Archive for April, 2007|Monthly archive page

Whata ya know? It's a bull.

Traders,

Everything you know is wrong
Black is white, up is down and short is long
— Weird Al Yankovic “Everthing You Know Is Wrong”

Market Bias:

BUYER’S EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

Whata ya know? It’s a bull.

We don’t want to look too hard at this market. It’s been very friendly to us.

Analysts across the Internet are laying it down as to how the market is right or wrong – but we here at the Growth Stock Report just sit back and laugh.

The market does whatever it wants, whenever it wants.

We don’t think it’s conceptually correct to believe the market “needs” or “should” do anything.

A perfect example is this week’s Barron’s where Michael Kahn writes “Technically Speaking, This Market Needs A Break”.

Kahn illustrates many fine tools for understanding technical analysis – but how do you make money with that?

Successful trading means positioning yourself to take advantage of good conditions for as long as they last, and exiting when things turn bad.

We never want to think we understand the market. But we must always know what we’re going to do. “Gain a dollar, lose a quarter” is the trader’s mantra.

Obviously some sort of pullback will be put in at some juncture. Where and when is beyond us.

Typically, price action finds a way to screw over the most amount of people, so we keep a close ear to what the common folk are up to.

Since the year 1900, this Dow rally ranks number four for duration, though is below average in magnitude.

As earnings season hums along, we expect more of the same. Mostly good news with an occasional disaster.

Thompson Financial estimates this earnings period will mark a 7% gain, which is double what Wall Street expected.

Technically speaking:

The Dow Industrial Average

($INDU), +1.23%, ticks further into all time high territory.

The S&P 500

($SPX), +0.65%, hits a new high before pulling back modestly at the end of the week.

Nasdaq

($COMPQ), +1.22%, picks up steam into new high territory.

Russell 2000

($RUT), +0.10%, ends the week unchanged after hitting a new high.

Volume indications remain bullish as the Dow and Nasdaq peg two days of accumulation, and the S&P 500 one day of accumulation.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) hits another low as its four-month slide continues.

The Gold & Silver Miners Index ($XAU) shies away from breaking out of basing formation. The commodity Gold pulls back from a double top pattern that teases as a cup-and-handle pattern.

The Consumer Index ($CMR) and The Cyclical Index ($CYC) register a new highs.

The Technology Index ($DJUSTC) breaks out to a new high.

The Semiconductor Index ($SOX) hits highs not seen since last spring.

The Banking Index ($BKX) consolidates for the week, still well below its February high.

The Retail Index ($RLX) also consolidates for the week below its February high.

The Software Index ($GSO) and Telecom Index ($XTC) continue to lead the Tech sector to new highs.

Disk Drives ($DDX) buck the trend with a new low for the year.

The Healthcare Index ($HCX) remains a market leader with a new high, as the Pharmaceutical Index ($DRG) and Biotechnology Index ($BKX) cool off with consolidation.

The REIT Index ($DJR) consolidates for ninth week in a row as it hangs below its 50-day MA.

The Transportation Index ($TRAN) trades in a bullish cup-and-handle formation.

The Airline Index ($XAL) airlines sink to a new low for the year.

The Defense Index ($DFX) hits another new high.

The Energy Index ($IXE) posts positive gains for the sixth week in a row as it hits a new high.

What Was Important About Last Week

STOCKS:

