As mentioned yesterday, today was going to provide some fireworks and the indices took little time falling into the red right out of the gate. Most of the news of the day was on the negative side, especially Citigroup's announced restructuring, in which the company will shelve more than 17,000 employees worldwide. A rise in the price of crude (up 12 cents to $62.01) was probably more of an annoyance than a catalyst.
Dow 12,484.62 -89.23; NASDAQ 2,459.31 -18.30; S&P 500 1,438.87 -9.52; NYSE Composite 9,413.63 -55.07
The real blow came just after 2:00, when the minutes from the most recent Fed meeting showed that the FOMC governors were far from favoring a rate cut in the near future, something for which many ill-advised speculators had been hoping.
It's difficult to comprehend how people who are paid to be in touch with such things could be so far removed from reality. Inflationary pressures are everywhere, but some analysts still held to the belief that the Fed would cut rates within the next three to six months. With a fed funds rate at an historically moderate level of 5.25%, what exactly were they thinking? Was it all just a set-up by short-sellers in the know?
Upon release of the Fed's minutes the markets sank like they were loaded down with lead weights. False hope apparently dies hard.
Declining issues carried the day by a 2-1 margin over advancers.
New Highs: 290; New Lows: 101. This is the first session in at least the last 7 that there were less than 300 new highs, which is our benchmark. Expect the market to continue a downward trend until this is reversed.
After gaining for 8 consecutive sessions on relatively weak volume, the markets took a sudden, but hardly unexpected turn today, unofficially the first day of earnings season. Today's decline lopped off nearly a third of the gains made over that 8-day run. Since the indices never reached the previous highs, we are still technically in a downtrend.
Wednesday, April 11, 2007
Tuesday, April 10, 2007
Eight Straight, But How High Is Up?
The Dow managed to close in the green again on Tuesday, but just barely, with the other indices following the lead. It brings up the question of whether this is really a rally, or just normal bounded in-range trading prior to some future market event during the great earnings deluge to come.
Dow 12,573.85 +4.71; NASDAQ 2,477.61 +8.43; S&P 500 1,448.39 +3.78; NYSE Composite 9,468.70 +39.49
Over the course of the last eight session the Dow has gained 273 points, or, an average of 34 points per day. If that doesn't sound like much, it's because it isn't. One just one day, April 3rd, the index was up 129 points, meaning the other seven days combined accounted for only 144 points, or just over 20 points per day on average.
Today's gain was less than 4 points. Yesterday's was less than 9. On March 30, the Dow was up 5.60 points. Three days, less than 20 points. The Dow could, and does, do that in a matter of minutes under normal conditions. In percentage terms, these last 8 days of gains amounted to less than 2.5%. 8 straight up days and the average still is 200 points shy of the February 20 record close. What's really going on here?
From a volume perspective, no single day has cracked the 3 billion mark. For purposes of comparison, on the black day of February 27, when the Dow dropped more than 400 points, over 4 billion shares changed hands. If anything can be said of this rally, it's that not everyone is participating, and, while gains are always good, these have not been very much so.
Today's performance was among the weakest, with 2.5 billion shares traded, even though advancing issues on the NYSE outpaced declining issues by a 5-3 margin, on the NASDAQ the margin was more on the order of 8-7.
Once again, it was a phenomenal day for new highs, with 408 issues making tops, and only 71 new lows. Those numbers haven't changed much for about a week, and considering the Dow's feeble close, this mini-rally seems to be at an end. What will propel the market over the next 3-4 weeks - in either direction - will be quarterly earnings, and all of that starts tomorrow.
Oil gained 38 cents to close at $61.89; gold gained 4.60 to $681.50; silver was up 12 cents to $13.93.
The real action starts tomorrow. Don't miss it.
Dow 12,573.85 +4.71; NASDAQ 2,477.61 +8.43; S&P 500 1,448.39 +3.78; NYSE Composite 9,468.70 +39.49
Over the course of the last eight session the Dow has gained 273 points, or, an average of 34 points per day. If that doesn't sound like much, it's because it isn't. One just one day, April 3rd, the index was up 129 points, meaning the other seven days combined accounted for only 144 points, or just over 20 points per day on average.
Today's gain was less than 4 points. Yesterday's was less than 9. On March 30, the Dow was up 5.60 points. Three days, less than 20 points. The Dow could, and does, do that in a matter of minutes under normal conditions. In percentage terms, these last 8 days of gains amounted to less than 2.5%. 8 straight up days and the average still is 200 points shy of the February 20 record close. What's really going on here?
From a volume perspective, no single day has cracked the 3 billion mark. For purposes of comparison, on the black day of February 27, when the Dow dropped more than 400 points, over 4 billion shares changed hands. If anything can be said of this rally, it's that not everyone is participating, and, while gains are always good, these have not been very much so.
Today's performance was among the weakest, with 2.5 billion shares traded, even though advancing issues on the NYSE outpaced declining issues by a 5-3 margin, on the NASDAQ the margin was more on the order of 8-7.
Once again, it was a phenomenal day for new highs, with 408 issues making tops, and only 71 new lows. Those numbers haven't changed much for about a week, and considering the Dow's feeble close, this mini-rally seems to be at an end. What will propel the market over the next 3-4 weeks - in either direction - will be quarterly earnings, and all of that starts tomorrow.
Oil gained 38 cents to close at $61.89; gold gained 4.60 to $681.50; silver was up 12 cents to $13.93.
The real action starts tomorrow. Don't miss it.
Monday, April 9, 2007
Back to Work: Dow Goes Seven for Seven
The Dow Jones Industrials got back to work on Monday after a three-day hiatus and quickly moved to the positive at the opening bell. The Dow remained in the plus column almost all day and finished higher by nearly 9 points. Stocks on the NASDAQ hovered around the flatline much of the day, and closed with a small loss.
Dow 12,569.14 +8.94; NASDAQ 2,469.18 -2.16; S&P 500 1,444.61 +0.85; NYSE Composite 9,421.29 +2.64
The session was one of the more lackluster in a series of similarly quiet trading days, but the Dow managed to eke out a minor gain even though advancers were beaten by declining issues by about a 12-10 spread. There were 463 new highs to 84 new lows, so little change there.
The best news for investors was actually released last Friday when the markets were closed. The Labor Department reported the economy created an additional 180,000 jobs last month, well beyond the market expectation of 135,000. Many of the new jobs were in construction, which was a little more of a surprise, since the housing industry had shown significant signs of slowing recently.
The rather tepid response was probably due to some level of disbelief in the Labor Dept. figures - which also showed unemployment declining to 4.4% from 4.6% - and anticipation of 1st quarter reports, most of which aren't due out until later this week and then for the two weeks thereafter.
Another damper on the market continues to be oil, or, to put it more succinctly, the price of a gallon of gas, which has risen for ten straight weeks. Traders actually may have gotten the message, or there was a subtle reduction in tension over Iran (rumors were widely circulated that the US would launch an attack on Iran over the Easter weekend, and that failed to materialize), as the price of crude for May delivery fell $2.77, closing the day at $61.51.
A few more days like today on the oil bourses should send the Dow and other indices skyward once again. Despite some concern over higher food prices, due in part to some food crops - particularly corn - being used to produce fuel instead, the price of oil and gas are still of primary importance.
Gold was slightly lower, but silver gained 7 cents to close at $13.81 per troy ounce.
Dow 12,569.14 +8.94; NASDAQ 2,469.18 -2.16; S&P 500 1,444.61 +0.85; NYSE Composite 9,421.29 +2.64
The session was one of the more lackluster in a series of similarly quiet trading days, but the Dow managed to eke out a minor gain even though advancers were beaten by declining issues by about a 12-10 spread. There were 463 new highs to 84 new lows, so little change there.
The best news for investors was actually released last Friday when the markets were closed. The Labor Department reported the economy created an additional 180,000 jobs last month, well beyond the market expectation of 135,000. Many of the new jobs were in construction, which was a little more of a surprise, since the housing industry had shown significant signs of slowing recently.
The rather tepid response was probably due to some level of disbelief in the Labor Dept. figures - which also showed unemployment declining to 4.4% from 4.6% - and anticipation of 1st quarter reports, most of which aren't due out until later this week and then for the two weeks thereafter.
Another damper on the market continues to be oil, or, to put it more succinctly, the price of a gallon of gas, which has risen for ten straight weeks. Traders actually may have gotten the message, or there was a subtle reduction in tension over Iran (rumors were widely circulated that the US would launch an attack on Iran over the Easter weekend, and that failed to materialize), as the price of crude for May delivery fell $2.77, closing the day at $61.51.
A few more days like today on the oil bourses should send the Dow and other indices skyward once again. Despite some concern over higher food prices, due in part to some food crops - particularly corn - being used to produce fuel instead, the price of oil and gas are still of primary importance.
Gold was slightly lower, but silver gained 7 cents to close at $13.81 per troy ounce.
Spare Time: Casino Games at Home
Investing is a tricky business. It involves strategy, timing, control of emotion and some luck... somewhat like casino games. So, it's no surprise that some top investors occasionally enjoy a heady round of blackjack, craps, or roulette.
Executive Gaiming Monthly, a company catering to the inner gambler in all of us, offers a variety of ways to bring the casino home with a nice selection of slot machines, gaming supplies, gift items and more, some of them perfect for Father's Day. EGM's high-quality casino products are sure to enhance any home game room.
One of the more popular and unique features at EGM is their game of the month club, which allows you to send a game package - like Texas Hold 'em, Poker Mania, Blackjack or Roulette - to a specific recipient or to your own home. It's an easy way to get the tools for some practice prior to a trip to your favorite casino for a tournament or just have a good time playing your preferred games.
In addition to their great selection of slot machines and game supplies, Executive Gaming Monthly also has an excellent selection of learn-to-play videos for many of the most popular games, like Let It Ride, Pai Gow, Three Card Poker and many more. EGM also offers a Personal Host Service for assistance with any purchase.
Investing is tough. But that doesn't mean you can't have some fun learning game strategy.
Executive Gaiming Monthly, a company catering to the inner gambler in all of us, offers a variety of ways to bring the casino home with a nice selection of slot machines, gaming supplies, gift items and more, some of them perfect for Father's Day. EGM's high-quality casino products are sure to enhance any home game room.
One of the more popular and unique features at EGM is their game of the month club, which allows you to send a game package - like Texas Hold 'em, Poker Mania, Blackjack or Roulette - to a specific recipient or to your own home. It's an easy way to get the tools for some practice prior to a trip to your favorite casino for a tournament or just have a good time playing your preferred games.
In addition to their great selection of slot machines and game supplies, Executive Gaming Monthly also has an excellent selection of learn-to-play videos for many of the most popular games, like Let It Ride, Pai Gow, Three Card Poker and many more. EGM also offers a Personal Host Service for assistance with any purchase.
Investing is tough. But that doesn't mean you can't have some fun learning game strategy.
Thursday, April 5, 2007
Stock Streak at Six Straight
The Dow added another 30 points on Thursday, the day before the markets take a break for Good Friday. While the Dow advance was reasonable, the NASDAQ actually outperformed on a percentage basis for the second straight day, gaining 0.51% to the Dow's 0.24. It's about time the bargain-hunting moved from the Blue Chips to the techs, and we could be witness to a dramatic shift in investor priorities shortly.
After all, many of the NASDAQ stocks represent relatively young, nimble enterprises, as opposed to the relatively stodgy businesses in the Dow 30. Tech is much better prepared to face the challenges of the 21st century and some of these companies are yet to embark upon long, long histories of solid earnings.
The Dow companies, on the other hand, are engaged in very segmented businesses which rely heavily upon manpower and raw materials. They are exposed to margin squeezes on the edges of their businesses and their ability to expand and react is questionable.
The Dow companies are, however, led routinely by strong managers and they have solid balance sheets. In this current market environment, though, it's all about profit and share price. Some of the Dow stocks are only going to levitate from M&A activity or aggressive cost-cutting, whereas the techs are innovative and potentially explosive (both ways).
Dow 12,560.20 +0.15; NASDAQ 2,471.34 +12.65; S&P 500 1,443.76 +4.39; NYSE Composite 9,426.97 +28.01
Volume was muted on Thursday, but that's nothing new. Market volume has been tepid for most of 2007. With earnings reports due next week and for three weeks after that, there's likely to be more trading, though it may not be any great shakes.
There's a strong rally brewing, as the numbers suggest. The new highs-new lows figures continue to be lopsided in favor of the highs, 396-69 on the day. Advancers held a 7-5 edge over declining issues.
Oil was under pressure, hitting a low of 63.60 before closing at 64.28, off just 10 cents. Gold gained $2, silver was up 12 cents, both again approaching the high ends of their channels. Something may be up. Then again, it could be nothing more than simple dollar arbitrage.
Happy Easter.
After all, many of the NASDAQ stocks represent relatively young, nimble enterprises, as opposed to the relatively stodgy businesses in the Dow 30. Tech is much better prepared to face the challenges of the 21st century and some of these companies are yet to embark upon long, long histories of solid earnings.
The Dow companies, on the other hand, are engaged in very segmented businesses which rely heavily upon manpower and raw materials. They are exposed to margin squeezes on the edges of their businesses and their ability to expand and react is questionable.
The Dow companies are, however, led routinely by strong managers and they have solid balance sheets. In this current market environment, though, it's all about profit and share price. Some of the Dow stocks are only going to levitate from M&A activity or aggressive cost-cutting, whereas the techs are innovative and potentially explosive (both ways).
Dow 12,560.20 +0.15; NASDAQ 2,471.34 +12.65; S&P 500 1,443.76 +4.39; NYSE Composite 9,426.97 +28.01
Volume was muted on Thursday, but that's nothing new. Market volume has been tepid for most of 2007. With earnings reports due next week and for three weeks after that, there's likely to be more trading, though it may not be any great shakes.
There's a strong rally brewing, as the numbers suggest. The new highs-new lows figures continue to be lopsided in favor of the highs, 396-69 on the day. Advancers held a 7-5 edge over declining issues.
Oil was under pressure, hitting a low of 63.60 before closing at 64.28, off just 10 cents. Gold gained $2, silver was up 12 cents, both again approaching the high ends of their channels. Something may be up. Then again, it could be nothing more than simple dollar arbitrage.
Happy Easter.
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