Stock Tiger Stalking Stocks™

For Monday December 17, 2007 

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Close Friday

Dow -178.11 at 13339.85, Nasdaq -32.75 at 2635.74, S&P -20.46 at 1467.95

 

inflatecoinInflation worries may have helped contribute to the market's further pullback on Friday. The  consumer-price index figures showed a rise of %0.8% for November so higher than the 0.6% expected and this bit of inflation may lessen the notion that the Fed may lower rates  again in January. 

Earlier in the week the Fed lowered the overnight rate by 25 basis points to 4.25% and as 50 basis points were "wished for" the market began a pullback. The Fed stated that uncertainty over growth and inflation had increased. Then  on the next day the Fed announced that they together with the Bank of England, the European Central Bank, Bank of Canada and the Swiss National Bank will lend a total of $110 billion to banks, to provide liquidity to the money markets and try to  restore confidence in the financial sector. The timing of this announcement was not very good as it looked like a market manipulation attempt but in the end it  will likely help boost the market.

 

One positive figure of the week was from the Commerce Department who said that retail sales rose more than expected, 1.2%, last month. I read that in the last 10 market days of the year that especially in the 3rd year of the presidential cycle the market is up 86% of the time. So pretty good odds that we are higher by the end of the year.

Here is the consumer price chart through October where we see the 0.3% increase in October but not the 0.8% in November but easy to see that this takes the chart above the May high. Some of the rise may be because of gift buying time of year as November apparel prices climbed 0.8% following unchanged prices in October. Overall energy costs were at 5.7% following a 1.4% increase in October.

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The weekly index performance:

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Top and bottom sectors for the week:


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The Dow is now back near the 50% retrace from the November run and below the 50-day EMA. Further weakness may find support at the 200-day or 62% retrace. The stochastics have gone below 80 but as the pullback has not been on high volume it seems that it will not go back to the 20 level before moving back up.

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The longer term view of the Dow.

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The Nasdaq is at its 50% level and also can find support here or at the 200-day EMA. The trend line is just a bit lower but as it is rising it may reach the 200-day in a week.

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The Bullish Percent of Nasdaq indicator is still in the bearish area that can has often been the buy point.

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The S&P 500 is back under its 200-day EMA due to its containing the financial sector stocks and they are performing poorly.

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The longer term chart sill shows it in an uptrend.

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The SOX semiconductor index ran a bit above resistance but not for long a it is now trying to find support.

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Same for the Russell 2000 - as there is no clear trend line or solid support near. There is some at 750 and lower as shown.

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The NYSE percent of stocks over their 50-day average has been backing off but  at an inconclusive spot.

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The Yen pulled back from its lofty area but the US markets did not rally which is often the case. For Friday at least this Yen decline is probably due to the rally in the US Dollar.

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The 30-year bond yield has again run above the 50-day and the trading channel. This then again suggests that rates will at least not be going lower.

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With the US Dollar rise, commodities and therefore gold pulled back on Friday and is now near the short term trend line and 50-day EMA.

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The US Dollar rallied on the idea that the Fed may be done cutting rates for a while. It now has resistance at near 78 and if it gets there it may need to make a retest of the lows. Trends in currencies can take a long time to turn around but when they do they are also can last for many years. There are so many now bearish on the Dollar that we can expect several shorter term rallies before a final turn takes place.

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Economic calendar from briefing.com

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NNRI up 15% for the week as the company released 3 news items.
The first was a comprehensive update of ongoing projects.

NNRF, INC. Announces Update of Corporate Activities

Many of things covered were in response to your questions. One item people were happy to hear as that NNRF's Chief Financial Officer and its Vice President are now both board members of ATOLL and that ATOLL ratified full and transparent reporting in accordance with SEC regulations. As a result NNRF be able to include its share of Atoll's revenues on their accounts.

NNRF expects to begin its first installation of FEECOM/BIECOM for E.ON in one of their nuclear power plants in January and has been asked to provide it also for a medical facility in Germany. They are also meeting with a South Korean nuclear radiation decontamination and waste management company in January to negotiate a formal marketing agreement for NNRF's shielding and encapsulation materials in the South Korean region.

