Skip to main content

Weekly Market Update: Watching those earnings

Weekly Market Call

Oil prices fell again though they made a comeback on Friday amid colder weather and Boone Pickens still looking for $70 a barrel before the year is out. Earnings season continued with disappointments from several tech bellwethers (Intel, IBM, Apple, Motorola). Some of the large caps (GE, Citi) did OK and kept the ongoing rally from flagging too badly. In general, earnings thus far are not setting the world on fire but are not causing investors to rush to the exits. Next week, the pace of reporting picks up and we'll get a better look at what 2007 might hold in store.

On the other hand, the averages did look a bit tired this week. Nevertheless, the Dow and the S&P 500 continue in their respective uptrends. The tech-heavy NASDAQ 100 was weak but not weak enough to have TradeRadar flash the SELL signal. Still, I am uncomfortable. There are a number of warning signs. The TradeRadar chart for QQQQ has been vacillating over the last few weeks. Tech sectors like semiconductors have been selling off and then perking up at the last minute as they did Friday. The tech bellwethers mentioned above displayed various problems (even Apple, who carried the market the week before last). Some delivered great earnings (Apple, of course) and others delivered lackluster earnings or news of job cuts (Motorola). All of them, however, have delivered downbeat forecasts for upcoming quarters. We may need to accept that the QQQQ still has a real potential to go sideways or even correct over the next few months.

ETF Comments

For those of you who are holding XLK, the tech ETF, it is exhibiting the same characteristics as the QQQQ. It is off its high but still no TradeRadar SELL signal. We mentioned oil in the first part of this post. It you are still holding XLE, the energy ETF, be aware that it has made a higher high and a higher low compared to previous peaks and valleys. It has dropped just below its 200-day moving average and crossed above it again with Friday's close. This is behavior that it has repeated twice before and then rallied significantly. TradeRadar's SELL signal at the recent peak back in December was not particlulary strong and there is now a weak BUY signal developing. Don't be surprised to see XLE bounce up from these levels. Then there is IYR, the US Real Estate ETF. In spite of all the handwringing over the current real estate market, this ETF shows no signs of stopping, hitting a new 2-year high this week.

Trade Radar Stock Picks

Taragon (TARR) disclosed this week that it had sold apartments in Connecticut for over $30M. The stock moved up to close the week at $11.67, a few cents above our recommended purchase price.

PacificNet (PACT) delivered still more upbeat news this week. They received an order for slot machines and announced an agreement to provide services to China's State Tax Bureau. The stock is still seeing some profit taking but the trend remains up and we continue to be holders at this point. PACT closed the week at $6.58, showing over a 25% gain thus far.

Generex (GNBT) had been a disappointment but the stock has perked up lately, possibly on bird flu concerns, and despite profit taking, managed to hang on to some gains this week. At least we are back in positive territory, closing at $1.76 with a 4% gain.

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional