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Showing posts from March, 2007

TradeRadarWeb - Updates

I have made some user interface improvements in the pages that launch TradeRadarWeb and in the software itself.

If you have loaded the digital certificate, it is now clearer that you can just go ahead and run TradeRadarWeb.

There is visual feedback that shows the user that the applet is loading. You will no longer have to stare at an immobile web page and wonder what's going on.

In the TradeRadarWeb software itself, I have added the start and end dates for the historical price data to be analyzed. The interface has been cleaned up and should be easier to use. The help file has been updated to reflect only the functionality available within TradeRadarWeb.

One last note. The data is retrieved from Yahoo! Typically, they update the day's data in the evening, around 9:00 or 10:00PM eastern time. When loading data, check the End Date field to ensure you have the latest data.

Weekly Market Update - the Fed triggers a rally

Weekly Market CallIt seems the last few weeks have each provided one day where the markets rallied strongly. In some of those weeks, there was also a day when the market fell hard. On balance, the bulls have had the best of it lately. In terms of the major averages, we are now back in positive territory with the Russell 2000 leading the way again with a 2.6% gain, the NASDAQ and the S&P 500 at 1.7 % and 1.3 % respectively and the Dow just barely getting to 0.1% year-to-date.

This week's catalyst was the Fed policy statement. The phrase "the extent and timing of any additional firming..." was removed and replaced with "(F)uture policy adjustments will depend on the evolution of the outlook for both inflation and economic growth." Investors interpreted this as meaning the Fed has now dropped their bias towards tightening and a rate cut could be in the offing. The bulls pretty much ignored the comment that inflation had not declined as expected.

As usual, there …

Web-based version of TradeRadar now available!

I have deployed a web-based version of the TradeRadar software. It features all the charting functionality that the desktop version has. I have removed the database and portfolio portions of the program but it still provides an easy way to grab data and view it using the TradeRadar methodology.

If you're running Microsoft Internet Explorer, click here to try it out!

As always, this service is free. See how TradeRadarWeb can help you generate your own BUY/SELL signals online.

Is SanDisk (SNDK) Recovering?

I have been bearish lately, especially on tech stocks until this last week. Now it seems some beaten down quality tech stocks are bouncing off a bottom and finding their way higher.

A case in point is SanDisk (SNDK). With the bottom falling out of flash memory prices, SanDisk began a long slide that started last November. It appears to be over now. Several analysts have recommended the stock, quoting an expected pick up in sales later in the year with that higher volume driving higher prices. In addition, there have been announcements that SanDisk, in partnership with Hynix, may be rolling out a new fabrication process that could double the amount of data per chip and lower manufacturing costs. There is a perception that we have seen the bottom in SanDisk's share price and that now is the time to get in. The stock has already shot up from the mid-30's to 43.38.

The TradeRadar chart below confirms this outlook and shows a clear BUY signal generated just within the last couple of …

Weekly Market Update - No progress

Weekly Market Call

This week the big down day was Tuesday when markets fell almost 2% again. The rest of the week was spent in modest recovery mode. We have essentially ended up back where we started two weeks ago. Does no progress mean we have established a bottom? My feeling is that there is further to go on the downside.

As has been the norm lately, the economic news was mixed at best. Delinquencies on sub-prime mortgage loans hit 13.3%, the highest since the third quarter of 2002. The words "liquidity crisis" are beginning to be heard and more market participants are beginning to think the sub-prime problems could spill over into other financial sectors. Other news this week (manufacturing reports, PPI, CPI) portrayed the economy as plodding along but certainly gave investors nothing to boast about.

Market sentiment at this point remains nervous. A new negative factor coming into play would send the indexes to new lows. A little hedging with some of the inverse ETFs might n…

Pick 'o the Month - a two'fer

Usually I focus on a single smaller, more obscure stock. In this case, I would like to submit two stocks, a large-cap, Cisco Systems (CSCO), and a small-cap, Big Band Networks (BBND). These two stocks embody a resurgence in the network infrastructure space. That theme is what ties these two picks together.

With the rising tide of video, music and movies downloaded over the Internet and cable companies offering bundled TV, phone and Internet, we have finally absorbed the glut of network capacity created during the Internet bubble. This deluge of multimedia is changing service providers’ business models, and the ways they manage and develop networks. The focus now is on how to move, manage and monetize content that is richer and more complex than ever before.

In response, as telecommunications companies ramp up newer, faster networks to handle all this traffic, Cisco Systems is a prime beneficiary. As the dominant player in network infrastructure, it has already seen profits begin to incr…

Down Day Again

The markets turned down again today. Some standout winners, though, were ETFs I mentioned in a previous post about inverse sector funds. The ProShares UltraShort Financials ETF (SKF) and UltraShort Real Estate ETF (SRS) were both up over four points today. For SKF, that was an almost 6.5% gain. For SRS, it was a 5.76% gain. Not bad.

