Skip to main content

Weekly Market Update - Uncertainty turning to Bearishness?

Weekly Market Call

All the major indexes moved nicely higher this week until Friday when things got ugly. Cisco reporting good earnings and providing positive guidance gave the market a lift on Thursday but it wasn't enough to carry through to the end of the week. I am reminded of when Apple announced the iPhone and the NASDAQ hit a new high, only to fall back soon after. As I said then, it seemed unlikely the market as a whole could rise on the back of a phone or on the results of just one stock.

So what precipitated Friday's swoon? Three Fed officials did say that though they expect inflation to moderate later in the year, the risk of higher inflation remains. The Dallas Fed president even indicated there was a potential for further rate hikes. Not a message the market wants to hear.

Earnings season is about over now. A number of large-caps reported good earnings this week including the aforementioned Cisco as well as Prudential, Disney, Marriott and News Corp. The bad news is that, based on recent guidance, the expected first quarter growth rate for earnings is expected to fall to just 5%. After a string of double digit gains, this is not making investors comfortable.

In any case, all the indexes were down Friday but the only one showing a TradeRadar SELL signal is the NASDAQ 100. TradeRadar has been flashing SELL for three weeks in a row now and, as a result, I have advised selling QQQQ and buying QID, the ProShares UltaShort QQQ ETF, to profit from the expected drop in the NASDAQ. With many traders saying the market is overdue for a correction and many analysts quoting a statistic about the Dow and the S&P 500 not having had more than a 2% pullback since July, it is no wonder that a bearish attitude is creeping into the market.

ETF Comments

The technology ETF, XLK, has not been correlating closely with the NASDAQ and is still not generating a TradeRadar SELL signal. On the other hand, it is certainly not looking like a buy here.

Oil climbed this week but did not break through $60 a barrel so XLE, the energy ETF, did not advance. If we don't soon see XLE move past the $59 to $60 range we can expect another leg down and, perhaps, a confirmation that the long-term peak in energy is behind us.

I have been watching the housing/real estate ETFs lately, especially after recommending Tarragon Corp. (TARR). IYR, the US real estate ETF, has really been accelerating upward. After a modest pullback on Thursday, it took a bigger hit on Friday, probably the result of the rate jitters discussed above, but still managed to close the week up half a buck. Nevertheless, IYR now looks like it is starting a pullback. As for XHB, the homebuilders ETF, it closed down over $2 lower than last week. After moving slowly but steadily up since mid-July of last year, XHB is now threatening to flash a SELL signal. Having already fallen through support at $39-$38, it can next expect support in the $35-$36 range so there may not be too much more damage.

TradeRadar Stock Picks

A bit of movement in Generex (GNBT) which closed the week up less than a dime over the previous week. Tarragon (TARR) had an interesting day on Friday, swinging over a 5% range but finishing the day and the week practically where it started. PacifiNet (PACT) moved down but closed the week off only about $.30. QID, a leveraged ETF that moves inversely to the NASDAQ 100 and a recent addition to the list of picks, finished the week up about half a buck. Friday's bearishness affected all these stocks negatively and provided a boost only for the ultra-short ETF.

Comments

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:


Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:


Results here were actually quite good and, to make things even better, the previous month was revised upward.

N…

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, TradingStockAlerts.com and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at Trade-Radar.com

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …