Dow -5.86 at 12986.80, Nasdaq
-4.88 at 2528.85, S&P +1.78 at 1425.35
Clouds
forming? Looking at the gains from the March lows, especially on the
lead dogs - the Nasdaq 100 and the NYSE, one would guess that the recession
will be short and the worst of the financial "crisis", the
declining housing market and the large inflation are
about behind us. If those things were true one sure would expect to see an
increase in trading volume. In reality the volume on this rally from March
is lower than the short term rally off the January lows. The buying has been
steady as each dip has been bought and we are pleased with it. We had 36
stocks hit their buy point this week alone from the watch list and this is
pretty remarkable.
Triggered list. However lack of volume
usualy means lack of commitment and if things start to break down again the
fall could be pretty fast if there are no strong hands to catch it. So
clouds may not be showing too much yet but keep an eye out as they may be
starting to form.
"According to the
National Small Business Association, more than 5,000 firms filed for
bankruptcy in April 2008, the most in any month since new bankruptcy laws
took effect in 2005. The data also show that in the first quarter of 2008
13,155 businesses filed for bankruptcy, an increase of nearly 45% from the
9,103 business bankruptcy filings during the same period in 2007."Yet with
this, the market advances. JPMorgan Chase & Co.'s chief executive said
Monday that he believes a US recession is just beginning.
It looks that way as the job losses
do not seem yet to show up in the spending habits too much. Retail is of
course down, yet I read that in the past quarter
gasoline sales
were up 16.3% and food sales were up 6.1% Both of those at new
price highs.
I understand that for a big part, the
markets are up because of the strong move in commodities, solar, agriculture
and also those that benefit from a weak dollar due to foreign sales.
These though in many cases have or are making such parabolic moves
that large corrections will come.
For the housing
sector there was some encouraging data that says that adjusted annualized housing
starts for April totaled 1,032,000, while
939,000 were expected. Building permits for April came in up 4.9% to 978,000.
Separately, the University of Michigan issued its
preliminary consumer sentiment survey reading for May,
which came in at 59.5. The reading dropped
month-over-month from 62.6 and was below the reading of
62.0 economists expected.
The Empire State Manufacturing Index for May came
is -3.2, below the 0 line reading
expected. The Philadelphia Fed Survey, below,
another regional manufacturing index, had a reading of
-15.6 for May. A reading of -19.0 was expected.
.jpg)
Recently, as crude oil prices have
generally gone straight up, the market has been spiking
every time it dips but has been ignoring it when it goes
up. The media still loves to blame any fall in the
market to high oil prices and just not talk about it
when both go up together. Wish someone would show them a
chart. Here is one from January 2003 showing how for the
long term the market and oil price rise have gone hand
and glove. There have been some divergences but other
times they have been in total lock step. The chart shows the
Value Line index of about 1900 stocks and oil is shown
in gold.
Here is just something that seemed
interesting. During recessions there are many sectors
that are sought after as "safe havens" Health care and
agricultural are two as people need both even in
recessions. This chart is the XLK technology ETF
and the DBA agricultural ETF shown as a ratio
and you can see that since the mid-March low that the
technology sector is the leader. This sector is much
more speculative and that would IMO be quite encouraging
except for the low volume of trading.
The past week's major indices:
The top and bottom sectors for the week.
This is the year-to-date top and bottom
sectors. Some big profits in the right sectors.
The top and
bottom industries for the week.
Of interest to chartists:
Stockcharts.com has a new
filter overlay for their charts named
"Ichimoku
Clouds". Before World War II Tokyo newspaper
writer Goichi Hosoda
and
associates developed
"equilibrium-chart-at-a-glance technique." From
Investopedia --
Ichimoku Kinko Hyo -A
technical indicator that is used to gauge momentum along
with future areas of support and resistance. The
Ichimoku indicator is comprised of five lines called the
tenkan-sen, kijun-sen, senkou span A, senkou span B and
chickou span. This indicator was developed so that a
trader can gauge an asset's trend, momentum and support
and resistance points without the need of any other
technical indicator. "Ichimoku" is a Japanese word that
means "one look." It may look very
complicated when a trader sees the indicator for the
first time, but don't hesitate to give this indicator a
try because the complexity quickly disappears once you
gain an understanding of what the various lines mean and
why they are used. There is much written about this so
you can read if interested:
Here
are four links to articles on Ichimoku Cloud Charts.
1
2
3
4
Here is
an example using the gold chart. The Tenkan-Sen and
Kijun-Sen lines can be of a variety of settings but they
are basically moving averages shown here in red and
blue. The space between the Senkou Span A (green line)
and Senkou Span B (red line) form the clouds. The clouds
are support and resistance ranges. In this example you
see how the green cloud acted as support at it top line
near the end of March and then at the bottom line on the
first of April then the top became resistance during
April until it broke down after April 21.The Chikou Span
is the stock's current closing price plotted 22 time
periods behind
and shown here in green. A basic concept is that it is
bullish when the stock is trading above the clouds.
Actually this has been mostly used in Japan in the FX
markets but is being used for stocks now also.
Here is the same chart without the
Clouds overlay but using the 9-day and 26-day EMAs as an
example so
you can see the similarities of the crossover. So if interested -
experiment and if you care to comment or post charts
please do do on the
message board.
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!
We are starting off the chart section
with weekly charts of the five major indices. Not many
comments but just to show the Fibonacci retrace and
overall view from last August. For stocks it is pretty
common that if they can advance above the 61.8%
Fibonacci line on a return back up that they will be
able to make it to the staring point - 100%. Am not sure
of the statistics on this for indices.
Dow around the 50%
Nasdaq 100 quite strong at 62%
now. The best of the group as large tech has been doing
well.
S&P 500 similar to the Dow.
NYSE also strong at 62%.
Russell 2000 the weakest
currently still under the 50% retrace.
Here is the Dow monthly chart showing the bounce near the 50-month EMA
and the support line. In my opinion (IMO) it is better for a longer term move to
have come from nearer the 20 line on stochastics and or 30 on the RSI. If we
pullback again over the next month or two we may see a reading under 20.
The daily Dow is not a bad pattern as it
has been in this consolidation around the 200-day EMA so
could keep going. The 50-day is nearing the 200-day EMA
and you know that often means volatile moves if they
touch or cross.
The Dow renko chart as it broke above the channel line this week then
pulled back to it. There was a sell signal on Friday from stochastics but
now yet on the CCI.
This is the Dow 5-min chart. If you are a member of stockcharts you can see
these lower time frame charts and in real time if you subscribe that way.
Friday at roughly 10am a sell was given when the CCI went under 100 and the parabolic SAR
went above the pattern as a secondary signal (you can adjust it to act more
quickly though it may give more false signals) The buy came as the CCI moved
back over -100. Stochastics issued a sell during the 26 point pullback then
issued a buy but they are not shown on the lines here as the parabolic SAR
stayed on the long side under the pattern. This made for two good day trades
of the YM (Dow e-mini) futures or for ETFs if using them.
The Dow Transports - who wudda thunk that when oil prices were making record
highs and the economy slowing that transports would be close to new
highs also. The move up from the 4400 level is too steep to hold but for now
they look bent on testing the 2007 highs.
The Nasdaq came up to resistance just over the
50% retrace. On a break over here the next target is
explained below. RSI is getting closer to 70.
Shorter tem Nasdaq view shows a
measured move target with the top move equal to the
bottom move off the base. This if achieved would also
fill the gap left near the start of the year at the
dotted line.
The Nasdaq bullish percent indicator is now close
to its mean area of about 47.
The Volatility Index VIX is close to the level it
was when the market topped out in October. In the bottom
of the chart is the S&P 500 showing its peaks and the
VIX bottoms. This may signal a possible top in the
markets.
The Nasdaq 100 monthly QQQQ good move off the RSI
support and the 50-month area.
The semiconductor SOX back over its 200-day EMA
and the first Fibonacci level. RSI is over 70 so caution
for the short term.
S&P 500 monthly chart
shows it is now back over the 20-day EMA or in the
bullish camp RSI is also back over 50. When the 2000
bear market started you can see it did go back up over
the 20-day EMA briefly. This is a monthly chart so only
the end of the month will show if it can close out the
month over that level, now at 1404.
S&P 500 only the EMAs are shown here and a cross
would be bullish if the 13-week goes back over the
34-week.
S&P 500 daily as an overview with the next
higher level of resistance shown.
S&P 500 60-minute
very near resistance.
S&P 400 Mid Cap - showing the very steep accent
it has made from the March lows. This has been up 7 days
in a row - first time doing that in over a year. MZZ
is the ProShares short for this and MVV for
longs. This at some point may made a decent drop
and being short at that point would be good so
worth watching.
NYSE also has the 50 and 200-day EMAs not far
from a possible crossover. This past week was the lowest
volume in 3 years. Not much enthusiasm.
The stocks on the NYSE now trading over their 50-day EMA
is getting near the levels of former pullbacks. Not
quite there yet but close enough for caution.
The NYSE advance decline chart and how near it is
to the channel top. A break out then return to
successfully test it and bounce would be very bullish.
We may instead se a failure to break out.
The Russell 2000 the weakest of the indices has
still moved back over the 200-day EMA and first
Fibonacci level.
Oil monthly chart - it is still moving and the
channel top, if valid, is quite a bit higher.
Last week we showed this oil chart
and noted that ExxonMobile XOM (shown in orange) was
going down but as we see, this week it had a rebound and
may make its forth try at the top.
DUG is the Proshares short oil and gas ETF. You
can trade it short and long but if your account does not
allow a short you can use DIG for long plays in oil
instead of shorting this one. We show only this one as
the other one is almost a mirror. This is a 3 line break
chart and the sell signal came when stochastics dropped
under 80.
Our usual gold chart may make it
to stochastics 80 again but watch the other charts and
keep appropriate stops
A closer view of gold showing the current resistance at the 50-day and later the first
Fibonacci line at 918.
Gold renko chart shows the buys and sells using the modified stochastics,
CCI and parabolic SAR.
Gold and silver index XAU broke above its trend line but buy any stocks
selectively.
Market vectors
Gold miner's GDX shown in a 60-min renko chart with the buy and sell
signals here using only the CCI and parabolic SAR. On Friday there was one early
short then a long.
Silver - nothing new from last week.
The Japanese yen also about the
same as last week.
The US dollar unfortunately
Before the ProShares Ulta ETFs
were here,
this fund was popular for trading the small caps short
though you could only trade it one time a day and had to
decide the day before. Stochastics are now near the blue line
oversold area when former bounces came. This is a weekly
chart and past moves did not happen in a flash but just
pointing it out.
|
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.)
Butch is still ill this week and we
wish him recovery soon. He is part of our original group
of about 6-8 people who had a private daily chat room
for several years ands we miss him.
Get well soon
Butch!
|
Weekly economic calendar from briefing.com
- not many items but some that could move the markets.
The week after this the US markets will be closed on
Monday, May 26 for Memorial day.
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!
News on stocks of interest:
NNRI Last year NNRF announced
an agreement with the International Center of
Environmental Security (ICES) of the Ministry of Nuclear
Energy of Russia. ICES is focused on the
remediation of Russian radioactive and toxic
contamination concerns and much engineering work has
been done but the final plans for various sites are not
yet complete. In this week's press release NNRF
announced that ICES and NNRF personnel will apply
RadSeal in one of Rosatom's facilities in the Murmansk
region of northwest Russia. This will demonstrate
the application and effectiveness of of its
radiation encapsulation. This application alone speaks
to the high level credentials of NNRF as they work
alongside ICES. They also announced that they will file
their 10Q for the period January 1-March 31 2008 by May
20.2008. Press release below.
INNRF,
Inc. Announces RadSeal Russian Demonstration
Now additions to our
watch list.
Remember that we add many stocks to it each trading day.
AIV Over $40.80
EQR Over $44.60 - was on list before but
taken off an now back - golden cross in April
AMB Over $60.00 golden cross in late
April
TER Over $14.25 golden cross in
May
ZLC Over $22.35 - EMAs getting closer to
possible bullish cross
SEED Over $7.62 and into the gap.
AEZ Over
$3.70
SUF Over $4.15. This has just
made a nice run so would be fine if it consolidates a
while. Note that the last time in February that it had
very high volume it then pulled back.
SRCL Over $57.15. Day tradrs
may watch for a pullback also as it could move several
points if volume keeps high.
MTRX This
time over $24.90
This photo collection picked with thoughts of those new cloud
charts
Photograph by Alex Popov
Wind of Change
Photograph by Olaroid Denroid
Photograph by
Victor Deshenko
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
