What is truth?

Posts tagged ‘NASDAQ’

Facebook turns nasty !

SAN FRANCISCO (MarketWatch) — Shares of Facebook Inc. fell more than 8% to $35.09 on Monday morning, putting the stock below its IPO price of $38 per share on its second day of trading. Facebook /quotes/zigman/9962609/quotes/nls/fb FB -11.33% made its trading debut on Friday following its $16 billion IPO, with the shares closing the day with a gain of only 0.6%. More than 35 million shares of the social network were traded at least check.

Facebook  quote May 21, 2012, 10:43 a.m.

Real time quotes

 Previous close $ 38.23

 Current price  $ 33.81  Change  -4.42 -11.57%

Day low  $33.00

Comment:

There appears to be more fools with money out there than I thought!

Dow below 12000

Dow below 12000

I came across this guy and I found him hilarious (First
video clip) the first time and from time to time I drop in to see what he is doing.
I love when he changes his voice I swear he has AlPacino right beside him he
must be a huge fan I just love the excitement!

As a trader myself I do agree with most of what he is saying about a possible
QE3 however I think we will see a jump in the financials (bank stocks for a while that is)

Dow Theory Update and Values

Submitted
 
 by Tim W Wood CPA on Fri, 28 Jan 2011

At present, we have a Dow theory non-confirmation in place that began in mid-January. According to Dow theory, we must operate under the assumption that the previously established trend is still intact until it is reversed with a move above or below the previous secondary high or low point. In this case, a downside trend reversal would require a move below the previous secondary low point. Until such time, the primary trend change that occurred in conjunction with the March 2009 low still remains intact. Now, as for non-confirmations, they serve as warnings of a possible trend change. Non-confirmations do not mean that a trend change is inevitable, because it is possible that the non-confirmation can be corrected. It is also possible that the previous secondary high or low point will not be penetrated. The current non-confirmation can be seen on the chart below. If this non-confirmation is not corrected then I know from my trend quantification work that there are statistical guides that can be used to help us gauge the meaning of this non-confirmation as well as the expected outcome. I will cover that all in the research letters and updates if it continues to develop. For now, this is a warning that must simply be watched and measured against the statistical and other implications. Don’t confuse non-confirmations to automatically be a “sell signal” because in accordance with Dow theory, that is a misconception. There is much more to the story that just a non-confirmation. Rather, it is a process in which statistical and other structural evidence must be understood, weighed and considered.

djia-djta-1-28 

In the last post here on January 14th I talked about bull and bear market relationships. In that post I explained some of the big picture reasons that the rally out of the March 2009 low must still be viewed as a longer-term bear market rally. One of the items that I did not cover there was value. Value is another historical marker of secular bear markets. Historically, the dividend yield will be roughly equal to the price earnings ratio at secular bear market bottoms. I have used the S&P data here because I did not have this data as far back on the Industrials. At the 1932 bear market bottom the yield was 10.50% and the P/E was just under 10. At the 1942 bear market bottom the yield was 8.71% and the P/E was 7.3. At the next great bear market bottom in 1974 the yield was 5.9% and with a P/E of 7.24. If we take this same reading at the 1982 low the yield was 6.2% and the P/E was 6.9. For the record, these P/E ratios are based on Generally Accepted Accounting Principles and not the bogus George Orwellian methods of today. At the 2009 low, the P/E was 26 with a dividend yield of 3.2, which is hardly at par. Therefore, based on this historical measure, there is also no indication that the 2009 low marked the bear market bottom. It is for this reason along with the historical bull and bear market relationship issues covered in the last post here that I continue to believe the rally out of the March 2009 low is a longer-term bear market rally much like was seen between 1966 and 1974. I have also included a chart of that period below.

  djia-djta-cycles-1-28

I told my subscribers before the anticipated rally out of the 2009 low even began that it would be a rally of a higher degree and that the longer it lasted the more dangerous it would become. What I meant was, the longer this rally lasts, the more convinced people will become that the bear market bottom has been seen. In looking at this chart of the 1966 to 1974 period above, don’t you think that it would have been pretty convincing that the worst was over as the market moved up during the 26 month rally into the 1968 high? As is the case now, it was the Dow theory phasing, bull and bear market relationships and values that warned of the pending phase II decline that finally did follow and that carried the market down to another new bear market low. But, then came the rally separating phase II from phase III. In this case it was a 32 month rally. Stop and think about it. After another leg down into the 1970 low don’t you think it would have been an even harder sell to convince people that the low had not been seen? Yet, Dow theory phasing, bull and bear market relationships and values warned that the bottom had not been seen and once again they proved correct. In January 1973 the Industrials turned back down and plunged to yet another new bear market low in December of 1974. It was then, only weeks after that low was made, that Richard Russell was able to identify the bear market bottom and he did so because he understood Dow theory. Based on the bull and bear market relationships, we should be operating within a little larger version of the 1966 to 1974 bear market period. I realize that this is probably a hard concept for most to understand. But, if we stand back and look at the historical relationships we see that this bear market has likely not run its course. I have found specific DNA Markers that have occurred at all major tops since 1896 and it is these markers that can be used to identify the top of this counter-trend bear market advance. I sincerely hope that people are listening and that they understand the context in which this rally is unfolding.

