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Showing posts from August, 2009

Q2 Growth Report - Part 1

Today's Wall Street Journal had an article that asked the question "Can Rally Run without Revenue?" Is the revenue situation really that bad?

Let's take a quick look at some the data compiled through the Alert HQ process.

After each quarter's earnings season, I try to pull together what I am now calling the Growth Report. Part 1 compiles the list of stocks that have shown a year-over-year increase in both revenue and earnings AND a sequential quarter-over-quarter increase in both revenue and earnings. Given the severity of the economic downturn, very few companies have been able to to pull off this trick.

The following table presents a comparison of the last two quarters:


Q1-2009Q2-2009In S&P 5002741All stocks
218312
The number of stocks in the S&P 500 that qualify as growth leaders and have made it onto the Q2 Growth Report has grown by 50%.

Similarly, looking at the entire stock market, the number of growth leaders has almost doubled in Q2 as compared to Q1.

Th…

So why shouldn't stocks continue to rise?

It's been a month since I last posted charts of the statistics we track at Alert HQ. Are there any new insights we can gather from a review of these charts?

In the last month, the major averages have doggedly managed to climb a few percent, while all the while bears have been saying stocks are over-priced and heading for a fall.

Fundamentally, economic reports have been rather benign though stubbornly high levels of unemployment remain a worrisome factor.

Earnings season continued through the month and is pretty much over now. Many stocks beat lowered expectations and a good number also provided decent forward guidance.

So why shouldn't stocks continue to rise?

The two main weapons in the bears arsenal are:
Stocks have outrun their fundamentals. Both trailing and forward PEs are way too high compared to historical normsStocks are over-bought. The rally from the March lows has been virtually uninterrupted. A pullback is due.My answer to the bears would be: "Yeah, maybe."

Her…

What does CMF say about the stock market this week?

Does this rally have any gas left? Don't know what CMF means? Hopefully, we can shed some light on both topics.

After a week of consolidation, where every day stocks struggled to close with a gain, I thought it might be a good idea to look at one of the indicators that takes into account the closing price relative to the high and low.

That indicator is Chaikin Money Flow. Developed by Marc Chaikin, the Chaikin Money Flow oscillator is calculated from the daily readings of the Accumulation/Distribution Line. The basic premise behind the Accumulation Distribution Line is that the degree of buying or selling pressure can be determined by the location of the Close relative to the High and Low for the corresponding period (Closing Location Value). There is buying pressure when a stock closes in the upper half of a period's range and there is selling pressure when a stock closes in the lower half of the period's trading range.

In this chart of the S&P 500, we can see the tails …

Weekend Winners and Losers - Alert HQ BUY and SELL signals for August 28, 2009

This post is to announce that the weekend's stock signals are available from Alert HQ.

Each week we scan about 7300 stocks and ETFs, checking fundamentals, performing technical analysis and looking for fresh BUY and SELL signals. Out of this process we generate the following lists:
Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downsideTrend Leaders - a collection of stocks in strong up-trendsCash Flow Kings whose free cash flow yield is 25% or greaterBollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger BandSwing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend. The view from Alert HQ --

It was a pretty ho-hum week in the stock market. The three major averages …

Thursday Swing Signals, Trend Busters and Trend Leaders for August 27, 2009

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

Today we have the following:
30 Swing Signals -- 21 BUY signals and 9 SELL Signals.
529 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 159 stocks that are new additions to the list and 97 that fell off the previous list.
16 Trend Busters of which 10 are BUY signals and 6 are SELL signals.The view from Alert HQ --

Thursday's signals always coincide with the release of initial jobless claims. This week, claims decreased a tiny bit and continuing claims did likewise. This was not enough to incite a rally and stocks dropped, only managing to struggle back and finish the day with the smallest of gains. Advance GDP for the second quarter was also released today and came in at -1%, better than consensus, but received no reaction from investors.

With respect to Alert HQ, we can make the following observa…

Finally! Tech turns the corner - Durable Goods report for July-09

The Durable Goods report for July was released today. Should tech sector investors be happy?

OK, the answer was revealed in the title of this post. Yes, it's looking like tech has truly established a bottom and has begun to carve out a new trend to the upside.

Shipments --

First, we'll take a look in the rear-view mirror and review the Shipments data. The following chart shows the summary data for the tech hardware sector as a whole. Month-over-month, shipments increased 7.4% and it sure looks like the downtrend has finally been broken.


