the previous four days, but we still had some important numbers to digest. Existing-home sales were up 3.9% in February to an annualized 6.69 million. That was the fastest growth since April and above economist estimates. This was a welcome report, after all the thrashing we received last month. The other news item making its way around was the 15 British sailors and marines that were captured by Iranian kidnappers. However, as expected, this was not market moving news. Read more
Stocks End Mixed After A Narrow And Choppy Session; Indexes Hold Up Well After Follow-Through
March 22, 2007 | Leave a Comment
Stocks traded in a narrow and choppy range today, digesting the gains from yesterday’s follow-through. That action was overall very positive considering that there were a couple of news items that could have sent stocks lower. Oil rose $2 to close over $61 and for the third week in a row, jobless numbers came in lower; this time by 316,000. However, stocks held up well, consolidating the gains from yesterday’s follow-through. Read more
Stock Indexes Follow-Through On Day Six Of Rally Attempt; Something Seems Wrong About This Follow-Through
March 22, 2007 | Leave a Comment
Stocks were boring and dead all day long, until 2:15pm when the Fed announced their decision on interest rates. When that happened, stocks exploded to the upside, destroying shorts in the process. The party was not started based on the decision, as everyone expected rates to stay at 5.25%. The fireworks erupted because the Fed left out the hawkish comments and adopted a more neutral rate policy. That sparked non-stop buying on strong volume, into the close.
At the close, the Nasdaq led the way with a 2% rally, retaking its 50 day moving average. The SP 500 and NYSE also retook their 50 day moving averages, with each rallying 1.7%. The SP 600 gained 1.6%, the SP 400 rallied 1.4%, and the DJIA gained 1.3%, rounding out a strong day in the markets. The two indexes that are throwing up a red flag to me are: The IBD 100 and the IBD 85-85 index. The IBD 100 gained 1.8% and the IBD 85-85 gained 1.6%, both lagging the Nasdaq’s gains. Normally at the start of a strong bull market, where we get a follow-through, these indexes will lead the market. They did in all the other bottoms, since October 2002, except the most recent one in July/August. Then these indexes also lagged in what turned out to be the weakest bull market I have been a part of.
Volume was much higher today on the NYSE and the Nasdaq. Nasdaq’s volume came in higher by 26%, but the NYSE only saw a 12% jump in volume. That is not a big volume increase over the previous day on such strong price gains. The other problem with the volume is the fact that on the NYSE it was only even with the 50 day volume average. On the Nasdaq it was only a tad higher than the 50 day volume average. On the best and most powerful follow-throughs that launch strong rallies, the indexes will normally launch a rally on volume well above this average. That did not happen this time, so this is another red flag on the rally.
Stocks Rally For Second Straight Day, On Lower To Flat Volume; Funds Still Have No Interest In This Market
March 20, 2007 | Leave a Comment
It was another day of light gains, for the stock market. However, today, had a bit more of a steady bullish bias to it, unlike yesterday, as big-cap indexes closed near their HOD. The good news for stocks came on the back of a better-than-expected housing starts number for February. That number was up 9% for the month, which is much better than the 14% drop in January. The bad news, in that mix, came from building permits as they fell again by 2.5%. The other positives effecting stocks was M & A activity. The news that CYTC is making a full bid for ADZA and that PALM might receive a bid for its business might have had a positive impact on stocks. Read more
