Showing posts from February, 2008

Semiconductor Holders (SMH)

The 50-day MAs are the talk of the town for the various indices. The SOX is stuck below its, but the Semiconductor HOLDRs ( SMH ) broke through - a nice follow through to Tuesday's higher volume resistance breakout. If this breakout holds it will be good news for the Nasdaq and Nasdaq 100 . In defence of the SOX , it is on the verge of a major breakout of both its 50-day MA and declining resistance from December. If it takes its lead from the SMH and breaks though it will create some room for a nice run to the 200-day MA. It's not hard to find wags waiting for the next decline, knocking recent market strength. I would prefer to see a more active retest of January lows, but the more I look at this market - the less I think this will happen. Trade my Stock Picks at

Durban Roodeport Deep (DROOY)

Durban Roodeport Deep ( DROOY ) has seen steady growth off the back of rising gold prices. The 20-day MA has proven itself to be a relatively good 'buy' point over the course of the last few months, but an alternative entry price could present itself if the mini-pennant covering the last 4 days breaks to the upside. The stock initially featured to newsletter Subscribers as a pick for January 25th [ $ ] after its bullish gap breakout. Existing holders could raise their stop to a trailing 1% break of the 20-day MA until it reaches my suggested target . Options players are out of luck on this one. The most recent PR was an upgrade from HSBC Securities on February 19th. Trade my Stock Picks at

Volatility and Zig Zag

There was an interesting relationship between profitable long trades in the S&P and the Zig-Zag indicator applied to the VIX. Over the past 10 years there have been 4 periods when a trade initiated at turns in the Zig-Zag indicator have turned profitable long trades - with no failures. The 'buy' side Zig-Zag signal has matched reaction lows in the S&P very nicely. The 'sell' side Zig-Zag signal has been a little early, although during the 2000-2003 Bear market it gave a perfect signal. However, one thing which has been consistent across 'sell' signals has been a lower 50-day MA compared to the 200-day MA. In the current market, this would approximate to another 6-months of VIX weakness/sideways action (and higher market prices). In terms of S&P returns it could be anything from 15-50% depending on market conditions (likely the lower end of this range for a bear market). Does this rank as another tick in the bull column?

Bullish Percents mixed once more

The Nasdaq Bullish Percent turned bearish with a drop below its 5-day EMA. If this weakness was to represent itself in the index I would look for a new closing low for February (but not necessarily a break of the month's intraday lows). However, the index does sit close to a break of declining resistance connecting January, and both February reaction highs - a big day this week would break through this resistance and likely negate the 'sell' trigger in the Nasdaq Bullish Percent: Better was the leading action in the Dow Bullish Percent. It finished Monday at 33% having managed a new reaction high for the month. This strength filtered through to the index Monday when it made its first break of the two reaction highs for February. Look for this strength to continue with a further push above 12,750 (but 12,200 can't be violated on a closing basis): The S&P Bullish Percents has yet to push above its February reaction high. The action in the index is a little better in t

Anyone for coffee?

In an article I wrote back in April 2006 I had talked a little about the expectations for soft commodities. My outlook at the time for coffee and cocoa where overshadowed by the subsequent rallies in the grains (corn in particular). However, taking another look at the long term chart for coffee there is an almost picture-perfect breakout from a cup-and-handle pattern for February with a 1996 price high of $300+ to aim for: Factor in growing demand from China (via Maoxian) and you have a nice recipe for future growth. Any supply problem from a crop failure would really set the cat amongst the pigeons. I did a quick search for stocks with coffee in their title and came up with the following: CBOU , DCFF , DDRX , GMCR , GWDC , JVA , PEET , SWS/UN.TO . Unfortunately, for companies like Peet's, Caribou's, and Starbucks , rising coffee prices will hurt these stocks. The London Stock Exchange has a Coffee ETF (COFF) , but I couldn't find something comparable for the U.S. market Weekly review

With the long weekend out of the way, what water has passed under the market bridge? Joe leads off with is his Crude Oil chart. Note resistance dating back to November of last year: Joe does not see the January bottom as significant for the S&P: Or channel support in the Nasdaq: However, the S&P does have Fib retracements to help: Ted has a number of interesting charts. First there is the band of support at 352 for the Semiconductors: With the Russell 2000 finding support at 689 But this support is countered by a breakdown in the point-n-figure chart which has a downside target comparable to a retest of January lows: Maurice Walker has another epic to read. Light at the end of the tunnel? The Financials were the catalyst to turn the market around in the last hour of trading on Friday. As CNBC reported that bond insurer Ambac is closer to a bail out deal expected to be announced Monday or Tuesday. The Financials had an intra day break down of their rising trendline being down


I am no economist, but if you look at the relationship between Crude Oil Prices and the 10-Year Treasury Note there was a fundamental shift over the course of 2007. The market shrugged this off until peaking in October 2007, but there has been no indication from this relationship that things will be changing any time soon. Will this mean more bad news for the markets? Hopeful bulls looking for rally targets may find indices 200-day MAs, rather than new highs, best bets forward.

Early signs of revival?

