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Showing posts from November, 2008

Weekly review - after the rally comes the wall of worry

Well, that was a short but stunning week! Major averages finished with double digit gains, the biggest weekly gains since the 1930's. What happened?

Once again, government actions were responsible for driving the stock market upward. The bailout of Citigroup was a major factor in Monday's rally as the Fed and the Treasury came through with another Sunday night rescue.

Further supporting stocks, a government commitment to purchase $600 billion of Freddie and Fanny mortgage-backed securities reassured mortgage lenders and MBS investors and had the knock-on effect of driving down mortgage rates. Despite poor numbers being reported for new home sales and existing home sales this week, the government action provided another glimmer of hope for the housing market.

To summarize the impact of the week's rally, the Russell 2000 gained 16.4% while the Dow gained 9.7%. The S&P 500 and the Nasdaq were in between with both showing double-digit gains. These gains were all the more surp…

Free Stock Alerts - Alert HQ for Nov 28, 2008 - the BUY signals are back!

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. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

The rally that began Friday afternoon a week ago carried over into this week's trading. Stocks marched steadily higher helped immensely by the government bailout of Citigroup and commitment to purchase $600 billion of Freddie and Fanny mortgage-backed securities. This had the effect of driving down mortgage rates and providing hope for the housing market.

Gains were stunning considering they were obtained in a mere three and a half sessions. The Russell 2000 gained 16.4% while the Dow gained 9.7%. The S&P 500and the Nasdaq were in between with both showing d…

Trend Leaders for Nov 28, 2008 - free list of chart-busting stocks

This post is to announce that Trend Leaders, our latest list of stocks in strong up-trends, is now available at the TradeRadar site.

Readers of the TradeRadar blog are familiar with the Alert HQ free lists of stock alerts. With Alert HQ, we try to identify those stocks and ETFs that are making reversals. Every week we scan all the stocks listed on the NYSE, AMEX and NASDAQ, over 7200 securities in all, to find those stocks or ETFs that are generating actionable BUY signals or SELL signals.

As a byproduct of the Alert HQ process we are providing a list of all the stocks or ETFs that are currently in strong up-trends. We call them Trend Leaders and the list is, of course, absolutely free. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day moving average.

This week we have 45 stocks that made the cut. After stocks hit new lows the previous week this most recent week's big gains allowed us to find a good number of stocks that …

Eight new ProShares ETFs - what they're all about

A batch of new ProShares ETFs became available today. The ProFunds company announced that 8 new ETFs began trading today and that 4 more will soon be available.

As can be expected with ProShares, there is a mix of ultra and ultra short ETFs. The ultra ETFs offer twice the performance of the underlying index on a daily basis while the ultra short ETFs offer twice the inverse performance on a daily basis.

The new ETFs fall into two categories: commodities and currency.

The new commodity ETFs --

In the commodity sector, ProShares currently offers the Short Oil & Gas ETF (DFG), the Ultra Oil & Gas ETF (DIG) and Ultra Short Oil & Gas ETF (DUG). They have now added the following four ETFs:
Ultra DJ-AIG Commodity (UCD) - based on the Dow Jones-AIG Commodity IndexUltra Short DJ-AIG Commodity (CMD) - based on the inverse of the Dow Jones-AIG Commodity IndexUltra DJ-AIG Crude Oil (UCO) - based on the Dow Jones-AIG Crude Oil Sub-Index Ultra Short DJ-AIG Crude Oil (SCO) - based on the inve…

Quick chart review - stocks pop, can they keep it up?

Wow! Stocks have put together two days of rip-roaring gains. The major averages have added roughly 12% in barely two sessions. So where do we stand technically?

With charts a mess and moving averages pointing steeply down, it's worth looking at resistance and support levels.

The major averages have moved up aggressively but have not yet cleared the first resistance levels. Indeed, today they began penetrating above resistance but fell back. These are the levels we are watching:
S&P 500: 850NASDAQ 100: 1500Dow Industrials: today the Dow breached first resistance at about 8250 but was not able to get past 8500Russell 2000: 450A clear push above these levels would imply the current rally has legs. Failure to break above them would bring out the caution flag again. As an example, the chart of the S&P 500 is presented below. The resistance level described above stands out plainly.


In closing, I would like to point out that none of the major averages have reached their 20-day moving…

Weekly review - stocks break down, can they dig their way out?

Stocks finally broke down to new lows this week making it look like 2008 could be the worst year for the S&P 500 since 1931. What the heck happened?

Citigroup continued its death spiral, announcing 52,000 layoffs while management failed to forgo bonuses and the stock price cratered. CEO Vikram Pandit railed against short sellers and "fear-mongers" while investors sold enthusiastically. Citigroup's move to take on around $17 billion of assets from a subsidiary fund caused investor alarm. Ironically, some of the analysts who had been very negative on the stock actually came out in defense of Citi and agreed with Pandit that the company has sufficient capital and enough federal backstops through various Federal Reserve and Treasury department programs to withstand the current downturn.

In general, financial stocks were all weak. Perception of rising problems in the commercial real-estate market and the Treasury's recent decision that TARP funds would not be used to bu…

Trend Leaders for Nov 21, 2008 - free list of chart-busting stocks

This post is to announce that Trend Leaders, our latest list of stocks in strong up-trends, is now available at the TradeRadar site.

Readers of the TradeRadar blog are familiar with the Alert HQ free lists of stock alerts. With Alert HQ, we try to identify those stocks and ETFs that are making reversals. Every week we scan all the stocks listed on the NYSE, AMEX and NASDAQ, over 7200 securities in all, to find those stocks or ETFs that are generating actionable BUY signals or SELL signals.

As a byproduct of the Alert HQ process we are providing a list of all the stocks or ETFs that are currently in strong up-trends. We call them Trend Leaders and the list is, of course, absolutely free. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day moving average.

This week we have only 16 stocks that made the cut. After stocks experienced a big breakdown this week, it was difficult to find many stocks that were still able to meet every o…

Free Stock Alerts - Alert HQ for Nov 21, 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. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

Stocks broke to new lows this week and despite a big rally on Friday, the losses on the week were severe. Citigroup continued its death spiral, announcing 52,000 layoffs while management failed to forgo bonuses and the stock price cratered. The automakers were unable to convince Congress they had any clue how to turn their businesses around so they got back in their private jets and regally returned to Detroit. Forebodings of problems in commercial real estate and commercial loans caused more fears of write-downs on the way. The Fed released its minutes from the la…

What's up with the lowly LED?

Pretty much every sector of the market is ugly these days so I console myself by looking forward to better times and trying to determine what sectors will be ready to outperform when the economy begins to gain traction again.

Could light emitting diodes be one of those sectors?

The simple light emitting diode (LED) has been around for decades and perennially shows up in signs and signals and as indicators in numerous gadgets. This mature sector of the semiconductor industry, however, is about to get juiced up.

In December of 2007, President Bush signed into law the Energy Independence and Security Act of 2007. Among many other things, the law mandates the phase-out of inefficient, power-hungry incandescent bulbs in favor of more efficient lighting solutions such a compact fluorescent and LEDs. Specifically, the law requires roughly 25 percent greater efficiency for light bulbs, phased in from 2012 through 2014. This effectively bans the sale of most current incandescent light bulbs.

Conse…

Part 2 - ultra short ETFs at a tipping point?

Last Friday I tossed off a quick post where I mentioned that most of the ProShares ultra short ETFs were exhibiting the same chart pattern and that they seemed to be at a tipping point. More accurately, I pointed out that there were two conflicting patterns emerging and it was difficult to know which would emerge the winner.

When the post appeared in Seeking Alpha, I was taken to task for not providing an analysis of the underlying index. Many of those who commented correctly pointed out that the ultra short ETFs move in reaction to the associated index; thus, it is misleading to attempt to chart the ETFs themselves.

