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Showing posts from April, 2009

Do multiple ETFs over their 200-DMA signify something more than a bear market rally?

Question of the day: Is it really just a bear market rally when we are starting to see so many ETFs moving above their 200-day moving average?

Many analysts consider a stock moving above its 200-DMA to be a buy signal. Furthermore, it is also said that a bull market can be defined as one where major market averages are trending up above their 200-DMA.

Through most of this bear market, we haven't seen many stocks or ETFs anywhere close to their 200-DMA. Now, that seems to be changing.

In my highly unscientific sample, I'm seeing a number of sector ETFs as well as the NASDAQ 100 have moved above their 200-DMA recently. Included among the ETFs I am tracking are the following:
Technology iShares (IYW) Network iShares (IGN) Semiconductor iShares (IGW) Consumer Discretionary iShares (IYC)Comparable ETFs from the SPDR family of funds are essentially doing equally well.

In addition, the NASDAQ Composite is a hair away from crossing over its 200-DMA and the Telecom iShares (IYZ…

Thursday Trend Leaders, Swing Signals and Trend Busters for April 30, 2009

This is a quick post to announce that Thursday's Trend Leaders, Swing Signals and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:
34 Swing Signals -- 19 BUY signals and 15 SELL Signals896 Trend Leaders, all in strong up-trends255 Trend Busters of which 19 are BUY signals and 236 are SELL signals

Tech - looking for a bottom in the GDP data

The Bureau of Economic Analysis today released the advanced report on GDP for the first quarter on 2009. The headline number came in at -6.1%, significantly worse than expected. The stock market, however, rallied on the news.

Two factors were looked at as positives. Consumer spending was up a surprising 2.2% where another drop had been expected and inventories saw a large decline. With spending up and inventories down, investors are hoping that manufacturing can finally begin to ramp up again.
What about the tech sector?The GDP data is presented in a set of tables and a few of them break out the numbers by sector. The chart below is taken from one of these tables. Note that the Information processing equipment and software category is the summary line for the whole table.

Extract from Table 2.--Contributions to Percent Change in Real Gross Domestic Product
[Quarters seasonally adjusted at annual rates]


2008:Q12008:Q22008:Q32008:Q42009:Q1Information processing equipment and software0.270.30…

AlphaDEX ETFs - performing as promised?

I mentioned last week that I was seeing a group of AlphaDEX ETFs on the TradeRadar Trend Leaders list. I was not at all familiar with the name but since they were performing so well I felt they deserved a look. It turns out they are managed by First Trust and they are intended to provide superior performance by taking fundamentals into account when selecting the stocks that make up each style or sector portfolio.

Index Universe first wrote about these ETFs way back in 2007 (here's the link from Seeking Alpha).

Here's how Index Universe described the mechanics:
The methodology for enhancing those indexes is transparent, but complicated. The stocks in each index are divided into growth, core and value buckets. The growth stocks are evaluated by five metrics and given a score:
three-, six- and 12-month price appreciation (i.e., momentum) one-year sales growth sales-to-price ratio.The value stocks are evaluated by three metrics and given a score:
book value-to-price ca…

Tuesday Trend Leaders, Swing Signals and Trend Busters for April 28, 2009

This is a quick post to announce that Tuesday's Trend Leaders, Swing Signals and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:
65 Swing Signals -- 37 BUY signals and 28 SELL Signals741 Trend Leaders, all in strong up-trends440 Trend Busters of which 39 are BUY signals and 401 are SELL signalsWe have now implemented a sorting feature on these web pages so it is easier to slice and dice these large lists of stocks and ETFs. Just click on a column heading to sort. Check it out!

Explanations of how these lists are derived are provided on their respective pages.

Trading leveraged ETFs? Stops are essential. Here's how to do it right.

Trading leveraged ETFs, ProShares or Direxion ETFs, for example, comes with a significant amount of risk, especially if the market begins moving against you.

This is why advisers recommend using a stop loss order. Often referred to simply as a stop, it directs your brokerage to automatically sell a stock or ETF if it falls to a pre-determined level. This is intended to limit an investor's loss on an investment.