This next chart focuses just on those hardware manufactures involved in computers and related products. The gain here, 2.7%, is less dramatic but again it looks like a durable bottom has been put in and improvement is underway.


This third chart is focused on Semiconductors. Here we have the star of the tech sector. Semis just put in a 43% increase in shipments month-over-month.


New Orders --

Looking to the future, let's review the New Orders data.

New version of TradeRadar stock analysis software now available for download

I am pleased to announce that version 4.2 of the TradeRadar software is now available. As always, it is being offered for free on our Download page.

New Features --

The major new features in this version include the following:
New charting look - instead of a simple red line for closing price we now display open-high-low-close bars. Up-days are colored green and down-days are colored red. Right click on the price series and you'll be able to switch to candlesticks. Can't emphasize this enough - charts look much more professional now and are so much easier to read.Made the SELL signal processing a bit more responsive. This addresses an anomaly in the calculations that sometimes made SELL signals weaker than they should have been.Integrated a statistical component: when closing price exceeds one standard deviation from the Slope (the orange line based on linear regression), the Signal Strength is boosted by 10%. If the closing price is still within one standard deviation, the Signa…

Fall back Tuesday - Swing Signals, Trend Busters and Trend Leaders for August 25, 2009

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

Today we have the following:
25 Swing Signals -- 12 BUY signals and 12 SELL Signals. We also have one Strong BUY.
467 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have only 261 stocks that are new additions to the list and 46 that fell off the previous list.
15 Trend Busters of which 5 are BUY signals and 10 are SELL signals.The view from Alert HQ --

Two days of trading this week and the story has been the same. Stocks work their way higher and then fall back in the last hour or two. That's the bad news. The good news is that stocks haven't really broken down below recent highs.

Looking for clues in our signals today, we see some underlying strength continuing to build.
Trend Leaders: over the weekend we had 252 stocks and ETFs on the Trend Leaders list. Today there are 467. That's an encourag…

Netscout - mystery breakout

Many stocks just peek above their upper Bollinger Band. Then there are other stocks that explode above their upper Bollinger Band. We've got one the latter kind for you today.

Netscout Systems (NTCT) exhibited a powerful move on Friday and showed up this weekend on our list of Bollinger Band Breakouts. You can see that breakout clearly on the chart below:

A month ago the company announced Q1-2010 earnings and missed analyst expectations by a penny. The company retained some investor goodwill, however, by reaffirming forward guidance and reinstating plans for a stock buyback.

Background --

NetScout Systems, Inc. designs, develops, manufactures, markets, sells, and supports application and network performance management solutions worldwide. The company's primary product suite monitors, collects, and publishes information on the behavior of individual applications and services, such as voice over Internet protocol, streaming media, electronic trading, supply chain management, interac…

Weekend Winners and Losers - Alert HQ BUY and SELL signals for August 21, 2009

This post is to announce that the weekend's stock signals are available from Alert HQ.

Each week we scan about 7300 stocks and ETFs, checking fundamentals, performing technical analysis and looking for fresh BUY and SELL signals. Out of this process we generate the following lists:
Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downsideTrend Leaders - a collection of stocks in strong up-trendsCash Flow Kings whose free cash flow yield is 25% or greaterBollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger BandSwing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend. The view from Alert HQ --

All three major averages finished the week at 2009 closing highs. A big de…

Baidu - primed for a trade?

Interested in an e-commerce stock with a Strong Buy rating?

Thursday night Alert HQ identified a well known stock that is often the target of fast traders. It looks like it might be poised for a quick gain again. Baidu (BIDU) appeared as a Strong BUY on our list of Swing Trading Signals. The chart follows:


Note how the stock fell almost to its 50-day moving average without penetrating it. It did, however, drop below its lower Bollinger Band and then rebounded nicely. Williams %R also shows it moving rapidly out of the over-sold area. As I write this morning, the stock is just kind of peeking over its 20-day MA, having tacked on another 2% since Thursday's close.

With the stock already up roughly 2% today, the short-term target would easily be another 4% or 5% above this level. Further gains would depend on, you guessed it, the fundamentals.

So how are the Fundamentals?