source: http://www.financialsense.com/contributors/tim-wood/dow-theory-update-and-values

S&P Winning Streak Stopped, Metals Endure Tough Week

Submitted by Thomas J Smith CFA on Mon, 24 Jan 2011

The S&P 500 edged slightly above the high end of my price range target of 1289-1292 last week. However, then it backed off and broke its seven week win streak.  There was no technical damage done as the index held above the previous weekly low. The S&P did lose momentum and a close below the lows of last week in the 1270 range would be a negative. 

The Dow put in another good week as key components IBM and GE responded favorably to better than expected earnings reports. The narrow nature of the Dow, just 30 members, hid some distribution in the broader markets last week. The NASDAQ and Russell 2000 indexes closed below very near term support levels. The selling showed rotation in the market as several big winners from December have been sold off in 2011. 

Looking at the longer term Dow chart 12,000 is a key level. In 2008 the Dow broke down from support near 12,000 and selling intensified. So, that old support of 12,000 on the Dow is now resistance. As I write the Dow is within a stone’s throw of that level as the market starts the week off strongly. Let’s see how the index acts near the key 12.000 level.

chart source: stock charts

The metals complex saw continued selling last week. The selling intensified last Thursday on fears that China will aggressively hike interest rates to combat inflation. Gold performs best in a negative real interest rate environment. If interest rates increase to curb inflation the allure of metals is decreased.

The dollar continues its rapid decline this week. The dollar reached its lowest level since mid November. As of this morning the dollar Index is down for the ninth session out of ten bringing the slide to more than 4% during this period. This negative action in the dollar has given commodities a mild boost today. In the CRB index, 10 are lower and nine are higher. Cocoa futures are up sharply, over 4%, after the Ivory Coast put a month-long export ban in place. Cotton and lumber futures are limit up in early trading. The energy and metals markets are not responding favorably to the declining dollar, opposite of the trend over the past several months. 

As companies report earnings this month, a key factor in forward guidance will be how they handle rising input costs. With the CRB in a strong uptrend over the past several months management teams have been dealing with rising costs to the raw materials required in making their products. Companies that can pass through those additional costs to their customers will continue to thrive. Companies that cannot will see margin pressure and likely selling pressure in their shares.

McDonald’s, American Express, 3M, DuPont, EMC, Johnson & Johnson, U.S. Steel, Qualcomm and Starbucks are some of the key fourth quarter earnings releases for the week. How the market responds to these leaders will set the tone for the market this week.

source: http://www.financialsense.com/contributors/thomas-j-smith/s%2526p-winning-streak-stopped-metals-endure-tough-week

Broad Market Reversal

New York Stock Exchange on Wall Street in New ...

Image via Wikipedia

Broad Market Reversal

 by Chris Vermeulen

Better hold on to your hat!

This had been an exiting week for traders as the equities market was on a verge of a major sell off. Fortunately, we were watching the market very closely and saw the sentiment and market internals shift shortly after a new low was set last week. That was an early warning for us that a trend reversal to the upside could happen at any hour or day this week.

Wednesday and Thursday’s rallies were on solid volume and the market internal indicators along with market breadth were strong also. There has been a large surge of new highs across the board on the NYSE, NASDAQ and AMEX. These numbers tell me that it’s not just one sector moving the market; instead it’s a broad market advance (institutional buying).

While I don’t typically try to pick major tops or bottoms because of the added risks and lower probability of winning trades, I do tend to spot them forming a few days in advance allowing me to tighten stops and take some profits on positions.

Trend reversals typically have large violent moves near the beginning and end of their life cycle making things not only tougher to trade but potentially more costly. Once I see a trend confirmed with moving averages, volume, and sentiment along with market breadth that’s when I start looking to take positions on pauses or pullbacks to support zones. This greatly increases the odds of winning/making money from the market. There are some really great Options Trading Strategies for taking advantage of these volatility changes in the market which you can get at OptionsTradingSignals.com

SPY Daily Chart:

 

 As you can see the market has clearly broken to the upside above key moving averages after finding support at the 50 day moving average. This rally has some solid volume behind it which I like to see also.

