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Sunday, October 31, 2010

Epic Fail


There were no bank failures this week that I know of, so it appears we have another week of suspense to see if last year's total will be topped. The bank failure situation, like damn near everything else in our economy, and in our political life, has reached the point of what, in the internet community, has become known as Epic Fail. George W. Bush was Epic Fail personified, but he was not the cause, and probably not even the worst example of it. Epic Fail has been building up in our economy, or government, our whole society, because of one thing: the two party system. When power is concentrated into the hands of a few, as it currently is with the Republican and Democrat parties, it is far easier for the mega-rich to buy influence, and thus have a "get out of jail free" card. This is becoming painfully obvious as the mega-banks have been proven to have conducted fraudulent, and probably felonious, behavior during and after the housing bubble, yet have been "punished" by being handed billions of dollars in tax money, while the Federal Reserve holds interest rates artificially low to liquify the banks at your expense, leaving your children and grandchildren a staggering debt. And it hasn't mattered which party was in power, has it? From 2002 to 2006 the Republicans were given a chance by the voters to right the ship, but they failed. The Democrats were then handed the duty in 2006, and equally failed. In 2008, we elected someone who was not only inexperienced, but a black guy to boot, because we were desperate for radical change. What did we get? More of the same. Epic Fail.

I once heard a Libertarian candidate (for what I don't remember) describe the difference between Democrats and Republicans like this: "One wants to drive us off the cliff at 100 mph, the other wants to drive us off at 95 mph." This pre-election rant isn't meant to influence anyone's voting, but if you do vote this week, my recommendation is vote for a third party candidate. Any third party candidate, even if he is a wingnut. Then, in 2 years vote him out and vote in another third party candidate. If we do that long enough, there will be enough political parties in Washington that buying them all off will become a very expensive proposition. If we don't, and we keep ping-ponging between Democrats and Republicans, we will end up arguing over crap like abortion and gay marriage while the banks continue to pillage the U.S. Treasury. Then in sometime around 2025, there will be a big banner, somewhere near the picture of Chairman Mao in Beijing, with a picture of the American flag, and the caption "Epic Fail".

Earnings Schedule This Week

here is what I have of this week's earnings schedule. I have no had a chance to confirm anything yet, and you can bet there will be several revisions over the course of the week.

Earnings Growth Charts

There were 20 stocks on the earnings list reporting last week, and I managed to get 19 of them graphed (TYL has insufficient data for a decent graph), so I went through them this morning and picked 6 of the most interesting. I will try to get the others posted when the earnings onslaught slows down later next month. My goal is to have complete data and graphs on the entire list before the end of the year, and at this rate it looks like a definite possibility.  On the graphs, in the top panel the black line is revenue growth rate, red EPS growth rate (charts without a black line are stocks that I do not have quarterly revenue data for). In the middle panel, black is price, red quarterly EPS, and blue price relative to SPX. At the bottom the black bars are volume.



 First up is ALGT, which has followed earnings pretty closely. Notice that revenue growth is rising, which usually precedes earnings growth.


 AMED is one that I don't have revenue data for, but you can see that EPS has been dropping. Price, however, has crashed. It looks like the market has little faith that this can turn around any time soon, and it will have a hard time making the next cut.



 CPLA is one of the for profit school stocks that have been under pressure due to governmental investigations (from what I have read, for good reason. Some of these companies have some questionable business practices). Earnings and revenue growth have been dropping, and price along with it. It might turn around when the heat is off, assuming they don't end up in handcuffs, but at this point I would not take that bet.



 DECK is one of the leadership stocks, and it broke out to a new all time high this week. Earnings and revenue growth have been dropping, but apparently the market expects that to turn around.


NEU has followed EPS to near perfection. Revenue growth has slowed, and EPS growth is at the moment non-existent, but I don't expect that to last long, and apparently neither does the market.

