Archive for September, 2007|Monthly archive page

New Format

Greetings!

We’ve changed our reporting format, and will now email the Weekly Market Report to registered free subscribers.

To register for free please submit your email address in the form in the right column.

Paid subscribers will continue to get the weekly Setups as listed in the subscribers area of our site.

This blog will now transform into more of a traditional blog with random musings and updates of recent breakouts that were listed for subscribers.

We’re really looking forward to our daily updates and are excited about this fall’s trading action!

Stay Profitable!

The Growth Stock Report

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Fed Mode

Traders,

Odds and ends, odds and ends
Lost time is not found again.
– Bob Dylan “Odds and Ends”

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 market’s solid rally tells us a rate cut is being factored in for the FOMC meeting Tuesday.

The question is how big will the cut be? This may very well be a “sell the news situation.

Bulls fear that a mere 25 point basis cut and comments over inflation concerns would trigger a sell-off.

And what would happen if there is no cut?

Anything could happen from the meeting, and with recent high volatility, up or down, a move could be big.

It likely won’t be until Wednesday that we get a grip of the true outcome.

For these reasons, we want to avoid having too much market exposure before the meeting.

So far, the Follow Through Day in the Nasdaq from a couple of weeks ago appears to mark a rallying point.

If the environment stays bullish for this fall we know there will be opportunities, so no reason bet heavy right now.

Breakout selections in Biotech have been behaving nicely.

Technically speaking:

The Dow Industrial Average

($INDU), 2.5%, pushes higher for the week, closing on its 50-day MA.

The S&P 500

($SPX), 2.1%, also pushes higher for the week, closing on its 50-day MA.

Nasdaq

($COMPQ), 1.4%, consolidates on hits 50-day MA.

Russell 2000

($RUT), 1.0%, consolidates under its 50-day MA.

Volume indications were mixed for the week, though remain bearish over the past several weeks.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) slips to a new low.

The Gold & Silver Miners Index ($XAU) pushes the top of a year-long trading range.

The Consumer Index ($CMR) inches up to close on its 50-day MA, which is trending below its 200-day MA.

The Cyclical Index ($CYC) consolidates just above its 200-day MA.

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

The Semiconductor ($SOX) falls from its 50-day MA and finds support at its 200-day MA.

The Software Index ($GSO) inches above its 50-day MA.

Telecom Index ($XTC) conosolidates under its 50-day MA and above its 200-day MA.

The Banking Index ($BKX) rally off lows, though remain below the 50-day MA.

The Broker Dealer Index ($XBD) also rallies off lows, though remains below the 50-day MA.

The Retail Index ($RLX) also rallies off lows, though remains below the 50-day MA.

The Healthcare Index ($HCX) pokes above its major MA’s.

Biotechnology Index ($BKX) makes its way up the right side of a base.

Pharmaceutical Index ($DRG) rallies to the resistance of its 50-day MA, which is trending below its 200-day MA.

The REIT Index ($DJR) inches higher as it finds resistance at its 50-day MA, which is below its 200-day MA.

The Transportation Index ($TRAN) is consolidating below its 200-day MA.

The Airline Index ($XAL) consolidates below its 50-day MA.

The Defense Index ($DFX) pokes out to a new high.

The Energy Index ($IXE) makes its way up the right side of a base.

What Was Important About Last Week

STOCKS:

  • Texas Instruments (TXN) released an update stating it sees Q3 EPS $0.47 to 0.51, excluding $0.02 gain, compared to previous guidance of $0.46 to 0.52, vs. $0.49 consensus estimate. Revenues are forecasted at $3.56 to 3.72 billion, compared to previous guidance of $3.49 to 3.79 billion, compared to $3.66 billion consensus estimate.
  • Take-Two Interactive Software Inc. (TTWO) reported Q3 (Jul) loss of $0.64 per share, excluding non-recurring items, $0.03 better than the consensus estimate of ($0.67). Revenues fell 14.4% year over year to $206.4 million vs. the $200.8 million consensus estimate.

ECONOMY:

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Adobe Systems (ADBE)
  • TUESDAY: AutoZone Inc. (AZO), Best Buy Co., Inc. (BBY), Darden Restaurants (DRI), The Kroger Co. (KR), Lehman Brothers Holdings Inc. (LEH)
  • WEDNESDAY: CarMax, Inc (KMX), Dress Barn (DBRN)
  • THURSDAY: Bear Stearns (BSC), Circuit City Stores Inc. (CC), Goldman Sachs (GS), Nike (NKE), Oracle (ORCL)
  • FRIDAY: none

On the economic front we have potential market movers with:

  • MONDAY: NY Empire State Index
  • TUESDAY: PPI, Core PPI, Net Foreign Purchases, FOMC policy statement
  • WEDNESDAY: CPI, Core CPI, Housing Starts, Building Permits, Crude Inventories
  • THURSDAY: Initial Claims, Leading Indicators, Philadelphia Fed
  • FRIDAY: none

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“Right discipline consists, not in external compulsion, but in the habits of mind which lead spontaneously to desirable rather than undesirable activities.” – Bertrand Russell

CANSLIM SETUPS

Play It Safe

Traders,

I want to be a criminal

Play it safe
— Iggy Pop “Play It Safe”

Market Bias:

SELLERS’ 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:

More distribution tells us it’s not safe to be a Bull.