The first 3-4 days of a trend reversal generally post some give moves but after that initial thrust expect a pause or pullback to happen.

SPY ETF Trading

SPY 60 Minute Intraday Chart:

 We were lucky enough to take profits on our inverse SP500 trade as the market started to give us mixed signals of a possible rally. A couple days later on Nov 26th we saw a major shift within the market sentiment preventing us from shorting the market again.

Two days later the broad market gapped higher triggering protective stops/short covering sparking a fierce two day rally which took the market up to a major resistance level. I do feel as though the market is going higher, but right now, everything is WAY over bought and trading at resistance. Even if the market moves higher for another 2-3 days and breaks this resistance level, it will most likely have a pause, or pullback as it regains energy for another thrust higher.

Trade SPY ETF

Mid-Week Trading Conclusion:

 In short, it looks as though the trend is now up and the Christmas rally could be gearing up for a good one!

source https://machholz.wordpress.com/wp-admin/post-new.php

Comment

Way ahead of you chris with this one

Market Brief

Wealthbuilder.ie

22nd. October 2010

 Getting Some Perspective

From a Dow Theory point of view this is the situation as I see it. The market is giving very strong signals particularly on the Transports side. My key break point is 5265 to give the first indication that the new Bull Run has commenced. We are currently at 4735. Near but not quite there. My key break point on the Dow Industrials is 13566. WE are currently at 11146 some 2420 points away.

 From a purely momentum perspective if the current positions on the Dow Transports and the Dow Industrials are solidly broken up through, even though the market is very overbought (based on fast and slow stochastics and the McClennan Summation index) it will very bullish short term. This situation is corroborated by price action on the NASDAQ and the S & P.

 As we are currently down the line on a fairly positive earnings season and it is understandable that when it ends there should be a correction, but if it proves to be mild it will offer an excellent buying opportunity to participate in your favourite value and momentum targets.

  Dow Transports: Weekly

 

 

Quarterly Market Brief & Stock Pick

source www.wealthbuilder.ie

Quarterly Market Brief & Stock Pick

The American stock market is still working through a consolidation phase following the magnificent run up since March of last year. The Dow transports have presented us with a new Dow buy signal but so far the Industrials have unconfirmed. The Dow 30 needs to break the 10,700 range convincingly before I will advise student clients to re-enter the market through their virtual portfolios.



The reason for this is clear. There are a number of major issues playing on the market and accordingly risk is high. In particular persistent unemployment, rising inflation, anticipated year end interest rate hikes and the planned end of quantitative easing are all still being priced into the competitive mix. I want evidence that this risk has been adequately discounted. Once we start moving to higher highs on both Dow 20 and Dow 30 we know that this process is over. Until that occurs the markets will probably be range bound as they have been since October – December 2009. If the confirmation signal is mixed it may prove problematic for valuations.

In general the QQQQ’s, the ETF for the NASDAQ, have been doing particularly well with AAPL breaking to new all time highs. This movement augurs well for technology moving forward, provided of course that the overall market returns to its former bull trend.

The dollar continues to grow in strength but this has more to do with a weakening Euro than any powerful fundamental growth in the American economy. In other words the issue is not who is the strongest but who is the least weak. As long as this is the case it will play havoc with Gold and Silver valuations and I continue to advise clients to avoid these metals in their virtual trading.

April is earnings season and I am looking forward with great relish to see how valuations in the market hold up. A lot will soon be told and how Wall Street reacts will give great insight on how to successfully play the rest of 2010. So keep your seat belts fastened and your minds focused.

Stock Pick

McDonald’s Corporation: MCD

Stock Fundamentals:

Dividend Yield:        3.5%

Financial Strength:    A++

Return on Capital:    21%

Return on Shr. Equity:    30.5%

Earnings Growth:    10%


McDonald’s Corporation finished 2009 in superb fashion and is one of my favourite choices for students learning the pension strategy.

Robust comparable store sales, margin expansion, and favourable currency movements were behind much of the earnings per share advance.

The momentum will probably continue into much of 2010. Although the economic recovery is taking shape, consumers are still looking to save money, especially in the face of high unemployment. Consequently, McDonald’s value and convenience have enabled it increase market share.

The company’s short and long term prospects look solid, Its dividend is secure and financial strength impeccable.

(Pension Strategy)

Note:    Since last March our pension portfolio mix is up a whopping 55%, including dividends, year on year. When one considers that this is our most conservative portfolio in terms of risk you soon realise the power of the recent stock market bull run. While we do not expect a similar performance this year from the pension portfolio over the last decade this strategy has proven itself to be ideal for those seeking an average 10-15% annual return with minimal risk and minor time allocation.

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