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

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