Stock Tiger Update

For  Friday November 3, 2006  

Hello -

First I wanted to thank those who went to the public chart list and cast a vote as it does help increase our readership.  It can be done each day you wish.

I appreciate your time and support in this way as it lets me know that we are being of some help and it makes it worthwhile. We received several nice emails also so many thanks to all!

This week has been slow with only a couple of new buys each day but we totaled up the Trading Record for October and it was a very profitable month again. We only record the first day of each trade as we have no way to know how long each person holds a stock and many of the picks moved up in a big way over the month.

If you are an active trader who can watch the market and bought 1,000 shares of each pick at the buy point and sold at the high of the day then your gains were $56,610 for October though not many can pick the highs each day. That is up from the September profits of $39,339 as the general stock market rally helped a lot.

If however you work at another job or have been at a beach and only put in blind orders to buy each pick at the buy price and then sold the stock at the close of the day on the first day your profits were only $37,836. There were a couple of big gains that had intraday reversals that lowered the gain. However even after commissions that is a very nice gain for not even having to once look at the market. Here is the October review

For today the market stats are:

Dow -12.48 at 12018.54, Nasdaq -0.33 at 2334.02, S&P -0.47 at 1367.34

We all remember the Spring sell off when the market dropped day after day and stocks as well. That is not the case now (at least yet) as there has been some good buying in many stocks and that is actually a bit of a surprise in some.

On Friday the labor report comes out and could spark a big move back up if the the numbers show strong job growth in October but if they show even more slowdown the markets could drop much more even with elections next week.

The DOW broke the trend line at the start of the week and today though was able to move off the lows and close above the center Bollinger band with a hammer.

The Nasdaq does not look quite as good. It is at a possible support now but that lower Bollinger band is sitting at 2300 and may be calling.

The SMH semis ETF broke below support and the 38% Fibonacci today. The volume was lighter so it could recover tomorrow as it is still above $33 but a drop below is likely to take it to the 50% area.

The Russell 2000 small caps are also not far from support at 740 and the 50-day EMA so if they sell off more tomorrow look for a bounce there as the elections may at least help to support the market from a larger correction until they are over.

The NYSE stocks above their 50-day average also dropped below the 80 line today so the shorter term top may be in. In the past it usually tests the line a couple of times and so far it has a bit but another time may also be in the cards. I think however the time of the year requires a dip before December.

The 30-year bond yield did make a small bounce today at support. The bond traders control the long term rates and they are betting that the economy will be weak as we head toward a recession in 2007.  With the long term rates still under the short term rates the "negative yield curve" does point to a recession. Usually when the curve starts to move in the opposite direction it can do so rapidly. It can only happen if long term rates rise or short term rates fall so the question is - When will the Fed start lowering rates? The rates look over sold now so they will at least put in a bounce.

I was asked about gold in the chat room today. It has broken above its trend line and the resistance line a bit. This may develope into a bigger move though it is over bought a bit now. In the past however it did run in an overbought state for quite a while. Several are diving in now. We know that gold is in a multi-year bull market so very long term it is fine and you can buy the dips. I am still watching the 350-day EMA though as in the pat it has tagged it before a sustained move back up to new highs. Maybe the others waiting just could not wait longer.

One way to buy gold is to buy the ETF  GLD This shows better its current overbought state. Above the top bands while RSI and stochastics are at their top levels. Not the best of entry points as you know.

Meanwhile even though we have had a few moves in gold stocks we played they have not been taking off. In the top section of this 60-min chart you see the HUI to Gold ratio chart and you want to see the HUI outperforming gold and it is not at the moment though the HUI is maintaining a nice upward move so if you are in some good moving ones just maintain a stop and let them run.

Earlier I said how some moves today surprised me. I am used to as we all are of having the market pull back after such a long run and seeing some stocks collapse as people take profit and dip buyers flee. 

KNXA is on our watch list and yesterday it had a big drop that in most cases would signal a deeper decline to come may be after a minor move up a little. But today instead the volume increased nicely and it made up the total loss from yesterday. This is quite bullish as it oftener cleans out the sellers so this break out we are wafting for may happen.

PRST is one we played on the $5.50 break out to fill the gap and it was textbook perfect and the pull back was expected but not all in one day. Likewise the recovery today on expanded volume is also not usual for a weak market. These type of moves suggest that the market is not weak as they demonstrate the buyers are wiling to step up even with an awful looking chart at the moment as they see them as buying ops. We would reenter this trade at the break of $6.22.

FRG was one of our picks that broke today for a buy but notice how yesterday it also took a dip. I do not know when they report earrings but as a mineral company with Uranium it is a good sector now. This cup and handle chart measures to about $9.00. It would have another break out at about $7.30. Note all the high volume up days since April so good accumulation.

Only one more day to trade this week - here are a couple that may break.

TRFC closed at the break out line at $6.00 with recent spike high at $6.11.

GGAL also closed at a break out line at $8.00 and an $8.10 shadow.

And SRT did the same and has a break out at $14.75

The last chart is only for the looks of it. It is the 5-min chart for the S&P 500 for the last two days. It has a nice base so could make a rally tomorrow - lets hope it does - it is a nice looking set up for one.

 That's all for now - have a super day and great weekend and we will see you soon.

Remember to check the ........Earnings Calendar on all overnight holds

Check the  message board also for other good stock candidates as there are several there right now.

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Include your First and Last name and the name you want to use. Your address will then be (your choice)@stocktiger.com

Best regards,

StockTiger.com

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