Thursday's new highs, sorted by industry
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The high volume advancers from the relative strength list.
The high volume decliners from the same list.
MFE reported after the close, and is up 3,9% AH. Tomorrow, from the relative strength list, we have AGP, reporting before the open, and SUR, time unknown.
This morning it looked like the bulls were taking total charge, gapping over 877 and taking us above yesterday's high. the "buy now before it's too late' mantra was probably being repeated over and over on CNBC, just before the rug got pulled out from under us. It didn't take long for 877 to fall, and we never got back above it. Unfortunately, there is just as much price congestion above 877 as below (the highlighted areas), and I don't think this rally has enough juice left to get through it.
The Nasdaq came out of the gates and headed right for the 200dma, coming within 5 points before pulling back. Today won't count as a distribution day because the close was higher than yesterday's, but it does look like distribution.
The Russell 2000 dropped like a rock during the pullback. If I was tempted to go short today, it would be here.
The Dow industrials have yet to clear the first area of price congestion. I am already hearing calls for re-structuring the Dow, as if that will improve conditions in the market. Hell, I'll bet there are 30 penny stocks on the pink sheets that are outperforming the Dow stocks.
New highs on the Nasdaq, with the new highs on the NYSE in the top panel. We are finally seeing improvement, especially on the Nasdaq, with today having the highest level since September.
The best case scenario, as far as I am concerned, is a pullback, on average to light volume, that lasts a few days. Watch for stocks, especially those on the relative strength list, that don't pull back. If the market takes off again, those will be the leaders. If we don't get a pullback, but continue to push higher, paradoxically I would consider that more bearish, as that is panic buying by the dumb money, and the big money boys are just waiting for the suckers to jump in.
I'll have the new highs and earnings update shortly.
UBET hit a new high yesterday on low volume, but followed through today on high volume. This is in a nice up trend since carving out a bottom late in 2008, price relative is strong, and CMF is showing accumulation.
EVR had a 52 week high going back almost a year, but the real breakout point was just below that. This is what you like to see in a breakout; increasing volume, strong price relative, and a nice consolidation pattern.
ARRS was sitting right on the 52 week high atr the close yesterday, and got volume and a gap up today on earnings.This is one of the better charts I've seen lately, with a definite uptrend since November, and a strong price relative line.
Not a true breakout, but what is remarkeable about this is that, at 19 million shares in the float, 49% of the float was short. I don't kn ow why so many of the relative strength type stocks are attracting short sellers. I like to liken holding on of these through earnings to palying craps, but in this case it was more like Russian roulette.
Item 1. The President of the United States has decided that Chrysler (a privately held company) will go into bankruptcy.
Item 2: The Treasury Secretary and the Chairman of the Federal Reserve threatened to remove the Chairman/CEO of Bank of Americca if it backed out of it's purchase of Merrill Lynch.
Item 3: The FDIC has announced it may offer financing to investors to buy distressed assets from banks, thus requiring them to put up no equity of their own, shifting all risk to the taxpayers.
I could probably go on and on, but you get the idea.
Karl Marx must be looking down on this and grinning like the Cheshire Cat.
Yesterday's probe above 877 looks like it had more significance than I thought it did, as this mornin we gapped up over 877 and are in the rarified air of the 880's, a place we haven't been in so long that a 6 month chart will no longer be adequate to show support and resistance. The catalyst for today's move is apparently a drop in unemployment claims. The number is still bad, but less bad than the last one. Leading up are XLY and XLB (but without gold), with strength in XLF and XLI, weakness in the defensive sectors XLP and XLU. Relative strength is in the Nasdaq, with the Russell 2000 lagging the Nasdaq, but still leading the SPX.
We are finally seeing improvement in the new highs, there are 35 so far this morning. Some promising breakouts include MRGE, ARRS, and NS. GMCR is not a breakout, but is a runaway gap up on earnings, up 42%. Also reporting last night were CIR down 4%, EXAC up 1.5%, ORLY up 7.5%, SXL up 1.5%, TIS up .9%. Reporting this morning: GSBC up 1.5%, HOS up 13%, LANC up 1%, MYL down 7%, WMZ down 1.7%, WPI up 1%. I did not have times for GTLS and TNDM, but they did report this morning, up 20% and 11% respectively. MFE is reporting after the close.
Wednesday's new highs, sorted by industry. We've been waiting for improvement here, it looks like we might be getting it.
The high volume advancers on the relative strength list. We have improvemnet here as well.
The high volume decliners. A lot of these are leading stocks, so there may be some rotation going on.
The stocks on the 2 watchlists that reported this afternoon:CIR down 6% AH, EXAC down 1.7%, GMCR up 17%, ORLY even, TIS not trading, and SXL up 3.8%. Those reporting tomorrow before the open: GSBC, HOS, LANC, MYL, WPI, and WMZ; Time not supplied: GLTS, MFE, TNDM; and after the close: None.
"Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower." Thus began the FOMC statement today, which had negligible effect on the market. There was a little volatility right after the announcement, and a brief rise to 782, before the final drop in the last half hour. The Fed appears to be becoming irrelevant, as they are seriously out of ammunition. Despite that, the SPX still has a bullish tint to it, as CMF continues to climb, and is now just below the level at the December peak. 867 seemed to be the pivot point today, as 877 provided resistance *except for the brief push above, the "bull trap" I mentioned this morning) and 857 was pretty strong support.
The Nasdaq broke out of it's range and appears to be headed for a test of the 200dma. CMF is now above the December peak, and may be indicating overbought conditions, but there really isn't any indications of massive selling on strength - yet. Price relative is flattening out again, so we may be headed for a pullback soon.
The Russell 2000 is also at a new high (for this up trend) and so has a new trend line. This one is still steep, but may be sustainable for a while. Price relative has broken out again, MACD histogram is positive, but still looks like it's going to flip soon. The only question is, does it do it before or after hitting the 200dma?
UUP is the ETF that tracks the dollar index. I prefer to do TA on the underlying index rather than the ETF chart, but stockcharts is late in updating the dollar index chart. I'm not sure what effect the Fed was trying to get her, but it took a shot up right after the decision, and never really came back down, so the late selloff in the market was not much of a surprise.
Bernanke is still making noise about buying treasuries. I don't think the bond market is buying it this time. The TNX went through a consolidation after bouncing back from the December drop, and broke out of it today.
From the statement:
"In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued." Understatement of the decade.
I will have the new highs update slightly early tonight, and will be off the internet totally until either very late tonight or tomorrow morning.
CERN is the earnings breakout of the day. The 52 week high here was 50, so this hass been in a long bottoming process. Today's volume was a little disappointing, but the close was near the high of the day, indicating virtually no selling pressure.
Another long bottoming pattern. this got crushed during the September-October crash, and has been slowly working it's way back up. Despite a lack of accumulation, there is a lot of strength here, and today's move cemented it into a strong uptrend. Watch out for a gap fill pullback.
LNN caught my attention as a big mover on the earnings list. It appears to be trying to reverse a nasty downtrend and broke out of a small consolidation earlier this month on earnings. It is facing pretty massive overhead resistance, but got a nice volume boost today, although the late selloff doesn;t look good.
GMCR mysteriously reversed today after briefly hitting a new high at the open. There was no catalyst that I know of for today's volume, and since it was reporting this afternoon, I thought that somebody got advance word of bad news. It turns out I was wrong, GMCR is up 16% in after hours trading.
The strange case of DNDN got a whole lot stranger after the close yesterday. It seems the Nasdaq was about to halt trading about 1:30 pm eastern due to a news release about Porvenge, a cancer drug that DNDN is now putting through tests. Seconds before the halt, a massive spike down took out several stops, knocking the price down over 50%. There was a mad scramble to buy up shares until trading was halted. the Nasdaq sent in the Keystone Kops to investigate, who said "nothing to see here, move along." Trading was resumed after hours, and the price went right back up to where it was, giving whoever bought up those shares at the last minute an enormous profit. What was odd about it was that there was a message on yahoo finance's message board for DNDN which said "High probability massive bear raid on DNDN at 12.30 pm central". I had the link, but Yahoo has since deleted the message. This case is so blatant, so outrageous, that the SEC had better do something if they expect to have a shred of credibility left. First of all, subpeona Yahoo and get that message, find out who knew what, and let's see some perp walks.
GDP figures came in this mornig, and they are just awful. GDP shrank at an annual rate of 6.1% in the first quarter. Howver, consumer spending was up, and the market is rallying on that news.
The SPX blew through 867 eaarly and is headed for 877. If that is taken out, this rally can easily go to 1000 or higher. if not, then we are still range bound. XLF is leading up (how increased consumer spending helps the financial sector is beyond me). XLV and XLU, the defensive sectors, are lagging. Uh, oh, the TNX, which was moving up early, has started dropping. Remember, we do have the FOMC decision today as well. I smell a bull trap.
I have 19 new highs so far. CERN is breaking out on earnings. ASC is also a promising looking breakout. On last nights earnings reports, we have BWLD down 6%, CERN up 8%, CRI down 2.6%, CTGX down 1%, FPO up 4%, PNRA down 10%. This morning we has reports from PAS, up 1%, and ZEUS, down 9%. This afternoon we will be watching CIR, EXAC, GMCR, ORLY, TIS, SXL.
Tuesday's new highs, sorted by industry. I was surprised that Finviz had their database updated so soon to reflect the symbol change for AAN. Good job, guys.
The high volume advancers from the relative strength list.
And the high volume decliners.
Earnings reports we are watching after the close today: BWLD, down 11% after hours, CRI down 5%, CERN down 3.5%, CTGX, not trading, FPO down 2.5%, and PNRA down 8%.
Tomorrow, before the open, we have PAS and ZEUS, after the close are CIR, EXAC, GMCR, ORLY, TIS, and SXL.
Another low volume day, and this time we don't have Air Force One to blame it on. The FOMC will be rekleasing their decision tomorrow, so I suppose we are all waiting for that, as if it has any relevance anymore. More of the same failed policies, from the people who didn't see it coming. Today we closed below 857, MACD is going negative, but RSI is holding up. This market looks like it wants to move down, but just can't build up any momentum.
The picture on the Dow industrials is no clearer. Price relative is in an incredibly strong downtrend, and the bounce here since March 9 looks weaker, but CMF shows no signs of distribution whatsoever. The buying may have dried up, but the sellers aren't out in force yet.
The Nasdaq is almost the mirror image of the Dow, with an incredibly strong uptrend in price relative, near normal volume, and a close above the open. MACD is looking like it's going tpo flip, but other than that there really isn't any sign of weakness here.
The Russell 2000 looks to me like it is running out of gas. It has outperformed on the way up (and outperformed today) but does look like it is going to pull back. But how far, and how fast, is anyone's guess. This looks like the most shortable of any of the indexes.
XLY started the day as the leading sector, over a full percentage point over any of the others. It finished the day even, in the middle of the pack. It's up against chart resistance and the 200dma.
It will likely pull back here. The resistance levels on the way up didn't offer much resistance; will they offer support on the way down?
One of the stocks I have posted below is DNDN. There is an article on Bloomberg about the strange behavior of that stock today, but anyone who has followed it the last couple of years shouldn't be surprised, it's done this a few times before. I had not noticed the trading halt (I became aware of it thanks to it being on the relative strength watch list I entered into clearstation). Spend your day watching a screen full of small and micro caps, and you'll see things like this quite often.
I'll have the new highs, and earnings report, update shortly.
AAN was an earnings breakout, and if you missed it at the open, it never gave another decent buying opportunity. One thing I noticed about this stock is how high the price relative line stayed during the febraury-March correction, but didn't go very high during the March-April rally.
One of the new highs. I suppose yoou can call this a failed breakout, although this wasn't really much of a breakout attempt. Volume was way too low and this has already made a big gain after the last pullback. Price relative is in an uptrend, but is not yet at a new high, so this is not a particularly strong stock.
This is why I don't get into news driven botech and drug stocks. Apparently some news about a drug test came across the wires, and in seconds this dropped from the low 20's to just around 8. What I find remarkable is how the gap filled in (almost to the penny), and how close the bottom was to the 50dma. I wonder how many astute traders were paying close attention to this and got it at 8, and how many of the sellers used market orders and saw the price drop 20-30% between the time they placed the order and it executed.
In the O'Neil system, the buy point in a cup and handle breakout is 10 cents above the high of the handle. In the case of AAN, this price point was hit right at the open, and it went up from there. A limit order entered pre-market is about the only way to handle a situation like this, but I hate to buy earnings breakouts until they have been trading at least a half hour, preferably an hour. I have seen many go up at the open, only to reverse and collapse (often during the conference call). Anyway, the O'Neil system also says never buy over 5% above the buy point, and we are well aboe that here. Let's see if it pulls back very far.
As promised last night, this morning I am looking at the last 10 days of the Russell 2000. From the low at 448 to the high at 482, the approximate mid point is 465, which looks like a pivot point. The low on this morning's gap down? 465. We are now in a "fade the gap" rally, with XLY leading the way, and XLF lagging very badly, with everything else stuck in the middle. Treasury yields also gapped down this morning, but are now rallying as well. Gold and oil are both down, as the dollar continues to rise. Today the FOMC circus begins, so I don't expect a lot of volume today.
There are 7 new highs, with AAN breaking out of a textbook cup and handle pattern on earnings.
Besides AAN (up 14%), last night's reports also included RCII, down 20%. This morning we had SMG, down 7%, and ICLR, up half a percent. After the close we will be watching BWLD, CRI, CERN, GTGX, FPO, and PNRA.
Monday's new highs, sorted by industry.
The high volume advancers from the relative strength list.
The high volume decliners.
Here nis a list of last week's new highs, with the number of days that they hit new highs. One thing i have been meaning to do is follow up on new highs, especially breakouts, to see how many are following through. I hope this isn't another case of collecting a lot of data for very little information, but we'll take a look over the next few weeks.
There were two stocks on the relative strength list reporting today that I misses. CHKP reported this morning and was down about 6%. AAN reported after the close and is up 8% after hours, RCII is down 5% after hours. Tomorrow ICLR and SMG are reporting before the open, BWLD, CRI, CERN, CTGX, FPO, and PNRA after the close.
The most notable thing about this chart is the low volume. Why? It seems that the U.S. Air Force buzzed lower Manhattan with a 747 and 2 F-16's, unnanounced, and panicked the streets below, including traders on Wall Street. What the hell were they thinking? They even flew by the Goldman Sachs building in Jersey City, causing an evacuation. The White House still has not explained the incident. It's getting weird out their, folks.
Despite the massive wierdness, the market did not surprise today. The sell-off was attributed to the fear of the swine flu spreading, disrupting any recovery attempt. But watching it intrady, it was testing and retesting support and resistance. 857 (where we closed) is a key pivot point, with a 20 point trading range in either direction. We may be in this range for a while, until there is something that pushes us above or below it, but right now the momentum is heading down.
I suppose the Nasdaq, being an all electronic exchange, wasn't as affected by the panic. This still doesn't look like it's getting ready to collapse, although it does look like a pullback is imminent. The Nasdaq 100 spent most of the day in positive territory.
The Russell 2000 took a pretty big hit today. This used to be the index I watched intraday (the SPX has been bouncing off pivot points almost flawlessly lately, so I watch that one). I may take a look at it tomorrow to get a better idea of the intraday support and resistance levels, as I suspect if the indexes crack, the Russell will be the first to telegraph it.
Logically, airlines would be vulnerable to a communicable disease scare, and sure enough, the airlines got hit hard today. I'll be looking for a retest of the 50dma, if that fails we may head for the March low. This index could be carving out a bottom here, that is, unless Bernanke's quantitative easing sends the price of oil up again.
Here is the XLE, with the dollar index in the upper panel. The relationship is pretty simple; weak dollar, high oil, strong dollar, low oil. Wednesday is another FOMC side show, so this could make a big move.
I'm expecting a lot of bizarre conspiracy theories to explain the incident in New York. What's really scary is that those conspiracy theories will probably be more credible than anything the government says about it.
One of the few successful breakouts today, this gapped 2 cents over it's 52 week high, and stayed above it all day. It pulled back sharply with the rest of the market, but closing halfway up the day's range on a day like this shows some strength.
One of the laggards in the restaurant industry, making a move. This is a reversal of a down trend which has yet to build a base, and today's failed breakout may be the start of one.