TIS has also followed EPS pretty closely, and EPS has fallen off a cliff. Unfortunately I do not have revenue data on this, otherwise we could anticipate a reversal in EPS growth, which usually follows revenue growth.
 still like this one, but if EPS doesn't turn around damn soon, this is going to have a hard time stayng on the list.

I am still working on a wayy to incorporate annual EPS and revenue into the chart, but at this point that is a low priority project, as it sure appears to me that, on my trading timeframe, quarterly EPS is much more important. Annual growth rates are good for narrowing down the number of stocks to watch.

Saturday, October 30, 2010

New Leadership Scan

Ticker Price as a % of 52 Wk H-L Range EPS growth past 5 years Return on Equity 50-Day Simple Moving Average 200-Day Simple Moving Average 20 day v/ms X
NFLX 97.84 0.43 0.68 0.16 0.63 117.7 0.47
TSL 79.96 0.66 0.25 -0.02 0.15 57.15 0.17
SOHU 94.28 0.31 0.21 0.31 0.47 49.63 0.16
BIDU 99.07 1.51 0.45 0.18 0.53 43.4 0.35
MELI 76.91 1.22 0.35 -0.03 0.2 34.35 0.23
CMG 98.17 0.75 0.22 0.22 0.51 30.92 0.29
FSLR 99.11 1.69 0.24 -0.01 0.1 30.88 0.11
DECK 93.29 0.34 0.28 0.18 0.27 28.93 0.09
FCX 91.22 0.47 0.44 0.12 0.26 26.58 0.14
IGTE 100 0.58 0.22 0.15 0.51 24.13 0.36
PCLN 96.83 0.67 0.51 0.13 0.49 23.94 0.36
SINA 91.74 0.43 0.46 0.16 0.37 23.34 0.21
AAPL 90.15 0.58 0.35 0.08 0.21 23.14 0.13
CBST 80.67 0.51 0.2 0 0.06 22.74 0.06
LULU 85.3 0.53 0.36 0.06 0.15 22.38 0.09
BMC 92.93 0.45 0.34 0.13 0.19 21.52 0.06
BZ 91.07 0.73 0.19 0.06 0.18 19.66 0.12
EBIX 100 0.67 0.32 0.15 0.42 19.48 0.27
HOGS 82.19 0.33 0.19 0.18 0.45 18.95 0.27
GOOG 95.71 0.69 0.21 0.18 0.18 15.72 0
UFPT 86.2 0.4 0.23 0.06 0.22 15.33 0.16
ROST 98.57 0.26 0.45 0.09 0.12 14.88 0.03
JOYG 88.13 0.57 0.44 0.06 0.24 14.75 0.18
RELL 86.91 0.51 0.18 0.09 0.17 14.41 0.08
EDU 80.71 0.3 0.18 0.08 0.18 14 0.1


This week the leadership scan yielded 25 stocks, of which I will be tracking the top 10 over the course of the week. The number of stocks coming up on this scan is increasing: it will be interesting to see if that is a bullish indication or an indication of a coming top.

Earnings Summary

I have 20 stocks from the earnings list reporting last week:

Reporting a quarter of accelerating growth - SKT, EEI

Reporting a quarter of decelerating growth - VLTR, CPLA, BWLD, AFAM, IVC, HWKN

Reporting a quarter of negative growth - CKSW, AMED, ARB, TIS, RGR, TYL, ALGT, LANC, FPO, NEU, VSEC

There is a ton of stuff to update on the earnings spreadhseet, but I will try to have it updated before the weekend is over.

Relative Strength By Industry

These are the industry groups classified by Finviz ranked in the 40 week average of percentage of stocks within the group in the relative strength range. These are the long term strongest groups and I highlighted them so they will stick out in the other scans I do.



 These are the top 11 in percentage of stocks this week. 6 of the highlighted groups are here. They are also all aboe their 40 week averages.

This is the top 10 in 1 week increase in percentage. None of the highlighted groups are here, and it would appear that these are mostly small groups or weak groups that have lots of room to move.