  • Amazon.com (AMZN) reported Q1 earnings of $0.26 per share, first quarter 2007 effective tax rate was 23% compared with an effective tax rate of 47% in first quarter 2006. Reuters Estimates said the reported actual of $0.26 was comparable to consensus of $0.15. Revenues rose 32.3% year over year to $3.02 billion versus consensus of $2.92 billion. The company issued upside guidance for Q2, saying it expects Q2 revenues of $2.7billion to $2.85 billion versus consensus of $2.69 billion.
  • Apple (AAPL) reported second quarter earnings of $0.87 per share, $0.23 better than consensus of $0.64. Revenues rose 20.8% year over year to $5.26 billion versus consensus of $5.17 billion. The company guided below consensus for the third quarter, saying it expects earnings per share of $0.66 versus consensus of $0.67.
  • Microsoft (MSFT) reported third quarter earnings $0.49 per share, $0.03 better than consensus. Revenues rose 32.1% year over year to $14.4 billion versus consensus of $13.89 billion. The company issued mixed guidance for the fourth quarter, saying it expects earnings per share of $0.37 to $0.39 versus consensus of $0.40.
  • Qualcomm (QCOM) reported second quarter earnings of $0.50 per share, excluding non-recurring items, $0.02 better than consensus. Revenues rose 21.0% year over year to $2.22 billion versus consensus of $2.19 billion. The company issued upside guidance for the third quarter, seeing earnings per share of $0.50 to $0.52 versus consensus of $0.46.
  • Ryland Group (RYL) reported first quarter earnings of $0.70 per share, excluding inventory valuation adjustments and write-offs, the goodwill impairment charge and a related change in effective tax rate, that may not be comparable to consensus of ($0.52). Revenues fell 34.3% year over year to $706.4 million versus consensus of $703.9 million. The company said that as a result of the uncertainty of current market conditions, it does not expect to achieve prior earnings guidance and is not able to provide new guidance at this time.
  • Wendy’s(WEN) reported first quarter earnings of $0.15 per share, $0.02 better than consensus. Revenues rose 2.0% year over year to $590.2 million versus consensus of $591.5 million. The company issued in-line guidance for the fiscal year of 2007.
  • Texas Instruments (TXN) reported Q1 (Mar) earnings of $0.35 per share, $0.04 better than the Reuters Estimates consensus of $0.31. Revenues fell 4.3% year/year to $3.19 bln (consensus $3.15 bln); gross margins were 51.3% vs. the street expectation of 49.7%. Co issued in-line guidance for Q2.
  • Altera Corp (ALTR) reported Q1 (Mar) earnings of $0.21 per share, a penny better than the Reuters Estimates consensus of $0.20. Revenues fell 3.9% year/year to $304.9 mln (consensus $310.2 mln). Co issued downside guidance for Q2.

ECONOMY:

  • The original estimate for first quarter real GDP growth is 1.3% at an annual rate, the weakest growth rate since early 2003. The consensus expected 1.8%. Housing lopped off 1.0 percentage point from the real GDP growth rate. Inventories and net exports exerted a combined -0.8 point drag on real GDP growth. A temporary drop in national defense spending subtracted an additional 0.3 points.Personal consumption plus business investment in equipment, software, and structures increased at a 3.6% annual rate.The GDP price index rose at a 4.0% rate in the first quarter, the fastest increase since 1991. Nominal GDP growth – real GDP plus inflation – grew at a 5.3% rate versus a consensus expected 4.8% rate.
  • New single-family home sales increased 2.6% in March to an annual rate of 858,000 from a downwardly revised 836,000 rate in February. The consensus expectation was a bounce to 890,000. At the current sales pace, the supply of unsold new homes dropped to 7.8 months. The decline was all due to the increased pace of sales, not falling inventories. As recently as mid-2005 the months’ supply was 4.3.
  • The median price of a new home was $254,000 in March, the second highest level ever and up 6.4% versus a year ago. The average price of a new home rose to $330,900, the highest ever and up 10.7% versus last year.
  • Existing home sales declined 8.4% in March to an annual rate of 6.12 million, the lowest since mid-2003 and substantially lower than the consensus expected level of 6.40 million. Sales dropped in all four major regions. The decline in sales was attributable to single-family homes as condo/coop sales were unchanged.
  • New orders for durable goods increased 3.4% in March, more than the consensus expected rise of 2.5%.
  • New orders excluding transportation gained 1.5% versus a consensus expected gain of 1.1%. Orders in February were revised up to a 2.4% increase from a previous estimate of 1.7%.The strength in new orders was mostly in transportation equipment, with civilian aircraft and parts up 37.6% and motor vehicles and parts up 3.3%. Orders for industrial machinery also contributed a large part of the gain, increasing 4.2%.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: American Home Mortgage Investment Corp. (AHM), RadioShack Corporation (RSH), Verizon (VZ)
  • TUESDAY: Atmel Corporation (ATML), Buffalo Wild Wings, Inc. (BWLD), DreamWorks Animation SKG, Inc. (DWA),
    DreamWorks Animation SKG, Inc (DWA), Eagle Materials Inc. (EXP), Marathon Oil Corporation (MRO), MetLife Inc. (MET), Procter & Gamble Company (PG), Qwest Communications (PG), Wyndham Worldwide (WYN), Yum! Brands, Inc. (YUM), Zoom Technologies Inc. (ZOOM)

  • WEDNESDAY: Applebee’s International (APPB), Barrick Gold (ABX), Garmin Ltd. (GRMN), Teva Pharmaceutical (TEVA), Time Warner Inc. (TWX)
  • THURSDAY: Bebe Stores (BEBE), Dean Foods (DF), QLogic (QLGC), Starbucks (SBUX), ValueClick, Inc. (VCLK), Williams Companies Inc. (WMB)
  • FRIDAY: Anglogold Ashanti Limited (AU)

On the economic front we have potential market movers with:

  • MONDAY: Personal Income, Personal Spending, Core PCE Inflation, Chicago PMI, Construction Spending
  • TUESDAY: ISM Index, Pending Home Sales, Auto Sales, Truck Sales
  • WEDNESDAY: Factory Orders, Crude Inventories
  • THURSDAY: Initial Claims, Productivity-Prel, ISM Services
  • FRIDAY: Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate, Unemployment Rate, Hourly Earnings, Average Workweek

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“The ability to concentrate and to use time well is everything.” – Lee Iacocca

CANSLIM SETUPS

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Broad Market Upside Ride

Traders,

Youll wish that you did, youll feel pretty stupid
Ill just sit and grin, the money will roll right in
— Nirvana, “The Money Will Roll Right In”

Market Bias:

BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

The major indexes charge higher as the first heavy batch of earnings reports rolls in.

Of about 25% of the S&P 500 companies reporting, approximately 67% of companies beat expectations.

The market is undoubtedly benefiting from the seasonal infusion of pension fund money.

With new highs across multiple sectors, we maintain our bullish bias.

Distribution on the Nasdaq could lead to a possible cooling of Tech stocks.

But the tone has been offset with accumulation in the Dow and S&P 500.

Technically speaking:

The Dow Industrial Average

($INDU), + 2.8%, blasts its way to a new high.

The S&P 500

($SPX), + 2.2%, hits a multi-year high.

Nasdaq

($COMPQ), + 1.4%, barely makes a multi-year high.

Russell 2000

($RUT), + 1.1%, inches its way to a new high, though shows some relative weakness on the week. s

Volume indications tilt to the as the Dow and S&P 500 make two days of accumulation. However, the Nasdaq does not confirm, posting three days of distribution.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index slides to a low not seen since early 2005.

The Gold & Silver Miners Index ($XAU) sits poised to breakout of a year-long base, which also serves as a multi-year head-and-shoulders-pattern. We love to see this generic technical analysis patterns get screwed up.

The Consumer Index ($CMR) hits a new high.

The Cyclical Index ($CYC) hits a new high.

The Technology Index ($DJUSTC) forms what may be the right side of a base, failing to hit a new high with the rest of the market.

The Software Index (GSO) and Telecom Index (XTC) hit new highs.

The Semiconductor ($SOX) inches to a new high as it breaks north of a six-month base.

The Banking Index ($BKX) rebounds off lows, though fails to make a new high. With many banks reporting earnings for the week, subprime woes appear to have been digested.

The Broker Dealer Index ($XBD) appears firm as it makes its way toward regaining a new high.

The Retail Index ($RLX) also appears firm as it makes its way toward regaining a new high.

The Healthcare Index ($HCX) Biotechnology Index ($BKX) and Pharmaceutical Index hit new highs.

The REIT Index ($DJR) shows relative weakness as it consolidates below its 50-day MA.

The Transportation Index ($TRAN) hits a new high.

The Airline Index ($XAL) shows weakness as it declines below its major moving averages.

The Defense Index ($DFX) hits a new high.

The Energy Index ($IXE) hits a new high, though remains unchanged for the week.