The ETF that was discussed in the previous post was the Ultra Short QQQ (QID). At the time (Friday, 11/14) there was a potential bearish head and shoulders developing. On the other hand, the ETF had also bounced off its 50-day moving average and was then above its 20-day moving average.

Looking at the NASDAQ 100, last Friday it was still hanging onto a support level but stil…

Industrial Production - tech rolls over, too

The Federal Reserve just released the Industrial Production numbers for October. The headline number, a 1.3% gain, was unexpectedly good due to the resumption of refining and manufacturing activities in the Gulf region after hurricanes Gustav and Hanna. But what about tech?

Below we show a chart of Industrial Production for the sub-category of Computers and Peripheral Equipment. There is a clear drop off in production. In terms of percentage change, the current down-trend is not huge. What is disturbing is that typically the months of September and October show growth as manufacturers of computers and peripherals build inventory for the holiday shopping season. Here we see the opposite effect: rather than growth we have a decline. The numbers for the semiconductor sector look pretty much the same.


The next chart comes from the Federal Reserve. It includes Industrial Production and Capacity Utilization for high tech industries.

There are some interesting features in this chart. For one, t…

Weekly review - consumers cut back and stocks get cheaper

Another wild week is now in the books. Just as it looked as if stocks were breaking to new lows Thursday, a furious rally ensued, taking the major averages up roughly 10%. Unfortunately for the bulls, that was the only up day in the entire week.

As I wrote in an earlier post this weekend, companies and economic reports were pretty consistent in declaring that the U.S. consumer is toast. Retail sales were off sharply, Best Buy and other retailers reduced their outlooks. Even Wal-Mart, one of the few companies that seems to be navigating this downturn successfully, predicted results would be slightly under previous guidance. Intel also reduced their near-term outlook and analysts rushed to reduce estimates on all the companies in the PC food chain. Dell got hammered as did Microsoft. Nokia also chimed in by announcing a softening in the cell phone market and Qualcomm and other component makers slid in sympathy. Circuit City declared bankruptcy. Jobless numbers crossed the threshold over …

Free Stock Alerts - Alert HQ for Nov 14, 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. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

This week made it tough to find winners. Companies and economic reports were pretty consistent in declaring that the U.S. consumer is toast. Retail sales were off sharply, Best Buy and other retailers reduced their outlooks (even Wal-Mart did!). Intel also reduced their near-term outlook and analysts rushed to reduce estimates on all the companies in the PC food chain. Circuit City declared bankruptcy. Jobless numbers crossed the threshold over 500,000. Markets sold off this week, rallied strongly on Thursday in the face of the worst news and then sold off again on…

Trend Leaders - the free list of stocks for Nov 14, 2008

This post is to announce that Trend Leaders, our latest list of stocks in strong up-trends, is now available at the TradeRadar site.

Readers of the TradeRadar blog are familiar with the Alert HQ free lists of stock alerts. With Alert HQ, we try to identify those stocks and ETFs that are making reversals. Every week we scan all the stocks listed on the NYSE, AMEX and NASDAQ, over 7200 securities in all, to find those stocks or ETFs that are generating actionable BUY signals or SELL signals.

As a byproduct of the Alert HQ process we are providing a list of all the stocks or ETFs that are currently in strong up-trends. We call them Trend Leaders and the list is, of course, absolutely free.

This is our second week offering a list of Trend Leaders. Last week there were 113 stocks on it and we were hopeful that the market was at the early stages of a tradeable rally. This week there are only 37 stocks left on the list and the potential for a rally is questionable. Still, this week we are able …

Chart review - ultra short ETFs at a tipping point?

So what's going on with the ProShares UltraShort ETFs?

