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Stock Tiger Stalking Stocks™
For Monday February 11, 2008
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Close Friday
Dow -64.87 at 12182.13, Nasdaq
+11.82 at 2304.85, S&P
-5.62 at 1331.29
 The U.S. Senate voted in favor of the economic
stimulus package. Or maybe it ought to be called "Please
vote us back into office package" as instead of fixing
what was and is wrong they use yet more government
money. This has to me made up for in taxes or cutbacks
or in more borrowing from China - India etc. The
package now is for about $167 billion and includes checks for
individuals making up to $75,000 and couples making up
to $150,000. They like to say it will provide a
significant boost to GDP growth in the second half
of the
year but it may not according to surveys that find most Americans will use
the money for debt and savings, not spending.
Nearly three-quarters of those asked in two
surveys said they will either pay down debt or save any
money sent to them as part of an economic stimulus package.
The remaining quarter indicated they would spend the money,
which is the goal of the program.
Of the things the market see -
Here is a look at the jobs decline over the last months.
In January there were no new jobs created and instead a
decline of 17,000. As you know the country needs about
150,000 new jobs a month to just keep up with new
applicants so any number under that means more
unemployment. On average over the last year the real job
losses were about 50,000 per month. I have read that the
average length of unemployment is now almost 9 months.
And this week new jobless claims were 356,000.
The market this weeks was down about
4% on all the major indexes with 7 out of 10 economic
sectors in the red for the week. I read that Goldman
Sachs now estimates that the total loss in the mortgage
security world will total $400 billion instead of the
earlier estimate of $200 billion. Some of the best
rallies though are in bear markets so we may have some
good ones even with recession and credit card defaults,
foreclosures and all. However preservation of capital is
to be highlighted in difficult times so you have it for
better ones. A Barron's piece was looking long term on
Saturday and said we may look forward to good stock
entry prices by 2010.
We have hundreds of Canadian subscribers and I noticed that to
earn a 22% gain on your money last year, all you had to do was open a checking
account in Canada. A year later, your Canadian dollar-based account would buy
22% more U.S. dollars. - Now he tells us! Of course I am not sure why you would
have wanted the US dollars.
Here are the major indexes for the week.
And the top and bottom sectors for the week. We had both
PAL and SWC that hit buy points on our watch list a week or so ago
and they were in the top sector.
The Dow if one had to guess looks higher odds to drop below this
support. I have seen though that the Advancing/Declining data has held up,
as has this little support line shown so watch also for a playable upside on
a shorter time frame chart.
DXD is the ProShares Ultra short for the DOW.
Can be played on its own or as a hedge with resistance now at $60.
The transportation sector has been pretty
impressive rallying up to the trend line and 200-day EMA.
Here is the optimist's view of the Nasdaq:
The Nasdaq 100 showing the support it is trying to
make and the current down trending channel.
The QQQQ monthly is still above the 50-month EMA.
We expect it will in time, to a minimum, tag the trend line shown below but
we may have a rally first. The histogram has turned negative and we see the
MACD bearish crossover.
QID is the ProShares ultra short for the Nasdaq 100
- QQQQ. It goes up about 200% of the percentage that the QQQQ goes down. We
see the bullish golden cross as the 200-day is now under the 50-day EMA. If
not playing these on their own they can also be used as a hedge against any
long term long positions.
The SOX semi conductor index so far is hanging in
there near support.
The BPCOMP hit quite an extreme reading and it
bounced but we did not see the same for the Nasdaq. In the pat this has
preceded a decent rally as shown.
The Nasdaq advance-decline
index is not yet showing any positive sign. Watch the Nasdaq in the
lower part as it may touch its trend line and bounce there.
The S&P 500 weekly shows the rally back to near the broken trend line and
then the fall back to the 200-day EMA. The 50-200 pinball we speak of would
eventually take it to the 50-day again and likely a good short set up.
The Russell 2000 short term shows the support and resistance areas.
Russell 2000 was
turned back at resistance on the weekly chart. The move over 20 on
stochastics are still suggesting a short term rally and if it could
tag the 50-week EMA would make a better short entry longer term.
Gold has made a fine recovery so far but it
still is showing negative divergence. A test of the 50-day would
probably bring more confidence. The bulls though so far are still
winning and it is in a long term bull market. The caution though is
with the power outages in South Africa and some mines had to shut
down a while you would have expected big new highs. Also many gold
stocks are not performing well with ones like IAG just
triggering a short sell recently.
Platinum broke above the top Bollinger bands in January then pulled back
a bit to get back under them. Now it is just pushing the bands up which is
bullish but you can see it is overbought.
Palladium has been on a roll but caution as it is in overbought
territory.
The US Dollar has made a higher low bottom but too early yet to see if it
is lasting. An eventual break over 78 and the trend line would be significant.
These are 3 of the top sectors lately so we are here only pointing them out. We
already mentioned Platinum/Palladium as we had two on our watch list. We also
had two or 3 coal stocks and they have done well.
Industrial Transportation - some of the components are: JLWT, CLDN, ACLI, R, ODFL, MRTN, PACR,
UACL, CNW, HUBG
Coal - some of the components are: NRF, USG, WLB, HW, YZC, JRCC, NCOC, FCL, FDG, PVR, ANR, CNX, BTU, MEE, ACI
The chart is at a possible break out but right now the MACD and
RSI show negative divergence.
Airlines - some of the components are: ALK, CPA, NWA, DAL, CAL, UAUA, LUV, SKYW, MESA, JBLU, HA, AAI
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Butch Cooley Market Comments
(Butch is founder of
Leg Up House
and the
Butch Cooley Worldwide
Hunting and Fishing . He has
been an active trader for decades.)
Market Comments February 8, 2008
When most charts I look at have the 50 dma well below
the 200 dma, and we keep making lower highs and lower
lows, then things in the market just can’t be too good.
This week was no different. Think like a Bear would be
my advice.
Obviously the Fed has not had too much impact. And they
are not going to. I really don’t know why the market
makes such a big deal out of the Fed. They are the ones
the caused the problem to begin with. So now we think
they will solve it? And now that we have an agreement
with the Congress on a stimulus package, I suppose this
will soften the blows coming, but that is about all.
And remember, no scheduled Fed meeting until mid March.
So no Fed catalyst until next month. We are almost done
with earnings, but even good earnings haven’t helped
this market.
I keep hearing analyst say we “talking ourselves” into a
recession. I don’t think that is really possible. I’m
a professional fisherman, and I can’t talk myself into a
fish!! We are most likely already in a serious
recession, and it simply takes time for everyone to
accept that fact, including analysts. Remember, all of
these people have a competitive agenda. They are all
trying to sell their “fund“ to all of us. No, there
really is a number of things wrong, but the worst of it
is the credit issues. And credit carries over into
housing. When the equity in our houses becomes an ATM,
hey, this is bad business.
For those looking for a bottom, I think patience is in
order. 11,600 seems likely again. So let’s see if we
go there and if we can hold that number. I really don’t
think all the bad news is out, in fact, I think there is
a lot more coming. Moody’s is messing around with
ratings, but sooner or later they will have to do
something. Maybe one or two of these big bond issuers
will fair well in this storm. By that I mean they may
survive. The real stupidity, if you think about it, is
they had almost no risk when they were simply insuring
municipalities for sewer systems, roads and power plants
as a main stay of their incomes. But they branched out
into mortgages, SIVs and CDO’s and they most likely
didn’t really know the full extent of their liability.
And even if they did, it was dumb. Warren Buffet made a
statement this week about this issue. He claims there
is plenty of money around to borrow, as long as you
don’t need it. But all the “dumb” money is gone. I
like that one. But the reality of the bond issuers is
they are on the hook for a lot of cash, and they simply
don’t have it. Moody’s is allowing them time to find
some in my opinion, just to keep their books right. We
shall see. But I have my doubts.
And we haven’t even gotten into commercial paper on
banks yet. No one is even talking about this issue, and
sooner or later, it will become an issue. So, yes,
there is a ton of bad news ahead of us. Wait until what
is being reported by banks and other financial companies
is subjected to audits. I really think that is when the
“stuff hit’s the fan”. I heard this week that
fundamentals just don’t matter when you are trading TA.
I’m afraid I can’t agree with that. News is an issue
that effects fundamentals, and it can cause a lot of
fear. Fear moves the markets in both directions. The
markets don’t like surprises. Right now, all the news
is moving it down. As I said at the beginning of this
article, most of the charts I look at are broken. There
is a reason for that. Money is coming out of equities,
and it’s going into bonds, ETF’s and also cash on the
sidelines. But a lot seems to be going into
commodities. And they won’t keep going up forever
either. I really see a lot of investors positioning
themselves for the worst. Hope for the best, but be
prepared for the worst.
I know this kind of information is not what most
investors want to hear. We all want good news and we
all want to make money, and we want to make it
everyday. Well, buy a wishing well, because it doesn’t
work that way. A good investor has positioned his
assets before an action happens. So if you aren’t out
of something you wish you were, sell into strength and
wait for other opportunities. I once heard this:
“There are more opportunities than there is time or
money”. I’ve found that to be most true. I am neither
a Bear nor am I a Bull. I invest. There are Bear
markets and Bull markets, and I invest differently in
each one of them.
BC |
This week is options expiration week along and
Valentine's Day plus
Bernanke is scheduled to speak on Thursday.
Here is the weekly economic calendar from briefing.com
HSXI HealthSonix was a stock we were watching as they make a
sound device to help in the pain of arthritis. We were waiting on the national
TV infomercial to begin and it has not so far. The company did make a
joint marketing program with Abbott Laboratories but not much happening with it
yet. Anyway, the company makes a ZingiberRx Joint and Muscle cream and says it
is is fast acting, non-staining, fast absorbing, and deep penetrating to help in
pain management of arthritis. If you are interested in a free sample, click the image below.
Let us know on the message board how it work for your pain.
The severity of some pullbacks seems a surprise and some say it is
on OTC or pink sheet stocks. Here are 3 of what were the Wall
Street darlings. We show them so you see that the sell off that has
taken place in stocks is not limited to small ones.
They could not get enough of Apple in December and took it up over
$200. This week it hit $117
Every quarter the big name
analysts were raising their targets on Google. Credit
Suisse and Goldman Sachs and many more were saying $800. It hit $488
this week.
ICE got cold also falling
from $194 to the $114 level this week.
GWDC had been way
over sold for some time and the RSI was under 30 so it made a
40% move up and above the 50-day EMA. Stochastics ran back over 80
which has been followed as usual by profit taking.
NNRI has pulled back much more than anyone expected. Friday
it put in a indecisive candle but may be a reversal. RSI is now in
the oversold level that normally precedes a move up like we saw with
GWDC above.. We are a week closer the the shareholder meeting
and year end earnings report of NNRF and ATOLL with the equity
accounting.
We often have stocks we are watching that never make it to the watch
list. USO was at support but its bounce on Thursday was on
light volume so we thought it may be a short set up. Friday however
volume really returned with a gap up. Over time this may set up
again as a short though if oil makes a larger correction.
Every so often we find that some people do not know that we add stocks to the
watch list each day. This is the
Watch
List updated daily. The home page also has a daily video and we
make an audio update most days before noon that you can receive by sending a
note to
news3@stocktiger.com
Additions to the watch list
CA A bounce
play so no exact price - on good volume over about $24.35
EBAY On break out
of flag on good volume - $28.50 - $28.70 area
TBSI Over $35.00
SLB Short
under $73.00
SPR Short
back under $23.66 has a shadow low of $23.08
GFI Gold Short
under $13.20
Q Short
under $4.90
DELL Short
under $18.85
RIMM Short
under $80.00
HPQ Short
under $40.00
FLR Short
under $106.00 - maybe Friday's bounce will hold
Winter images
That's a full lid for today - will see you all during the week.
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