What Was Important About Last Week

STOCKS:

  • Google (GOOG) reported Q1 (Mar) earnings of $3.68 per share, excluding non-recurring items, $0.37 better than the Reuters Estimates consensus of $3.31. Revenues including Traffic Acquisition Costs fell 99.8% year/year to $3.7 mln vs the $3.57 bln consensus.
  • Advanced Micro Devices (AMD) reported Q1 (Mar) loss of $0.90 per share, excluding non-recurring items, $0.43 worse than the Reuters Estimates consensus of ($0.47). Revenues fell 7.4% year/year to $1.23 bln vs the $1.23 bln consensus.
  • American Express (AXP) reported Q1 (Mar) earnings of $0.88 per share, includes three gains and three charges, does not appear comparable to the Reuters Estimates consensus of $0.79.
  • Washington Mutual (WM) reported Q1 (Mar) earnings of $0.86 per share, $0.02 better than the Reuters Estimates consensus of $0.84.
  • Capital One Financial (COF) reported Q1 (Mar) earnings of $1.62 per share, $0.35 worse than the Reuters Estimates consensus of $1.97. Revenues rose 12.0% year/year to $3.43 bln vs the $4.07 bln consensus. Co lowered guidance for FY07, sees EPS of $7.00-7.40 vs. $7.68 consensus.
  • International Business Machines (IBM) reported Q1 (Mar) earnings of $1.21 per share, in line with the Reuters Estimates consensus of $1.21. Revenues rose 6.6% year/year to $22.03 bln vs the $21.85 bln consensus.
  • Intel Corp. (INTC) reported Q1 (Mar) earnings of $0.22 per share, excluding $0.05 gain from tax settlement, in line with the Reuters Estimates consensus of $0.22. Revenues fell 1.0% year/year to $8.85 bln vs the $8.96 bln consensus.
  • Yahoo! (YHOO) reported Q1 (Mar) earnings of $0.10 per share, includes $0.07 in option expense that analysts were including in their estimates, $0.01 worse than the Reuters Estimates consensus of $0.11. Revenues rose 8.7% year/year to $1.18 bln vs the $1.21 bln consensus.

ECONOMY:

  • The Consumer Price Index (CPI) increased 0.6% in March, exactly as the consensus expected. The CPI is up 2.8% versus a year ago.
  • Energy prices increased 5.9% in March. Excluding food and energy, the core CPI was up 0.1% in March and 2.5% versus a year ago, both lower than the consensus expected.
  • Core CPI inflation was held down by apparel and lodging away from home (hotels). Apparel prices dropped 1.0% (the second largest decline in more than seventeen years) and lodging away from home dropped 2.3%. Without these two components, the core CPI would have been up 0.2%, as expected.
  • Industrial production declined 0.2% in March versus a consensus expectation of zero change. In the past twelve months, industrial production is up 2.3%. All of weakness in production is attributable to a huge weather-related 7.0% drop in utility output, the second largest drop in seventeen years.
  • Manufacturing production increased 0.7% in March, the largest gain in three months, although production growth was revised down for both January and February.
  • Manufacturing output is up 2.6% versus a year ago. The production of high-tech equipment grew 3.2% in March and is up 24.7% versus a year ago.
  • Capacity utilization declined to 81.4% from a downwardly revised 81.6% in February. The consensus forecast was 81.9%. In the manufacturing sector, capacity utilization increased to 80.1%.
  • Housing starts increased 0.8% in March to 1.518 million units at an annual rate. The consensus had expected a slower 1.495 million rate.
  • Nationwide, single-family starts rose 2.0% and multiple-unit starts dropped 3.8%. By region, the rise in starts was entirely due to activity in the Midwest, where starts jumped 44.5%. Starts declined in every other region.
  • New building permits rose 0.8% in March to 1.544 million units at an annual rate, better than the consensus expected decline of 1.4%. All of the increase in building permits was attributable to single-family units. Building permits were down 25.9% versus March 2006.
  • March retail sales increased 0.7% overall and 0.8% excluding autos, both close to consensus expectations. February retail sales were revised to show a 0.5% gain, after originally being reported as up just 0.1%. Retail sales are up 3.8% from a year ago, 3.9% excluding autos.
  • The largest gains in retail sales were in gasoline, building materials, clothing and accessory stores, general merchandise stores (which includes department stores), and restaurants and bars. The rebound in building materials was the largest gain since January 2006.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Altera Corporation (ALTR), Amgen (AMGN), Boston Scientific Corporation (BSX), Plum Creek Timber (PCL), Texas Instruments (TXN),
  • TUESDAY: AT&T (T), Chicago Mercantile Exchange Holdings Inc. (CME), Coach, Inc. (COH), DuPont (DD), The Cheesecake Factory (CAKE).
  • WEDNESDAY: Affymetrix (AFFX), Allegheny Technologies (ATI), Apple Inc. (AAPL), General Dynamics (GD), Pulte Homes Inc. (PHM), Raytheon (RTN), Xilinx, Inc. (XLNX), XTO Energy Inc. (XTO).
  • THURSDAY: Beazer Homes USA Inc. (BZH), Boyd Gaming (BYD), Broadcom (BRCM), BUNGE LIMITED (BG), Countrywide Financial Corporation (CFC), Diamond Offshore Drilling Inc. (DO), ExxonMobil Corporation (XOM), Ford Motor Company (F), Microchip Technology (MCHP), Microsoft (MSFT), Newmont Mining Corporation (NEM), The Dow Chemical Company (DOW), XM Satellite Radio (XMSR).
  • FRIDAY: Baidu (BIDU), Ceradyne (CRDN), Chevron (CVX), Coventry Health Care, Inc (CVH), Ingersoll-Rand Co. Ltd. (IR).

