SPX with another retest of the lows on Friday and last Monday and last Tuesday. How now? Well a positive divergence on the MACD Histogram has developed which could indicate a solid bottom and a good time to buy(click on chart). My big worry, another cockroach in the financials like BSC.
Also, New Highs less New Lows on the NYSE/NAZ has plummeted from the numbers hit back at the January low - 1,959 net new lows on January 22/23 and 442 yesterday when the market hit almost the same 1,270 low. Another positive divergence.
Barron's this week with an interview of Bruce Berkowitz who runs the FAIRX fund. Biggest positions- S BRK CNQ MHK WCG LUK XTO USG PWE.
MORN rates FAIRX with 5 stars a .68 BETA, 1.01 Sharpe, Alpha of 8.26 and a 9.1 standard deviation. YTD in the top 1% of its category, top 2% in the last 12 months, 36 months and 60 months. Pretty pretty good and pretty pretty steady.
DJIA closes down 195, NAZ -51 and SPX -27.5.
Strongest groups- metals, oil service, utils and ags while brokers, airlines and banks were the weakest.
NYSE- 5/1 losers to winners;
NAZ -3.5/1 losers to winners;
NDX -8 WINNERS- LINTA PCAR IACI BBBY APOL SHLD ALTR;
OEX-4 WINNERS- BA S IP CSC;
IBD -15 WINNERS;
VIX- closes up 14% and is trading 14% above the 10 SMA;
TRIN- 2.23- maybe signaling a reversal on Monday- (BSC dependent)
Down volume about 12X Up volume; Fairly heavy at 1.85B shares;
Tech not so horrible despite the carnage on the NAZ- AAPL -1%, GOOG-1.1%, BIDU flat;
OIH down $1 or .57% after being way down earlier;
Dougie Kass with some interesting observations on realmoney.com- like selling off positions today in front of next week as the markets will be difficult to figure in lieu of more BSC news- and GS and MS big beneficiaries on the apparent end of the BSC era.
And C looking for a 1 point cut by the FED next week- Hmmmm.
Finally, if you beat yourself up on your bad trades- just keep this one in the back of your head- Joe Lewis with his $1.2 B investment in BSC now worth about $300M - so almost a $900 M loss in a quick 75 days.
So a pretty good call as the markets continue to worsen in the afternoon trade and more action by the margin clerk would not be surprising.
Metals up and metal stocks generally down;
Covering shorts this afternoon probably makes some sense as some good news may be out Monday morning;
Some talk "out there" that BSC stock could be worthless- management says book value in the "$80 area.";
Crude down to $110 and gold hovering near the $999.5 level;
Euro- 1.564 to the $;
VIX - UP 19% to 32.48- last time it was at these levels- "the rogue trader bottom Jan 22/23;
Next problem for the markets - C BAC WM NCC MS MER LEH GS?
NAZ not so good despite the remarks from Jimmy Cramer - down almost 60 and the BKX down 4.5% but not so bad - (sure); Either he can't read/can't see/ or can't do math; but definitely a clown;
And BESPOKE with some interesting facts since the bottom;
MOTHER OF ALL REVERSALS
There it is - BSC tanking to a 2 handle before the bounce back and if you think BSC is the only cockroach on the board well- this fish is not so sure.
Anyhow, DJIA now down 116, NAZ -24 and SPX -16. Just when we had all the happy talk of the double bottom and the take away from there. Not so easy. Oh and new 52 week highs for GLD/SLV.
Strongest sectors- metals, ags, defense, internets, retail and telecoms while brokers, gaming, banks, airlines and semis lag.
Key stocks- green includes BIDU BG POT DECK MA- losers LVS NVDA C NYX ICE UA MS MER WYNN CME;
NYSE- 1,800 net losers;
NAZ- 1225 net losers;
NDX- 10 WINNERS;
OEX- 6 WINNERS;
Down volume 6X the Up;
Careful out there as we probably go back near the lows.
Futures are ramping higher on the heels of the surprisingly benign CPI report. Before one gets too excited, remember, the rips have been excellent shorting opportunities and in front of the weekend - don't be surprised if that is the case yet again.
Technically, the bulls will tell you the 1.270 double bottom is in based on yesterday's turn around - bears will mention that 1,330 on the SPX has been a very difficult area to bust above. On top of that, FIB 23.6 level at 1,342 area and if they can get through there, the down sloping 50 SMA sits at 1,355- bottom line plenty of resistance above. Further- we are back in the middle of the 1,370/1,270 trading range.
PRETTY PRETTY VOLATILE
A typical wild day on the street with the DJIA moving down about 230 near the open and moving up to +90 and closing +35. RUT very strong closing +1.85% and the NDX +.9%.
Strongest sectors- metals, homies, biotech, small caps, oils, real estate and trannies while emerging markets, insurance, drugs and internets lagged.
NYSE- 475 net winners;
NAZ- 640 net winners;
NDX - 60 GREEN;
IBD- 75 GREEN;
WINNERS- ADSK LRCX AMGN STLD MRVL ISRG ATI UNH COF BHI SLE NYX MER CI BA EOG CHK GG RIMM TISI ARGN PQ FSTR WFR NDAQ RRC;
LOSERS- TTES HRBN MR HDB GIGM LVLT HANS YHOO WFMI UAUA BIDU AKAM INFY LEAP F WB S GM KFT CCU CSC TWX;
Up volume 1.5X Down volume;
RSI (2) levels:
Here we go again as markets moved up when most didn't expect it. Some nice comments from Barney Frank and S&P but I suspect their is still plenty of downside left.
Technically we bounced between SPX 1320 and 1280- so the lows held again. Brokers earnings next week and that shall be pretty pretty interesting. Bad news coming just don't know from who or when.
Markets are moving higher and Billy Crystal is stepping into the batters box in Tampa -and down swinging.
The RUT is leading the way and not sure why but that is what it is- Market internals a bit better than flat on the NAZ- and slightly worse on the NYSE.
Strongest sectors- metals, homies, biotech, airlines, small caps, trannies and oils while China, insurance, emerging markets and brokers lag.
Financials rapidly improving as talk of more government intervention comes to the markets.
Smart folks probably out shorting every rip higher and this certainly qualifies. My plan for now- sell strength and short strength- more problems ahead as one of these big institutions is going to have problems- and if you think its baked in the cake- watch BSC every day.
Markets not quite in crash mode but seem to be getting close- DJIA -230, NAZ -44 - SPX -27 and the rally from Tuesday seems like it was years ago.
Strongest sectors- metals, biotech, oils and semis while brokers, airlines, banks, insurance and gaming are the worst.
Market internals - 8/1 red on NYSE and 4/1 red on NAZ;
NDX - 4 GREEN;
OEX- 7 GREEN;
VIX - higher by 8% and nearing the supposed magic 30 number;
Markets are very weak and my guess any break of the recent low at 1,270 may bring on BIG selling.
Gold at 1k and oil at/near 111-
I suspect that markets will get worse over the next few months and a crash bringing the DJIA to 10,000 may not be far fetched. Would anyone be surprised to see a major problem at a big broker/bank? And if you think its all priced in to the cake- just watch BSC.
THE GART MAN
Dennis Gartman with a great tidbit of information this morning on how well the economy is doing in his clever eyes:
"we pay particular heed to tax revenues, for we believe tax revenues to be the clearest and cleanest information regarding the economy- As we like to say and simply put, no one anywhere has paid tax on business he or she thinks they are going to do, or upon profits they think they are going to earn, or upon hours they think they are going to work. People and businesses pay taxes only on profits they have indeed earned or upon hours they have indeed worked. For years, tax receipts have been running far above the government's figures on GDP growth, which we've used to argue that the economy was far stronger that the government told us it was. However, beginning in the autumn of last year, we began to watch with some sense of impending disaster as tax receipt growth rates were beginning to falter. Now they are plunging; the "faltering" state is behind us and the collapsing state is hard upon us. For the record, February's receipts fell to $105.72 billion compared to the $120.31 billion in receipts for February of 07. Treasury said both corporate and individual income tax payments fell. Treasury should have added that they did not fall..... they plunged. Spending for the month rose to $281.3 billion.....obviously a record for any February... from $240.3 billion last year."
Dennis is long gold and short equities expecting the ratio between the two to greatly increase in favor of the metal.
He will be guest hosting Squawk Box tomorrow morning.
Some evening links- Captain Kirk here with his take on SPX 1,300;
And Trader Mike with his nightly chart report;
More TICK TALK from Dr. Brett;
Check out the new site from Instant Bull;
BESPOKE with a stretched sector;
A new FIB article from Trading Markets;
This guy better be wrong;
Hulbert on Bottom talk;
W with some shrewd observations;
Finally, the girl who slayed wall street's fav;
Markets close near the lows and the DJIA gives up about 200 points from the morning high.
Strong sectors- ags and biotech with airlines, banks, oils, real estate and homies bringing up the rear.
VIX- UP a whole 3%;
Down Volume - 2X the Up;
NYSE- 800 net losers;
NAZ - 365 net losers;
NDX -60 GREEN;
OEX -40 GREEN;
IBD -35 GREEN;
Bulls looking at the next level of 1,300/1,305 - below there and most probably expect a return to the old lows.
Markets are off their best levels withe the DJIA losing about half its gain.
Strongest sectors- financials, gaming, ags, internets, biotechs and retail while airlines, energy, telecom and semis lag.
Pretty quickly folks forget how Spitzer went after Wall Street research issues- Anyone remember Blodgett etc. and the positive research on the IPO's etc- Jack Grubman- wasn't that all started by Spitzer?
Anyhow, markets hit a wall this morning somewhere near the SPX 1,330 level pullbacks are probably a buy today as folks are getting bullish.
Markets are slightly lower this AM with the DJIA -10, NAZ -9 and SPX -4.
Sector strength found in metals, utils, biotech and drugs and weakness in airlines, china, homies, trannies and real estate.
Key stocks - mainly lower with BIDU CAT GRMN MA C higher and KLAC VMW AMZN POT LVS CME TIF MS MTW ICE lower;
NYSE- 525 net losers;
NAZ - 430 net losers;
NDX- 50 GREEN;
OEX- 45 GREEN;
IBD - 35 GREEN;
VIX- up 1%;
Down volume 2X Up volume;
WINNERS- MTL WFR BVN SID MA AUY BBL VIVO COF CAT CPB CI ROK AMGN GOOG GE BIDU STLD SNDK ADBE SIRI FLEX;
LOSERS- UAUA KLAC APOL LVLT MICC NIHD ESRX UNH S F GM ALL WB UPS BDK BABY TTES HRBN FSTR VIP TITN GIGM EDU ARGN;
First level to watch on the downside- 1,315 then the 1,300 area- but looks like lackluster trading so far.
And Spitzer supposedly resigning this morning.
Morning readings- Dennis Gartman- congratulating Big Ben but still way short the markets and still looking at a big bear market. BESPOKE with their oversold market timing signals.
Gapping up- TMA TWTI DNDN QTWW JSO MBLX ING JCG UBS CS CAM BHP BCS CAT WWE AEO RTP STP STLD SOLF TTWO DB C SYMC SIAL CHK;
Gapping down- PGNX DIVX BLUD HUM CHPHD AMIE PSS AET UNH ICFI XOMA DPM KLAC MW AKRX GLBC CNDS WYNN NIHD AMGN CI TTES BLK ICE AAPL NYX;
Checking the charts- down trends look intact until /if 12,500 on the DJIA and 1,340/1,350 on the SPX. Also, note a positive divergence on the MACD Histogram as a higher low on the MACD and a lower closing price on the SPX- And even a buy signal on the Stochastic.
A nice day in the markets as the DJIA closed +417, NAZ +86 and 47 on the SPX. The RUT the biggest winner +4.6%.
Strongest sectors- china, banks, brokers, real estate, reits, emerging markets, homies, oils, small caps and trannies while biotechs, drugs, semis, defense and airlines were up but lagged.
Key stocks- all finished green with biggest moves in ICE MTW MS POT CME C NYX BIDU RIMM and BAC- laggards- LVS MO MCD VMW KO PG;
NYSE- 5/1 winners to losers;
NAZ- 3/1 winners to losers;
NDX -95 GREEN;
OEX- 95 GREEN;
IBD 100- 93 GREEN;
VIX- down almost 10% to 26.58;
90% of the 2B shares traded was to the green and that is a bullish signal;
Technically, DJIA 12k and SPX 1,300, initial resistance was child's play for the bulls with the next level of 1,315 also in the rear view mirror for now. Next area- 1,340- 23.6 FIB level and also the 50 SMA as of today.