On another note, I have beefed up the Tools page on the Trade-Radar.com web site. I have added a number of new stock screeners, some that are unique and are definitely worth a try. Unfortunately, I had to remove the link to the Business Week screener as they are no longer offering that feature on their site.

On still another note, I know I am late with the March Pick o' the Month. I am in the middle of some kitchen renovation and my time has been limited. I will work on it as soon as possible.

QID as a contrary indicator?

I have written about inverse ETFs a number of times in this blog and even chose the ProShares UltraShort QQQ (QID) ETF as a Pick o' the Month.

I thought readers of this blog might be interested in a post that discusses the action in QID as a contrary indicator.

Click here to read the post at SeekingAlpha.

Tips for TradeRadar Users - Filter Settings

A pattern has been developing where TradeRadar generates a BUY signal and then, within a few months, a weak sell signal is generated. The signal appears weak (Signal Strength indicator less than 60% or 70%, Kurtosis not high enough) because the the reversal is not abrupt.

What about those stocks that move up nicely and then run out gas, dropping little by little until the profits are all gone? I have just seen this happen with PacificNet (PACT) and TradeRadar never flashed a solid SELL signal.

I believe the issue here is that the TradeRadar engine generates its best signals when there are more than eight months of daily data available. When you have less data to work with, the solution is to reduce the amount of filtering. The default value is 5 days. Try 3 or 4 days. Not only will the Signal Strength increase, the Kurtosis will also increase. At that point the Dashboard may flash the three green lights that indicate a solid, actionable signal.

As two examples, I have been reporting on T…

Weekly Market Update - bears take a breather

Weekly Market CallThe week began with another selloff followed on Tuesday with a big up day. The remainder of the week the averages moved in a fairly tight range. Sentiment seems to have evened out with bulls remaining optimistic but saying that caution is in order and bears expecting a retest of the recent lows.

The only reasonably important economic news related to jobs and wages. February job growth came in just shy of expectations. Investors chose to believe this provided some assurance the economy was still in decent shape even though the number was the lowest in two years. Wages increased more than productivity did. On the one hand, higher wages support consumer spending but, coupled with a slower rate of productivity growth, it tends to compress company margins. Investors went with the bullish interpretation.

TradeRadar signals at the end of this week sit pretty much where they were at the end of last week: all indexes still flashing the SELL signal. In this first chart, you can …

Tuesday Rebound - is it for real?

The markets looked great today. All the really beaten down sectors popped including financials and tech. That's the good news.

The bad news is that the damage over the last week or so has been so great that today's rally didn't even move the needle in terms of the charts. Indeed, the TradeRadar signals are still firmly bearish on the indexes and sectors that I track here.

As we all know, markets don't go straight up and they don't go straight down. Expect more volatility for the near term and don't be surprised if we see another low later this week. After all, today's economic news was anything but supportive. Q4 productivity was lowered to 1.6%, below the consensus of 1.7%, from a previous read of 3.0%. Unit labor costs were more than double economists' forecasts with a rise of 6.6%. With productivity improving an anemic 1.6%, margin pressure is beginning to develop. This is not the foundation for a rising market.

Weekly Market Update - The mood changes

Weekly Market CallThis week the markets gave up all of their year-to-date gains and then some. The search for a culprit was all over the place. Greenspan was blamed for having said a recession "was possible" later in the year. The Chinese stock market was blamed because they led off the slide this week by dropping 8.8% in one day. January durable goods dropped 7.8% from the previous month. Fourth quarter GDP was, as expected, revised downward to 2.2%. January new home sales dropped 16.6%.

The mood in the market now appears to be much more pessimistic that it was just last week. All this market and economic news would have been taken in stride last week as investors looked past it to a soft landing. This week it appears to have driven the sell-off.

Interestingly, nearly all the market commentators and fund managers made a point of saying the economy is in pretty decent shape and this abrupt drop was probably not the start of a major correction, let alone a bear market. Stocks c…

Time for Inverse Sector ETFs?

With what at first looked like a spasm in the market now displaying all the markings of a full-blown correction, it could be time to consider inverse sector ETFs.

ProShares has a slate of ultra ETFs that tracks eleven Dow Jones US indexes: Basic Materials, Consumer Goods, Consumer Services, Financials, Health Care, Real Estate, Industrials, Semiconductors, Oil & Gas, Technologies and Utilities. The ultra ETFs are meant to deliver 200% of the performance of the underlying index.

These ETFs come in two flavors: long and short (the short funds are often referred to as inverse). The short ETFs go up when the underlying index goes down. The long funds go up in concert with the underlying index.

If you are in the bear camp and believe we have further to go on the down side, this could be a good time to identify those sectors that are expected to be most under pressure in the coming weeks or months. In reviewing the charts this week, there was a pretty consistent pattern: big drops starting…