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: Consumer Confidence, Existing Home Sales
  • WEDNESDAY: Durable Orders, Existing Home Sales, New Home Sales, Crude Inventories, Fed’s Beige Book
  • THURSDAY: Initial Claims, Help-Wanted Index,
  • FRIDAY: GDP-Adv., Chain Deflator-Adv., Employment Cost Index, Mich Sentiment-Rev.

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“Beware of endeavoring to become a great man in a hurry. One such attempt in ten thousand may succeed. These are fearful odds.” – Benjamin Disraeli

CANSLIM SETUPS

Bulls Hold Momentum

Traders,

Momentum for the sake of momentum
Neko Case “Lion’s Jaws”

Market Bias:

BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

New highs across various sectors gives the broader market something to shoot for.

If it weren’t for Wednesday’s heavy distribution on the major indexes, conditions would be more promising.

Nasty sell-offs like we had in February usually aren’t recovered from so smoothly. The V-shaped price-action found on the major indexes does not promote the sound basing environment technical analysts like to see.

But the market can do anything.

Rather than focus on all that’s wrong, it’s more important to look at what’s working. The Follow Through Day in the books holds.

Breakouts in Energy names continue to perform.

New highs in Software, Telecom, and Health related sectors set the tone for opportunity.

Subscribers to the report get the layout for single name candidates.

Technically speaking:

The Dow Industrial Average

($INDU), 0.4 %, pushes higher above its 50-day MA – closer to February’s high.

The S&P 500

($SPX), 0.6 %, moves comfortably above its 50-day MA – closer to February’s high.

Nasdaq

($COMPQ), 0.8 %, fills a downside gap on the charts as it trades above its 50-day MA, under February’s high.

Russell 2000

($RUT), 0.7 %, edges north of its 50-day MA, continue to win the relative strength game against the other major indexes.

Volume indications lean t the bears for the week with heavy distribution across the indexes Wednesday. It’s not enough to signal a bearish bias, but one or two more this week would do it.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The US Dollar Index ($USD) sinks to new lows for the year.

The Gold & Silver Miners Index ($XAU) moves further above its 50-day MA, and closer to negating a bearish head-and-shoulders pattern.

The Consumer Index ($CMR) comes within kissing distance of a new high.

The Cyclical Index ($CYC) positions to breakout of a bullish cup-and-handle pattern.

The Technology Index ($DJUSTC) consolidates above its 50-day MA.

The Semiconductor Index ($SOX) holds above its 50-day MA as it struggles in a tightening triangle pattern.

The Banking Index ($BKX) struggles below its 200-day MA.

The Broker Dealer Index ($XBD) consolidate below the 50-day MA and above the 200-day MA.

The Retail Index ($RLX) consolidates on its 200-day MA.

The Software Index ($GSO) breaks out to a new high.