There are essentially two kinds of stops:
A hard stop that causes the stock to be sold if it hits a particular price.A trailing stop that causes a stock to be sold if it falls a particular percentage from the most recent highWith leveraged ETFs it can sometimes be tricky setting stops. An investor must evaluate the underlying index and translate that evaluation into an appropriate stop for the leveraged ETF. This is necessary because the price action of the ETF is totally dependent on the performance of the underlying index.

Some ETFs are leveraged 2X, such as the ProShares ETF…

Weekly Review - tech leads the way to new highs, will others follow?

Stocks weakened a bit this week but for the most part held their gains. There were fractional losses on all the major indexes except for the NASDAQ which managed to advance 1.3% and has now achieved seven straight weeks of gains.

Earnings season, of course, is in full swing and things are as confusing as I've ever seen them. One news report will describe how a company saw a huge decline in earnings and revenue and another news report will focus on how the same company beat expectations. Overall, investors are still in the "glass is half full", "things could be worse" mode and are grateful that the majority of earnings surprises have been positive.

This has especially been true among tech stocks; hence, the strength in the NASDAQ. Among the notable companies with well-received earnings this week we had Apple, Microsoft, eBay and Amazon.

On the other hand, financial stocks, while turning in earnings that are better than most expected, are still facing headwinds from…

Swing Signals and Trend Busters for April 24, 2009

This post is to announce that our weekend batch of new swing trading signals is available at the TradeRadar Alert HQ Swing Signals page.

Our system looks for those stocks and ETFs that have exceeded their upper or lower Bollinger Bands and then have moved back inside the Bollinger Band envelope by a certain amount. Our interpretation is that there is a reversal underway and a short-term trading opportunity has presented itself.

Today we have a total of 68 swing trading signals or which 43 are BUYs and 25 are SELLs.

Trend Busters, too --

We have also posted our weekend list of Trend Busters. These are stocks or ETFs who are breaking out above downward sloping trend lines or are breaking down below upward sloping trend lines.

We have 371 Trend Buster signals based on daily data of which 31 are BUY signals and the great majority are SELL signals.

We also have 940 Trend Buster signals based on weekly data. In this case, things are reversed: 894 of them are BUY signals.

To see today's lists y…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for April 24, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7300 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.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band. These lists are all available at Alert HQ.

Here is what we have this week --

Well, the market wasn't able to make it seven straight weekly gains in row. As a result, the signals based on daily data are weakening while the signals based on wee…

Introducing TrendBusters - who's breaking their trend line now?

I've been working on a new feature at Alert HQ. It's called TrendBusters. Here how it works.

Building on the functionality we use to produce all the other signals we offer at Alert HQ we are able to scan over 7200 stocks and ETFs and, in this case, build classic trendlines.

When testing a stock for a BUY signal, we connect the daily highs to generate a trendline and test to see whether the latest price is 5% higher than the trend line. When testing a stock for a SELL signal, we connect the daily lows to generate a trendline and test to see whether the latest price is 5% lower than the trend line.

Crossing the trendlines implies a reversal; hence, the trend has been broken; hence, TrendBusters.

The table below presents the results of our first shot at generating a list of TrendBusters. Almost all of them are SELL signals. This is looking like an effect of almost every stock in the market rallying from the March 9 low. Many of the stocks rocketed higher and established fairly steep …

Thursday TrendLeaders and Swing Signals, April 23, 2009

This is a quick post to announce that Thursday's Swing Signals and TrendLeaders are now available at Alert HQ.

Today we have 64 Swing Trading Signals. There are 20 BUY signals and 44 SELL signals.

We also have a new list of TrendLeaders, 738 in total. No surprise that Apple is on top of this list.

Looking at our Swing Signals, the SELL signals are outnumbering the BUY signals. And the TrendLeaders list seems to be shrinking little by little each time we run it. Stocks seem to be entering a bit of a weakening phase. Is it time to get worried?

Please check out our latest stock market data at the TrendLeaders page and the Swing Signals page. You will also be able to download the data in a CSV format file that can be opened in Excel. Of course, it's all still free.

