Skip to main content

Weekly Market Update - New highs again!

Weekly Market Call

Out of nowhere the market exploded to new highs this week. Amid continuing concerns over the sub-prime situation and the state of the economy, investors were able to seize on a few glimmers of good news. Retail sales were not as bad as expected and the news that Rio Tinto is buying Alcoa demonstrates that the buyout game continues with exuberance.

By the end of the week, investors had absorbed ratings agencies marking down more sub-prime debt, more lackluster retail sales data and higher oil prices. Still, the market held its gains. The Dow was the prime winner this week, gaining 2% and making its biggest percentage move in nearly four years. The S&P and NASDAQ turned in respectable showings of 1.4% and 1.5% gains. On a somewhat troubling note, the Russell 2000 only managed a 0.04% gain.

What's coming up for the market this week? Plenty of potentially market moving data will be reported including the following: NY Empire State Manufacturing Index, PPI, CPI, Industrial Production, Capacity Utilization, Housing Starts, Building Permits, Initial Jobless Claims, Philadelphia Fed Survey, FOMC Minutes and Crude Oil Inventories. Whew! And it's earnings season, to boot. Among the companies reporting will be Intel, Merrill Lynch, Novellus, Coca Cola, J&J, Yahoo, a bunch of big banks, Google, Microsoft, eBay, SanDisk and so on. To cap it off, Fed chief Bernanke will provide semi-annual testimony on the economy and monetary policy before House and Senate panels. There's no way I would venture to guess where the market will end up by the end of the week!

ETF Comments

Indexes: the ETFs that track the major averages spent the first part of the week in the doldrums and then rocketed upward on Thursday. On Friday, they managed to hold on to their gains. New all-time highs were set by DIA, SPY and IWM and a new 6-year high was set by QQQQ. Looking at the charts, there were upside gaps established on Thursday. DIA and QQQQ showed the most extreme moves. IWM looks to be moving up more calmly in an ascending channel.

Real Estate: In spite of interest rates on the 1-year Treasury note remaining stubbornly above 5%, REITs have been trying to recover. The iShares Dow Jones US Real Estate ETF (IYR) off its recent bottom but is no where near being out of the woods yet. Drawing the trend line down from its high back in February to where we are today, it can be seen that it's getting close to poking its nose above the line but in terms of the moving averages, it's still well below the 50-day and 200-day moving averages so there is plenty of resistance out there. A recent pick is Health Care Property Investors Inc. (HCP) (see my post discussing health care REITs). They are somewhat in the same boat as IYR but are closer to displaying a reversal; indeed, the TradeRadar BUY signal is beginning to flash.

Financials: the financials are trying to establish a bottom also. The Financial Select Sector SPDR (XLF), for example, after dropping below its 200-day moving average has now recovered and closed the week just above it. Just in time, too, as its 20-day MA was about to cross the 200-day in a bearish downward movement. The KBW Bank Index ETF (KBE) is still deeply underwater, a few points below its 200-day MA. Closing the week just above its 20-day is good but the fact that the 50-day is crossing below the 200-day shows there is still some bearish activity to be worked out. This continues to be a sector to stay away from until the picture on interest rates clears up.

TradeRadar Stock Picks

To view this week's updates on the portfolio of TradeRadar Stock Picks, please visit the Track Profit & Loss page at


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: Contact us if you have questions or identify any new issues.

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve