Stock Tiger Stalking Stocks™ For Monday May 4, 2009 You may subscribe to this newsletter free - subscribe Past 5 days Dow Nasdaq Close Friday Dow +44.29 at 8212.41, Nasdaq +1.90 at 1719.20, S&P +4.71 at 877.52   Not entirely. We have a lot of travel this week and are pressed for time so not many comment on the charts today. Next week there will be no newsletter but there will be a new watch list for that Monday. Check the Blog as there are usually some posts of stocks of interest there and we will see you in the chat room. A bullish week as investors continued to buy any dips. Before March 9th no one wanted stocks and today with unemployment reaching 6.27 million and rising plus factory orders declining, they feel like buying. Not too much was bought on Friday though as the volume was very low. There also have not been too many stocks hitting new highs and that suggests a pull back is coming, Commodities though got a boost and energy stocks popped up on Friday after a down day the day before. Coffee stocks also kept rising all week. The government's bank stress test results won't be released until May 7, which is later than the May 4th release that was originally planned. I read that some executives at several banks began to debate the test results. The Conference Board said its Consumer Confidence Index surged this month, jumping 12 points to 39.2, its highest level since November. The report, which is based on a survey of 5,000 U.S. households rose despite falling home prices andrising unemployment.   The Bureau of Economic Analysis said that U.S. GDP shrank at a 6.1% rate in the first quarter compared to a 6.3% GDP decline in the previous quarter. The contraction was worse than the 4.7% decline expected by economists. On a year-over-year basis, the first quarter GDP declined by 2.6% compared to 0.8% decline in the first quarter. The decline in fourth quarter GDP compared to the previous quarter reflected negative contributions from exports, private inventory investment, equipment and software, non-residential structures and residential fixed investment.   The ISM said its index of activity in the sector rose to 40.1 in April from 36.3 in March, with a reading below 50 indicating a contraction in the sector. Economists had been expecting a more modest increase to a reading of 38.4. A notably slower pace of contraction in new orders contributed to the improvement in the sector, with the new orders index jumping to 47.1 in April from 41.2 in March. Production also contracted at a slower pace, with the production index rising to 40.4 from 36.4.  Initial jobless came in at 631,000 for the week ended April 25th, down 14,000 from the previous week's revised figure of 645,000. Economists expected claims to remain unchanged at 640,000. The 4-week moving average for initial claims, a statistic that flattens out week-to-week fluctuations, declined 10,750 to a level of 637,250. The number of people receiving ongoing unemployment help, a statistic known as continuing claims, increased 133,000 to a level of 6.271 million   Many investors are looking to the early 1930s for some insight into the current economic/stock market environment. While there are significant differences (global economy, credit default swaps, TARP, FDIC, etc.) between the current environment and that what occurred in the early 1930s, there are also many similarities (bank failures, bankruptcies, severe market declines, etc.). After all, history may not repeat but it often does rhyme. For some perspective on the current stock market rally that began on March 9th, this chart illustrates the duration (calendar days) and magnitude (percent gain) of all significant Dow rallies that occurred during the 1929-1932 bear market (solid blue dots). For example, the bear market rally that began in October 1931 lasted 35 calendar days and resulted in a gain of 35%. As this chart illustrates, the current Dow rally (hollow blue dot labeled you are here) is slightly below average in both duration and magnitude relative to the average 1929-1932 bear market rally (hollow red dot).   This past week's major indices. The top and bottom sectors for the week.   The best and worst industry groups shows the leaders up more than the above graph as  the mix is slightly different. Multi chart - indices riding the top band which can also at times be before a pullback. The Dow monthly shows it has moved over the 50% retracement from the 1987 low to the 2007 high. It could get to the 38% as RSI has just gone over 30 and stochastics over 20. The close resistance on the weekly. Utilities got a a pop. Transportation is up to resistance and all is ok until the lower trend line is taken out. The Nasdaq weekly close to the the broken support line and 50-week EMA Nasdaq daily at the 200-day and near horizontal resistance. SOX ran over the 200-day briefly. Nasdaq 100 still in the lead over the S&P. Nasdaq 100 now over the 200-day EMA. The long term S&P 500 monthly and the 50% retrace not far overhead. RSI and stochastics over their lower lines but no cross of MACD. At some point we will finish this minor wave a up and drop into a b down. Stochastics is now over 90. Daily S&P 500 The NYSE   The percentage of stocks on the NYSE over their 50-day moving average is still high at 91%. Our advance / decline NYSE ratio chart is back to the lower trend line resistance. Mid caps just under resistance. Russell 2000 similar. Value line still leading XLF financial sectore holding off until stress test results it seems. Russian RTSI. Commodities CRB index showing the pop up on Friday. Now near horizontal resistance. Crude oil for part of Friday moved over the near term horizontal resistance. The OIL  ETN. Gold was down for the week after hitting the trend line resistance. During this deflationary time it would be expected to remain under some pressure. The gold cloud chart falling after hitting resistance. The gold iShares GLD daily. The GDX 60-min renko chart gave a short-sell signal this week after a good run on the long side.. Gold stocks have not attracted much interest. Here on the XAU. Silver is stuck between the 50 and 200-week EMAs. The US dollar fell and it is at its trend line. The 200-day and 38% retrace are below.     Butch Cooley Comments (Butch is founder of Leg Up House and the Butch Cooley Worldwide Hunting and Fishing . He has been an active trader for decades.) Stock Market Comments I guess Chrysler/Fiat is the biggie this week.  If it's not, it was the news that seemed to take a little steam out of this 2 month rally.  But what the heck, the rally has to end at some point.  Nothing goes up forever.  Although some play the game like it will.  And there is just a lot of resistance out ahead of this rally right now.   I really can't see any immediate good that will come from Chrysler joining with Fiat, and then going into bankruptcy.  President Obama gave a pretty wild speech regarding this, and he did a good job trying to make us think bankruptcy was just a formality. He obviously was not too happy with those creditors who held out for a better deal.  Well, I can't blame the creditors either.  Supposedly they are holding secured debt, and the numbers I'm seeing, their debt might be around $7 billion.  They just don't want .29 cents on the dollar.  That's what courts are for.  Maybe they can get a better deal. But they messed up the Treasury brokered deal.  I also don't ever trust anything to do with business that the government gets into.  I can't recall anything the United States Government makes money at.  Free enterprise is a good system.  All the Department of the Treasury is going to do is muddy the water.    And Chrysler most likely will emerge from bankruptcy court, only it will not be a very significant company anymore, nor should it be.  The joining with Fiat, I guess that could end up being significant, but that would be down the road, some 3 or 4 years before you could expect anything profitable to come from it.  There are many things that have to happen in order, and Fiat is number 186 on a list of 200 items. And right now we are on item #2.   No matter what happens in bankruptcy court, we have to really look at revenue and income for Chrysler.  Where is it coming from?  The sale of cars and trucks, which they aren't selling.  Are we expecting them to sell more after bankruptcy?  I am certainly not believing that.  I do hope they keep their pickup trucks.  Those I like.  Only once Fiat gets their hands on them, who knows.  I realized, I know very little about Fiat, so did some research this week.  Apparently they don't make a pickup, but they do have over 20 models of what I will call "small cars".  Kind of cute too.  And is this a prelude to what we can expect to happen with General Motors in June?  Probably.  It's probably a significant warning to GM.  What I personally am afraid of is seeing these companies become the new "GM", .......Government Motors.  Like I said earlier, I like free enterprise.  It's a system that seems to work really well, is profitable for most, or you don't survive the competition.  If you can't make the grade, you go out of business.  For some reason, we are being told this is not good anymore.  Maybe Fiat will become a better idea. Whatever happens, GM and Chrysler will be smaller.  And in the longer term, that could be better, if they can remain companies at all.  In the short term, no one is selling cars.  No income, no profits.  Show me the "good" there. It's the same with the earnings this quarter.  Have you noticed all the analysts reduced the benchmarks?  Over 67% of companies reporting did better.  Better than what?    Certainly made it easy for the companies reporting to beat the Street.  But no one is reporting any profits.  They are barely reporting revenue.  Take Dow Chemical's results for instance.  They reported gains this week, but also they are closing 20 plants and laying off 5,000 people and selling some assets.  So they really didn't make a profit.  Not really.   Even Jim Cramer figured this one out.  It's all money being saved, from layoffs, reduction in expenses, and tightening the belts.  It's not rigged, but it's orchestrated.  And it's baloney.  It surely helped a bear rally run upwards of 30% for almost 2 months.  That was great.  But even the "herd" will figure this out.  And probably already has begun to.  Now, there are some people calling for a real Bull rally from this point on.  Wow!  That is going out on a limb.  I am really a Bull at heart.  I love being able to buy high and sell higher.  It's easy.  Sumner Redstone, CEO of CBS and a few other companies, were interviewed this week.  That is exactly what he called for, a Bull rally.  Well, let's see, CBS was trading around $35 range a couple years ago.  Now it runs in the $7ish range.  So, it would be fair to say Sumner Redstone has his own agenda?  But there have been others calling for the same thing.  It is not going to happen.  Bet me!!  What I am fearful of though is we go into some kind of prolonged trading range.  I don't like trading ranges.  It's harder to make money, and I like simple and easy.  Up moves, 30%, easy.  50% retrace, easy.  Sideways...that's hard work.  But, it is a direction, and it could come to be.  I am not looking for any kind of Bull rally right now.  And this why.  The Stress Test results will not be released on May 4 as previously scheduled.  Really?  Apparently there is just too much arguing going on between the banks and the regulators in charge. But there will be leaks and "investigative" reporting soon.  And the names of some of the bad banks is coming out.  And the numbers will not be good.  And the rally needs the financials or it can't sustain itself.  So low volume, serious resistance and news will most like stop our current rally.  And I think that would be a good thing.  Let's all settle down, get a nice retrace and then head back up? Did anyone notice the Senate could not pass the mortgage bill this week that allowed bankruptcy judges to impose new terms on loans?  Wasn't even close.  I remember when this was a big issue to most of the Democrats in Congress and was a point in the election.  But it would seem the banks just didn't care for this thing, and you can't blame them.  They want control, not a bankruptcy judge.  So that is a dead duck. But it does look like we are going to get something along the lines of a fair credit card bill. I'm not sure what fair means here either.   The House has passed their version this week and the Senate should deal with it next week.  You know the banks don't care for this one.  I think it is called the Credit Card Holder's Bill of Rights.  Some are referring to it as the Small Print Bill.  Should this become law, it doesn't take effect for a year, except the part about raising your interest rates.  You would have to have 45 days notice of pending increase, and that increase could not take effect for 90 days.  Basically the Banker's Association is saying any new legislation could further curtail credit.  I doubt that.  There isn't any credit right now.  The Bill certainly would help some people, but it will do very little for the overall economy, either short term or long term.  The banks will still be able to raise your interest rates, they will simply have to tell you now. The FDIC has closed 32 banks to date in 2009.  Silverton Bank in Georgia was closed late Friday.  Georgia tops the list of states on the FDIC's list for 2009.  Silverton Bank is known as a "banker's bank".  I believe there are 20 such banks in the country.  I guess 19 now. The thought here is when a banker's bank fails, we may be looking at other regional and community banks to fall into trouble shortly.  Some felt that these types of institutions should be put on the too big to fail list.  So we will keep an eye on this.   If you are not following the IRS vs. UBS, it is really and interesting law suit.  The IRS has basically filed a civil suit against UBS in Federal Court, Miami, to gain access to 52,000 American's accounts, secret accounts, numbered accounts, from that bank. And it's believed there might be at least $15 billion of untaxed money here.  Maybe more. Well UBS asked the courts to throw the law suit out this week.  The quotes are just too good.  UBS:  "Despite the clear historical record, the IRS now asks this Court to force a Swiss financial institution and it's employees, over the express objection of the Swiss Government, to violate Swiss law by producing a massive quantity of confidential account information located exclusively in Switzerland.  IRS: "The IRS asks this Court to enforce against UBS a broad civil summons seeking information on many thousands of clients located exclusively in Switzerland, even though compliance would compel UBS employees to commit crimes in Switzerland".  I think this is just too funny!!  Wonder if the Federal Judge will find it that way.  The reason I am even writing this is a couple of months ago, I received a letter from the IRS, requesting my confidential numbered account information for Switzerland.  Now, I don't have a Swiss bank account, and never have.  But I got a kick out of the request.  Isn't the point to a secret account...to be secret??   Maybe we are just more broke than I thought we were. It's May and we should be seeing Social Security  payments to about  50 million people this month.  About $250 per person.  It's part of the current stimulus package and it's a lot of checks and a lot of money, $12.5 billion  That should have some impact on spending come June and July.  The idea here was retired people and those on disability would be prone to spend this money.  Thus stimulating the economy.  They are probably correct. Flu??   I'm at a loss as to what to think regarding Swine Flu, or N1H1 I guess we have to call it now.  We don't want to offend swine farmers or swine I guess.  Earlier in the week, this sounded pretty nasty.  Just the word "pandemic" is unsettling.  There was some initial downward movement this week early because of the outbreaks in Mexico, but the media is all over the map regarding just how serious this flu can be.  Certainly 150 plus people dying is serious enough.  Or is it?  So I called the CDC for additional information.  I got more info than I needed, but what I found out amazed me.  20,000 people die each year in the USA from "regular flu".  That averages out to about 55 people a day to flu alone.  This is the old kind of flu, not the new pandemic kind.  Over 40,000 die from pneumonia a year. That's 110 people a day.   Well, now 150 or 160 in Mexico just doesn't sound so bad after seeing the regular flu numbers.   I'm still at a loss.  But so far the markets have blown the news off.  Hopefully, that is where it belongs.   BC Here is a list of stocks reporting earnings on Monday before eh open.  Check the updated Earnings Calendar on all overnight holds. Weekly economic calendar from briefing. com. To try futures trading you may sign up for a free simulated account that uses live streaming data. Futures have been very volatile so great opportunities right now for wide swings. When any of you sign up for a new stockcharts.com accounts there is a space to put in a referral name on that form. If you enter  stocktiger@stocktiger.com they give us credit. Thanks! Featured Stocks ERF Wireless, Inc. ERFW  http://www.erfwireless.com/ This week I will be at their office and attend the oil and gas show in Texas where ERF wireless will be with Schlumberger. America West Resources AWSR  http://www.americacoal.com/   This week I will visit their office and Horizon mine in Utah. We have written in the past about Amber Ready and will keep you informed when we have any details of the start of trading as May should be an exciting month.   Remember to check the blog as information is posted many times each day - please post your own comments and charts.  In case you do not know, on the blog topic or any topic on the message center, if you click on the Notify button as shown above, you will be sent an email when new posts are made to that topic. If you trade ETFs our large list of them is here http://stocktiger.com/etf/etflist.php Note on the site pages on the top menu we now have Live Charts. These update themselves and we have several of the popular Ninja Trading mechanical trades that many have used over the years. We also have FAZ and FAS in 15, 5 and 1 minute variations as well as The Dow and others. They do dot yet all fit on the menu so ask in the chat room. We have also added free image hosting to the Extras menu. Last week we had 25 stocks hit their buy point and product at least intraday profits. New additions to our watch list. Remember that we add many stocks to it each trading day.   CHK  Over $21.08 then top at $21.07 REP  Over $19.50 PBI  Over $25.25 note the 200-day EMA above HTE  Over $5.08 ACO  Over $20.91 or over $21.00 MOLXA  Over $15.72 TIE  Over $7.30 - $7.86 is top break out LDK  Over $8.50 on good volume then over $8.90 LINTA  Over $5.71 CPST  Back over $0.88 or $0.92   For your eyes....   Photographer unknown   Photograph by Kade That's a full lid for today - have a great week. Check the Earnings Calendar on all overnight holds. Check the current message center also for other good stock candidates as there are several there right now. If you use StockTiger mail you can access your account using simply my.stocktiger.com . If you would like a free StockTiger.com email address that uses the Google Gmail spam filter and you can check your mail from anywhere. Send me (ST) a personal message from the message board.  Include your First and Last names and the name you want to use. Your address will be (your choice)@stocktiger.com Best regards, Richard