More cash, less debt = stock market gains?

Today there were a couple of posts about how tech stocks are currently especially attractive because they hold plenty of cash and tend to have little debt. Paul Kedrosky initially caught my eye with his post "Tech Cash is King" which in turn pointed me to a story on Bloomberg by Eric Martin.

I ran a screen tonight that looked at both cash and debt. Specifically, I screened for a Price-to-Cash ratio under three, a Debt-to-Equity ratio under three and a Market Cap greater than $2.5 million. Based on these criteria, I obtained a list of 136 stocks.

Judging from our list, it is absolutely true that many tech stocks do seem to have lots of cash and little debt. What also became apparent as I went through the list is that there are also a lot of pharmaceutical companies that meet these criteria. Below is a shortened list that should give you a general flavor of this screen's result:

SymbolNamePricePEPrice To SalesPrice To BookDebt To EquityCashADPTAdaptec, Inc.$2.9050.892.330.81N…

Wednesday TrendLeaders and Swing Signals, April 22, 2009

I wanted to generate a new list of TrendLeaders today and while I was at it I also produced a new batch of Swing Trading Signals. They are all available now and can be found at the TrendLeaders page and the Swing Signals page, respectively.

The market has been pretty erratic so far this week but there are still 824 stocks and ETFs that qualify as TrendLeaders. As of the close of trading today they are all above their 50-day moving average and registering strong trends according to Aroon, MACD and DMI analysis.

I notice there are quite a few PowerShares ETFs on the list today as well as some ETFs I have never heard of: the First Trust Alphadex funds. Something to look into...

We also have a new batch of Swing Trading Signals. Just like yesterday, we have 38 signals in total. Today they are split down the middle: 19 are BUYS and 19 are SELLS.

Please check out our latest stock market data at the TrendLeaders page and the Swing Signals page. You will also be able to download the data in a CSV…

Tuesday Swing Signals for April 21, 2009

This post is to announce that the Tuesday batch of new swing trading signals is available at the TradeRadar Alert HQ Swing Signals page.

Today we have a total of 38 swing trading signals of which 24 are BUYs and 14 are SELLs.

To see today's list you can check out the TradeRadar Swing Signals page. All 38 stocks are listed, plus we provide a free download in the form of a CSV text file which can be easily opened in Excel or any text editor.

For more detailed explanations of how the system works, click on this link and this link.

Is this the long awaited pullback? ...charting the S&P 500

It's been a while since I did a post devoted solely to technical analysis of a stock or index but now seems like a good time.

Market technicians have been watching in awe as the market put together six straight weeks of gains. Every pullback turned out to be a "buy the dip" opportunity for the bulls.

Today, we finally had the kind of down day technicians were predicting given how far and how fast the market had climbed.

With IBM and Texas Instruments beating earnings expectations after the close today, perhaps the market will rebound as it has done so often over the last six weeks.

If it doesn't rebound, though, where might we be headed?

The move from the March 9 low to the April 17 high is so clear that it seems to cry out for Fibonacci retracement analysis.

Rather than draw a bunch of lines on the chart below we have added two bubbles. The light green bubble is in the vicinity of the 38% retracement which would be at roughly the 796 level. Note that this is also an area …

Weekly Review - the return of fundamentals?

The first week of earnings season didn't spook the market too badly and major averages managed modest gains. This makes it six straight weeks without a loss. We survived reports from Goldman Sachs, JP Morgan Chase, GE, Citigroup, Intel and Google. If you dig into the numbers of each of these bellwethers there were certainly a few questionable items; nevertheless, the fact that they were all "less bad" than expected gave investors the go ahead to push this rally for another week.

Economic reports had little effect this week. CPI and PPI came in below expectations and some bloggers resumed discussion of deflation. The markets, however, shrugged off the news. The worst report was from the housing market where starts dropped to a 510,000 annual rate, well below the expected 540,000 and a clear signal that the real estate market has not yet turned the corner.
As usual, I want to present our usual two charts to demonstrate the state of the overall stock market.
TradeRadar Alert H…

Weekend Swing Signals for April 17, 2009

This post is to announce that our weekend batch of new swing trading signals is available at the TradeRadar Alert HQ Swing Signals page.