So after this huge day- markets for the year are as follows:
RSI (2) levels:
What a difference a day makes- and how bout the great stuff from Liz Ann.
Markets are getting a second wind but resistance seems to be pretty heavy at SPX 1,300 and DJIA 12,000.
If you think its a Short covering rally - check these stats and also look at some new targets from the strategists.
Some work by the Pharma guy on PFE and its dividend and MORN on some ***** stocks.
And how about shorting some SPX etf's near these levels with a stop a bit above the 1,300 level?
GS now up $2+ after being up $7+ in the early trade.
One more important Obama endorsement.
Markets continue higher but well off their best levels of the day. The DJIA 12,000 and SPX 1,300 numbers were pretty good initial resistance. It will be interesting to see if they can put em in the rear view mirror before the end of the day- I doubt it.
Strongest sectors- banks, ags, oils, real estate, reits, brokers and metals while biotech, airlines, telecom and semis lag. And don' t look now, but crude is back to knocking on the $109 door.
NYSE- 1675 net winners;
NAZ- 990 net winners;
NDX- 75 GREEN;
OEX- 89 GREEN;
IBD 100- 85 GREEN;
WINNERS- HDB FSTR TKC MTL MOS JOYG MICC FMCN ISRG STLD APOL BBBY WB MS WFC COF C AXP RF POT FSLR PX STT RIG MTW;
LOSERS- LVS DECK CELG UA MCD ESRX VRTX AMLN NIHD QCOM FLEX AMGN XRAY S CI UNH TXN BA TGT RTN CPB CMCSA MRK;
VIX - 28.35 down 3.5%;
Up volume 5X Down volume;
Markets are higher on the heels of liquidity moves by the fed this morning. The DJIA is +235, NAZ +38 and SPX +23.
Strongest sectors- banks, brokers, ags, emerging markets, real estate and homies while semis, biotech, tech and internets lag.
Key stocks- 39/40 GREEN led by MS C POT MTW BIDU GS- lagging- SMH UA CELG MO MCD GRMN PG;
NYSE- 2280 net winners;
NAZ- 1500 net winners;
NDX- 90 GREEN;
OEX -95 GREEN;
IBD 100- 94 GREEN;
IBD 20- list out this AM and 12 of the 20 are in the oil patch. Just wondering if thats another topping signal. RIG EOG XTO HAL HES SU DVN NXY CHK CNQ APA ECA;
VIX- 27.7 and down almost 6% - trading 6% above the SMA 10;
For now - looks like resistance on the SPX and the DJIA are the 1,300/12,000 levels. If its gets there -1,315 on the SPX should be very important as it was the big line of support before the last few days.
RSI (2) levels at near 60;
Another day in paradise as the DJIA closes down 155, NAZ -43 and SPX -20 and 3 points away from the magic 1,270 number. Oh and some issues in the New York State Governor's mansion.
Strongest sectors- semis, utils, drugs, oils and internets while ags, airlines, brokers, metals and biotech were the weakest.
Market internals- 6/1 losers/winners on the NYSE and 3.5/1 losers to winners;
NDX- 15 GREEN;
OEX -15 GREEN;
IBD 100- 9 GREEN;
WINNERS- CMED BOOM ENS ICLR CEDC SVR TISI HES MA VMED APOL AMAT AMGN EXPE MCD ORCL TXN XRX HNZ BUD AMGN;
LOSERS- UNH CI LEH ATI C GM COF MER GOOG LVLT VRTX NIHD UAUA NVDA FWLT GILD MICC RIMM FMCN SMTS AFAM TITN MTL ARGN AGU FCSX FSTR;
VIX- nearing 30 and about 7% higher - trading 15% above the 10 SMA;
My proprietary overbought/oversold breadth indicator about as over sold as it gets and near levels it has been at other market bottoms.
RSI (2) levels- at near 3;
10 year Bond- 3.44%;
Going out on a limb and declaring a rally some time tomorrow as I have covered most shorts.
And just like that the markets head lower on the heels of some rumors regarding BSC- stock down 13% as I type while C breaks the $20 level. Remember how it was cheap at $30 - just wonder what kind of steal GOOG is here down at $420 and $325 off the highs.