This is the top 11 in 4 week average. This is short term strength, and 8 of the highlighted groups are here.

This is the top 12 in 10 week average.  This is medium term strength, and 9 of the highlighted groups are here.

This is top 10 in difference between the 4 week average and 10 week. This would be the strongest short term uptrends. These are mostly small groups, with specialty eateries the only highlighted group here, and it has only 4 stocks.

It is beginning to look like trying to judge group strength by increases or decreases in percentage of stocks in the relative strength range is badly skewed by the differences in group size, and that the various averages I have calculated are much better at judging overall strength. i is also interesting to note that, for the most part, the same groups pop up on short, medium, and long term strength scans,

I have the raw data uploaded to the industry spreadsheet, which can be downloaded and sorted in any way you see fit. the relative strength spreadsheet is also up.

Relative Strength Scans

Here are the results of this week's relative strength scan. There is higher turnover than normal this week, which may be due to earnings season, and hopefully not due to database problems. There are 1745 stocks int eh top 25% of their 52 week price ranges, an slight increase over last week. From left to right, the first 3 columns are stocks from last week retained this week, the 4th column are the new stocks this week, and the 5th is the stocks dropping off this week's list.

The spreadsheet will be uploaded later today.


Retained


New
Off
APKT MSB ZAGG
AGCO
AAPL
AKAM MIPS

AGNC
ADTN
ALTR MOS

ANAD
AGAM
AIG NRCI

ANN
ATML
ASYS NFLX

BORN
BUCY
ARTW NVTL

BRK.B
EXPE
ARUN OVTI

CML
EXXI
BIDU PTEN

CRM
FDO
BEXP JCP

CTV
FINL
CAVM ANTP

CTXS
FL
CF PIR

DRIV
FNSR
CHTP PWER

ENTR
GBX
CCME PCLN

FFIV
HNR
CMG RDWR

FPTB
HOGS
CPX SOL

IGTE
JBHT
CROX RFMD

KNDI
KLAC
CY RVBD

KRO
KRA
DECK RBN

M
KWK
EXAS SKS

MELI
LIA
FSLR SIGA

NANO
LNN
FMCN SINA

NVLS
LULU
FCX SPRD

OPEN
NTAP
GBDC SWC

PFCB
OAS
HL TGB

RCL
OCLR
IPI TWI

RITT
PCS
ISLN TZOO

SHMR
RDC
JASO TQNT

SNIC
SGEN
JBLU LCC

SOHU
SLW
LRCX URI

TIE
SVNT
LVS VHC

TORM
THMD
LDK VOLT

TSL
TIBX
JADE WNR

VMW
VIA.B
MBI WYNN

WLT
VLCCF

IBD 100

 it was a pretty big week on the IBD 100, outperforming the market, with several really big gainers, but also several really big decliners. SVR was the biggest gainers, but that was an acquisition, so I will take a look at the second and third biggest gainers. FFIV was the 2nd biggest gainer, after a big go up on earnings,  As of last Friday (blue arrow) this was in the process of finding support after the big drop in cloud computing stocks. It was one of the ones to hold up best, which could have been a clue that the market was anticipating good earnings. It hasn't done much snce the gap up, and a consolidation close to the breakout point for a few days would be a good entry point.


JKS is making it's weekly appearance on this list, this time as a gainer. This is starting to settle down into it's first real base, Last Friday saw it under the 50dma for the first time, in hindsight the ideal buy point, but getting it there was just a guess, because there was nothing in the charts suggesting support there. If this does build a decent base here, a breakout could lead to a very big move.



LXK was the biggest decliner, and it looks like an earnings hit. If I had been in this, and gotten it properly (when it broke out in early September), I would have been out before it reported, as I never hld through earnings, especially if I have a decent profit. Watch this one; it may hang around the 200dma for a week or 2, then head back up.