After a good day on Wednesday, what can the bulls pull out of the bag next? On a closing basis there was a modest resistance breakout in the S&P, helped by the earlier February 12th 'Buy' signal in the Bullish Percents. Having said that, the S&P Bullish Percents need to break 35% soon if the momentum of the signal is not to be lost. The Dow Bullish Percents do exhibit better health, only the index has to pick up the pace. Closing support at 12,200 remains strong. The Nasdaq Bullish Percents still ride the January 24th 'Buy' signal, but a breakout has yet to occur in the index.

Contango Oil and Gas Co, (MCF)

Contango Oil and Gas (MCF) has featured a number of times in my stock pick section of the website. Tuesday's little jump above a tight consolidation is a good opportunity to raise the stop - if not add to a little more, or take a new position. I haven't raised my price target . The stock has been relatively news shy of late, with quarterly earnings already out of the bag. Trade my Stock Picks at

No Weekly Review

Due to the long weekend there will be no review for this week.

Top 3 Dividend Stocks

I ran a quick scan for dividend paying stocks on MSN Screener with the following parameters: Current Dividend Yield >= 5% Market Capitalization >= 100,000,000 Div Yield: 5-year average >= 5% EPS growth YTD vs YTD >= 25% EPS growth Qtr vs Qtr >= 15% Return on Equity >= 17% The screener returned eleven stocks; best of the bunch were [1] Terra Nitrogen Co. LP ( TNH ): This has the added advantage of belonging to Agricultural Chemicals, ranked strongest sector according to . The weekly chart is looking tired with falling volume on new highs combined with a bearish divergence in the MACD trigger line. Should the stock trade inside a $72-$126 range it would be an attractive dollar-cost-average candidate. Those looking to pick a single entry price should look to the Fibonacci levels: $103.71, $106.66, $114.92 and/or the 50-day MA. Re-invest the somewhat erratic dividend and this could be a great long term hold as commodities (and their associated stocks) t

Wednesday Market Review

Current market opinion is available daily at my parent site . Subscribers to my newsletter get this information delivered to them by email. The 20-day MAs became the first scalp for bulls. Volume did measure as a (modest) accumulation day, negating Tuesday's distribution day. Last week's gaps for the NASDAQ and NASDAQ 100 are the next challenge on the menu for tech indices. The leading Russell 2000 , which was able to nudge a break of its 20-day MA yesterday, now has the 50-day MA only some 10 points away. Again, if the Russell 2000 breaks its 50-day MA I would expect the other averages to follow suit. Large caps [ Dow and S&P ] have a little further to run before they get to their 50-day MAs, with the tech averages ( NASDAQ and NASDAQ 100 ) the furthest away. However, the semiconductor index may help the latter indices as it closed 6% off its 50-day MA. The other area running in tech's favor is the relative leadership of semiconductors over the NASDAQ 100 -

Bullish Percents rise once more

The Bullish Percents have turned bullish (again!); although the Nasdaq Bullish Percent have been bullish since January 24th. The Dow is interesting as 12,200 looks to be support based on closing price . The S&P struggles a little and this could reverse as a whipsaw signal - but for now it is bullish. McClellan Oscillator holds on to bullish signal But indices remain vulnerable as recent gains fall well short of the prior week's selling. Double bottom confirmations will need 5%+ gains in the indices, which given the gains we have seen over the last few days could take a while.

Bullish divergences at play as Tuesday's gap breakdowns tempt....

There is one stock for today, Contango Oil and Gas ( MCF ) available in the free section of my main website and made available to readers of my newsletter. As for the markets it is still a waiting game to close last Tuesday's gap breakdowns, although the 20-day MAs are likely to get in the way first. As a sidenote, there is an interesting divergence at play in the Percentage of Stocks above the 50-day MAs. When the market bottomed in January only 15% of Nasdaq stocks were above their 50-day MA. This rose to 26% as the market made a new closing low for February. This divergence is further supported by the bullish divergences in the Ultimate Oscillator and MACD trigger line. Also look at how a negative divergence played out during the October top. Trade my Stock Picks at

Microcap Speculator: Financial Blog Search

Josh over at Microcap Speculator has created a new Financial Blog Search . Give it a test drive today. Weekly Review

Dr. Joe kicks the week off with his summary: Joe is marking a bottom for the Nasdaq: He has an interesting chart showing the correction in Citigroup during the last recession. Look at the volume... Even on the all-time chart: The monthly Nasdaq is on a bullish percent watch: Ted Burge has some important levels to watch in the Russell 2000: and QQQQs: Richard Lehman had this to say: 2/9 -- The big picture hasn't changed but the short term is really mixed. The larger trends are all still down and heading toward what should represent at least a retest of the former lows or even new lows. That may take a few weeks or more to develop though. Meanwhile, the major indices are getting there in their own ways. The short term mini channels are so unclear it appears the Dow is down, SPX is up, Naz, QQQQ, RUT and XLE up but almost at critical declining trend lines, XLF and XLK down. That says the short terms are almost anyone's guess right now. 2/7 -- Today's back and forth can be d


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