While the Technology sector is showing relative strength, the Nasdaq’s Follow Through Day has a lot going against it.

September is the worst month for the Bulls.

With many sectors facing resistance at their major averages it’s too much to bet against.

As many traders, speculators and pundits squabble over the market’s next move, we feel the safest and wisest thing is to lay low.

From a breakout buyers point of view there simply aren’t the setups to go for anyway.

Now is the time to preserve capital until stronger indications come forward.

Technically speaking:

The Dow Industrial Average

($INDU), -1.8%, rallies to its 50-day moving average before falling back.

The S&P 500

($SPX), -1.4%, also rallies to its 50-day moving average before falling back.

Nasdaq

($COMPQ), -1.2%, also rallies to its 50-day moving average before falling back.

Russell 2000

($RUT), -2.2%, consolidates below its major moving averages.

Volume indications go to the Bears for the week as the S&P and Nasdaq notch two days of distribution a piece.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dolar Index ($DXC) falls after skimming its 50-day average.

The Gold & Silver Miners Index ($XAU) rallies above its major moving average.

The Consumer Index ($CMR) consolidates on its 200-day average.

The Cyclical Index ($CYC) consolidates above its 200-day average and below its 50-day average.

The Technology Index ($DJUSTC) pulls back to its 50-day average.

The Semiconductor ($SOX) falls back below its 50-day average after rallying above.

The Software Index ($GSO) pulls back to its 50-day average.

Telecom Index ($XTC) consolidates under its 50-day average.

The Banking Index ($BKX) struggles under its 50-day average, which is below its 200-day average.

The Broker Dealer Index ($XBD) consolidates below its major moving averages.

The Retail Index ($RLX) falls back from its 50-day average, which is below its 200-day average.

The Healthcare Index ($HCX) consolidates on its major moving averages.

Biotechnology Index ($BKX) rallies and holds above its major moving averages.

Pharmaceutical Index ($DRG) consolidates below its major moving averages.

The REIT Index ($DJR) consolidates on its 50-day average, which is below its 200-day average.

The Transportation Index ($TRAN) consolidates below its major moving averages.

The Airline Index ($XAL) also consolidates below its major moving averages.

The Defense Index ($DFX) consolidates above its major moving averages.

The Energy Index ($IXE) rallies and holds above its 50-day average.

What Was Important About Last Week

STOCKS:

  • VeriFone Holdings (PAY) reported Q3 (Jul) earnings of $0.42 per share, ex items, $0.02 better than the Reuters Estimates consensus of $0.40. Revenues rose 57.1% year/year to $231.9 mln vs the $226.7 mln consensus.
  • J. Crew Group (JCG) reported Q2 (Jul) earnings of $0.32 per share, $0.03 better than the Reuters Estimates consensus of $0.29. Revenues rose 13.2% year/year to $304.7 mln vs the $308.7 mln consensus.
  • American Eagle Outfitters (AEO) reported Aug same store sales +9%, vs +6.7% Briefing.com consensus. It also reiterated Q3 EPS guidance of $0.47-0.48 vs $0.48 consensus.
  • Guess? (GES) reported Q2 (Jul) earnings of $0.40 per share, $0.07 better than the Reuters Estimates consensus of $0.33. Revenues rose 48.2% year/year to $388.3 mln vs the $345.6 mln consensus.


ECONOMY:

  • Non-farm payrolls declined 4,000 in August and revisions to June and July subtracted 81,000. The consensus expected a gain of 100,000.
  • Government jobs unexpectedly fell 28,000 in August. Excluding government, private sector payrolls increased 24,000, but were revised lower by 36,000 in June and July. Manufacturing payrolls fell 46,000 (the biggest loss since 2003), information fell 7,000, transportation and warehousing jobs declined 4,000. Financial jobs were unchanged. Healthcare added 49,000 to payrolls, while retail trade added 13,000.
  • The unemployment rate remained at 4.6% (4.642% un-rounded).
  • Average hourly earnings increased 0.3% and are up 3.9% versus a year ago – a level of wage growth similar to that of the late 1990s.
  • The ISM non-manufacturing business barometer (a measure of production growth in the services sector) was unchanged at 55.8 in August. The consensus expected a decline to 54.5. Levels above 50 signal expansion and levels below 50 signal contraction in the services sector.
  • Growth in non-farm productivity (output per hour) was revised to a 2.6% annual rate in the second quarter, up from an originally reported 1.8%. This was above the consensus expected 2.4%. Non-farm productivity is up 0.9% versus a year ago.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Shuffle Master, Inc. (SHFL)
  • TUESDAY: none
  • WEDNESDAY: Jos. A. Bank Clothiers (JOSB)
  • THURSDAY: none
  • FRIDAY: none

On the economic front we have potential market movers with:

  • MONDAY: Consumer Credit
  • TUESDAY: Trade Balance
  • WEDNESDAY: Crude Inventories
  • THURSDAY: Initial Claims, Treasury Budget
  • FRIDAY: Current Account, Export Prices ex-ag., Import Prices ex-oil, Retail Sales, Capacity Utilization, Industrial Production, Business Inventories, Mich Sentiment-Prel.

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

Nothing can be more hurtful to the service, than the neglect of discipline; for that discipline, more than numbers, gives one army the superiority over another. ” – George Washington

CANSLIM SETUPS