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Showing posts from July, 2010

June Durable Goods -- Tech sector at a tipping point?

The advanced report for Durable Goods for June was released Wednesday and it contributed to a drop in the market that day. Indeed, headline numbers were disappointing (especially since this is supposed to be a manufacturing led recovery):
New orders for manufactured durable goods in June decreased $2.0 billion or 1.0 percent to $190.5 billionShipments of manufactured durable goods in June, down two consecutive months, decreased $0.7 billion or 0.3 percent to $195.0 billion. This followed a 0.7 percent May decrease. Unfilled Orders.  Unfilled orders for manufactured durable goods in June, down following two consecutive monthly increases, decreased $0.1 billion to $802.9 billion.  This followed a 0.3 percent May increase.Inventories.  Inventories of manufactured durable goods in June, up six consecutive months, increased $2.8 billion or 0.9 percent to $308.2 billion.  This followed a 1.1 percent May increase.  Transportation equipment, up six consecutive months, had the largest increase,…

Earnings finally matter -- and the market recovers

Having spent the day working on renovating a bathroom I confess I don't have the energy to get too deeply into another post tonight. Still, I wanted to share the the weekly charts from Alert HQ.

The view from Alert HQ --

The data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6040 stocks and ETFs each weekend and gather the statistics presented below.

In this first chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We then plot the results against a chart of the SPDR S&P 500 ETF (SPY).


Last week I opined that this chart looked "bottomish." After this week's strong performance (major indexes gained more than 3% and the Russell 2000 gained 6.6%) this chart is now looking downright bullish. Do you realize that we now have roughly 50% of stocks above their 50-day moving average? That's the best level we've seen in the last two mo…

Agriculture sector is on fire -- here's a roundup of stocks and ETFs

In case you haven't noticed, agricultural products, grains in particular, have been putting on an impressive rally. Take a look at this chart of the Dow Jones - UBS Grains Index:


If you're looking for a way to participate in this rally, I have the following list of ETFs courtesy of ETFdb.com:

SymbolNameDBAPowerShares DB AgricultureRJAELEMENTS Rogers Intl CommodityJJGiPath DJ-UBS Grains TR Sub-IdxCOWiPath DJ-UBS Livestock TR Sub-JJAiPath DJ-UBS Agriculture TR SuGRUELEMENTS MLCX Grains Index TR UBCUBS E-TRACS CMCI Livestock TR CORNTeucrium CornFUDUBS E-TRACS CMCI Food TR ETNUAGUBS E-TRACS CMCI Agriculture TAGFPowerShares DB Agriculture Lon
Another way to play this is to look for some of the better fertilizer and agricultural chemical companies. I have written previously about CF Industries Holdings (CF) and came to the conclusion that it was undervalued and in the process of breaking out (click here to read the post). That exercise made me aware of what was going on in the s…

Value stock with a growth stock chart -- RLI could be worth a look

So how can a stock be on both the Trend Leaders list and the Trend Busters list? To review, the Trend Busters lists consists of those stocks or ETFs that have simply broken a trend line while the Trend Leaders list includes those stocks that are exhibiting bullish performance according to MACD, Wilder's DMI and Aroon analysis.

After running Thursday night's Alert HQ process, I have a stock that is on both of these lists and is also passing the screen for Reasonable Value. This company is RLI Corporation (RLI). Here is the chart :


I've drawn two trend lines in blue: a longer term trend that is sloping upward and which RLI seems to be following and a shorter-term downward sloping trend that the stock has broken through to the upside. The fact that RLI has burst upward out of the wedge formed by the two trend lines is another positive which suggests the stock could hit $59 before too long. All in all, pretty bullish performance.

Why is RLI considered Reasonable Value?

Here are…

Earnings scorecard -- two weeks in, where's the evidence for a double-dip?

The first two weeks of earnings season are in the books so it's time to take our first look at which sectors are doing well and which ones are - uh - "underperforming".

The chart below breaks down each sector's earnings reports into five different categories and gives total stocks that have reported thus far.

SectorEarnings BeatsY-o-Y Earnings IncreasesY-o-Y Revenue IncreasesUpside GuidanceTotal Providing GuidanceTotal Number of Stocks ReportingBasic Industries1111152616Capital Goods37344071747Consumer Durables27282661633Consumer Non-Durables21181811328Consumer Services33364323049Energy99120218Finance4847200384Health Care24212662232Miscellaneous87100713Public Utilities9781210Technology637275174783Transportation2224252326Totals31231431844168439
Before getting into individual sectors, let's start by looking at some of the totals and calculating the percentages.
Earnings beats:  71%Year-over-Year Earnings Increases: 71.5%Year-over-Year Revenue Increases: 72.5%Upside G…

Stocks show gains two days in a row -- is the rally back on?

