Archive for March, 2010|Monthly archive page

The Bear Camp

Heavy sellers stepped up with a second day of distribution in a row for the S&P 500.

As we we’re starting to lean Bearish yesterday – we’re certainly parked in that camp today.

Short setups to be listed on Stock Report for subscribers.

Price Reigns Supreme

Wednesday gave us the second day of Distribution in a week on the S&P 500 and Dow.

This heavy selling is a sure sign that institutions are unloading. This is a concern for Bulls as volume shifts often lead price shifts.

But price reigns supreme. So as long as the market ticks in new highs we’re going to keep our ‘Buyer’s Caution’ bias.

Respect For This Bull

Not a bad rally following key healthcare reform.

While low-volume does little to take away from Friday’s heavy selling, or distribution, we can’t ignore the uptrend here.

While markets do in fact leave clear tops and bottoms, there’s often plenty of clues that giving warning.

Volume is key to discerning institutional flow, which in turn steers the markets.

Should we begin to see a trend of heavier volume on down days it will be a strong sign to avoid the long side of the market.

But we’re keeping our Buyer’s Caution bias out of respect for this bull.

Fear Of Heights

The bull’s momentum stays intact with the Dow, Naz, S&P and Russell 2K indexes all inching higher Tuesday.

But distribution from the Retail and Semiconductors threatens to take it all down a notch.

Volume precludes price-action – at least usually.

It should also be noted that the major indexes all notched in Accumulation Days, where volume on the advance was higher than yesterday’s.

The high-volume would be encouraging if the day’s move was bigger. But it wasn’t, and grinding action can be cause for concern for bulls.

A better grip on today’s action will be had as the week moves along. One day weighs little in the bigger picture.

Going With What We See

GSRTrades Weekly Market Report

 

Market Bias
Buyer’s Caution

 

Where We Are

The bull is alive and well with an uptick of new highs from key stocks and sectors.

Last week’s heavy-volume buying gives us an indication that institutions are stepping up in support of these prices.

These improved market dynamics have led us to adjust our market bias to Buyer’s Caution. What goes high often goes higher. We never argue with the market.

What’s important now is that we see quality stocks supported with breakouts. Not only is this good for our own breakout buying strategy, but the market would be prone to reversal without it.  

On the leadership front, we’re seeing a return of tech names, such as Apple, Inc., which bounced back from its pullback to peg a new high last week.

The tech-laden Nasdaq and Russell 2000 each made new yearly highs last week, as did the retail, biotechnology, airlines and defense sectors.

Strong basing action from financial stocks also gives this market some backbone. Without the support of banks we’d be less confident in this bull.

In fact, every stock sector is trending well above its major moving averages.  

But it’s important to keep it in perspective that our analysis and bias is reset every week and always prone to change, just as the market is.

While it’s true that some very sharp and successful speculators have come out as bearish this year, unless we have the price and volume clues to back it we go with what we see.

 

Technically Speaking

MAJOR INDEX BIAS & PERFORMANCE FOR WEEK
BIAS
Index
Chg.
%
Action
+
DJIA
+241 +2.33% Rallies above its 50-day MA
+

Nasdaq
+34 -0.25% New High for year
+

S&P 500
+34 +3.10% Rallies above its 50-day MA
+

Russ. 2K
-37 +5.96% New High for year
or = Above or Below 40-week exponential moving average. + = 50-day SMA is above the 200-day MA

FOUR-WEEK VOLUME INDICATOR BIAS
Accumulation
Distribution
BIAS
Index
Major
Minor
Major
Minor

DJIA
5 0 3 0

Nasdaq
5 0 2 0

S&P 500
6 1 2 1

Russ. 2K
3 1 2 0
Accumulation: index up with more volume than previous day. Distribution: index down with more volume than previous day. Major: > 60-day average, Minor: <.

SECTOR TREND BIAS & PERFORMANCE FOR WEEK
BIAS Sector % Action
+

U.S. Dollar, $DXC +0.11% Holds above its major MA’s
+

Gold & Silver Miners, $XAU +5.84% Rallies above its 40-wk MA
+

Commodities, $DJAIG +0.63% Holds at its 50-day MA
+

Consumers, $CMR +2.66% Rallies to new high
+

Cyclicals, $CYC +4.83% Rallies above its 50-day MA
+

Technology, $DJUSTC +3.19% Rallies above its 50-day MA
+

Semiconductors, $SOX +3.74% Holds just above its 50-day MA
+

Software, $GSO +3.96% Rallies just shy of new year high
+

Telecoms, $XTC +1.53% Trades between major MA’s
+

Banks, $BKX +2.44% Rallies just shy of new year high
+

Broker Dealers, $XBD +3.0% Rallies above its 50-day MA
+

Retail, $RLX +3.24% New high for year
+

Healthcare, $HCX +1.87% Holds just above 50-day MA
+

Biotechnology, $BKX +1.52% New high for year
+

Pharmaceutical, $DRG +1.26% Trades between major MA’s
+

REITs, $DJR +3.9% Rallies above its 50-day MA
+

Homebuilders, $DJUSHB +4.09% Rallies above its 50-day MA
+

Transportation, $TRAN +1.48% Rallies above its 50-day MA
+

Airlines, $XAL +0.77% New high for year
+

Defense, $DFX -0.55% New high for year
+

Energy Index, $IXE +3.76% Rallies above its 50-day MA
or = Above or Below 40-week exponential moving average. + = 50-day MA is above the 200-day MA

 

News To Watch This Week

Earnings:

  • MONDAY: Affymax, Inc. (AFFY), H&R Block, Inc. (HRB)
  • TUESDAY: J. Crew Group, Inc. (JCG), Jamba Juice (JMBA)
  • WEDNESDAY: American Eagle Outfitters Inc (AEO), FuelCell Energy (FCEL), Hot Topic (HOTT), Men’s Wearhouse (MW)
  • THURSDAY: Aeropostale, Inc. (ARO), Goldcorp (GG), Miller Industries (MLR), Quiksilver (ZQK), Rite Aid Corporation (RAD), Shuffle Master, Inc. (SHFL), Smithfield Foods (SFD), Stewart Enterprises, Inc. (STEI), The Buckle (BKE), Zumiez Inc. (ZUMZ)
  • FRIDAY: AnnTaylor Stores (ANN), Smith & Wesson Holding Corporation (SWHC)

Economic:

  • MONDAY: none
  • TUESDAY: none 
  • WEDNESDAY: Wholesale Inventories, Crude Inventories, Treasury Budget
  • THURSDAY: Continuing Claims, Initial Claims, Trade Balance
  • FRIDAY: Retail Sales, Mich Sentiment, Business Inventories

 

The Word On The Street

 

This Week’s Word On Discipline

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

 

This Market Report is our broad analysis that is the foundation for our Growth Stock Report, which highlights trading opportunities in individual stocks.