Almost all of them are carving out charts with the same characteristics. I've made some rough (very rough!) notations on the chart of the Ultra Short QQQ ETF (QID) below. There are two interesting formations playing out simultaneously:
A head-and-shoulders is forming. I have pointed out the head and both shoulders in the chart below with the big red sloppy letters S and H and S. This chart formation carries bearish implications for this ETF.
Moving averages tell a different story. It is clear that both the 20-day and 50-day moving averages are well above the 200-day moving average. Recent action shows the ETF staying above its 20-day MA until October 27. At that point it fell below the 20-day and soon bounced off the 50-day MA and closed the week once again above the 20-day MA. I have underlined in blue where QID bounced off the 50-day. This successful test of the 50-day and retaking of the 20-day is potentially bullish.


Concl…

Is Qualcomm the best semiconductor company in the world?

IC Insights recently released their research bulletin that ranks the major semiconductor companies worldwide over the first three calendar quarters of 2008. The company provides two rankings in their free offering: a list of the top 20 by sales and a list of the top 20 by sales growth rate.

Qualcomm (QCOM) is a notable performer on both lists:
Qualcomm used a 27% year-over-year growth rate to jump five spots and rank as the 9th largest semiconductor supplier through the first three quarters of 2008.This 27% year-over-year growth rate is good enough to place Qualcomm in the number one position in the rankings based on sales growth.Ironically, Broadcom (BRCM), Qualcomm's rival both in the courtroom and in the cell phone industry, is close on Qualcomm's heels with a 26% growth rate that is good enough for the second spot in the growth rankings. Where Qualcomm's sales volume allowed it to move up one spot, Broadcom's sales volume allowed it to move from 23 on last year's…

Skyworks - why is this company smiling?

Amidst the gloom and doom, it was a pleasure to read a conference call transcript where the company reported good earnings and committed to a positive forecast. Skyworks Solutions (SWKS) seems to be in a sweet spot and they were happy to share the good news.

First, the company beat expectations on the just finished quarter. Sales rose 22% year over year to $233 million, beating the company’s forecast of $225 million and the average analyst estimate of $226 million. Profit of 21 cents, excluding some costs, beat estimates by a penny. Gross margins expanded to 40.8%.


So much for the past. What about the future?

First, a little background is in order. Skyworks makes semiconductors for the wireless industry. This includes analog and mixed signal integrated circuits used in cell phones, base stations, aerospace-defense, wireless metering and other similar segments. The company has a market cap of about $1 billion. According to Yahoo! Finance it has a price/sales ratio of 1.29 and a PEG ration…

Introducing Trend Leaders - a free list of stocks in strong up-trends

This post is to introduce a new feature of the TradeRadar site. Readers of the blog are familiar with the Alert HQ free lists of stock alerts. With Alert HQ, we try to identify those stocks and ETFs that are making reversals. Every week we scan all the stocks listed on the NYSE, AMEX and NASDAQ, over 7200 securities in all, to find those stocks or ETFs that are generating actionable BUY signals or SELL signals.

As a byproduct of the Alert HQ process we are now providing a list of all the stocks or ETFs that are currently in strong up-trends. We call them Trend Leaders.

This week we are offering our first list of Trend Leaders with 113 stocks on it and it is, of course, absolutely free.

If your investing style is dependent on trending and momentum, you should be able to easily find a few stocks to add to your watch list or your portfolio.

You can read more and download the free list at the TradeRadar Trend Leaders page.

Weekly Review - is this rally still alive?

Another notable week came to a close with politics and negative economic reports taking center stage.

This week the country participated in an historic election while stocks bounced up and down and then up again.