DJIA -98, NAZ -25 and SPX -15 and under 1280. Remember the low and 61.8 FIB number is 1,270.
Sectors in the green- SEMIS- tech, gaming, utils with relative strength while ags, airlines, brokers, biotech, metals and homies with weakness.
NDX- 20 GREEN;
OEX -29 GREEN;
IBD 100- 9 GREEN;
NYSE- 1500 net losers;
NAZ -1050 net losers;
RSI (2) levels:
Five year Treas. yield at 2.335%- lowest since June 2003- 10 year at 3.46%;
Time to cover shorts here and now for a short term bottom - wouldn't surprise me - but would probably be happier putting out shorts at higher levels. FEAR in the air- a little anyway.
Markets open and the verdict so far is mixed- DJIA -20, NAZ FLAT, SPX -3.5. Small cap value green - small cap growth red;
Strong sectors- semis, airlines, gaming, trannies, homies, insurance, banks and tech while metals, ags, oils and defense lags.
Key stocks - also mixed with MCD UA WYNN BIDU MGM MSFT higher and ICE BG POT VMW DECK NVDA NYX GOOG lower;
Market internals- slight negative bias with NDX half GREEN and OEX 40 GREEN;
IBD 100- hurting today with 20 green- metals and oils dominate and most lower;
VIX - higher by a whole 2% almost;
Down volume about 2X up volume;
Market feels like it wants to move higher but all the mini rallies so far have been sold. Banks and financials doing a bit better than the market so just maybe they can lift it later in the day.
GS with these comments on briefing.com- "cannot rule out inter meeting rate cut by Fed Monday" "baseline case- is Fed holds off, cuts 50 bps at meeting;
Gapping up on my screens- VMED JOYG WYNN APOL MCD CMED OXY TCM FMT SEED TSO;
Gapping down - LVLT MICC CELG CMCSA GOOG DLB PCLN AUY AGU POT;
And believe it or not - more estimate cuts to brokers at Citibank;
Bob Brinker of the Market Timer newsletter says in his latest issue (March) that he expects the markets to "test" the January lows on lower volume and make new higher some time in 2008/2009. So far the lower volume theory is dead on- One may not think much of the radio personality but he did call the top in 2000 and the bottom in 2002/2003.
Ken Fisher, generally bullish and in the latest edition of Forbes- notes the following:
The credit squeeze-
"If you believe the popular economic myths of the day, you think there's a credit squeeze--less total credit available. This is nonsense. There's indeed less credit available to poor risks, individual and corporate. But that just means there's more for the good borrowers."
"Total corporate borrowing--that is, total U.S. corporate debt issuance--was higher in 2007 than in 2006. In January 2008 U.S. corporate borrowing was $101 billion, up slightly from the same month a year ago. The majority of this debt was of investment grade, meaning that it was rated BBB or better; within this segment the borrowings were up 12% from a year ago. Some credit crunch! companies are flush with capital and borrowing power. This is bullish, both for the economy and for stocks, especially stocks of big companies."
Ken on takeovers and buybacks:
"A parallel myth is that corporations have stopped doing takeovers and stock buybacks. Tell that to Microsoft. It's just that we've changed from a lot of small deals to fewer bigger ones. By the fourth quarter "credit crunch" headlines were ubiquitous, yet fourth-quarter 2007 announced takeovers were $478 billion, the fourth-largest quarter ever. The volume was a $116 billion gain from the third quarter. Share repurchase announcements in January totaled $59 billion, up 16% from a year ago. That's a $700 billion annual rate. The prior four months were also up--collectively, by 63.5%, to $276 billion ($828 billion annualized)."
And Ken's take on the big C:
"It's going to take years for the financial sector to recover from its excesses, just as it took years for energy to recover from the 1980 collapse and for technology to recover from 2000. Still, I like Citigroup (25, C). The stock costs less than half of what it did last year. The market value of $129 billion looks high against earnings of $3 billion. But those earnings reflect the subprime writeoffs. These writeoffs have simply nothing to do with the underlying business. Take them out of the equation and you find Citi going for four times operating earnings. I think this is a $40 stock by mid-2009."