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Stock Tiger Stalking Stocks™
For Monday October 1, 2007
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Close Friday
Dow -17.31 at 13895.63, Nasdaq
-8.09 at 2701.50, S&P
-4.63 at 1526.75
October 1, 1908 - 99 years ago - Henry Ford
introduce s Model T car - price $825 but no A/C, CD
or iPod.
I do see a "street rod" version 1927 model on eBay for
$9,499.99
current bid. 402
Chevrolet engine with two new 500 Edelbrock carburetors and 4
speed Muncie transmission with original Chevrolet shifter.
On Friday the Dept. of Commerce released its Personal Income and
Consumption report and spending was
up 0.6% for August, a bit stronger than the expected increase
of 0.4%. Personal spending
makes up 70% of economic activity. Personal income rose 0.3%
(consensus +0.4%). This is down from a
0.5% increase in July. These figures were called reassuring
but were not enough to close the market at the highs of the day.
It was reported that St. Louis Fed President Poole caused a
bit of a stir near the end of the trading day after he
reportedly said it would be a mistake for markets to bet on more
rate cuts. That comment helped erase earlier gains in the
Treasury market and sent the major indices to their lows for the
session until the last 45 minutes.
Briefing.com mentioned that "Equity traders eventually viewed Poole's comment as
an innocuous remark. After all, no Fed official is going to
come out and say, "Yes, it would be a good idea to bet on more
rate cuts."
Former Federal
Reserve Chairman Alan Greenspan told BBC Radio that there is an
increased risk of recession in the U.S. now, but that he still
places the odds at less than 50/50.
I would place the odds of a recession much higher and there may
be one now in real terms. The housing and credit problems will take
quite some time and the foreclosures as they increase put more homes
on the market and weaken it and personal spending. Recession does
not meant the market has to crash but it is quite over bought now
and we expect a pullback within the next couple of weeks even if the
big caps can make news highs before that.
For the quarter the Dow, Nasdaq, and S&P 500 gained 3.6%,
3.8%, 1.6%, respectively. The dollar index, meanwhile, dropped
5.1%.
For the week.....
Gainers and losers for the week
The Dow broke outside
the top Bollinger bands last week and since have been unable to make
much movement. Many traders expect the market to pullback soon at
the start of this new quarter but the continued fall of the US
dollar may bring in more money from outside the USA as they pay so
little for it which makes stocks cheap as long as the US holders do
not start a sell off. The players of the S&P were buying more calls
than puts so are more bullish and this in time will lead to a
pullback as when they are overly bearish the large number of puts
actually gives the market some support. The end of quarter mark up
can last a few days into the next quarter so perhaps the markets
will make some news highs before the correction.
In this view we show the
money flow index and it demonstrates now negative divergence as
it is going down as the Dow goes up. This is not a perfect
timing indicator but it shows that money is flowing out of the
stocks as the price goes higher so the stock price will follow
in time.
The transportation index
still is very weak and below its moving averages. This shows the
weakening economy or at a minimum the disinterest in owning stocks
that make their best profits in a strong economy.
The Japanese Yen
basically unchanged from last week.
The Nasdaq long term
weekly chart shows it may as well make new highs as stochastics not
yet quite over bought.
The daily chart shows the support at the 2650 area
and the small move it would take to make news highs.
The monthly QQQQ shows the strength though of
the top 100 market cap stocks in the Nasdaq. If we only were to look
at this chart we would not see anything not to like other than
the lower volume this past month.
S&P 500 weekly is similar to the Nasdaq but note the much
lower volume than the last high.
Russell 2000 This chart is rather weak still -
not getting better and I doubt that it will make new highs any
time soon. The 50 and 200-day EMA have been trading places and
at the moment cannot make up their minds.
The NYSE on this chart still looks fine and
RSI has room to move higher though stochastics are overbought.
The number of stocks in the NYSE trading over
their 50-day average is getting close to its former highs. If it
does get to 80 again it may mark the top of the market. If it cannot
reach there than the top is already in.
Oil again to new highs this week
This shows oil price that has been adjusted for
inflation. though Bloomberg does not agree as they wrote on Friday -
"Today's intraday high of $83.76 was less than a
dollar from the all-time inflation-adjusted high reached in 1981."
So these two sources of information are about $16 apart in
adjusting for inflation. The weakness of the dollar of course
means you have to use more of them if buying foreign oil. 
Oil that is is priced in Euros will require more dollars
as it is worth so much less - ouch! I now get only 24.4 rubles for
each dollar or about 4% less than a couple of weeks ago. I have to
pay 4% more for everything and that is a big change in such a short
time.
Gold may be running out of steam as even
with the dollar dieing it could not make news highs
The 30-year bond yield hit
resistance last week and is pulling back - important as a break out
would not be good for mortgages.
Economic calendar from briefing .com
A look at longer term
stocks. NNRI The company
released its quarterly report for the period ending June 30 on
Tuesday night and the stock sold off on Wednesday and Thursday
with a partial recovery on Friday. I think the sell off started
as people hoped that the ATOLL numbers would be in this report
but they were not yet so no income was recorded for the period.
Once some selling started of course a perfect set up for the
shorts to enter for a quick profit. The report showed the losses
for the quarter of $2 and $4 million however if one reads the
report they find that these are not cash related. There was
about 300k shares of stock paid for services and at the time the
stock was given the prices was average $5.39 so that gave the
company $1.6 million as a loss to use for future earnings tax
adjustments. The $4 million was interest related and some in
regards to the conversion of loans to shares as you can read in
the filing. This will save the company money as they no longer
have to pay the interest. I know the the accounting for ATOLL is
in the works and will be released as soon as possible. From the
filing the company did say: "The
foregoing revenues, operating expenses and net losses are not
indicative of what future operating results are anticipated to
be. Management for the Company believes that revenues should
increase measurably and outpace operating expenses, thereby
resulting in net income for fiscal year 2007." With this in
mind the sell off presents a buying opportunity.
On the technical side
the chart has returned to over sold territory with stochastics
under 20 and RSI bounced near 30. There could be another day or
day's of sell off or maybe not. For a mid term and longer term
it is not important. A turn back up in stochastics above 20 may
signal the change back up for the trend. Remember that 2 1/2
months ago it went to $1.80 and in 6 days was at $3.89 and the
company has made very significant progress since then.
Shareholder communication has not been as good as we would like
as an explanation before or at the time of the filing may have
prevented this dip in share price. I believe the company's
management will be taking steps to improve the communication
with the shareholders. Also this week the company filed the
amendment number 5 in its ongoing comment period with the SEC.
It appears that each time the questions from the SEC are less
and this typically indicates that they are running out of
questions and when they are finished the company can apply for
another exchange.
I know we are all a bit tired of the stock price staying in this
same range for over 2 months but it is not so uncommon after a
stock gets so over bought as it did in April. We can hope the
return to those prices will be more gradual so will have less
problems sustaining levels as it moves back up. With the
recent ATOLL move to its new location that is exactly in the
center of nuclear building activity and the soon to be plant in
Germany, NNRF is now at the start or some significant additional
revenues.
PLTG Oil and gas play still
basing under the moving averages while MACD still rising. I
think this one will give substantial profits over the next year.
A break out over $0.25 will be very bullish.
SIBE This one which
produces the musical Hats! has had some recent volume. They
still have not finalized the merger - meaning the original
shareholders have yet to receive the new stock but likely to be
done this quarter. In 2008 they have many things set to begin:
A
license with Tampa Bay Performing Arts Center for the rights to
produce HATS! throughout the State of Florida beginning January
1, 2008 for two years with an option to renew for an additional
two years. A license with Harrah’s Entertainment (Las Vegas)
through Dick Foster Productions (a subsidiary of Sibling
Theatricals, Inc.) to produce HATS! in Las Vegas opening January
2008 and potentially other Harrah’s controlled venues in
collaboration with Dick Foster Productions.. They seek to
optimize revenue by licensing the HATS! trademarks and by
selling HATS! merchandise.
NPWS The company demonstrated a working prototype of its fuel cell. This is
the only company who has done this with a silicon wafer design and it is a
milestone in that it shows that it really works and does so without the need for
oxygen which means that it can operate in non oxygen environments. They will now
be working on improvements and the form factor plus the company has many other
projects for other sizes and specifications. There will be a company conference
call at 1:30 p.m. Pacific on Thursday, October 4, 2007. The conference call will
be broadcast live over the Internet at
www.neahpower.com
or the telephone dial-in number is (888) 275 - 7122 for domestic
participants and (706) 758 - 0257 for international participants.
Now additions for our watch
list: ENH Over $42.00 - had
$42.30 shadow on Friday
AWH Over $52.21
GSIG Above $11.36
JRCC we bought a few days back but has another
level at the 50-day EMA $6.46
EGO Gold over $6.25
HLX Over $43.00 then top at $43.86
AMGN Over $57.75 has 200-day EMA at
$58.76
JNPR Over $37.57
PTSEF Back over $1.76 - shadow at $1.82
DSX Back over $29.00 on good volume - $29.54
top
BABY Over $16.50 then $16.92
KRY Gold - I think over $3.30 but has 200-day
and resistance at 3.45 area
SIGA my bet is back over $4.25 on good volume
DECK Over $113.50
ACTS This was s big watch
list winner on Friday - now watch for a reversal back up.
There are also many user picks now on the
message board
Last week we showed some
topiary in a park. This was an empty field but this summer they made
a nice little sculpture garden with a lot of fun designs and many
are the lamp holders.
That's a full lid for today - will see you all
during the week.
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