Tuesday New Highs

Tuesday's new highs, sorted by industry.

The high volume advancers from the relative strength list.


The high volume decliners from the same list.

SNX reported after the close, and is up 6% in after hoours trading.

Consumer Confidence Kills The "Window Dressing"

Being the end of the quarter, I had a thought, what better way to celebrate than look at a 3 month chart. We ended on a down note thanks to those pesky consumers, obviously they haven't been listening to Kudlow or their confidence would have, oh, "soared". Instead, they worry about loss of income (hey, that's what credit cards are for). We were right on the cusp of a breakout when the bottom fell out, and despite relatively low volume, it was higher than yesterday, which should qualify as a distribution day.


Both the SPX and Dow are in the process of forming a near perfect head and shoulders pattern. There was enough of a volume increase here to give us a distribution day. That should make 5 on the Dow, 4 for the SPX. That's a "get the hell out" signal.

The Nasdaq is also forming the same pattern, although the right dhould is much higher than the left shoulder. I'll have to research it to see if that means anything.

The Russell 2000 is weakening more rapidly than the other indexes, which usually happens when the market slips into a correction.

Here is the sector performance for the quarter. My question is, if the financial sector is so healthy, why are they getting taxpayer bailouts? Why not the consumer staples sector? What do you need more, credit cards or toothpaste?

Speaking of bailouts, here is a story I caught about a company that is about to go bust. I know, it's a Mexican company, but you can't make decent fish tacos without corn tortillas.

And also speaking of market manipulation, Zero Hedge has a story about "revised" data for San Diego area homes sales. Doesn't surprise me, I live in the San Diego area, and houses just are not selling.

I will probably be a little early with the new highs update tonight, as I may not have internet access later this evening.

OPTR

Just about the only breakout on the relative strength list, OPTR is breaking out of a poorly formed cup and handle pattern (the proper breakout was Friday. when it passes the high point of the handle). Volume just isn't there, and the price relative line is very weak.

HX

HX is a thinly traded stock that shot up huge on earnings. You kn ow it's thinly trade when a "spike" of less than 250k dwarfs previous volume bars. This is a good one to further investigate, as many big moves in fast growing companies start exactly this way.

Quarterly Performance - Earnings

Here are the quarterly performance figures for the stocks on the earnings list. The ones highlighted in yellow are the deletions. Most are in the lower half of performance, not terribly surprising, but we do have one oddity, TSL, which performed quite well despite a severe drop in earnings. Technical performance is not considered in adding or deleting stocks from the list, but it may be a signal that earnings may turn, so we should keep an eye on that. AXYS, of course, was deleted only because it is being acquired.

Breakout Candidates

MAIL is the only one that is actually at a new high, but it isn't getting volume. I also scanned for high volume, and canme up with interesting patterns in GERN and NEXM, but neither looks to me like a particlarly good buy right now.

Consumer Confidence Craters

A funny thing happened on the way to a breakout this morning. We were poised to get past 928 and get into a new trading range, and in fact did hit 930, but at 10:00 AM we hit a snag. Now,I'm thinking, what ould possibly have gone wrong? I checked the economic reports: 9:00 AM was the Case/Schiller Home price index, 9:45 Chicago PMI, and, uh oh, 10:00 AM Consumer confidence. It came in at 49.3, fully 6 points below expectations. And it was the last consumer confidence report that reversed a potential correction last month. "You live by the sword, you die by the sword". We are now below the pivot at 918, and hit a low this morning at 915. A further drop below 908 and we could be in trouble. Among the oddities I am seeing: A ramp jon in the TNX This morning at 9:00 AM (possibly due to the Case/Schiller release, oil pulling back after an overnight run to 72, and a pretty big breakdown in the XAU. No sector is showing any particular strength, but XLU is getting pounded pretty badly.In another role reversal, the Russell 2000 is the leading index, but the Nasdaq is not far behind. The Dow industrials are lagging badly once again.

There are 33 new highs, but none look like compelling breakouts so far. APOL is up on earnings, and the rest of the school group appears to be moving up in sympathy. This group may be starting to re-assert the leadership it had in March. On the earnings front, we will be watching SNX, which is on both the relative strength and earnings watch lists. It reports after the close.

Monday New Highs

Monday's new highs, page 1.

Page 2.

The high volume advancers from the relative strength list.

The high volume decliners from the same list.

Market Rises, Drags Oil With It

928 was our target for today, and we hit it (specifically, 27.99) a couple of times before pulling back. We've been expecting a ramp into the close and we got one, bringing us right back up to just pennies below 928. I can't draw any conclusions about volume, because even though I retrieved the charts a little later than usual, I still don't know how up to date stockcharts, volume data is. Anyway, we should be getting lower than normal volume due to a pre-holiday period.

The Nasdaq trailed all daym but is still by far the leading index. This reeally is not showing any signs of weakness, and hasn't been below the 50dma since March. MACD is getting ready to flip over again, and the price relative is strengthening.

The Dow industrials are becoming increasingly irrelevant. Volume has been declining, and when we get rallies, they are pretty tepid here.

The Russell 2000 was very weak today, and despite an imminent MACD flip, does not look terribly bullish to me, but not bearish yet either. My fear is that this is going to go into the trading range from Hell.


School stocks were the leaders of the early stages of this rally, but topped out by early April and went into a correction. The industry as a whole is now forming the right side of a base, and several may be approaching breakout points. We may be seeing a lot of rotation going on while we are stuck in this range.

Sorry about being a bit late, I will have the new highs update shortly.

DL

A Chinese school stock that went through a nasty correction in May, formed a handle this month, and broke out on high volume today. This could be the group to be watching in the next few weeks.

KONG

Judging by the name, I would say these guys are Chinese. Another formerly thinly traded stock that went into an up trend and started attracting volume. It jsut went through a month long consolidation where it didn't quite get to the 50dma. CMF has been in a decline since April, but the price relative line is quite strong.

FUQI

FUQI was #1 on this week's IBD 100, which may account for today's high volume. This has had a high EPS rating in IBD for quite a while, but couldn't draw flies for volume until it started getting some back in May. It's pretty seriously extended above the 200dma (along with hundreds of other stocks, most of which refuse to drop), but the price relative line says that this still has a lot of strength.

MFE

Notable for a) a perfect pullback to the 50dma, and b)not being Chinese. There was not catalyst for today's volume that I could find. CMF shows a lot of accumulation since this hit bottom in March. The only flaw here is a weak price relative line.

CNBC Lets The Truth Slip

I said I ws going to try to stop inflicting CNBC videos on my readers, but this one is so good it's not funny. Zero Hedge beat me to it, so you can go there and watch it.

This line is classic: "This market continues to be propped up by Government intervention and manipulation." The censors at the Ministry of Propaganda must have been asleep.

Earnings Schedule This Week

We have only two stocks we are watching reporting this week:

June 30 AMC - SNX (on both lists)

July 1 BMO - LNN (earnings)

Monday Morning Update

This morning i had the idea of looking at the 10 day chart without looking at the daily first, just to see if I get different numbers. the 10 day high is 928, the low is 888, a 40 point range with 908 right in the middle. Since we are in the upper half, I cut the upper range in half, putting a line at 918, which has been in the general areas of chart support and resistance. As I am writing, the SPX has tested the upper boundary, biuncing off 927. A break above and we are in a new range, but a test of 918 could come later. Today's leading sector is XLE, as oil has recaptured the $70 level. Close behind is XLI. Relative weakness in XLV, XLF, and XLP. Leading is the Dow, lagging are the Nasdaq and Russell 2000, the Russell quite badly. The TNX is having a "fill the gap" rally after a gap down this morning.

There are freaking 51 new highs already. One thing I am noticing is a lot of gaps ups followed by sharp sell offs. As far as breakout possibilities, look at SMED, OMN, and SPAR. One thing I didn't do this weekend is check the earnings schedule for this week, so I will do that during the day today.

Top Performing Industries, Quarter 2

It's not quite the end of the quarter, but I ought to get this done while I have the time. Here are the top 20 performing industries (according to the screener at Finviz) for Q2.

Here are the bottom 20. It's odd that Hotel/Motel REITS would be the top performer, as I was reading somewhere just this morning about a huge increase in loan defaults among hotels/motels.

Earnings List Additions

Here are the stocks to be added to the earnings spreadsheet for this quarter. A couple have short histories of earnings, but there were so few stocks actually growing earnings I really relaxed the standards to get some additions.


ADY, ALX, CVGW, EEI, EVOL, GMCR, GTIV, LINC, ISH

GMCR has a float slightly bigger than 30 million, but I'll let it in, so we have a totalof 10 subractions and 9 additions, still nicely under the limit of 100 I had originally set.

Last quarter I over estimated the time it would take to redo the sheet, so let's hope this tinme I haven't under estimated it. I still plan to have the update done before July 1.

The White Whale

Like Ahab pursuing Moby Dick, I have had an obsessive relationship with something that IBD calls the "supply/demand" rating. This is another of their proprietary ratings, meaning they won't ell us how it is computed. Stocks are ranked from 99 (best) to 1 (worst). However, they do not list this rating in their stock tables (they have a rating called "accumulation/distribution" rating that they do list; it is rated a through E and just about worthless), but do list it on the weekly charts they publish in the paper. One thing I have noticed is that stocks rated over 90 consistently trade above the 50dma, so I really wanted to see how they compute it. I read once that they somehow combine shares traded with the number of shares floating, and once I was able to get a reliable database of number of shares floating, I started playing with it and came up with "volume per million shares" dividing the average daily volume (from Zacks.com) by number of shares floating (from Finviz.com). This week I looked at the top 20 v/ms stocks from the relative strength scan, and noticed that several were also on the IBD 100. Aha, now i can see how the v/ms value compares with the IBD rating. Above are the top 20, and in the third column, the supply/demand rating for the members of the IBD 100. I wanted to see if there is a correlation. I can see two problems already: first, the sample is too small, I really need to do a more comprehensive (and time consuming) study, and second, Zacks.com gives average volume for the last 20 days, and I supect IBD goes back farther than that. However, of the 9 IBD 100 members on the list, 6 are rated over 90, so I may well be on the right track.

Stay tuned, this study might actually go somewhere.

Honduran President Deposed

Honduran President Zelaya has been arrested in an apparent military coup. Zelaya, an ally of Venezuela's Hugo Chavez, is reportedly being held at an air force base. He has been at odds with both the military and the country's Supreme Court over constitutional issues.

Look for more of these types of actions as the world economic crisis continues.

Earnings Spreadsheet Deletions

I have done the deletions for this quarter from the earnings spreadsheet. I based them on dramatically slowing earnings growth (more properly, dramatically increasing negative growth) and settled on 10, although I could have picked quite a few more. I am going to wait to see if we get some earnings reversals next quarter (green shoots, you know), but if we don't next quarter could be quite brutal. The first, AXYS, was easy because it is being acquired by GD. The other 9 are:

ASTE, CIR, CRK, DXR, GEF, IIIN, SHLM, SNSTA, TSL

These will continue to be tracked offline, and if they show signs of reversal they might end up back on.

On a housekeeping not, now that I have downloadable float data, I am changing the criteria to 30 million shares or less. Any that are currently on it with more than 30 will be grandfathered in.

I am working on possible addition, and I hope to have that done today. my plan is to have the update entirely done before July 1.

Relative Strength Performance

Here are the top 25 performers for the week from last week's relatice strength scan. One thing to note is the good performance for the past year of many of these, indicating that leadership of the last rally is not the leadership of this rally.

Earning Summary Week of June 22

Reporting a quarter of accelerating earnings growth - None

Reporting a quarter of decelerating earnings growth - None

Reporting a quarter of negative earnings growth - AVA, AZZ, FRD, RBN

I will try to have the additions and deletions to the earnings list done by tomorrow night, and should have the spreadsheet completely updated before July 1.

The relative strength spreadsheet has been uploaded.

Relative Strength Scans

Here are the results of this week's relative strength scans. My methods did not change from last week. I will have the spreadsheet updated and uploaded later today.

IBD 100

CYOU is obviously a recent IPO, and part of that industrial powerhouse group, Chinese online gaming. I shouldn't complain, leave it to the communists to figure out how to make money with a dot com. It was also the biggest gainer on last week's IBD 100. It hasn't been trading long enough to form a proper chart pattern, other than a line going up. As of last Friday (blue arrow), it was in the middle of another pullback, probably about the best entry point you could get.

DDRX was the second biggest gainer, and to say this is extended is the understatement of the decade. I'll have to shorten the time fram on the chart in order to properly read it. Yesterday it got it's best volume in the last 6 mnths (and probably all time), so this isn't likely to collapse anytime soon. If you caught this back around 25 cents, you are a trading god.

MCRS was last week's biggest decliner. As of last Friday's close it appeared to be in a somewhat orderly pullback to support, and looked like it was going to bounce, but yesterday had a high volume collapse right through the 50dma. I can't find any reason, and there was not a lot of warning. Ouch.

NEU was the second biggest decliner, and it to looked like a pullback to support, but on higher volume than you would like to see. It too had a high volume drop through the 50dma, then tried to rife the 50 day up. Yestesrday it got high volume churning, usually not a good sign.

The IBD 100 outperformed the market this week. IBD has changed the market outlook from "under pressure" to "confirmed uptrend". However, there are now 4 distribution days on the Dow, 3 on the SP500, Nasdaq, and NYSE, on top of the distribution days that have fallen off the count, which is reason for caution here. I don't know how much farther we can go up, but it's a long way down to 666, and the risk/reward ratio is a little iffy up here.

Friday New Highs

Friday's new highs, page 1.

Friday's new highs, page 2. there were 137 new highs, many with extremely high relative volume. that was most likely dur to the Russell index rebalancing done today.

The high volume advancers on the relative strength list.


The high volume decliners from the same list.

AZZ reported earnings this morning, and was up 1.62%.

Right Back Where We Started

I checked with the IBD website, and volume was substantially higher than this chart shows. Unfortunately I can't wait several hours to retrieve the charts, so I'll have to live with it. We had the Russell indexes rebalancing today, which was why we had the high volume. The intraday pivot at 913 was tested a couple of times, and held, but we never tested the upper boundary at 923. We are just about where we began two months ago, and are in danger of forming a head and shoulders pattern, with a target down around 800.

We had a weekly loss of .25%. Again, volume will likely be revised higher. This week we got a bounce off the 40 week ma, which is now at the critical 878 area. I suspect we will have futher testing of that area, and a break below leaves us with 800 as a target. A break out above 950 could take us to 1150 or beyond.

The Nasdaq weekly shows a bounce off the 10 week ma. We have a resistance level at 1880, then nothing of any consequence unto 2010. On the downside, we have critical support around 1650-ish.

The Russell 2000 ended positive for the week, by a whopping .1%. It did break the 10 week ma, but closed the week above it. A breakout above 1535 could take us all the way to 650, but a break down below the 40 week ma could take us down to 400. It is also forming a potential head and shoulders, but it is way too early to tell.

Here is a weekly chart of the U.S. Dollar index, showing the magnitude of the deflationary problem we were facing. We have retraced about half of the move up, with no clue as to which direction it goes next. It is a shame we have to have a trashed dollar to get a rally in the stock market.

It is the end of the quarter, and I have the quarterly update of the earnings sheet to do. I will likely decide on removals and additions this weekend, and have the sheet updated by July 1. This weekend I will have the normal post schedule, but I will not update the earnings spreadsheet until I have the revisions done.

I will have the new highs update shortly.

PALM

There was an ungodly number of new highs today, with a lot of stocks making huge mves on big volume increases, many for no reason that I could find. PALM was probably the most closely watched of the earnings breakouts today This has yet to form a first base after reversing it's down trend. It looks like it has been drawing a lot of accumulation since hitting bottom in March. The rising price relative line is a thing a beauty.

ISH

ISH is one I have had on my acquisitions list for quite a while, but I wasn't paying attention, as the deal fell apart in January. This is one that is rapidly growing earnings and has high relative strength, and now that it has hit a new high it finally caught my attention. I could not find any reason for today's volume spike. Now I have to go through my acquisition list and make sure theere aren't any more of these.