Only gold was up for the week and not much at that.
For the past week water and beer were the sector winners. For the last 52
weeks the only major sector that is up much is brewers - up 27% and biotech
is up almost 3% for a year so with weak economies one still buys drugs and
beer.
The top and bottom industries
for the week.
For your viewing pleasure we share the steaming feed of the six baby
Shiba Inu puppies. It occasionally is off the air and they show only slides but
it will come back on in a while - from California. puppy
cam There is sound
also.
USA stocks still very
popular around the world. As an unscientific look at the popularity
of US stocks this map shows the visitors to the stocktiger.com site.
The larger the dot the more visitors from that location. As the site
only covers the US stock market it is clear that there is still a lot
of trading interest in the US markets from Tasmania to Vladivostok
and Hawaii to Cape Town. We are glad they all visit and hope all are
making profits.
The new
new blog link
if you are not registered asks you to do so one time and
you can select to have it remember you for future
visits. (same long in is regular message board) To post
chart images there just save them to your disk and up
load them using the "additional Options" box when you
post a Reply.
Clearly this is one of the worst markets
that most have seen. When we say worst we
mean for those who have stayed in long
positions when the market has fallen for
over a year. Fortunately I do not think many
reading this have keep long positions as
they learned to use technical analysis to
get them out of them when support is broken.
They have also learned to use the new
reverse (short) ETFs to profit when there is
a decline. Much of conventional Wall Street
is deep into losses as they are so
conditioned to buy and hold. Funds are
ranked by performance but one of the main
benchmarks are just to beat the S&P 500
performance. The S&P for 2008 is down 40% so
if a fund manager is down only 35% that is
considered good performance. I imagine on
CNBC they keep coming on telling people that
is is a good time to buy as they have doe
for a year as they do not care if there is
any real gains as long as they beat the
market. Most of us care a lot that we make
real profits and do so each week. We had 18
stocks hit trade points this week and make
profits and had several automatic trades
like GDX swing back and forth for
additional profits. Futures' trading had one
amazing day on Thursday as buy signals
triggered and the rise was fast and steep.
One day we will have some clearer signs that
a bear market rally of a longer term nature
is talking shape and at that time we can
hold longs for days or weeks but until
then
we take upside break out profits quickly on a
case by case basis and let the shorts run a
while. Did we have a short term bottom on
Thursday? Maybe but the Friday sell off was
more than we would like to see so await this
options expiration week with interest.
On this week's multi index chart we have the 20-day EMA shown. If the rally
continues watch that area as if they close above it there is next a target of
the 50-day EMA.
The Dow daily chart. If the yellow D line holds then we expect a move up
toward E where the question is if there will be a break out then or a move lower
to put in a lower low for 2008. Some still feel the a fifth wave down has not
completed and look for one move decline in this phase of the bear market before
a counter trend rally.
This 30-min Dow chart shows how nutty the market is that all want to
predict the future over the next days and weeks. The two guesses are not ours
but ones or variations of popular outcomes at the moment. While it is kind of
fun to guess what will happen and what labels will be applied it does not help
much in making money it seems. It is more likely that one can use the trend
lines and volume to base trades on. In this case on Thursday the Dow went down
to the yellow trend line and bounced. Whether it completed wave 5 or was a D etc
did not matter one bit on Thursday and the buy signal came because the trend
line held. The stochastics and RSI gave buys and volume came pouring in. If the
rally continues and the top trend line does not get broken then shorts will
enter there and if it does get broken longs will buy. How long it will last will
depend on the strength of either situation at the time.
60-minute Dow shows the RSI crossing up over 30, stochastics crossing up
over 20, MACD crossing and histogram turning positive when the trend line held
on Thursday. If that completed a wave 5 down or is still in a wave 4 was
unimportant if you were looking to buy. These indicators all pointed up at the
same time so trying to figure out which wave one was in was not especially
useful at that time.
Longer term Dow shows the turquoise channel has pretty much held. At some
point the 2002 lows come into play to be tested and likely the 62% retrace at
about 6400. It could happen sooner or later. The one thing that suggests that it
waits a while is that RSI is under 30 so enough oversold to make a move
possible. We also have seasonality on the bulls side though retail is dropping
quickly this year. But November 13, 1929 the markets hit a bottom
and rallied for some time but ultimately rolled back over and did not actually
bottom until July of 1932. If that happens again it will be summer of 2011 when
a bottom finally comes.
Mike Burk pointed out that there
were 1514 new lows on the Nasdaq October 10, 788 new lows October 24
and 664 new lows on November 13. The decreasing number of new lows
on each decline is bullish but the number is still high enough to
suggest another test. This monthly Nasdaq shows the 26 year
trend line and the close about on it. If this is broken on the
monthly close one would expect the 2002 lows to be tested also at
1108.
The daily Nasdaq and the higher volume Thursday move followed by lower
volume Friday pullback. We would want the yellow line to hold. If the rally
picks up the top trend line resistance is shown at about 1650.
The Nasdaq 60-min chart shows the bottom trend line was not touched but
the indicators all turned up as it ran to the 50-period EMA.
The NASI made a reversal crossover but we think it may only be lagging
and will cross back soon on any continued move.
The VIX dropped to is 50-day EMA and moved back up. Bulls would rather
the volatility decrees and this stay under 50. Not many longer term investors
want toe enter the market when a stock can loose 10% of it value in a day for no
outside company reason.
The Nasdaq 100 lost 7% for the week but still over the drawn support.
The Nasdaq 100 proxy QQQQ 60-min found resistance at the trend line. If
it re enters the triangle the next major resistance it at the top line
just over $32.00.
S&P 500 weekly closed right where it did 3 weeks ago. RSI and stochastics
still oversold.
This S&P 500 60-min chart shows some things to look for as buy signals
for a reversal after a good decline.
A closer 60-min view. 50% retrace and 50-period EMA over head. 870 short term
support.
The NYSE only broke its October low by a small margin then rallied on
higher volume.
The number of stocks on the NYSE now trading of their 50-day EMA is at 6.9%
S&P 400 mid caps has the stochastics still pulling back but like in most
chart thee is a possible double bottom short term.
Russell 2000 daily shows a very volatile index. The move up over 110
points in 5 days suggested a pullback and in Russell 2000 tradition it came all
the way back into Thursday and again rallied strongly. On the daily, the
stochastics never got under 20 but on the 15-minute chart as shown on the
blog
there was a very clear buy signal on Thursday that netted a 58 point move up
from the bottom. Then there was a sell signal also after it reached its peak.
Banking index BKX no
signs yet of a bottom.
The London Financial Times FTSE has been doing much better than the US
indices.
Commodity ETF GSG weekly closed below its 2007 low. Not drawn here is the
$33.15 2003 spike high that may be now support area. No signs yet of an RSI turn
up. This is extremely V ish in shape so at some point a counter trend rally may
also be volatile.
The oil monthly chart is now just below its lower trend lime. There is a
shadow low of 51 so the 50 area is considered. RSI is above 30 and stochastics
just breaking under 17.
US oil fund USO monthly well below its
trend line and not far from the 42.50 shadow low from 2007
The daily USO shows the 40.50 low from the past.
At some point there will be an oil and gas rally and DIG is one way to
trade this and could be a trade on a break over the Friday high and trend line
of about $34.00
Gold long term trend line
is actually not so far below at near $650 while the 200-week EMA is
at $686.
Gold daily does shows
MACD turned up but no other signs of a good base to move up longer
term.
The HUI had a
volatile week and the chart does not yet show any real buying
interest and we looked at over 100 gold stocks and even though some
day they may all see big gains there are hardly any that have
encouraging set ups at the time. We did put two gold stocks back on
the watch list that look pretty decent and we have traded them in
the recent past.
Silver remains weak. It had run up a bit in a
bear flag for two weeks and pulled back again this. Watching MACD
for a turn up.
The US dollar could be in wave 5 but it also
may only be in a 4th wave rally and will fall to finish off
the 4th and begin the fifth wave up. There is negative divergence
shown on al the indicators at the moment.
|
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.)
Stock Market Comments
GM: Looks like Nancy Pelosi and Harry Reid are going to
make an attempt to offer GM some kind of bailout funding
in the next week. I'm not certain at this point is has
a chance of getting out of the House, nor will it get
support in the Senate. For one reason, a lot of US
taxpayers are just bit tired of bailouts. somewhere, we
have to draw a line as too how much money we are going
to throw at this problem. But Congress doesn't have to
listen to the voters right now, as the next vote is 2
years away. But let's assume they get a bill through
Congress, would President Bush sign it into law? I
doubt it. I think Pelosi is serious about all this, but
I think we are simply "going through the motions". Why
on earth should the US taxpayer be bailing out GM? If
we did give them $25 billion next week, what would be
the terms? Would the taxpayer own part of GM, like the
80% we supposedly own of AIG? What would change?
Nothing. GM is a poorly run conglomerate and has been
for years.
First of all, the UAW agreement is killing them and has
been for years. In 2004, when GM put down a truck frame
on their assembly line, it was already in the hole
-$1595. That amount was what they were paying for UAW
medical benefits for every truck being made in that
year. That's ridiculous.
Second of all, they have too many brands and they don't
sell. GM has been making autos for years that no one
wanted. You tell me that Buick or Oldsmobile are
"popular". I don't know anyone who owns a Saturn, and
those that I know that own Hummers wish they didn't.
And what is the real difference between a GMC and a
Chevy truck?? So once again, I went to my local GM
dealer to see what kind of deal I could get. I picked
on the Cadillac Escalade. This is a super deluxe SUV.
And that is what GM has been making and marketing and
selling for the last few years. The list price, sticker
value, was $79,500. I had no idea these things were
priced so high!! I remember looking at a Hummer in 2003
and it was $59,000 and I thought that was pretty silly
for a vehicle I couldn't park in 90% of the world's
parking spots.
GM is offering all kinds of kick backs on the Cadillac
Escalade, and they finally got the price down to $59,000
cash!! Now you know these things are not walking off
the showroom floor at that price. What really surprised
me is I live a moderate sized town. And they had 19 of
these things on the lot. They aren't going to sell
them, plain and simple. I never got into the financing,
but I got the idea they were more interested in a cash
deal or me getting my own financing. Lets just say the
dealer didn't bring up their financing it for me.
That's bizarre.
GM is not in financial trouble due to the world's credit
shortage, credit swaps, or credit derivative problems.
They are in trouble because they are terrible
businessmen. They put all their eggs into making big
trucks and SUVs. And for a few years, that seemed to
serve them well. They are over stocked with vehicles,
over priced and they have too many people working for
them. And they pay them too much. The company doesn't
make any money. I can't recall them ever making any
money on cars sold in the US.
But they are putting the "fear factor" into the markets
and making it sound like we have to bail them out, or we
are going to pay a bigger price down the road. If our
government does in fact give GM $25 or $50 billion
dollars, nothing will change at GM. It will be same old
stuff, different day. They will simply burn through the
loaned money, instead of their own. And in 6 months to
a year, they will be back asking for more. What is
their threat? They will lay off 250,000 workers. And
that will spin through related industries and total 2.5
million workers over a year period. Well, those numbers
are fairly accurate. I read this week where bankruptcy
on the part of GM would effect some 300 US based
employers negatively.
My complaint, and I have so written to my Congressmen,
is a loan won't matter. In the end, GM will still
fail. It's too late for GM. They made poor decisions
for too many years and now because no one can buy their
autos at any price, they are simply screwed. There are
some things that simply can not be fixed by throwing
money at the problem. This is one of them. So let's
just let them die gracefully, and cheaply as possible.
Yes, huge layoffs will hurt, but they are coming
anyway. And GM won't just die. A business this size
just won't go away. They will have to reform, and logic
dictates reformation for them would be a good thing.
But the initial impact of a GM failure would be pretty
devastating. I have no way to see into the future. But
I can also see no way that GM can survive with our
present economic situation. If Congress appropriates
money, cash injection, loan, whatever, the terms will be
lenient, if there are any real terms to begin with. But
it can't possibly produce the sale of more autos and
that is the major problem. And their problem isn't with
GMAC. That company income/loss amounts to very little
of GM's overall money problems. Some place soon, the
government has simply got to let the cards fall where
they may. We cannot bail out every company that is
having problems with survivability. I think Paulson
tried to make that message a bit clearer on Wednesday.
And the markets didn't like his "attitude" or his change
in "direction". I think Secretary Paulson is a pretty
smart guy. I think he has an absolutely impossible
mission in front of him. And I think he will be very
glad to turn it over to whoever Obama appoints in his
place. But nothing will change.
Oil continues to drop, and so does gold and other
precious metals. These two indicators alone tell me we
are in real serious trouble and for a long time to
come. I am not at all certain GM, Chrysler and Ford are
going to get their bailout presently. I am fairly
certain a bill will get sponsored, maybe even passed,
but I do not believe the Bush Administration is going to
sign it into law. And I don't think it will be popular
enough to "matter of fact" get by the veto. If it comes
before Obama in late January, I think the damage will
have already been done, and it simply won't matter.
And another thing to consider. The Treasury has gone
through all but about $60 billion of their $350 billion
"allotment" from Congress. So they are going to have to
go before Congress soon and ask for the other $400
billion, or some part of it. No matter how I look at
it, GM doesn't survive this. Amazing when you think
about it. Makes me wonder who else will be gone a year
from now??
Butch Cooley
|
Check the
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.
Barcharts has this type of graph that give all the numbers you may look for.
Looks to me like some useful tool for a CNBC market commentator to use to
explain the market movement for the day. It was pointed out in the chat room
so passing it along. This one is for the Dow for Monday.
Russell 2000 statistics
New additions to the
watch list.
Remember that we add many stocks to it each trading day.
And remember to also check the
blog
and
post comments intra day.
NJR Over $38.42
ATG Over $30.55
FMX Over $29.50
RRC Over $42.50 then $44.00
GG Gold over $24.20 - 50-day now at
$24.71
AMGN Biotech Over $60.00 on good volume
CF Break out of bullish flag over about
$65.00 or for aggressive on break of $51.00 within the pattern
AEM Gold over $35.90
Feed the
eyes - today the blues
Photograph by
Anular
Photograph by
Tombe
Photograph by
Evgeni Gurov
That's a full lid for today - will see you during the week.
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