IPXL was the second biggest decliner, all coming yesterday and not on earnings. This reports Monday, so somebody may know something (and illegally trading on that), probably taking out several stops on the way. It's a pity, because this was making a very nice cup and handle pattern. If it reports good earnings, it will probably gap up huge, but this is now radioactive as far as I'm concerned, because it has proven to be vulnerable to some serious manipulation.

Once again, I don't have this morning's IBD, so I don't have the distribution day count, but I don't think it has change much since last week.

Friday, October 29, 2010

Friday New Highs

There were 243 new highs today, here is the list.

These are the top 10 industries in percentage of stocks making new highs:

Name Stocks NH Percent
Auto Parts Stores 5 2 40
Long Distance Carriers 3 1 33.33
Cigarettes 7 2 28.57
Diversified Utilities 26 7 26.92
Health Care Plans 15 4 26.67
Silver 9 2 22.22
Small Tools & Accessories 9 2 22.22
Agricultural Chemicals 15 3 20
Chemicals - Major Diversified 15 3 20
Housewares & Accessories 5 1 20
Technical & System Software 25 5 20

These are the high volume advancers and decliners from the relative strength list:


Advancers


Decliners

Ticker Relative Volume Change
Ticker Relative Volume Change
EXXI 11.75 0.79%
EXAS 9.6 -19.95%
DECK 4.37 7.61%
PWER 6.29 -6.38%
MIPS 3.82 5.83%
OCLR 5.3 -2.21%
VLCCF 3.17 0.00%
NVTL 4.37 -2.96%
HNR 1.76 2.30%
FSLR 3.32 -8.91%




GBDC 1.72 -1.55%




EXPE 1.68 -0.65%

There were a grand total of 20 stocks (including 3 I didn't catch until today) from the earnings list reporting this week, so i will be busy with the earnings summary this weekend.

Friday Weekly Charts

 I am a little short on time today, so my post will be brief. i will have the usual charts, but woll be a bit less verbose, which is probably a good thing. The market has been consoldating right about 1185, poking higher and lower occasionally, only to be sold off or bought up immediately. It is clearly in a holding pattern, waiting for the events of next week to unfold.


 the weekly chart sure looks like it wants to pull back here. the question is, will it break through the April high first? probably not, but a nominal pullback will give the market the necessary ammo to make another assault at it, perhaps as early as January. That is, unloess Bernanke actually goes through with his "QE 2", in which case stocks, and everything else, will be bought up with increasingly diminishing dollars.


 The Nasdaq is nearly at the April high, and unlike the others, really isn't slowing down. It would take a sudden, unexpected reversal to stop this one. Is that possible? Oh, yeah, I see one in late April of this year.



The Dow is also near the April high, but is really laboring nowm, and had a marginally down week. Volume was a little muted on the downside, but this looks like it is really going to struggle trying to break out here. Agai, a nominal pullback would be the most bullish scenario here.


The transports look pretty much the same. These have lost the leadership they had earlier this year.

The Russell 2000 has resumed it's laggardship, after leading this rally in the early stages. . If real trouble develops, we will probably see it here first.

Next week could be quite interesting. he market has apparently priced in a substantial amount of QE, and I would not be surprised to see a "sell the news" scenario. The mess in the financial secot is also beginning to take it's toll, and I think it will be about as well contained as the sub prime mess was.

I will have the new highs update shortly.

DECK

Well, this is a leading stock, and it did report good earnings, got a big gap up, and pretty good volume, but the chart really doesn't impress me. ATR was rising before the breakout, price relative is not very strong, CMF is declining (although that's not necessarily bad), and it never formed a handle. It came well off the high of the day at the close, and is a prime candidate for a failed breakout. Of course, it could take off from here just as easily, but for my money this is a low probability trade.

WSTG

At first I saw a high volume breakout from a decently formed cup and handle pattern here, but on closer inspection there are way too many flaws for me. First off, this gets nothing for volume (25k is a "spike"), so it doesn't take much to move it around in either direction. The price relative line is weak, and was declining withile this was forming the right side and handle of the base (highlighted areas).  It does have a pretty well defined trading range for a thin stock, and it did break out, so I have to give it the benefit of the doubt, but not with my money.

DDIC

This one is a little better, but still pretty thinly traded with a very wide pattern here. The resistance just below 10 was very stiff, and getting through that was a major accomplishment, so it should now be a pretty good support level, and I wouldn't go anywhere near this unless it omes back to test it.

Industry Group Weekly Performance

Name Stocks Change
Broadcasting - Radio 11 3.59%
Silver 9 3.05%
Auto Dealerships 11 2.13%
Beverages - Brewers 9 2.02%
Paper & Paper Products 26 1.98%
Lumber, Wood Production 13 1.91%
Advertising Agencies 14 1.81%
Consumer Services 13 1.75%
Resorts & Casinos 15 1.74%
Agricultural Chemicals 15 1.72%

Today's top 10 industries.


Name Performance (Week) Stocks
Internet Service Providers 16.23% 9
Broadcasting - Radio 11.10% 11
Resorts & Casinos 9.75% 15
Silver 7.00% 9
Gaming Activities 5.66% 11
General Entertainment 5.38% 16
Diversified Communication Services 5.28% 29
Printed Circuit Boards 5.25% 16
Nonmetallic Mineral Mining 5.15% 10
Semiconductor- Memory Chips 5.05% 9
Drugs Wholesale 4.61% 6
Semiconductor - Broad Line 4.37% 26
Recreational Goods, Other 4.29% 10
Semiconductor - Integrated Circuits 4.02% 56
Oil & Gas Drilling & Exploration 3.96% 84
Gold 3.94% 48
Auto Parts Stores 3.70% 5
Agricultural Chemicals 3.52% 15
Paper & Paper Products 3.42% 26
Internet Software & Services 3.41% 35

Here are the top 20 for the week. I will have the far more useful relative strength data this weekend.

Market Leader Performance

Ticker Performance (Week) Relative Volume Change
AAPL -1.38% 0.69 -0.66%
BIDU 9.46% 0.68 -1.42%
CMG 17.39% 0.39 0.19%
DECK 4.03% 5.22 7.61%
FCX -0.97% 0.64 -0.73%
FSLR 4.19% 3.47 -8.70%
HOGS -5.33% 0.78 2.25%
LULU 2.41% 0.5 0.77%
NFLX 1.74% 0.89 -2.44%
PCLN 6.95% 1.22 2.77%




BMC 1.85% 2.1 4.09%
BUCY -9.07% 0.64 1.78%
BZ 4.99% 0.81 1.54%
EBIX 9.70% 1.64 -2.27%
GIII -6.20% 0.39 -1.46%
IGTE 14.14% 0.65 -0.49%
JOYG -2.37% 0.58 1.99%
RELL 1.69% 0.45 -0.55%
ROST 1.55% 0.41 0.55%
SINA 4.82% 0.52 2.81%
UFPT -4.15% 0.62 -0.25%


Here is the weekly performance for the leadership scan, the top 10 above, the rest below. As mentioned earlier, DECK is breaking out on earnings. There were a couple of really big gainers n the week (CMG and IGTE) and nothing really breaking down.

DECK


DECK is a member of the leadershio scan, the relative strength list, and the earnings list, so when it reported last night it had my attention. It is breaking out big this morning on pretty good volume.

Breakouts

Here are today's top 4 relative volume breakouts. All are on earnings.

Today's Pivot Points

Floor
Woodie's
Camarilla
Demark
R3 1202.27 R2 1195.98 R4 1190.62 High 1186.66
R2 1195.9 R1 1190 R3 1187.2 Low 1174.23
R1 1189.84 P 1183.55 R2 1186.06

P 1183.47 S1 1177.57 R1 1184.92

S1 1177.41 S2 1171.12 S1 1182.64

S2 1171.04

S2 1181.5

S3 1164.98

S3 1180.36





S4 1176.94

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