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data. It's been a while since I wrote a post highlighting the latest Alert HQ signals but I want to remind everyone that we have been putting up the Tuesday, Thursday and Saturday morning signals regularly without interruption.

Today we have the following:
25 Swing Signals -- 23 BUY signals and 2 SELL signals.
87 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 35 stocks that are new additions to the list and 43 that fell off the previous list.
15 Trend Busters, of which 11 are BUY signals and 4 are SELL signals.125 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 75 are bearish gaps and 50 are bullish gaps.
The view from Alert HQ --

Over the weekend I wrote that Friday's market action was so bad that it seemed the advantage had gone …

Bond ETF reversal alert -- but will the rally continue?

This weekend's Reversal Alerts based on weekly data turned up an interesting BUY signal for an ETF I had never heard of before.

The symbol is IGOV and the ETF is the iShares S&P/Citigroup International Treasury Bond Fund. The S&P/Citigroup International Treasury Bond Index ex-US is a market value-weighted index designed to measure the performance of treasury bonds issued in local currencies by developed market countries outside the U.S.

Holdings include bonds from Japan (fully 25% of the fund), France, Italy, Germany, Austria, Canada, Australia and even the problem children like Greece, Ireland, Spain and Portugal. Credit ratings are mostly in the AA to AAA range.

Maturities are mostly short to intermediate with roughly 75% of holdings falling into the 1 to 10 year maturity range.

Regardless of the exposure to problems in Europe, this ETF has been on a roll since early June when a  multi-month downtrend reversed to the upside. The chart of daily data follows:


This chart su…

All it takes is one bad day and advantage goes to the bears

Friday stocks staged another retreat just when bulls were looking for upside follow-through. Instead of a nice push above the 50-day moving average, confirming the bullish trend, we got a 3% drop that wiped out more than a week's worth of gains. Now, charts are shaping to show lower highs and lower lows - the classic definition of a down trend.

The view from Alert HQ --

The data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6040 stocks and ETFs each weekend and gather the statistics presented below. First, here's the two charts and  I'll summarize my interpretation at the end.

In the chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We then plot the results against a chart of the SPDR S&P 500 ETF (SPY).


The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.


OK…

Weekly ProShares Review -- foreign stocks grab investor interest

Some interesting things going on with ProShares ETFs this past week.

Every now and then for the last few weeks I have been presenting a list of the ProShares ETFs that have exhibited the strongest performance over the course of the last week or have registered the biggest increase in volume.  Since these ETFs are primarily short-term trading vehicles and, as such, can be viewed as indicators of short-term sentiment, looking at the leaders among them can paint a picture of those areas of the market in which short-term investors are currently most interested.

Looking back over the course of the previous week, the five ETFs with the biggest gains were:

SymbolFund NameGroupObjectivePercent Change - PricePercent Change -  Avg VolumeEFOUltra MSCI EAFE Ultra 200% of the underlying12.7%176.8%EETUltra MSCI Emerging Markets Ultra 200% of the underlying11.5%16.1%XPPUltra FTSE/Xinhua China 25 Ultra 200% of the underlying10.9%22.4%UPROUltraPro S&P500 Ultra 300% of the underlying10.2%-44.5%…

An update to Trade-Radar Stock Inspector is available: version 5.2.6 is live

I'd like to notify users that a new version of Trade-Radar Stock Inspector was just made available over the weekend. The update is related to a fix for the user interface.

Some flaky things were going on when entering new stock symbols and retrieving data. It's all been resolved. Both methods now work just fine.

For your reference here are the two methods:
Method #1: Click the "Get data from Yahoo" button, enter the new symbol in the text box and all data will be retrieved and stored in the database.
Method #2: Enter the new symbol in the dropdown and click the "Search Database" button. Then click the "Get data from Yahoo" button to retrieve data.)

I also fixed a bug that is encountered when Yahoo data has non-numeric results in today's price data. Instead of blowing up, the program now just rejects the data. This usually happens only on very thinly traded stocks or ETFs.

If you'd like to take advantage of these updates, click on [ this lin…

Heads up! -- 4 Reasonable Value stocks starting to break out

Here's another "Reasonable Value" screen run against Saturday morning's Trend Busters and Trend Leaders lists. For those of you who have not see one of my previous "Reasonable Value" posts, here are the criteria for the screen (slightly tightened compared to previous posts):
PE between 0 and16PEG between 0 and 1.2Price-to-Sales less than 2Debt-to-Equity less than 1EV to EBITDA less than 10 Today there are four stocks that pass this screen and they're all from the Trend Busters list.
SymbolNameIndustryLast PriceMarket CapPEPEGPrice To SalesPrice To BookDebt To EquityEV to EBITDAENDPEndo Pharmaceuticals Holdings Inc.Major Pharma-ceuticals$23.472.729B9.570.621.831.780.21314.71TDWTidewater Inc.Marine Transportation$41.172.135B8.130.181.810.860.11166.25UNFUnifirst CorporationOther Consumer Services$44.63866M11.370.990.851.250.25424.9SPRSpirit Aerosystems Holdings, Inc.Military/ Government/ Technical$21.122.972B15.830.870.691.810.54727.17
Given that all …

Market turns on a dime last week -- now, fundamentals will rule

The market turned on a dime this week. Pundits struggled to find a decent reason. An increase in the IMF's GDP forecast for 2010 was modest, a drop in weekly jobless claims was welcome but still modest, retail sales reports for June were mixed (though industry experts say June is generally weak so don't worry about it) and ISM Services were actually slightly lower that expected. Nevertheless, the herd swung into buying mode and stocks jumped 5%.

The debate now switches to whether the bull is back or whether this is just a flash in the pan rally,soon to be forgotten. The blogosphere naturally provides both sides of the argument. Well known investor and hedge fund manager Doug Kass declared we have seen the bottom for 2010 and it's upward from here. On the other hand, we have people discussing the possibility of Elliot Wave theorist Robert Prechter's call for Dow 1000. No doubt things will end up somewhere in the middle.

The view from Alert HQ --

In the meantime, let'…

One bad month of data and the wheels come off -- could the technical situation be any worse?

This past week's market action seemed especially vicious with the S&P 500 dropping 5%, the NASDAQ dropping 5.9% and the Russell 2000 falling 7.2%.

I've spent the last two weeks looking at the Alert HQ data and thinking stocks might still have some strength in reserve. This past week's results show that my faith was misplaced.

To illustrate how severe this downturn has become just take a look at the following charts"

In the chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 6400 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).


What is unusual about this chart is how the yellow line, after making such a significant move above the magenta line, turned and plunged. In the two and a half years I have been doing this kind of moving average analysis, this is the most volatile this chart has ever been and this is the bi…

7 day losing streak for the Dow but not every stock is plunging - value stock in the Ag sector is breaking out

After running Saturday morning's Alert HQ process I checked my "Reasonable Value" screen against the day's Trend Busters and Trend Leaders. For those of you who have not see one of my previous "Reasonable Value" posts, here are the criteria for the screen:
PE between 0 and 20PEG between 0 and 1.3Price-to-Sales less than 2Debt-to-Equity less than 1Today there is just one stock that passes this screen and it's from the Trend Busters list. The company is CF Industries Holdings (CF). The following chart shows why the stock is a Trend Buster:


On Friday, the stock popped up above the bearish trend line (in green). It now sits just below its 50-day moving average. From a technical analysis point of view, the bullish breakout over the downward trend line is a positive but buyers would need to have confirmation by seeing.the stock move above that 50-DMA. Supporting the bullish case, MACD and Williams %R show a change in trend to the upside is in the making. Th…

8 steps to simpler investing

If you invest in the stock market, you need to pick stocks. That means you need to learn about the company and make an educated decision whether to buy or sell.

How do you do stock research?

Does it go something like this?
Look for an interesting stock, maybe one that was discussed at SeekingAlpha or MarketWatch or some other site that you read.Pull up a chart and start trying out different technical indicators. Try to remember how each one works and evaluate it in your head. Complain that most charting sites only allow maybe half a dozen indicators to be displayed at one time.Try to remember the results of each indicator as you move on to do some fundamental analysisLook through Yahoo! Finance or Google Finance or one of the other sites that provides stock fundamentals. Try to remember how all the financial ratios work, which items are important and what range indicates value versus over-priced.Now that you have spent an hour or so surfing the web and trying to pull together a bunch of…

After being wrong for two weeks, am I finally seeing the glimmer of a bottom?

This is a quick post announce that the Thursday Alert HQ signals are available. Predictably, SELL signals predominate. After two weeks of nearly non-stop selling that is no surprise.

What is a surprise is that the Swing Signals list is nearly all BUY signals. There are only 20 Swing Signals today but only one is a SELL signal. A preponderance of BUY signals generally suggests that the market is ready to turn up.

Should we trust this indication and bet on an upturn? Nineteen BUY signals comprise a shaky foundation for expectations for a rally. After all, today the market was merely less bad so these 19 stocks are a pretty small percentage of the 6000 or so stocks that we evaluated at Alert HQ tonight.

Given that we look at so many stocks at Alert HQ I thought I'd show a chart of the Russell 3000 which can be used as an approximation of the whole stock market.


So many analyses have focused on the emerging head and shoulders pattern and various support levels. In contrast, this chart…