Major events for the week:
The week started off with auto sales which, as expected, were horrible.
Next, of course, was the election of Barack Obama, the first African-American to be elected to the nation's highest office. The stock market surged on election day.
After strong gains on Tuesday and in the prior week, the markets proceeded to lose 10% in the next two days after the election. It felt like yet another slow-motion crash.
The blame for the downturn in stock prices was assigned to the ADP employment report which indicated a continued weakening in the job market and suggested Friday's non-farm payrolls numbers would be similarly weak.
Then there was the bad ISM services report indicating contraction in the service sector.
Cisco's John Chambers delivered a downbeat…

Free Stock Alerts - Alert HQ for Nov 7, 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. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

This week the country participated in an historic election and investors participated in changing their minds. After strong gains on Tuesday and in the prior week, the markets proceeded to lose 10% in the next two days after the election. The blame was assigned to the ADP employment report which indicated a continued weakening in the job market. Then we had a bad ISM services report. When Cisco's John Chambers delivered a downbeat assessment of the economy and of the next couple of quarters, the markets sold off again. The non-farm payrolls numbers were publish…

How will $200 netbooks affect the PC industry?

ASUSTek is planning on making life harder for many PC makers.

The Taiwanese manufacturer of motherboards and PCs recently announced earnings (it’s shares are publicly traded in Taiwan and on the pink sheets in the US and on several other foreign stock exchanges). CEO Jerry Shen held a conference call to discuss the financials and also spent some time covering company expectations for the world-wide notebook market and what ASUSTek’s share might be.

Shen expects his annual notebook shipments growth in 2009 to be higher than the industry's growth of 10-20%. The company also expects to grab a 30% share in the netbook market in 2009 – shipments of 6-7.5 million units out of an estimated 2009 netbook market scale of 20-25 million units.

Shen detailed that the company has adjusted its mid-range and entry-level Eee PC's pricing and market position, and expects to launch an Eee PC priced at US$200 in 2009.

Consumers may love this but other PC manufacturers will find themselves under price…

Weekly Review - sentiment turns, can momentum carry this market upward?

October came to a close and it was one for the record books. Record volatility, record declines in major averages and record intervention in markets by central banks and governments worldwide.

The final week of the month, however, stood everything on its head. We had bad economic data yet stocks rallied.

Among the awful data points: real GDP declined 0.3% on an annualized basis in the third quarter, impacted by a 3.1% decline in consumer spending. With 70% of economic growth based on consumer spending, that is a worrisome statistic indeed. Consumer confidence hit record lows. Chicago PMI fell by a sizable amount. Jobless claims stayed stubbornly high.

On the positive side of the ledger, credit markets continued to improve with LIBOR extending its decline and the commercial paper market registering increased activity now that the Fed has rolled out a facility to backstop this market, too. New home sales increased a bit, more than analysts expected. The durable goods report featured a high…

Yes, Virginia, it's a tradeable rally!

OK, stocks rallied this week. But does the rally have legs?

Sometimes the market rallies inexplicably. Given the bad news in economic reports this week, it looked like we might see another crash. We saw GDP come in with a 0.3% decline, a precipitous drop 3.1% drop in consumer spending, jobless claims stubbornly staying at recession-like levels, a major decline in the Chicago PMI and mixed numbers in the durable goods report.

Despite all this, stocks rose. Perhaps investors felt all the bad news was priced in and stocks were finally cheap enough to buy. I am beginning to think that we may see more buying.

Moving Average Analysis with a twist --Below we present some statistics derived from the TradeRadar Alert HQ process. Each week we scan 7200 stocks on the NYSE, the AMEX and the NASDAQ and run a number of technical analysis screens against each one. One of the indicators I have found to be reliable this year is tracking how many stocks have their 20-day moving average above their 50-day …

Free Stock Alerts - Alert HQ for Oct 31, 2008 (BUY signals galore!)

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. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

On Monday of this week stocks pretty much hit bottom and from there moved strongly up. The move was rather broad based and, as a result, we generated a good list of stocks exhibiting BUY signals based on the short-term indicators derived from daily data. This may not signal an "all clear" for investors but it does seem to show that stocks have firmed, sentiment has improved (despite a raft of awful economic data released this week) and it may be worthwhile to dip a toe into this market on the long side.

Against this backdrop, we see the signals based on da…