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Showing posts from August, 2008

Free Stock Alerts - Alert HQ for Aug 29, 2008

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move.

Volume was very low this week but the market still managed to make some big moves. After all was said and done, the major averages ended the week down modestly. For the month of August, however, they did manage a gain. Many analysts said the low volume was a sign that investors lacked conviction. Or maybe that most traders were on vacation. In any case, there were no startling trend reversals among the major averages and the situation in individual stocks was much the same.

As a result, this week's alert lists are again somewhat abbreviated compared to those that were generated during the recent run-up. This week we have 23 BUY signals and 11 SELL signals based on daily …

Dell whiffs - why it was no surprise

Dell reported earnings after the close today. Net income dropped 17% to $616 million in the quarter on a revenue increase of 11% to $16.4 billion.

Excluding restructuring and other charges, Dell would have earned 33 cents a share. Including the charges, per share earnings are on track to be the lowest the company has recorded since late 2006 or early 2007. And this is after the company spent over a billion dollars to buy back shares.

Yesterday, I wrote a post on the Durable Goods Report (read it here). I made the point that new orders for Computers and related products were down 10.7% in July. That was more than twice the 4.7% drop that occurred in June. Shipments for Computers were down 12.9% in July after being down almost 5% in June.

Well, we recently received earnings from Hewlett-Packard (HPQ). In the PC segment, where they compete directly with Dell, H-P turned in pretty good numbers on a 15% increase in sales.

Given the fact that H-P and Dell are the two largest U.S. PC manufactu…

ProShares Links - the list for 8-28-2008

It's time for another list of links to posts by other bloggers that are writing about ProShares ETFs. This week's list is comprised of posts from Seeking Alpha. I recommend that you click through to the authors own sites after reading these posts on the Seeking Alpha site.

Thu, Aug 28SKFMortgage Fraud Is on the Rise, Infecting the GSEsThu, Aug 28DOG, PSQ, SHAn Investor's Guide to Bear MarketsThu, Aug 28EFZEFZ: Portfolio Hedge with RisksWed, Aug 27SHGetting CenteredSun, Aug 24FXPShanghai's Own Stock Market RulesSun, Aug 24SKFLax Underwriting , Foreclosures, and Credit Crunch Stimulate Misery IndustriesSun, Aug 24SKFBig Ben's Jackson Hole, Wyoming Pep RallySun, Aug 24DUG, DXD, EEV, EFU, EWV, FXP, MZZDouble Short ProShares ETFsFri, Aug 22EEV, EWV, FXP, SCC, SDP, SJHDouble Short ProShares ETFs: Volatility Goes Both WaysFri, Aug 22SRSFreddie and Fannie: Living in the PastFri, Aug 22SCC, SSGWill UltraShort ETFs Experience Whiplash Again?Thu, Aug 21SEFThe Twin I-Be…

Durable goods report lights up Wall St - but who's lurking in the shadows?

"Was a sunny day, not a cloud in the sky. Not a negative word was heard." - Paul Simon, Was A Sunny DayToday's durable goods report surprised investors by posting a rise of 1.3% in new orders for the month of July. This was way more than the anemic 0.2% expected by economists. Shipments clocked with a robust gain of 2.5%.

Digging down a level, it turns out that much of the gains were due to transportation equipment, specifically aircraft. New orders were up 28%. (Now if Boeing could just deliver...)

Excluding the volatile transportation sector, new orders were up only 0.7%

Exports were generally identified as the driver behind these good numbers. This led some analysts to worry that we are unlikely to see growth like this continue with world economies slowing and the dollar rising.

In the meantime, though, it was time for stocks to bask in the sun; the major averages all made healthy moves to the upside today. Still, there were a few sectors casting shadows on the good times…

Cree on a roll - rising on rumors or something more substantial?

One of the stocks that showed up on this week's Alert HQ list of BUY signals based on daily data is Cree, Inc. (CREE)

It has a chart that meets the Alert HQ criteria. The stock has been in a steady decline for months and has just popped up over its 50-day moving average. Its DMI is turning positive just as MACD has already done. It appears a reversal to the upside is underway. The 6-month daily chart is below:


The stock has recently benefited from a good earnings report. A week ago Cree announced that fourth-quarter profit rose 31 percent as sales of the company's light-emitting diodes drove a 22 percent revenue gain to beat Wall Street expectations. Per share profit rose from $0.08 to $0.09 for the quarter.

For the full fiscal year, Cree reported net income of $33.4 million, or 38 cents per share, down from a profit of $57.3 million, or 72 cents per share, in fiscal 2007. Revenue rose 25 percent to $493.3 million from $394.1 million.

Despite the improvement on a quarterly basis, …

S&P 500 sector analysis for Aug 22, 2008

Below we present our sector analysis for the S&P 500. We have looked at three characteristics:
Percentage of stocks in a sector whose Aroon analysis indicates they are in an UP trendPercentage of stocks in a sector whose DMI analysis indicates they are in an UP trendPercentage of stocks in a sector that are trading with their 20-day moving average above their 50-day moving average.
Each of these characteristics would tend to be associated with a bullish trend. The following bar chart presents our results:


The first fact that jumps out is that Energy has become the clear laggard. How the mighty have fallen! It is no surprise we saw an over-sold bounce in oil last Thursday.

At the other end of the spectrum, Health Care and Consumer Staples are doing quite well, reflecting the popularity of defensive positioning among market participants.

Consumer Discretionary, a previously out of favor sector, has made great progress. In my opinion, however, it is questionable whether this sector can ho…

Weekly review - stocks hit the brakes

Major averages gave way this past week. Losses seemed rather modest but the underlying data is starting to look very suspicious. Yes, we had a big rally on Friday but our data shows a real slowdown in upward momentum.

We use both daily data and weekly data collected from the Alert HQ process to compile the market statistics discussed below. Each weekend we scan over 7200 stocks and ETFs looking for BUY and SELL signals. In the process, we collect various technical information that we roll up into charts like the ones below.


The chart above is based on daily data. It clearly shows that many stocks have fallen below their 20-day and 50-day moving averages. It also shows that more than a thousand stocks are no longer exhibiting strong up-trends according to Aroon analysis. The number of stocks showing strong buying pressure according to Chaikin Money Flow analysis showed a small decline.

So is this merely a pause in a major up-trend? For the optimists, we can point to the fact that we don&#…

Free stock alerts - Alert HQ for Aug 22, 2008

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move.

Despite a strong rally on Friday, the major market averages ended the week with modest losses. Unfortunately, we seem to have lost some of the momentum we saw in the Alert HQ numbers during previous weeks. It seems like most stocks decided to tread water.

As a result, this week's alert lists are rather abbreviated compared to those that were generated recently. This week we have 19 BUY signals and 12 SELL signals based on daily data. Looking at weekly data, we have 28 BUY signals and 10 SELL signals.

Stop by Alert HQ and download your free lists. The lists based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If…

Why H-P couldn't move the market

Hewlett-Packard (HPQ) was unable to rescue the stock market today. Though major averages finished with gains after two down days, the tech-heavy NASDAQ was not able to rally to any significant extent. What happened?

H-P, IBM, Cisco and Oracle, as the three-hundred-pound gorillas of the U.S. tech industry, are often able to move markets when they release earnings. This always frustrates me as these four companies are hardly representative of the hundreds of small and mid-size companies that make up a large part of the tech universe.

Not to disparage the company, H-P's numbers were very good. For its third quarter, earnings rose 11% from a year ago as sales reached $28 billion. That's serious money.

It's worth looking at the company's main lines of business to get a true read on how HP is doing.

PCs: Personal computer sales rose 15% from a year ago to $10.3 billion, with notebook revenue up 26% and desktop sales rising by 6%. Operating profit was $587 million.

Comment: notebo…

ProShares ETFs - is Consumer Goods a better bet than Consumer Services?

Consumer discretionary stocks have been in the news lately. As oil prices moderated and the U.S. dollar appreciated, the stocks shot upward. The consumer discretionary ETFs, naturally, followed suit.

There are a number of fund companies that offer ETFs focused on the consumer discretionary sector. They include:
Consumer Discretionary Select Sector SPDR (XLY) - large-cap blend with 83 stock holdingsPowerShares Dynamic Consumer Discretionary (PEZ) - mid-cap blend with 60 stock holdingsVanguard Consumer Discretionary VIPERS (VCR) - large-cap blend with 411 stock holdingsIn looking at the ProShares family of ETFs we see that there are two long ETFs in this category:
Ultra Consumer Goods (UGE) - large-cap blend, 147 holdingsUltra Consumer Services (UCC) - large-cap blend, 226 holdingsProShares also has a pair of corresponding Ultra Short ETFs:
UltraShort Consumer Goods (SZK) - large-cap blend, 147 holdingsUltraShort Consumer Services (SCC) - large-cap blend, 226 holdingsSo it seems there is qu…

Weekly review - rally continues with focus on the dollar

Mixed economic reports seem to have resulted in mixed markets this week. Large caps made little progress (Dow down 0.6%, S&P 500 up 0.1%) while small caps displayed decent gains (NASDAQ up 1.6% and Russell 2000 up a very nice 2.6%).

As everyone tries to determine whether the next bull market is now beginning, economic reports refuse to be clear. Industrial production and the New York Empire State Index were both up slightly, suggesting economic activity, while not growing strongly, is at least holding its own. Retail sails were somewhat soft, impacted by a horrible auto sector. Weekly jobless numbers continue to disappoint.

CPI showed higher than expected inflation despite the large drop in commodity prices we have seen recently. Apparently investors decided that lower commodity prices would show up in more benign inflation numbers in the near future so stocks ended up rallying the day CPI was announced.

Whether the new bull market has begun or not, it is clear that stocks have been …

Free stock alerts - Alert HQ for Aug, 15, 2008

This post is to announce that the latest list of stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move.

Once again this week, the alert lists are free!

Markets were mixed this week and so were our signals. Large caps more or less went sideways whereas small caps tacked on decent gains. In terms of our signals, the ones based on daily data delivered a decrease in BUY signals while the ones based on weekly data delivered an increase in BUY signals.

In any case, we have another set of good sized alert lists this week. We have 45 BUY signals and 7 SELL signals based on daily data. In addition, we have 65 BUY signals and 29 SELL signals based on weekly data.

Stop by Alert HQ and download your free lists. I myself like the lists based on weekly data and this week we have a nice increase in…

Is investing like dieting?

OK, so the title of this post is calculated to make you say "Wha..?" But there is actually a similarity that is worth talking about.

Recently, there has been a study released on dieting. The study emphasizes that those people who write down every single thing that they consume are much better at controlling their eating habits and actually losing weight. By documenting their true eating habits, these dieters have a much better idea about what exactly they are eating, where they are giving in to temptation and allowing fattening foods into their diet and where they are accomplishing their goals by eating the right things at the right times. And by tracking their weight as they document their eating, they are forging a relationship between input and output, cause and effect. Thus, they are better able to modify their behavior.

The study determined that those dieters who rigorously wrote down what they ate were better able to lose weight and keep it off compared to those dieters …

Safe to buy the Ultra Short Financials again?

Monday I bought the ProShares Ultra Short Financial ETF (SKF). I have bought and sold this ETF several times in the past year or so.

Here are my reasons why I think now is a good time to own SKF:

Financial stocks are emerging from earnings season. The somewhat misplaced enthusiasm over the way many of the financials exceeded drastically lowered expectations is beginning to fade. In terms of year-over-year results, these stocks, pretty much across the board, stunk up the place. We are now seeing some analyst downgrades, even for the likes of Goldman Sachs.

The winds of adversity are blowing in the direction of the financials again. Auction Rate Securities are negatively impacting a range of financial institutions. They are engaged in buying back illiquid securities and are facing potential fines as the New York Attorney General generally makes life miserable for them. It appears that bonds backed by consumer loans and credit card debt are becoming increasingly shaky. Credit requirements a…

Another slick deal for Google or Yahoo or both?

In discussing Google and its sources of revenue, I have often pointed out that the company does much more than monetize search. Pointing to Google's SEC submissions, I have shown that the AdSense product provides roughly one third of Google's revenue. Given the billions of dollars Google pulls in each quarter, this is no insignificant amount.

Today, ValleyWag wrote about the deal Google has made to provide advertising for Yahoo! It was generally believed that the agreement was strictly related to search advertising. Today, the parties published their agreement. Many sections are blanked out as there are aspects of the deal that the companies do not wish to make public yet.

What is surprising is that the deal is not limited to search advertising at all. A major component seems to be AdSense. The language of the agreement discusses that AdSense ads can be deployed to Yahoo!-owned properties and such other sites as meet Google requirements.

ValleyWag makes the point that Google can …

Weekly review - after a good week, will we get follow-through?

Oil down, stocks up. Seems a simple formula. Dollar up, Euro down. It's easy to play this game, isn't it?

Let's see, what other games can we play? Banks pay fines for sleazy behavior in auction rate securities market, pay billions to wronged investors and take more junk onto their balance sheets. Financial stocks close the week with a gain. Huh?

Ok, so maybe this stuff isn't so simple after all. In actuality, as the market has moved steadily upward we have continued to receive numerous conflicting signals. This week initial claims came in higher than expected, extending the trend of the last few months showing a deteriorating job market. This contributed to lower than expected wage costs when the productivity numbers were released. Speaking of which, productivity increased, something not usually associated with a recessionary economy.

Other conflicting signals can be found thanks to the currency markets. Tech has been a strong sector in the recent rally and exports seem t…

Free stock alerts - Alert HQ for August 8, 2008

This post is to announce that the latest list of stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move.

This week I also want to announce that the alert lists are free!

We have been offering the Alert HQ lists of BUY and SELL signals for months now. It is undeniable that the Alert HQ system does indeed identify many profitable trades. On the other hand, there have been a significant number of false signals, where things didn't work out as expected.

As a result, I have decided to make the Alert HQ stock signals free for now. As I have mentioned in numerous previous posts, the stock lists are excellent additions to a watch list. Keep an eye on the ones you determine to have the most potential and verify that the stock price is following through as expected. Do some fundamental res…

Microsoft out of ideas?

"Sometimes money buys you everything and nothing."
-- Prince, from the song Condition Of The Heart Yesterday Bloomberg reported an analyst's expectation that Microsoft (MSFT) would institute a $20 billion share buyback program.

There hasn't actually been a formal announcement from Microsoft that I have seen, yet the news has rapidly spread around the Internet as the Bloomberg report was picked up by bloggers, news sites and technology sites.

UBS analyst Heather Bellini expects Microsoft to complete the repurchase over the next three months, and that the amount is at least five times larger than its average share buyback per quarter in the last fiscal year, according to the Wednesday Bloomberg article.

So what does this mean?

Earnings --

When companies buy back shares, net income is spread across fewer shares. This results in an apparent increase in earnings per share even if total income stagnates. A buyback of this size might raise Microsoft's EPS by as much as $0.…

ProShares Links - this week's list, 8-6-2008

It's been a few weeks since the last time I published a list of links to posts by other bloggers that are writing about ProShares ETFs. I have accumulated a good list now, most from Seeking Alpha and one from Barron's Online.

Wed, Aug 6QLDAugust Market in Store for a BounceTue, Aug 5UYGEnergy May Not Be the Top Performing IndustryTue, Aug 5MZZTuesday Outlook: Fed DayMon, Aug 4SDSWas That a Bottom? Let's Get RealMon, Aug 4SDPTime to Short the UtilitiesFri, Aug 1SKF, UYGThanks, Chris! Love, ProSharesThu, Jul 31DIG, DUGMost Overbought and Oversold ETFsThu, Jul 31PST, TBTSearching for the Best Bond ETFThu, Jul 31DDM, DIGETF Update: Leveraged and Inverse ETFs, Short ETFs, MicrocapsThu, Jul 31DIG, DUG, QIDBank Stocks: Another Day Through The Looking GlassWed, Jul 30SSO, UYGOptions Trader: Wednesday OutlookTue, Jul 29SSODouble Longs: An Equity Idea in a 6% World?Sun, Jul 27DUGWhy I'm Not Buying Oil's Recent 'Correction'

Semiconductor rankings out - roadmap to investment opportunities?

"We're all pilgrims on the same journey-but some pilgrims have better road maps."
- Nelson DeMille
We write here on a fairly regular basis about semiconductor companies. IC Insights just came out with their Semiconductor Supplier Ranking for the first half of 2008. They provide two charts, one based on sales and one based on growth rate.

There are some interesting aspects to the rankings that are worth reviewing.

Qualcomm (QCOM) is a company that we previously held in our trading portfolio. It recently saw its stock jump based on the ending of litigation but it was a big gainer in the rankings due to exceptional sales growth. QCOM moved up four spots and is now considered the 10th largest semiconductor manufacturer based on sales and is the number two stock based on growth rate.

Taiwan Semiconductor (TSM), a company we recently wrote about (read the post here), made gains in both rankings as well. The company moved from sixth to fifth place based on sales and is the top stock…

Weekly review - major averages struggle, broad market rises: I'll take what I can get

"And I'd like to leave this game a winner...
But tonight I'll take what I can get"
-- Dashboard Confessional
Despite news of Merrill Lynch raising more capital and another bank failure, financials owned this past week. The sector gained a strong 4%. Other sectors weren't so lucky. The major averages barely budged though the Russell 2000 managed an 0.8% gain.

Oil strengthened on the week but finished at about $125 per barrel, still low by recent standards. Economic news was mixed. ISM manufacturing came in at 50, better than expected and indicating flat growth which, after all, is better than contraction. GDP came in at 1.9%, lower than expected but still indicating an expanding economy. Jobs showed a seventh straight month of declines though not as bad as expected and unemployment went to 5.7%, higher than expected.

Small caps kept the ball rolling in the stock market this week. Without the decent showing in the Russell 2000 we wouldn't have seen the continued im…

Alert HQ for the week ending August 1, 2008

This post is to announce that the latest list of stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move.

Markets were somewhat mixed this week with the Dow down a bit, the NASDAQ flat and the S&P 500 and Russell 2000 up a bit. Nevertheless, this week's action saw stocks advance sufficiently to continue the trend we saw last week where BUY signals outnumbered SELL signals. Based on daily data we have 63 BUY signals and only 4 SELL signals to offer this week

When it comes to signals based on weekly data, however, we see BUY signals and SELL signals running neck and neck: 29 BUY signals and 30 SELL signals.

Despite the good number of BUY signals based on daily data, major market averages seem to be struggling to overcome resistance. If that resistance is indeed overcome, we shou…