NNRF, Inc. Announces Nuclear Waste Container Project

The company announced that it has made an agreement with Engineering Center of Nuclear Containers (ECNC) to design and develop Type B(U) dual purpose transport and storage containers for solid high level radioactive waste. There are many type of containers and this type was selected due to it important demand. These include units from 10-80 tons and are designed for transportation and long term dry storage of high level radioactive waste. The Russian government has budgeted approximately $1.4 billion will be for waste containers long term and NNRF and ECNC hope to secure a significant portion of this. ECNC won an award at the Atomeco 2007 show for advanced advanced nuclear waste container technologies from the Federal Agency of Nuclear Energy of the Russian Federation. technologies from the Federal Agency of Nuclear Energy of the Russian Federation. This is a long term project but I believe that even short term that this is beneficial to NNRF as there are few world companies in this field that it highlights their significant stature in the nuclear field.

At the show I saw videos of crash testing of other 20-ton containers as they are hauled up 10 metes and dropped on the ground and then again on a large metal spike, put into fire, then underwater and dropped in sub-zero weather. Tests like these are part of certification process and this highlighter the expertise of ECNC.

NNRF, Inc. Announces ZAO EMPB ATOLL Q3 2007 Results

ATOLL in the third quarter had gross revenues of $18.7 Million and net after tax income of $ 3.5 Million. For the first 3 quarters combined this is a total of $56.7 million in sales and $12.75 million in after tax profit to ATOLL. NNRF receives its share of profits in the form of dividends and some investors seem to want them to get them sooner. Remember that NNRF also wants ATOLL to grow and it would as an example make little sense to take money out of ATOLL and then pay taxes on it and turn around and loan ATOLL money say for new equipment. Personally I do not care the exact timing of when money that is owed NNRF is paid as long as it is being used to be long term benefit of NNRF shareholders. As this money is paid as a dividend it des not show at this time as revenue but as investment income. ATOLL's auditor's became a registered firm with the United States Public Company Accounting Oversight Board (PCAOB). NNRF's U.S.-based auditors will participate in ATOLL's year end audit which is scheduled to commence the week of January 21, 2008. As mentioned above chages being made will facilitate NNRF's ability to equity account for Atoll and include NNRF's share of ATOLL's income on NNRF's financial statements.

We saw the expected move up from very oversold conditions and had a low volume pullback from the center Bollinger band and stochastics 50 line. With excellent ATOLL earnings, progress in the Velcont acquisition and the beginning of installations of FEECOM/BIECOM plus the variety of other projects we expect the resumption of the uptrend to come.

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PLTG Announced a week ago the the Tennessee burn off stage of its first natural gas wells is about complete. They had a press release that they had a live broadcast interview on American Stock Exchange by Blair Merriam, President. The corporate interview will be scheduled for US broadcast syndication over the next couple of weeks. 

Live Platina Management Interview at AMEX

In this PR it said that the company will achieve profitability in the coming quarters and this time-indefinite statement may have caused the weakness in the last couple of days as some want always the fastest results.

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PYR.v This stock is low volume but Friday saw some larger trading so perhaps a cross trade. With increasing earnings and making profits I think the volume will pick up over hre next few months as it gets more known and listed on the Toronto exchange.

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GWDC The press release stated they with their partner will open their first specialty gourmet café in Shanghai, China in February. I have been buying in the 55 cent range as the stock has been consolidating and I like the progress the company is making.

Growers Direct Shanghai Coffee Cafe to Open February 29, 2008

HENC Is sitting while waiting for drilling news. We have shown the  stop point and break point in last weeks newsletter and watch for news.

CYRX They are getting closer to announcing more details as promised in late October.

Additions to our watch list.

IMN  This is not on the watch list but looks like it may drop more.

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SONC Short  under $22.50

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TRW  Short  under $21.68

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PBW  ProShares for clean energy so a collection of stocks - over $26.50

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IMMR  Short  under $12.00

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CEVA  Over $11.40

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TER  Short  under round number $10.00

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CTR  Over $15.50

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SEH  Short  under $12.85 or recent low of $12.74

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HVT  Short  under $8.00 with a $7.76 shadow low

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WEL  A pullback play so watch for a reversal at about the 50-day EMA if the Friday low does not hold

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IMAX Short  under $6.30 with a $6.05 shadow low or may be a long on strong volume over about $6.70

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Photos from December 8, 2007

On red square Saturday evening. The word for red used to be used for beautiful so Red Square is Beautiful Square. In the last few year they have put up a skating rink on it in the weeks surrounding New Years. Here you see it with GUM department store in the background.

GUM Department Store

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You more often see the St. Basils Cathedral  end of the square but this is on the other end. State Historical Museum

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The skating rink is on the left out of the picture and the Kremlin on the right.

St. Basil's Cathedral

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That's a full lid for today - will see you all during the week.

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The Financial Ad Trader
The Financial Ad Trader