Dow -7.90 at 12638.32, Nasdaq
+14.34 at 2522.66, S&P +2.12 at 1400.38
June
- its summer! Ok, I know, the summer solstice in America is not
until June 20 but seems that the start of June is pretty much considered the
start of summer in general. Let's hope is is a good trading one. I read from
Mike Burk that in all years the S&P 500 is up about 54% of the time in June with
an average gain of 1.0% but in the 4th year presidential cycle which we are not
in, it is up 74% of the time with an average gain of 1.7% making it the best
month on average in the 4th year cycle years. We had a great week and in only 4
day with 24 new trades from the watch list - pretty amazing. From our longer term
stocks we compared a couple last week and we said we would short KYUS
under its Friday close and it fell 37% so far. We preferred its neighbor
PLTG which so far gained 6% and PYR.v which jumped 67%.
For the month of May the Dow lost
-1.42%, the
S&P 500
gained 1.07%,
Nasdaq
up 4.55%, and the
Russell 2000
up also 4.48%. Crude oil prices
were up 12.4% while commodities as a whole were up 3.2%.
The Russell 2000 with its gain this week made new recovery highs which is interesting as
the small stocks are thought not to do as well with raising interest rates which
may be coming. The market except the Dow has been up 4 days in a row so this
usually means a pullback is in order as it is overbought a bit. It is however,
the start of a new month and this has been a pretty good day lately for the
bulls.
There were some good earnings reports from DELL and MRVL and
TIF. Tiffany & Co. said they hade very
good European and Asia Pacific sales.
April personal consumption
expenditures came out and were flat when you account for
inflation. There are I believe those fiscal
stimulus checks that came out or are coming so that may
add to consumer spending for the May and June figures.
The Chicago PMI numbers were up a bit but at 49.1 they
are still under 50 so in a slowdown at least in
the Chicago area.
The major indices for the week were mixed with gold
and oil giving up the most.
This week the Bureau of Economic Analysis issued a
report that GDP rose at an annual rate of 0.9%
in the first quarter, which is faster than an earlier estimate of 0.6%
which was also the rate in the forth quarter. GDP growth is thought
of as sluggish at a rate below 3.0%, but it is better than some would
have thought.
The weekly jobless claims
did not change much at 372,000, which was
in-line with expectations.
The week's gainers and losers by sector.
The top and
bottom industries this pat week.
We have not shown this Wilshire World index in a long time so post for
reference. It broke above its descending trend line then went back and tested it
and is now back over the 200-day EMA. The 200-day is flattening out which would
be bullish.
The Dow weekly chart shows the modest gain the Dow made this week and it
closed still under the 50-week EMA. If this is an A-B-C correction we may be in
the B wave up to be followed by a C wave back down.
The Daily Dow chart shows the bounce right at the 50% retrace line so now
we have a triangle. It is getting close to the apex and if this is a valid
triangle it should break one way or the other before it runs out of room. The
50-day EMA was headed up though now it is flat. The stochastics just gone back
over 20 which was the short term buy signal at the bounce.
The Dow on the renko chart has yet to give a buy signal even
though the Dow has moved up about 200 points so it still treats the move as
"noise" - we will see.
The Dow transports recovered quickly from their decline as when something
is in a strong uptrend it can be hard to kill its momentum as dip buys keep
buying until they get stung a time of two.
Here is the transport closer view and it almost made it to the 50-day and
trend line but the bulls were too aggressive.
The Nasdaq is back near its resistance where it failed to break 2 weeks
ago. Could be making a small double top or could break out to try to fill that
gap.
The semiconductor index SOX also back to resistance at the 38% retrace
near 428.
The Nasdaq 100 weekly chart almost has made new recovery highs and almost
made a bullish engulfing candle to compete with last week's bearish engulfing
candle. Volume though was very light.
The QQQQ monthly continues as it had dipped below stochastics 20. I did
not think it would move so quickly back up.
The S&P 500 we showed the support at the 38% and trend line so this
bounce was expected. Last week was about the lowest volume of the year until
Friday afternoon so all the indices need more volume.
The S&P 500 chart showing only the 13 and 34-week EMAs and a crossover
would be bullish. This is a weekly chart.
Again on the monthly chart the S&P 500 closed under the 20-month EMA
which generally defines the bear market boundaries.
This is a ratio chart of the S&P 500 to the Russell 2000 and the
breakdown here shows that the Russell 2000 is performing better than the S&P.
Support is shown and a bounce would show a reversal where the relative
performance of the Russell would become less than that of the S&P.
The Russell 2000 made new recovery highs just under the 50% retrace.
This one has had good momentum but a pullback would be helpful. It may
instead actually break out but then we would expect a pullback.
The weekly Russell 2000 showing the new high since the March low.
The S&P 400 mid cap index broke down from its very steep rising channel
but recovered strongly and it again is near its highs.
