Is that a sharp turn around. Thursday most every industry group
was down but on Friday almost all were up as the dip buyers
again supported the markets.
Worries about the strength of the US economy was the blamed
reason for the Thursday sell off and the Core PPI staying
unchanged on Friday was what the media said caused the buyers to
come back on Friday. The idea is a slower economy together with
no signs of inflation will cause the Fed to cut interest rates.
The yield curve, though improving, is still inverted and
recession may show itself later this year or next. In this chart 10
equals 1 - when both the 10-year and 3-month have the same interest
rate.
The Chinese stock market is a concern as we know the reaction in
the US markets this spring when it sold off. And as their market day
starts before the USA a big drop there can result in a big gap down
in the USA.
I do not have a chart of the Chinese market but here is an ETF
basket of 25 Chinese stocks. Amazing volume in it on Friday and it
is now again trading above the top Bollinger bands. Of course it
could break out but with the negative divergence of the MACD and RSI
it is more likely to fail. The Chinese market is much different than
the USA's as it is reported to be made up of over 95% small retail
investors and not institutions like in the USA. This can result in
even more dramatic sell offs as panic can spread faster with
individuals. We know from the NASDAQ bubble that they can go on
longer than one would expect but they do eventually break. I read a
Forbes article from March of 2006 warning that this ETF was
overbought and it is up 50% since then.
But while gold was down other metals were the big gainers
this week.
The daily Dow shows the drop below the trend channel and the RSI drop
below 70 and the next day recovery.
The weekly chart shows the overbought condition as the candle is above the top
band of 13,268 and stochastics again near their high. This is options expiration
week so it may help to keep the market supported though MaxPain on the QQQQ is
$45 so seems to far below for them to shoot for it.
The S&P 500 monthly not far from the resistance so seems it needs another
rally to at least tag the line.
No break shown here on the percentage of those on the S&P 500 trading above
their 50-day average.
And the Nasdaq held support and 2600 can still be reached before the bull
takes a larger fall.
The NYSE shows the Friday rally stopped right at the resistance formed by
recent lows and stochastics still pointing down.
The Russell shows the relative weakness in the small caps as they are
still below the February highs.
Oil rallied back to the underside of the broken trend line so only can
watch as it means little so far.
The US Dollar continued
its bounce from support.
Gold was not even able to test its April highs
putting in lower ones instead so may pullback more this time. Watch
the trend line and the retracement line near the 660 area. The
350-day EMA which has been solid support for years is still moving
up and would be great if a successful tag of it took place this year
as that could spark another extended rally in gold.
Here is the daily of gold and
the failed break out tries.
Although the Dow has been making
new highs this year it is only in terms of the US dollar as for in
Euros is is still not above its 2000 high. For the broad markets
however this has been a good bull market. Here are two long term
charts to show. The NYSE has had a great 27 year run here
even with the several weak years.
The Value Line from about
250 to 2400 - amazing.
The weekly economic calendar
from Briefing.com
On our site the trade record shows the high prices on the day each stock hit the
buy point to show the maximum gain that could have been made on the first day
and also shows the closeing price or the least that could have been made on the
first day. Obviously most people hold for more than one day and hopefully
selling some on the fist day so that their gains overall can be much higher and
any losses reduced or eliminated. On the home page we also show the monthly
percentage gains. These are based on buying each stock using and equal dollar
amount and 10% of the total portfolio worth. The April figures were right in
average of the past 7 months (we did not keep closing prices before then) at 32%
for the month if you sold all buys on the same day at the close. This is the
minimum you could do as the largest percentage of stock continues higher.
We generally figure that 90 percent off all trades close higher on the fist day
than the buy price but in April it was quite amazing. Of the 115 buys only 3
stocks closed on the first day lower than the buy price and one stayed even.
That is a 97% success rate and we do not expect that to be repeated but a super
month and year so far.
Our 3 Special Situation stocks had a sideways week and that is exactly what we
wanted to see. After a correction on strong volume it seems better to work
sideways as a rapid reversal back up often can start a new round of selling. A
sideways market lets buyers and sellers become more neutral as they decide on
prices. It also allows time to pass while the companies progress with their
growth and the next round of announcements.
NNRF was up as volume increased on the upside and diminished on the
downside. It closed a bit above the 38% retrace and there is a little gap bottom
at $8 that may offer resistance when reached. The stochastics are just coming
off their lows and a gradual move back up is great as it build supports as it
goes. The 50-day EMA also keeps moving higher and soon will reach the lows of
the recent pullback further adding to support. We really like the company and
the chart is perking back up. This is a great sector to be in and we think this
company has and is building more expertise than any.
CYRX has had decreasing
volume as is the nature of so many traders as they wait to buy in
wild times. The Stochastics have not yet turned up but seems this
will be pretty soon. As the company said in the SEC filing and press
release it will mention more details and names in the future. It
seems that this month will be the start and we suggest buying in
quiet times but as the volume shows, most seem to prefer to pay more
and buy after the good news while the smarter buyers buy some extra
to sell into strength so add to later on any weakness.
I was outside and bought an orange juice in a
Tetra Pak - it was named a Tetra Brick. I remember the first time I
saw this packaging so many years ago. It was milk and it could keep
fresh for 6 months or a year with no refrigeration. Now of course it
is known around the world as it revolutionized the packaging
industry for many products and became a world standard.
CryoPort may do the same for the frozen
shipping industry as their shippers take over the market. This low
volume consolidation seems a good area to get in before the next run
begins. Remember the the industry itself is a $3.4 billion one so
growth potential is tremendous.
Smell the coffee CFPC
closed up nicely for the week and like NNRF a bit over the
38% retrace. I bet the next time it starts the clock on staying over
$2 for 10-days to apply for AMEX it will be successful as this
consolidation has been building support. This may be a good month
for Coffee Pacifica.
Now some additions to our watch
list.
EPIQ
straight forward over $24.00
DYN over $10.53 but
aggressive traders may want to take an early entry with stops of
course.
CGI looks nice but not
enough volume so a pullback and then an increase would be nice
before a $34.55 break out.
XOHO big volume on
Friday. Hard to pick and exact buy price. This line is at about
$5.28 and may be a good place.
SQNM we show the longer
view as the trend line is shown and the meeting of the 50-200-day
averages. Increased volume suggests it may try a turn around and a
break over $3.90 would be our buy point.
SVN we show using two
charts. Looks like $6.40 to $6.50 would make a decent entry short
term.
On the longer term chart we see
the general trend break and a close over $7.00 would be more
significant.
FDO over $33.30 so maybe
more people now shop at this chain as the economy weakens?
ALU a double level - over
$13.71 an entrance into the gap and $13.60 an early entry. Notice
that this stock is prone to gap up and down so it is risky to hold.
TEVA has a gap at $40.00
and $1-$2 seems first potential.
Photo from
http://www.alwayscurious.com/
Night Sky from
http://www.steves-digicams.com
That's a full lid for today - Will see you all
during the week.
Check the
Earnings Calendar
on all overnight holds.
Check the current
message board 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 interface so you can check your mail from anywhere, (you do not need a
Gmail account) send me (ST) a
personal message from the
message board
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