The Telecom Index ($XTC) hits a new high.

The Healthcare Index ($HCX) hits a new high.

The Pharmaceutical Index ($DRG) hits a new high.

The Biotechnology Index ($BTK) hits a new high.

The REIT Index ($DJR) consolidates below its 50-day MA.

The Transportation Index ($TRAN) inches above its 50-day MA as it approaches new highs.

The Energy Index ($IXE) hits a new high.

What Was Important About Last Week

STOCKS:

  • Lam Research (LRCX) reported Q3 (Mar) earnings of $1.15 per share, $0.09 better than the Reuters Estimates consensus of $1.06. Revenues rose 2.7% year/year to $650.3 mln vs. the $644.7 mln consensus.
  • Research In Motion (RIMM) reported Q4 (Feb) earnings of $0.99 per share, including a stock-based compensation expense that was included in analyst estimates, in-line with the Reuters Estimates consensus of $0.99 and a penny below the First Call consensus of $1.00. Revenues rose 65.8% year/year to $930.4 mln vs. the $936.8 mln consensus.
  • Bed Bath & Beyond (BBBY) reported Q4 (Feb) earnings of $0.79 per share, $0.01 better than the Reuters Estimates consensus of $0.78. Revenues rose 18.4% year/year to $2 bln (consensus $1.94 bln).
  • Genentech (DNA) reported Q1 (Mar) earnings of $0.74 per share, excluding option expense & Roche redemption items, $0.07 better than the Reuters Estimates consensus of $0.67. Revenues rose 43.2% year/year to $2.84 bln (consensus $2.75 bln).

ECONOMY:

  • The Producer Price Index (PPI) increased 1.0% in March versus a consensus expected gain of 0.7%. The PPI is up 3.1% in the past twelve months and has climbed at an annual rate of 6.9% in the past three months.
  • All of the PPI increase in March was due to food and energy prices, which rose 1.4% and 3.6%, respectively. The core PPI was unchanged versus a consensus expected 0.2% gain. However, the core PPI is up 1.6% at an annual rate in the past year and 2.3% over three months.
  • Consumer goods prices increased 1.4% in March and are up at an annual rate of 8.6% in the past three months. Excluding energy, consumer goods prices increased 0.5% and rose 7.8% at an annual rate in the first quarter, the fastest quarterly growth rate since 1988. Capital equipment prices fell 0.1%, but are up 2.0% in the past year.
  • Core intermediate goods prices (ex-food and energy) increased 0.2% in March and are up 3.5% versus last year. Core crude prices increased 7.7%, are up at a 59.8% annual rate the past three months, and are up 24.7% versus a year ago.The trade deficit in goods and services contracted to $58.4 billion in February from a downwardly revised $58.9 billion in January. The consensus had expected an increase to $60.0 billion.
  • Exports declined $2.8 billion in February but are up 9.3% versus a year ago. The drop in exports was attributable to widespread weakness in capital goods, including computer accessories, drilling and oilfield equipment, and civilian aircraft.
  • Imports declined $3.3 billion in February, have fallen in four of the past six months, and are up only 3.4% versus a year ago. Petroleum accounted for the entire drop in imports, mostly due to lower volume rather than lower oil prices.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Citigroup Inc. (C)
  • TUESDAY: Ameritrade Holding Corp. (AMTD), Intel Corporation (INTC), International Business Machines (IBM), Johnson & Johnson (JNJ), Steel Dynamics (STLD), Washington Mutual (WM), Wells Fargo & Company (WFC), Yahoo, Inc. (YHOO)
  • WEDNESDAY: Abbott Laboratories (ABT), eBay (EBAY), Gilead Sciences (GILD), .P. Morgan Chase & Co (JPM), Kraft Foods (KFT), LaSalle Hotel Properties (LHO), Motorola Inc. (MOT),
  • THURSDAY: CBOT HLDGS INC (CBOT), D.R. Horton (DHI), Google (GOOG), Harley-Davidson (HOG), Marriott International (MAR), Merrill Lynch (MER), Nucor (NUE), The Nasdaq Stock Market, Inc. (NDAQ), UnitedHealth Group Inc. (UNH)
  • FRIDAY: Caterpillar Inc. (CAT), McDonald’s Corporation (MCD), Schlumberger (SLB), Xerox Corporation (XRX)

On the economic front we have potential market movers with:

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“Everything you want in life has a price connected to it. There’s a price to pay if you want to make things better, a price to pay just for leaving things as they are, a price for everything.” – Harry Browne

CANSLIM SETUPS

Damaged Bull Regains Footing

Traders,

Market Bias:

NO BIAS

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

The holiday shortened week gives little evidence to support a strong bias.

