Market Soapbox 05/17/05
Resistance: DJIA 10400; SP500 1180; Nasdaq 2010; NDX 1500
Support: DJIA 9900 ; SP500 1125 ; Nasdaq 1870; NDX 1375
Positive: Everything else
Weak: healthcare, pharma, B2B, semi mfg, biotech, tobacco
52 Week HiLo: NYSE 65/38; Nasdaq 51/58; Amex 24/29
A/D Volume: NYSE 1322/428, Nasdaq 856/622, Amex 157/37
Volume: NYSE 1.806B, Nasdaq 1.521B
Upcoming Notable reports:
WEN: Core CPI Mar 0.2%; CPI Mar 0.3%
THU: Jobless Claims Prior 325K; Leading Indicators Mar -0.3%; Philly Fed Apr 12.0
Building Permits 2129K, (Mar 2050K, est. 2043K); Housing Starts 2038K; (Mar 2030K, est. 2000K); Core PPI +0.3%; Mar 0.2%; PPI +0.6%; Mar 0.5%; Capacity Utilization 79.2%, Mar 79.6%; Industrial Production -0.2%, Mar 0.3%
European (DAX -0.36%) & Asian markets (Nikkei 225 -1.11%) were down. Dollar up vs. Yen/Euro, bonds, commodities oil & gold up.
10 year note +3 ticks, yield -.013 @ 4.12%, lowest in 3 months. Oil: +.74%; closed @ 48.97. Contra action: $, oil, gold, commodities and bonds all up. Sniff, Sniff.
Today's Sooey Pig Pig!! award goes to CIBC World Markets for upgrading Stratex Networks STXN (a wireless network equipment provider) from sector perform to sector outperform.
Forward PE -4.80, price to cash flow ratio -3.60, Income -49M. EPS YoY are -138% and plummeting 3 straight Qtrs. (-0.09, -0.08, - 0.19) on a -27% net profit margin.
Stock price down 39% in 12 months & institutional ownership 80%. Stock up over 5% today on the upgrade. They are in a market segment that will take off in the next 5 years. But for the moment, Oink, Oink.
A minor dip down on the PPI news, then a continuance of the late Friday bounce up with short covering as the main suspect. 9 of 10 sectors up on very lite volume.
The reversal came at 2:30EST when the Treasury Dept. said it may eventually name China as a manipulator of its currency, increasing pressure on China to revalue the yuan.
Rumours that a fund controlled by George Soros has been shedding stakes in major technology companies to make room for energy names affected Tech.
Today's economic reports indicated a mixed bag; building is still holding, industrial production and utilization are slightly down and inflation is on the rise.
The expected dip from the CPI was minor. We take it day by day and observe that the up days are without conviction. Until we see upward action with conviction, we remain in a defensive position, as the downside potential still looms large.
The NDX 1500 and NAS 2000 are at psychological resistance levels. The DJIA and SP500 are approaching resistance. Mid Caps are being more supportive than small caps due to interest rate fears.
If the indices break to the upside on high volume, this may confirm that we have seen the worst of this down slide and the market is on the mend.
Tomorrows market action is critical for follow through and conviction on what started Friday afternoon. If Tech breaks down with a pump & dump, oil & energy will step in, but will it be enough?
After today there will be no short covering for Friday and profit taking should come into play. A rise in the PPI might assist a nice consolidation in the markets tomorrow, perhaps lasting through Thur. Just my opinion, I could be wrong.
Support: DJIA 9900 ; SP500 1125 ; Nasdaq 1870; NDX 1375
Positive: Everything else
Weak: healthcare, pharma, B2B, semi mfg, biotech, tobacco
52 Week HiLo: NYSE 65/38; Nasdaq 51/58; Amex 24/29
A/D Volume: NYSE 1322/428, Nasdaq 856/622, Amex 157/37
Volume: NYSE 1.806B, Nasdaq 1.521B
Upcoming Notable reports:
WEN: Core CPI Mar 0.2%; CPI Mar 0.3%
THU: Jobless Claims Prior 325K; Leading Indicators Mar -0.3%; Philly Fed Apr 12.0
Building Permits 2129K, (Mar 2050K, est. 2043K); Housing Starts 2038K; (Mar 2030K, est. 2000K); Core PPI +0.3%; Mar 0.2%; PPI +0.6%; Mar 0.5%; Capacity Utilization 79.2%, Mar 79.6%; Industrial Production -0.2%, Mar 0.3%
European (DAX -0.36%) & Asian markets (Nikkei 225 -1.11%) were down. Dollar up vs. Yen/Euro, bonds, commodities oil & gold up.
10 year note +3 ticks, yield -.013 @ 4.12%, lowest in 3 months. Oil: +.74%; closed @ 48.97. Contra action: $, oil, gold, commodities and bonds all up. Sniff, Sniff.
Today's Sooey Pig Pig!! award goes to CIBC World Markets for upgrading Stratex Networks STXN (a wireless network equipment provider) from sector perform to sector outperform.
Forward PE -4.80, price to cash flow ratio -3.60, Income -49M. EPS YoY are -138% and plummeting 3 straight Qtrs. (-0.09, -0.08, - 0.19) on a -27% net profit margin.
Stock price down 39% in 12 months & institutional ownership 80%. Stock up over 5% today on the upgrade. They are in a market segment that will take off in the next 5 years. But for the moment, Oink, Oink.
A minor dip down on the PPI news, then a continuance of the late Friday bounce up with short covering as the main suspect. 9 of 10 sectors up on very lite volume.
The reversal came at 2:30EST when the Treasury Dept. said it may eventually name China as a manipulator of its currency, increasing pressure on China to revalue the yuan.
Rumours that a fund controlled by George Soros has been shedding stakes in major technology companies to make room for energy names affected Tech.
Today's economic reports indicated a mixed bag; building is still holding, industrial production and utilization are slightly down and inflation is on the rise.
The expected dip from the CPI was minor. We take it day by day and observe that the up days are without conviction. Until we see upward action with conviction, we remain in a defensive position, as the downside potential still looms large.
The NDX 1500 and NAS 2000 are at psychological resistance levels. The DJIA and SP500 are approaching resistance. Mid Caps are being more supportive than small caps due to interest rate fears.
If the indices break to the upside on high volume, this may confirm that we have seen the worst of this down slide and the market is on the mend.
Tomorrows market action is critical for follow through and conviction on what started Friday afternoon. If Tech breaks down with a pump & dump, oil & energy will step in, but will it be enough?
After today there will be no short covering for Friday and profit taking should come into play. A rise in the PPI might assist a nice consolidation in the markets tomorrow, perhaps lasting through Thur. Just my opinion, I could be wrong.
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