Skip to main content

Weekly Market Update - New quarter off to a good start

Weekly Market Call

In spite of there only being four trading days this week, the market made the most of them, tacking on a good 1.5% and nearly erasing the losses that began in late February.

Major drivers this week included: falling oil prices when Iran released the British hostages, more M&A activity with Kerkorian bidding for Chrysler and a reported .7% increase in February pending home sales.

On the other side of the ledger, the ISM services index number indicated that services were joining manufacturing and housing in this year's slowdown. Indeed, weak factory orders were also reported this week.

On Friday, March payrolls came in with a gain of 180,000, a bigger than expected gain. This will add fuel to the bullish fire as it supports the notion that the consumer will continue to support the economy even if business spending continues to slow. Along with payrolls, it was reported that hourly earnings were up another .3% in March. This coupled with a recently reported decrease in productivity has inflationary potential. In general, the positive data for workers means that it can be assumed that there will be no interest rate cuts anytime soon.

Nothing has occurred since February to change my opinion that the economy is slowing. Why the market has returned nearly to its 52-week highs is beyond me. It is true that the economy is not falling off a cliff but do we deserve the rising valuations we see today?

ETF Comments

Indexes - all of them (and their associated ETFs: DIA, SPY, QQQQ, IWM) were up this week. They are all clawing their way out of the TradeRadar SELL zone where they have been stuck for the last month or so. IWM and SPY are the strongest, DIA is the weakest and the QQQQ is the messiest but they have all turned in strong performances in two of the last three weeks.

Commodities - Oil fell to $64.28 after the British military personnel were released by Iran and the US Oil ETF (USO) fell accordingly. USO is now flashing a short-term SELL signal but on a longer term chart, it still seems to be in an up-trend. The Energy SPDR (XLB) remains in a solid up-trend and tacked on more gains since last week.

Technology - The SPDR Tech ETF (XLK) peeked out of the TradeRadar SELL zone last week and this week completed a strong move out that positions it back in the box where it had been trading sideways in much the same manner as the QQQQ.

Housing - the SPDR Home Builders ETF (XHB) at least stopped falling this week. Saying that there had been strength would be going too far. The iShares REIT ETF (IYR) was up over a point from the previous week but is still in the TradeRadar SELL zone. IYR is still below its 65-day moving average and after this week we have now seen a lower high develop. The trend here is still down as IYR failed to recover to anywhere near its pre-downturn level. As mentioned last week, it may not be too late to do a little hedging with SRS, the ProShares inverse real estate ETF.

Biotech - XBI, the Biotech SPDR, had a strong week and is probably over-bought on a short-term basis. XBI is now positioned to reversed the intermediate down-trend that has been in place since last November.

Financials - the SPDR Financial ETF (XLF) gained only a few cents and, as I said last week, continues to display one of the strongest TradeRadar SELL signals though it manages to stay above its 200-day MA. I can't tell if XLF is over-sold or ripe for another downdraft. In week when the market was strong, XLF barely budged - not exactly a ringing endorsement for the financial sector. Could be another hedging opportunity here; putting a few bucks into SKF might be a good idea.

TradeRadar Stock Picks

Generex Biotechnology (GNBT) is pretty much doing nothing so we continue to hold. This week it closed at exactly the same price at which it was recommended.

The NASDAQ 100 was up nicely this past week so the ProShares UltraShort QQQ (QID) got slammed and closed the week down at $51.55. Our short-side pick swung from a 2% gain last week to a 2% loss this week. The QQQQ is looking stronger lately but is just barely peeking out of the TradeRadar SELL zone. With another earnings season coming up in a week or two and expectations being low, it would not surprise me to see QQQQ slide solidly back in the SELL zone soon. And so we will continue to hold QID a little longer to see how this plays out.

Cisco Systems (CSCO) was up and closed the week at $26.06 so we are back in the black again with a 1% gain.

BigBand Networks (BBND) was up half a buck to close the week at $18.51. We are now sitting on a 6% gain.

SanDisk (SNDK) came back a bit from last week's weakness and managed to close at $44.50. Our gain has increased from 1% to 2.6% and it remains solidly in the BUY zone.

Our latest pick is Millicom International (MICC). They were recommended at $79.30 on Tuesday of this week and finished the week at $83.30 for a 5% gain. I usually try to pick cheaper stocks that are undergoing a reversal in trend. This one was picked as a suggestion for the CNBC Million Dollar Portfolio contest and exhibits a strong intermediate up-trend, a large market cap and a high beta. Read about it in a prior post.

Comments

Anonymous said…
I tried to download and Run TradeRadar but I had some problems. I am using the new Windows Vista. When I try to run the program, it says that there is some INI or database conflict and the operation is cancelled.
When I was installing it, it kept telling me that I had a newer version of a file that was being downloaded. I don't know, I am not very computer savvy.

Either way, the download didn't work.
stockpicker2010@yahoo.com

Popular posts from this blog

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 professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. 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)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for Jan 16, 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 over 7400 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.

Wait, there's more...

We also use the Alert HQ process to generate more free lists of stocks and ETFs

The first byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

As another byproduct of the Alert HQ process we have generated a list of stocks that have broken either above their upper…