Baidu, Inc. provides Chinese language Internet search services primarily in the People's Republic of China and Jap…

Optimistic Thursday - Swing Signals, Trend Busters and Trend Leaders for August 20, 2009

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

Today we have the following:
111 Swing Signals -- 105 BUY signals and 5 SELL Signals. Plus, we have 2 Strong BUY signals.
168 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 43 stocks that are new additions to the list and 91 that fell off the previous list.
12 Trend Busters of which 2 are BUY signals and 10 are SELL signals.The view from Alert HQ --

This is the second week when initial jobless claims were higher than expected and the previous week's numbers were revised upward. Nevertheless, the U.S. market optimistically took its cue from Asia and Europe and finished with a roughly 1% gain. Stocks today were helped by a positive result from the Fed's Philadelphia manufacturing survey which, in tandem with the NY Empire State index, shows that manufacturing is in the healing process.

Providin…

Interactive Intelligence - a smart investment?

Looking for a tech stock with a strong BUY rating?

Tuesay night Alert HQ identified a small cap stock that appears poised for a quick gain. Interactive Intelligence (ININ) appeared as a Strong BUY on our list of Swing Trading Signals. The chart follows:


Note how the stock barely touched its 50-day moving average on an intra-day basis and is now bouncing up off its lower Bollinger Band. You can see the strong reaction of the Williams %R indicator as it moves steeply up from an over-sold value. In addition, that 50-day MA is heading nicely upward while the stock has already regained its 20-day MA.

So technically the stock was a good trade today, gaining 3.86%, and showing a potential for a good 5% or 6% more over the next few days and perhaps more over the longer term as long as the overall market doesn't plunge.

What about the fundamentals?

Interactive Intelligence is a small cap stock that is involved in IP telephony. The buzz word best describing the company's business is "un…

Rebound Tuesday - Swing Signals, Trend Busters and Trend Leaders for August 18, 2009

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

Today we have the following:
81 Swing Signals -- 63 BUY signals and 7 SELL Signals. Not only that, we also have 12 Strong BUYs.
216 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have only 19 stocks that are new additions to the list and a substantial 457 that fell off the previous list.
12 Trend Busters of which 4 are BUY signals and 8 are SELL signals.The view from Alert HQ --

After two days of declines (and Monday's decline was a doozy) it was a relief to see stocks rebound today. Of course, everyone is wondering if the rebound will continue or whether stocks will resume their losing ways.

Looking for clues in our signals today, we see two wildly divergent developments.
Trend Leaders: a week ago we had 989 stocks and ETFs on the Trend Leaders list. Now there are only 216 with a mere 19 new ones added…

Time to sell your stocks?

The stock market took a body punch today. Should you sell everything?

Let's take a look at two representative indexes.

First up is the S&P 500. Check the red ellipse drawn on the chart.


This ellipse highlights the area where there is a convergence of the 50-day moving average, the lower Bollinger Band and a short term support level established in June. In other words, this range from 945 to 955 should provide serious support for this important index.

This next chart shows the NASDAQ 100. Here we have drawn a red circle and a blue ellipse.


The red circle highlights the convergence of the 50-day moving average and the short term support level established in June, much as we saw above in the chart of the S&P 500. In the case of the NASDAQ, however, the lower Bollinger Band is higher than the previously mentioned indicators and the index has already slid pretty close to it. So the NASDAQ 100 has two support areas: the range from 1510 to 1520 and that range around the lower Bollinge…

Weekend Winners and Losers - Alert HQ BUY and SELL signals for August 14, 2009

This post is to announce that the weekend's stocks signals are available from Alert HQ.

Each week we scan about 7300 stocks and ETFs, checking fundamentals, performing technical analysis and looking for fresh BUY and SELL signals. Out of this process we generate the following lists:
Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downsideTrend Leaders - a collection of stocks in strong up-trendsCash Flow Kings whose free cash flow yield is 25% or greaterBollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger BandSwing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend. The view from Alert HQ --

Major averages finished the week with losses following four straight week…

Zig zag Thursday - Swing Signals, Trend Busters and Trend Leaders for August 6, 2009

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

Today we have the following:
46 Swing Signals -- 26 BUY signals and 20 SELL Signals.
845 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have only 92 stocks that are new additions to the list and a substantial 234 that fell off the previous list.
20 Trend Busters of which 8 are BUY signals and 12 are SELL signals.The view from Alert HQ --

Hard to believe that stocks turned in another good performance despite a couple of dismal economic reports. Retail sales for July were pretty much a disappointment, with sales declining from June's levels and significantly below expectations. Initial jobless claims were up compared to last week and, indeed, last week's numbers were revised upward.

Providing some support to stocks, a bond auction went off well today and news that hedge fund manager Paulson had buil…

Tuesday signals caution - Swing Signals, Trend Busters and Trend Leaders for August 11, 2009

I'm back from New York City and the annual boys night out at Yankee Stadium with three generations of my family. The weather was hot but when I looked at the results in the market today, it looks like the rally is turning cold.

In any case, I am back in time to generate another list of Swing Signals, Trend Leaders and Trend Busters for Tuesday. They are now available at Alert HQ. All are based on daily data.

Today we have the following:
53 Swing Signals -- 13 BUY signals and 40 SELL Signals.
989 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have only 72 stocks that are new additions to the list and a substantial 313 that fell off the previous list.
19 Trend Busters of which 7 are BUY signals and 12 are SELL signals.The view from Alert HQ --

After two back-to-back days of declines following a couple of weeks of treading water, we are starting to see real signs of weakness in our Alert HQ signals.

Last week the number of stocks on our list of Trend leaders hit…

Weekend Winners and Losers - Alert HQ BUY and SELL signals for August 7, 2009

This post is to announce that the weekend's stocks signals are available from Alert HQ.

Each week we scan about 7300 stocks and ETFs, checking fundamentals, performing technical analysis and looking for fresh BUY and SELL signals. Out of this process we generate the following lists:
Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downsideTrend Leaders - a collection of stocks in strong up-trendsCash Flow Kings whose free cash flow yield is 25% or greaterBollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger BandSwing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend. The view from Alert HQ --

Major averages finished the week with solid gains of well over 2% with th…

SKF versus the VIX

In my semi-rant about leveraged ETFs from Monday, I mentioned that the 2X ETFs can be held for longer than one day, especially when volatility is moderate to low. This post takes a closer look at this proposition.

I decided to take the worst case situation and look at the most maligned of the ProShares ETFs: SKF, the UltraShort Financial and its corresponding bullish ETF, the Ultra Financial, UYG.

To compare results to the underlying index, I also included IYF, the iShares Financial ETF.

To investigate performance in the presence of volatility I brought the VIX into the analysis. The following table shows how the performance of each ETF is related to the VIX by calculating the correlation factor. The closer the correlation gets to 1, the more closely the ETF tracks the VIX. The closer the correlation gets to -1, the more the ETF tracks the opposite moves of the VIX.



VIXSKF
IYF
UYG

PeriodGain
(Loss)Cor-
relationGain
(Loss)Cor-
relationGain
(Loss)Cor-
relationGain
(Loss)VIX below 404/8/2009 to 8/5/20…

All fall down Thursday - Swing Signals, Trend Busters and Trend Leaders for August 6, 2009

This time, Cisco didn't help the market one bit.

After a positive start, the major averages just continued to work their way downward, closing moderately lower. Cisco's beat the night before and relatively positive guidance wasn't positive enough to convince investors that stocks, already overextended, deserved to rally further.

Recent leaders Financials and Materials also gave ground today. Technically speaking, it looks like the highly anticipated pullback is underway. Stocks are falling.

The view from Alert HQ --

Our list of Trend Leaders is hanging in at a level comfortably over 1000. This is a good indication of the bullish sentiment in the market but if a pullback is underway there will be a bit of a lag before we see it in the Trend Leaders list.

The signals with the least lag are the Swing Signals. For the last week or so, we have been seeing more SELL signals than BUY signals. Today we see more of the same. Way more of the same.

Our Trend Busters list is expanding and, …

Saved by the bell Tuesday - Swing Signals, Trend Busters and Trend Leaders for August 4, 2009

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

Today we have the following:
33 Swing Signals -- 13 BUY signals and 20 SELL Signals.
1286 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 358 stocks that are new additions to the list and 120 that fell off the previous list.
13 Trend Busters of which 8 are BUY signals and 5 are SELL signals.Saved by the bell on an up-down-up Tuesday --

Major averages managed to end in the green today after starting the day with weakness, rallying to show strength through mid-day and then swooning only to exhibit a "stick-save" in the last half hour of trading. It looks like investors are expecting a pullback but are still feeling bullish. In other words, we have a market of two minds.

The results at Alert HQ are equally schizophrenic. The number of stocks on our list of Trend Leaders just keeps pushing higher…