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Charts courtesy of stockcharts.com

Sunday, November 30, 2008

Data Storm

Having found several reliable sources for data, I now have several spreadsheets full. One thing I need to do is learn an SQL database manager, as manually updating the sheets and manipulating the data is getting very time consuming. I haven't used a database manager since the days of dbase 3, so it will take me some time to learn.

From Finviz.com, I got data on institutional transactions. I don't know how recent or accurate the data is, but I ran the stocks on the earnings sheet to see what I would find. Above are the top 10 increases in institutional accumulation. The first thing I noticed is that these are stocks that have been absolutely creamed of late. It has been said that institutions buy on weakness and sell into strength, and this sure looks like the case here.


These are the bottom 10 in institutional transactions. Some, but not all, have been strong lately.

These are the stocks on the earnings sheet that have the largest percentages of float short. There are a couple of ways you can look at this: 1) You want to avoid stocks that are getting heavily shorted, or 2) you can look for possible short squeezes. It depends a lot on your tolerance for risk.

I normally don't do detailed fundamental analysis, mainly because I've found that technicals are far more important, but one factor I like to look at is return on equity (ROE). I'm not even sure what it is, but I do know that stocks, especially small caps, that have high ROE also have a high probability of growth. Here are the top 10 ROE stocks on the earnings sheet.

I am going to add a third sheet to the earnings sheet, putting all the data that I have on each stock together on one sheet. I will be uploading a new sheet shortly.

Saturday, November 29, 2008

Earnings Summary Week of Nov 24

There were only 2 stocks on the earnings sheet reporting last week: GBR, reporting decellerating earnings growth, and MXC, which has no data for this quarter last year.

Relative Strength Scans

The results of this week's relative strength scan, with industry group and percentage of 52 week high-low range from Zack's, along with float, short float, and net institutional transactions from Finviz.com.

IBD 100

I haven't been able to get my copy of IBD yet this morning, so I am relying on clearstation data, which is notorious for taking a long time to update. However, the difference between the biggest gainer and second biggest is so trivial this week it isn't worth worrying about. Overall the IBD 100 had a very good week, with the top 2 stocks gaining over 30% on the week. I have ISYS as the biggest gainer, .03% over NCIT. Last Friday, ISYS bounced right off a support level, and on Monday broke through the 200dma, which probably was the best enty point. I don't know if I would toch it here, for a couple of reasons: 1) Low volume, and getting lower as price goes up; and 2) relative strength, despite getting to a new high, looks a little weak to me.

NCIT was te second biggest gainer. Last Friday it undercut the 200dma on high volume, a very bad sign, but on Monday got a nice volume surge right back through it. I don't see a really good entry point, because there was no way to know that this was going to make such a big move. Had I been in it, I would have attributed it more to luck than anything else. It is right up against resistance here, and will probably pull back.

CPB was the biggest decliner, and last Friday gave one of those head fake moves that suck in a lot of bulls. It undercut the 200dma, but that attracted a high volume buying spree. It then collapsed on Monday and Tuesday (I believe it reported earnings on Monday), and got a decent bounce which softened the blow.


GENZ was the second biggest decliner, and there is nothing to love about this chart. It's been in a downtrend since August and has failed to get back above the moving averages.

I should be back with the relative strength scan later today.

Friday, November 28, 2008

Friday New Highs

Today's new highs, sorted by Zacks industry group (LOPE is not yet in Zacks' database, but it is a school. AIPC is not in Zacks' database, it is a food processing company).

Leftovers

Today has one characteristic that sticks out like a sore thumb: low volume. With the shortened trading day and the probable absence of a lot of the big traders, that wasn't a surprise. It's hard to draw conclusions from today's price action, but the SPX is slammed right up againdt the down trend line from the "bailout high". It's awfully hard to guess which direction we will go on Monday, but the TNX was dropping again today, so I suspect we might be headed for a pullback.

Yesterday the Nasdaq was the leader, today the laggard, with the Nasdaq 100 finishing negative on the day. It's hard to establish a trend when the indexes take turns taking the lead. Volume was incredibly low, even for a shortened session.

The Russell 2000 had a rather blase day, except for the fact that it has broken through the downtrend line. This could be a sign of strength, or it could be a head fake. We should geta clearer picture on Monday.


I have been waiting for quite some time for commodities to bounce back and start asserting leadership, but it just ain't happening, particularly in agriculture. Until the dollar stops rising, commodities are going to be held low, and I have no idea how long this is going to take.

I recently read that the pledges for the bailouts now exceed the inflation adjusted cost of World War 2. (I will try to find the reference and post a link later). I don't know about you, but I find passing off the cost of this to our children and grandchildren to be an obscenity.

COGT


One thing I need to do is spend more time on scans. COGT broke out to a new high after breaking a 52 week high going back to June, but the high volume increase last week should have caught my attention. Zacks' screener does screen for stocks making moves (1 week increase, 1 month, etc) and I can fairly easily scan for those. This has made a terrific move, but it might be too much too fast.

INT


This was a breakout from a couple of weeks ago, which pulled back and gave another entry opportunity, and is now breaking out again to a new high.

PW

There are a couple of interesting things about this stock. The name says it's a railroad, but according to both IBD and Zacks, it is a REIT. Today is got a volume "surge" t0o 24 thousand shares. The other intersting thing is that it has been in a very slow, steady uptrend for 2 years.

Thursday, November 27, 2008

The Way Of the Warrior


I started trading in late 2005, after having read William O'Neil's "How To Make Money In Stocks". I had virtually no knowledge of economics, and relied on the mainstream financial press for information. About April of 2006, I discovered financial blogs, and started hearing the bearish voices for the first time. By November of 2006 I had become bearish myself, and started realizing that a lot of what I was hearing in the mainstream was more propaganda than information. In early February, 2007, I started this blog, partially to help educate myself in chart analysis, and partially to counter the crap I was hearing from the Kudlows of the world. I knew things in the credit markets were getting bad, but I had no idea how bad. I expected a drop in the market in 2007, but I couldn't fathom it being cut in half like it has been.

The name "Samurai Trader" was more of an accident than anything else. I had several clever names in mind for the blog, and every single one was not available. In exasperation, I tried several more, just using words that came to mind, and "Samurai Trader" was available, so I took it. I knew who the Samurai were, but I didn't know anything about them. After a while, I started looking into who they were, and discovered a group of people that were about as far from Wall Street as you can get. The Samurai lived by a code they called "Bushido". It emphasized honor, loyalty, courage, and respect for your fellow man. I have always been deeply impressed with someone who can live by a strict code, because I am used to the "situational ethics" found too often in American business.

I believe we are headed for some very tough times ahead. Many people are losing jobs, homes are being lost, retirement accounts are being wiped out, and the government will probably be too strapped with bailing out billionaires to help. It is my hope that those of you who have made some coin in this market debacle will think about something: that maybe you can help. It may be something simple, like buying an unemployed Circuit City worker a lunch. Maybe giving a little money, or even some of your time, to a local homeless shelter. At the very least, don't live by the Code Of Wall Street, which seems to be "don't get caught".

"A swordsman's path shall never end, nor will the code of Bushidō. As long as there's someone to protect, as long as there is someone to carry on the code of Bushidō, it will not die. There will always be injustice and suffering, and one swordsman can't change the world, no matter how strong he or she is. But I can always protect those in my sight. I will always protect the weak and helpless, for that is the true code of Bushidō and I shall achieve this without taking a single human life. There will always be someone who will carry on my will and hold the sword which I hold, and carry on the code for it is something that needs to be pure and true, not altered by greed or evil. So if one billion people follow it wrongfully, or just a handful follow it righteously, it is the handful that are the true and strongest of all."- Ali Armani

Happy Thanksgiving everyone.

Wednesday, November 26, 2008

The Best Rally Since 1932?

Lots of bad economic news, a rising dollar, and dropping treasury yields told us that the market was headed down, and sure enough, it did gap down at the open, but quickly reversed and rallied all day. For the expected low volume, it made a huge move up, probably because all the big hedge fund boys doing the heavy selling took the afternoon off.

It was the Nasdaq's turn to lead today. In a bull market, you have leadership, you don't alternate leaders on a daily basis.

The Russell 2000 will be the first to test the down trand line. A break of this, and this rally just might be more than an oversold bounce.


The market disconnected today, the yield on the 10 year treasury dropping big again, and briefly breaking 3.0. This is another possible indication that the big sellers took the day off.

I happened to be able to watch a little CNBC today. The common theme: This week has been the best 3 days since 1932. Not exactly comforting news.

As usual, Wednesday night is the night I don't have internet access until late, and I probably won't be doing an udate tonight anyway. I do have a post planned for tomorrow, but if you are going to be busy tomorrow, I'll wish you happy Thanksgiving now.

EBS

EBS broke out to a new high on very good volume, but could not hold it and closed below the previous high. Relative strength is getting slightly weaker, CMF is on the low side for a stock trying to break out. This is getting very close to double the 200dma, which is usually where stocks get over extended and vulnerable to quick and nasty corrections.

STRA

A couple of points about this chart that are not good: Low volume, which is influenced by the pre-holiday slowdown, and relative strength dropping. CMF still shows accumulation, and the close was near the top of the day's range, but I am still a little dubious of this chart.

Wednesday Morning Update


Well, well, the dollar is up, and so is the market, for once. It's probably due to the pre-holiday low volume, but it just might posssibly be a break in the pattern we've been stuck in. The market did gap lower today, but has been rallying since. The SPX is now well off it's low at 841. The Nasdaq, taking it's turn to be weak yesterday, is strong today. XLY is the leading sector, XLU lagging, with XLE, XLB, and XLI shoing strength. The short squeeze in the financials appears to be over.

Stocks that are either breaking out or at new highs: EBS, HOTT, GVA, and STRA.

Tuesday, November 25, 2008

Tuesday New Highs


Today's new highs, I forgot to sort them. There is nothing on the earnings sheet reporting tomorrow.

The Squeeze Is Running Out Of Gas


Volume is shriveling as the Thanksgiving holiday approaches, and today was typical of a low volume day. We were threatening to head down all day, especially with drops in oil and the 10 year treasury yield, yet kept rallying on each test of support. Financials led today, energy weak.
One thing I am suspecting is that this was another bailout-induced short squeeze, and it is running out of gas.

The Nasdaq 100 was the laggard of day. One thing notable in these charts is how MACD is whipsawing of late, not giving reliable signals.

The Russell 2000 was in the middle, and hit a resitance level and stopped. This week probably will not get near enough volume to give us a decent hint as to where it is going.

The yield on the 10 year treasury dropped immediately upon the bond market open, and stayed down all day. These moves are absolutely huge, and not very comforting. Despite this, the SPX was positive, although it really didn't rally until after the bond market closed.

XHB is the ETF that tracks the home builders, which is the industry that made the biggest gain today. Since the home builder industry was the first to crack (back in July of 2005), it might be on of the first to reverse and indicate a market bottom is imminent.

I'll be back with an update tonight, later than usual.

CIA

CIA put in a nice try, breaking out to a new high on good volume, but pulled back below resistance. Relative strength is very high, CMF declined silightly while the base was being built. The only problem with this is the very thin average volume.

AGNC


AGNC is not in clearstation's breakout scan, probably because it is a relatively new issue and not in the database yet, but it did show up in a relative strength scan last night. It broke out today on very nice volume from a somewhat flawed cup with handle base.

OIH


I have been watching OIH (10day 15 minute chart). It broke the 20ma early, and can't get back above it. 77.84 looks like a good support level, if that is broken this looks like it would be a good short.

POSTSCRIPT: Written after market close

(5 day 15 minute chart) OIH kept teasing, putting several pins through 77.84, broke below it, then reversed sharply. I waited and waited for confirmation of a downtrend and never got it.

CIA


CIA has just broken out through resistance at 9.16. Volume is decent, could get better. This bears watching.

Tuesday Update

The dollar collapsed again just before market open on the announcement of yet another lending facility. Now the Treasury Dept is going to target consumer lending. WTF, are they going to start issuing credit cards now? The Dow rallied up this morning, led by JPM and C, but the SPX was lukewarm and the Nasdaq was negative. About an hour into the trading day, they all reversed and went negative. Energy is the weak sector today, financials strong.

I'm still waiting for my lending facility. I don't have crap loans for collateral, I have a pretty nice baseball card collection, and I'll settle for a paltry $1 Billion.

There are no breakouts yet on my scans, but there are a couple that might break out today. HOTT is rebounding after a couple of days of high volume selling, and briefly hit a new high. It needs better volume.

AGNC appears poised to test reistance and break out, but it is also in need of better volume.

There were no stocks on the earnings sheet reporting this morning.

Monday, November 24, 2008

Monday New Highs


Monday's new highs, IMCL and PHLY are acquisitions, LOPE is an IPO, and WGL was today's breakout.

In keeping with the tradition of AMEX stocks reporting earnings with no warning, GBR (up 0.5%), and MXC (up 14%) reported today.

Dollar Drops, Market Rallies

Another day, another bailout. The AP (via yahoo finance) has a nice timeline of the bailouts this year. I'm afraid to actually add up all the money the taxpayers are on the hook for, and it's likely to get a lot worse.

Before the market opened, the dollar dropped huge on the bailout news. That resulted in a rise in oil prices (by 9%) and a rally in financials, energy, and basic materials. We were in a pretty steady uptrend all day, right up until we hit resistance in the last 15 minutes and sold off. Volume dropped off quite a bit from Friday. MACD is whipsawing again. The market was badly oversold and a rally like this was overdue, but We won't be out of the woods until we can break the down trend.

The Nasdaq was almost identical. It also slammed up against resistance and pulled back. It's hard to say if the selling at the close was profit taking or short sellers selling into strength. Things could get quite interesting if we break through the resistance on big volume. Short interest is not at the nosebleed levels it was at last month, but still fairly high.

The Russelol 2000 was a bit stronger than the other indexes today, and also encountered resistance. On of the problems with V-shaped, straight off the bottom rallies is the overhead resistance.

The yield on the 10 year treasury shows just how unstable this market is. It is making insanely huge moves. It seemed like there was a panic out of treasuries of traders afraid of missing a rally in equities.

C made an almost immediate 50% jump, wiping out the shorts in the process. XLF made the biggest move of any sector ETF, but as I was watching, the SPX was moving in tandem with XLE, which was up 8%, only half of the XLF gain. Clearly this market is being moved more by the energy sector than the financials, which have lost too much market cap to make that big a difference.

How much longer can the U.S. Goovernment continue bailing out Wall Street before they themselves become insolvent?

I should have an earnings update later tonight.

WGL


The only breakout today. Volume was pretty low, but it did manage to close above prior resistance. Relative strength here is very good, CMF has remained high even during the October panic.

BMI


One of the big movers on the earnings sheet today, this is pretty indicative of the amount of damage in the market. After collapsing, this has been outperforming the market of late, but has a lot of overhead resistance to get through.

We Have A Breakout



The first of the day, WGL, a utility, is at a new high, but volume is on the low side.

Citigroup Saved By Treasury Pirates

The market is rallying huge on yet another bank rescue by the government. Stop me if you've heard this before. C is being bailed out and it appears the taxpayers will be on the hook for about $300 billion in losses. I wonder how much of that money will go to pay bonuses. Let's see if I have this right: If your business is shuffling paper and you make a lot of stupid moves and lose tons of money, the taxpayers will back you up. If you manufacture, oh, say cars, and the economy goes bad because of the actions of the first business, and your sales go into the toilet, you are SOL. Yep, I think that's about right.




Not surprisingly, the dollar is tanking on the news, sending prices up. The financial sector is leading, with energy, basic materials, and consumer discretionary strong, utilities weak.

Nothing on the earnings sheet has reported. There are no breakouts as of yet, but I will be watching for them and will post any as I catch them.

Sunday, November 23, 2008

News On The March

Somali Pirates in talks to acquire Citigroup, seek to become bank holding company.

The best line in tht article:

PAULSON: TARP PIRATE EQUITY IS AN `INVESTMENT,' WILL PAY OFF

The funniest thing is, in the wake of the last few months, this story is almost believable.

Weekly Charts

The bond market usually sniffs out problems in the economy well before the stock market does, so it pays to monitor what is going on. This past week saw a sudden and vicious drop in the yield of treasuries. TYX is the yield on the 30 year treasury. The weekly chart shows it has been in a down trend since May-June of 2007, just before the subprime crisis became a reality in July. MACD has been weakening since 2006. Last week's move was big, fast, and chewed right through any levels of support, meaning their was a mad scramble to get into them. Whether this is sustainable or not remains to be seen, but it looks like we are going to have a very interesting December.

The TNX is the yield on the 10 year treasury, and is the one I monitor most closely. Often the stock market moves in tandem with the TNX, with the TNX leading by a few minutes. If you look at the spikes in the last year, they roughly coincide with the "crises" such as Bear Stearns, Freddie and Fannie, and Lehman. They quickly reversed. This last move down coincides with the stock market breaking the 2002 low, and it has not yet reversed, which is troubling.


IRX is the yield on the 90 day treasury. This has made the most dramatic moves, and each crisis drives it lower. It has been yielding virtually zero, yet there was another rush into them last week, and again, no bounce back up.

Stockcharts.com has charts for prices and yields of all U.S. Treasury instruments. You can find them in the symbol catalog on the home page. You should also be able to monitor the yields real time through your stock trading platform, but they might use different symbols.

My understanding of the bond market is pretty slim, but I do know that money going into treasuries is not going into stocks, So if yields keep dropping on treasuries, that means that traders are more willing to take a low return rather than risk equities. I'll be monitoring these closely in the coming weeks.

If anyone can add to, or correct anything I have wrong, please do through comments.

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