The NYSE was by comparison quite weak this week as seen on the weekly
chart.
The VIX as we said last week could lately be used to trade the markets as
this time it failed to break higher above the resistance so you could have
gone long the market there. It close at about support or just under. As it
drops it signifies less "fear" in the markets.
The XLE financial ETF dropped to support and so far has held it. The
lower volume however is suggesting that in the future this support will not
hold.
Oil is in red and green and ExonMobile in orange. The oil company is
continuing to underperform the commodity. This week there was a decline in
oil inventories but the Energy Department reported that it was a temporary
thing due to delays in unloading oil tankers along the Gulf Coast. Last
week we mentioned how the tankers are just sitting at sea waiting, they hope,
for even higher prices to unload. If oil continues to fall they may have to
unload at lower prices instead and drive prices lower.
This GSG is a commodity ETF has the clear support is at the trend
line and 50-day EMA. Not sure it is ready to go that low yet but if so may
be a buying op.
This water resources ETF PHO broke out on Friday so it is not only
metals and oil and grains.... that have the momo.
Gold had a sell signal on our faithful chart as gold made lower highs
and stochastics dropped under 80.
On the gold daily shorter term you see the small trend line bounce on
Friday. If this holds it may be making a triangle as shown in turquoise with a
resolution pushed out a month or two.
The gold "cloud" chart shows that it pulled back when it got to the
bottom of the red cloud which is resistance and there was a bearish crossover.
Market Vectors GDX 60 minute renko chart. This show the possible trades
recently using the parabolic SAR and CCI as buy and sell signals.
The gold and silver index XAU is at the 38% retrace and bounced again
near the yellow trend line. There is no clear indication as it is in between
the 50 and 200-day EMAs.
Silver also between
the EMAs and support and resistance.
The EURO - Japanese Yen ratio
chart is again at the top of the triangle and
it seems to have room for another pullback. This would
be negative for stocks as can be seen in the lower
portion of the chart were is shown the S&P 500.
And here the Japanese yen by itself at the 38% retrace line.
The US dollar did bounce at the trend line
which I think is good for the USA in general.
Weekly economic calendar from briefing.com Friday
will be the employment report. Fictitious or not it can
still be a market mover.
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News on stocks of interest:
NNRI NNRF Inc seems to be
sitting and waiting for the first quarter earnings
release due out as soon as the numbers from ATOLL are
reviewed. The company along with STUDSVIK took part in a
nuclear show and conference in Germany last week.
Last week we showed the KYUS
chart and explained that it was up on heavy promotion
and a sale under the Friday close would be reasonable.
So far the decline has been 37%. It may find support at
the dotted line or the 50-day EMA as we have no idea if
the campaign to move the stock price up is over or not.
Remember that this company has much less than
PLTG and PLTG is trading at about $0.10.
On PLTG -it closed up for the week about 6% with
very heavy volume on Tuesday. forgot last week to
mention the letter to shareholders from the CEO can be
found here as a PDF file -
Letter from CEO.
PYR.v Pyramid Petroleum
we have talked about for many months as we expected a
very significant upside for it. Their situation was
greatly improving over the months but it took some extra
months to finalize the deal last year but the wait has
been well worth it. The company reported a profit
for the last two quarters of $0.05 each quarter. If they
only keep those same profits and added no additional
production that would put them at 20 cents for the year
or now trading at about a PE of 5. A 15 PE is more
common so that would put the stock price to about $3.00
Not this month keep in mind but this has good upside
potential as they do plan to increase production to
3,000 barrels a day in 2008. A future listing on the
Toronto Stock Exchange will help get them known better
and increase the volume. This may now be short term
overbought as it gained 67% last week but pullbacks are
still buyable.
Pyramid Petroleum's 1st Quarter
2008 Operational Cash Flow is $0.12 Per Share
Now additions to our
watch list.
Remember that we add many stocks to it each trading day.
DOV Over $54.36
PRFT Over $10.85
TEL This broke out a bit so now
continuation over $40.26
WMT Over $58.15 then $58.84
CMCSA Over $22.75
KKD Over $3.50 -- oops - see the
next chart
KKD the above chart shows the closing price on May 30 at $3.44 but I
happened to open it again before sending this and it now shows $3.55. I guess we
cannot buy the break out - but maybe a continuation or on a pullback. I have
never eaten one of these but they sure had a cult following years ago when
people would camp out to be in line for new store openings.
BRP Over $82.75
CTRN Over $22.35 or $22.75
GRA Over $27.31
BABY Over $21.80 - thanks baby
JRCC Over $38.50 or $39.35
AMGN Over $44.20 then $44.75
IFC Short
under $4.00
Grey skies here but may starts
the sunny time.
Photograph by Boris Pazumofskey
Photograph
by Sergio Afanasenko
Photograph
by Zhanna Kuchera
That's a full lid for today - will see you all during the week.
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