Our system looks for those stocks and ETFs that have exceeded their upper or lower Bollinger Bands and then have moved back inside the Bollinger Band envelope by a certain amount. Our interpretation is that there is a reversal underway and a short-term trading opportunity has presented itself.

Today we have a total of 31 swing trading signals or which 13 are BUYs and 18 are SELLs. For some reason this week, we seem to have a number of Chinese companies in the list and they are mostly SELL signals. A sign the rally in the Hang Seng starting to take a breather? Stay tuned...

To see today's list you can check out the TradeRadar Swing Signals page. All 58 stocks are listed, plus we provide a free download in the form of a CSV text file which can be easily opened in Excel or any text editor. In addition to the signal and the stock symbol, we also provide…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for April 17, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7300 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.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band. These lists are all available at Alert HQ.

Here is what we have this week --

Yup, the market registered a sixth straight gain this week. As a result, we are finding plenty of bullish signals. Again the BUY signals outnumber the SELL signals, the …

PC Rankings - one company firmly in the top spot

More rankings, this time for the major PC vendors.

The numbers in the following chart are from Gartner and cover U.S. shipments in the first quarter of 2009. Hewlett-Packard for the first time since 2001 has taken the lead, slipping ahead of Dell. Apple, despite its market share slipping from over 9% down to 7.4%, is solidly in fourth place. Apple stock has been doing quite well and is one of the few that is trading above its 200-day moving average so investors are apparently not too concerned about market share numbers. Gartner has this to say:
Analysts think that Apple’s relatively higher ASP created challenges for it in the tough economy, but that its deft control of inventories limited its shipment decline.


Company1Q09 Shipments1Q09 Market Share (%)1Q08 Shipments1Q08 Market Share (%)1Q09-1Q08 Growth (%)Hewlett-Packard 4,22827.7 3,80424.811.1Dell Inc. 3,99626.2 4,77531.2-16.3Acer 2,07613.6 1,3899.149.4Apple Computer 1,1357.4 1,1487.5-1.1Toshiba 1,0056.6 8405.519.6Others 2,83718.6 3,3…

Semiconductor Rankings - looking up from the bottom

With tech, including the semiconductors, rallying furiously the last month or so, it is worth keeping in mind how deep the downturn has been in the sector.

I found the following chart at the EETimes.com web site (hat tip to Semiconductors editor Mark Lapedus).


As can be seen, a consistent theme is weak Q4 revenues followed by Q1 guidance that ranges from bad to worse.

As we move through the currently unfolding earnings season, we'll have to keep an eye on management projections for Q2. Hopefully there will be some further confirmation that we have seen the trough for semiconductor revenues.

Disclosure: none

Thursday Swing Trading Signals now available

Thursday's Swing Trading Signals are now available on the TradeRadar Alert HQ Swing Signals page.

Based on today's daily data we have a total of 33 signals: 22 BUY signals and 11 SELL signals.

For those of you who are new to our Swing Signals, we use the basic concept of stocks exceeding their upper or lower Bollinger Band and then reversing back inside the Bollinger Band envelope. To help avoid whipsaw we use Williams %R to confirm the price reversals.

To see this updated list you can check out the TradeRadar Swing Signals page. All 33 stocks are listed, plus we provide a free download in the form of a CSV text file which can be easily opened in Excel or any text editor. In addition to the signal and the stock symbol, we also provide some basic fundamental data to help you select the stocks that are of most interest to you.

Tuesday Swing Signals for April 14, 2009

This is to announce a new set of Swing Trading Signals is available on the Swing Signals page at Alert HQ.

Last week ended on an up note and we had lots of BUY signals. So far this week, stocks have not been performing so well; therefore, it seemed like a good idea to run our Alert HQ process again and see what kind of Swing Signals we generate now.

We have a total of 54 signals today, this time 44 SELL signals and only 10 BUY signals.