As the indexes climb above their 50-day MA’s we are encouraged to see Telecom, Energy and Biotechnology establish new highs.

But the broader picture portrays a damaged bull trying to regain its footing.

Though conditions lean slightly toward a positive environment for longs, it’s not enough to take a full swing at.

We’ve taken advantage of setups in Energy, as mentioned for subscribers, but few stocks are meeting our strict fundamental guidelines.

April tends to be a strong month for the indexes. We want to take things on a day-by-day basis, keeping an eye on price and volume for further clues.

Technically speaking:

The Dow Industrial Average

($INDU), +1.7%, claws its way back above the 50-day MA.

The S&P 500

($SPX), +1.6%, regains its 50-day MA.

Nasdaq

($COMPQ), +2.1%, closes at the gap left from early March’s downpour, and also conquer its 50-day MA.

Russell 2000

($RUT), +1.6%, trades above its 50-day MA for the second week in a row as it shows relative strength against the other major indexes.

Volume indications confirm an uptrend with a Follow Through Day in the books backed with an additional accumulation day across the indexes.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dollar Index slides to a new low for the year, trading well below its major MA’s.

The Gold & Silver Miners Index moves further above its major MA’s, coming closer to knocking out a bearish head-and-shoulders pattern.

The Consumer Index and Cyclical Index trade comfortably above their major MA’s.

The Technology Index recovers above its 50-day MA, with much work to do before regaining highs made for the year.

The Semiconductor Index consolidates in a trading range, closing just above its 50-day MA.

The Banking Index hugs its 200-day MA, trading below its 50-day MA.

The Broker Dealer Index trades between its 50-day and 200-day MA’s.

The Retail Index finds resistance at its 50-day MA.

The Software Index moves closer to a new high.

The Telecom Index hit a new high.

Healthcare cruises north of its 50-day MA, moving closer to a new high.

Biotechnology hit a new high.

REIT’s struggle below the 50-day MA and above the 200-day MA.

Transportation hugs its 50-day MA, with much to recover before regaining a new high.

The Energy Index broke out to a new high.

What Was Important About Last Week

STOCKS:

Immucor (BLUD) reported third quarter earnings of $0.21 per share, $0.02 better than consensus. Revenues rose 21.3% year over year to $57.1 million versus consensus of $55.1 million.

Micron (MU) reported a second quarter loss of $0.07 per share, $0.06 worse than consensus. Revenues rose 16.5% year over year to $1.43 billion versus consensus of $1.47 billion.

ECONOMY:

The ISM non-manufacturing business barometer (a measure of production growth in the services sector) declined to 52.4 in March from 54.3 in February. The consensus expected a rise to 55.5.

The ISM Manufacturing index fell to 50.9 in March from 52.3 in February. The consensus expected a smaller drop to 51.1.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Schnitzer Steel Industries, Inc. (SCHN)
  • TUESDAY: ALCOA Inc (AA)
  • WEDNESDAY: Bed Bath & Beyond Inc. (BBBY), Christopher & Banks (CBK), Genentech, Inc. (DNA), Research In Motion Limited (RIMM)
  • THURSDAY: Commerce Bancshares, Inc. (CBSH), Fastenal (FAST),
  • FRIDAY: General Electric (GE), Infosys Technologies LTD (INFY)

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: none
  • WEDNESDAY: Crude Inventories, FOMC Minutes, Treasury Budget
  • THURSDAY: Export Prices ex-ag., Import Prices ex-oil, Initial Claims
  • FRIDAY: Core PPI, PPI, Trade Balance, Mich Sentiment-Prel.

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This Week’s Word On Discipline:

“When things are steep, remember to stay level-headed.” – Horace

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