Skip to main content

Weekly Market Update - bulls trying for a comeback

Weekly Market Call

There is no doubt investors were more optimistic this week. All the averages put in strong showings with all but the Russell 2000 racking up more than 2% gains.

The week was reasonably free of bad news so investors had an opportunity to focus on what good news there was: durable goods orders surged and new home sales for July surprised to the upside. Bank of America taking a stake in Countrywide Financial was looked at as a vote of confidence that the worst in the real estate sector might be over. The VIX eased and so did Treasuries.

This is not to say that there weren't some disappointments this week. There were more announcements of other lenders with liquidity problems (Thornburg Mortgage) and a number of financial firms closing their mortgage units altogether or announcing layoffs.

There was a bit of merger news to remind investors of the good old days. E*Trade and TD Ameritrade are said to be talks, Rio Tinto is still bulking up for acquisitions and the Dubai government is buying into the MGM Mirage.

It was a pretty good week but there is still considerable uncertainty and a continuing tug of war between the bulls and the bears. To help investors figure out the direction from here, we will see a big list of economic news released this week: Existing Home Sales, Consumer confidence, FOMC minutes to dissect, Initial Jobless Claims, Core PCE, Chicago PMI, Factory Orders and so on.

ETF Comments

Indexes: Using the TradeRadar software to look at the ETFs corresponding to the major averages (DIA, SPY, QQQQ and IWM), we see pretty much the same story across the board -- they all remain in the TradeRadar SELL zone. Looking to see if the recent upturn has been enough to generate a new BUY signal since the market peaks back in July, we see only very weak signals that under normal circumstances would not be actionable. It is clear that an up trend has not yet been firmly established.

Financials: XLF and KBE are deeper in the SELL zone than the major averages. KBE has bounced back sufficiently to generate a BUY signal that is weak but not as weak as those mentioned above. Is KBE getting ahead of itself or is it a leading indicator?

Real Estate: There is still no hope for the homebuilders and XHB shows little in the way of establishing a bottom. REITs have been somewhat firm, however, and we see IYR, though still in the SELL zone, sporting a weak but very sharp BUY signal when looking at the price action starting in February. According to our guidelines it is too weak to be actionable but it makes me wonder if it's time to take our profits in SRS, the inverse REIT ETF.

TradeRadar Stock Picks

Our bullish picks were mostly up and our bearish picks were down but not out. To see more detail on the portfolio of TradeRadar Stock Picks, please visit the Track Profit & Loss page at trade-radar.com

Comments

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…