It's interesting to see two ProShares ETFs on the list. The Short Financials (SEF) is generating a BUY signal and the Ultra Real Estate (URE) is generating a SELL signal. Is this a sign that the market is about to turn around? We shall see...

My intention is to run the Swing Signals screen every Tuesday, Thursday and Saturday. Bear with me if I miss a day here and there. Eventually everything will be automated from start to finish but currently there is still some manual effort required.

In the meantime, check out our newest batch of Swing Trading Signal…

So who's got the money? This screen gives a clue

There have been a number of portfolio managers who have been quoted as saying that the safest companies to invest in these days are the ones that don't need to continually go to the credit markets to fund their businesses. These are companies with substantial piles of cash that should allow them to ride out this recession without having to pay exaggerated borrowing costs in today's credit markets.

Though corporate bond issuance is currently robust, spreads are still quite high with the yield on double-A bonds more than 3.5% higher than comparable Treasuries. This is better than last year but significantly worse than the historical average. For bonds that are rated less than double-A, terms get even tougher and demand is correspondingly weaker.

I ran a screen this weekend (all numbers are as of Saturday morning) to identify those companies with big cash stockpiles. Rather than look at the absolute value of cash, I looked for those companies whose price to cash ratios appear to be…

Weeky Review - sure we're over-bought but is that really a negative?

I've been doing a bunch of new development on the Alert HQ software, upgrading to a more robust database, automating more tasks and improving the Swing Signals algorithm. I also took some time off to enjoy the family over the Easter holiday. Bottom line - I'm late in posting the Weekly Review.

Being late, I won't go into too much depth but I do want to present the usual two charts.
TradeRadar Alert HQ Stock Market Statistics --
Each week our Alert HQ process scans almost 7300 stocks and ETFs and records their technical characteristics. The following charts are based on daily data and presents the state of some of our technical indicators.

This first chart presents the moving average analysis for the entire market and contrasts it with the performance of the S&P 500 SPDR (SPY). When the number of stocks trading above their 50-day moving average (the yellow line) crosses the line that tracks the number of stocks whose 20-day moving average is above their 50-day moving avera…

Updated Swing Trading Signals for week ending April 10, 2009

I've spent some time this weekend experimenting with the Swing Signal screen that we use in the Alert HQ software. I have made two changes that have resulted in a smaller but more robust set of swing trading signals.

We still use the basic concept of stocks exceeding their upper or lower Bollinger Band and then reversing back inside the Bollinger Band envelope. The problem with this approach is that in some cases, the initial trend is still intact despite the fact that the stock is back inside the Bollinger Band envelope. In other words, the expected reversal is probably not occurring.

To improve our results, we have made the following two changes:
We have added a calculation of Williams %R to confirm that the price is really turning up in the case of BUY signals (coming out of an over-sold condition) or that the price is really turning down in the case of SELL signals (coming out of an over-bought condition).
We now require that the most recent closing price be higher than the previo…

New Swing Trading Signals for April 10, 2009

This post is to announce that our weekend batch of new swing trading signals is available at the TradeRadar Alert HQ Swing Signals page.

After Wells Fargo pre-announced robust earnings, stocks took off this week. As a result, we have a lot more BUY signals on our list.

Our system looks for those stocks and ETFs that have exceeded their upper or lower Bollinger Bands and then have moved back inside the Bollinger Band envelope by a certain amount. Our interpretation is that there is a reversal underway and a short-term trading opportunity has presented itself.

Today we have a total of 58 swing trading signals or which 39 are BUYs and 19 are SELLs.

To see today's list you can check out the TradeRadar Swing Signals page. All 58 stocks are listed, plus we provide a free download in the form of a CSV text file which can be easily opened in Excel or any text editor. In addition to the signal and the stock symbol, we also provide some basic fundamental data to help you select the stocks that …

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for April 10, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7300 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.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band. These lists are all available at Alert HQ.

Here is what we have this week --

After another good week where the market registered a fifth straight gain, we are finding that all kinds of stocks and ETFs are moving up strongly. This is amply demonstr…