All posts by Tate Dwinnell

Stocks

Apple a Big Gamble

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If you’re holding Apple Computer (AAPL) through its earnings report tonight you’re making a big gamble.  Apple has raised the bar for this quarter’s earnings report, so anything short of a blow out quarter could derail this stock in a hurry.  Analyst estimates put earnings this quarter at .24 a share, but Apple will need to handily beat the "whishper number" of .28 and provide positive guidance if it hopes to avoid getting bruised tomorrow.

Also concerning is the deteriorating technical action over the last couple weeks.  High volume selling in early March has been followed by tepid buying.  Add to the mix a difficult market and it becomes clear that holding a stock that has already a had a tremendous run through its earnings report doesn’t make much sense.  Holding out of fear of missing further gains is a decision based on greed and should be avoided.  Should a sell off occur tomorrow, next support areas to keep an eye on are 35 and 30.  Regardless of what happens with the stock, it will be interesting to hear just how fast those Ipods are flying off the shelves after the bell today.

ETF Movers

ETF MidDay Movers

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Ticker Name Price %Price
Change		 % Vol Change DI 20 DI 40 RS % From 50DMA % From 200DMA
IYZ Ishares Telecom 23.27 -0.21 242 -1 -1 57 0.26 1.09
PPH HLDRS Pharma 74.32 1.23 204 4 13 56 4.02 3.02
EWJ Ishares Mcsi Japan 10.5 -0.47 142 -6 -4 45 -1.87 2.34
XLE SPDR Energy 42.02 -0.8 139 -2 -8 89 -0.1 15.95
RKH HLDRS Regional Banks 132.95 -0.49 119 -7 -7 52 -1.86 -1.58
OIH HLDRS Oil Service 94.4 -0.53 75 -2 -5 83 -0.44 13.68
IGE Ishares Natural Resources 144 -0.86 66 -1 -10 83 -1.11 11.55
XLB SPDR Materials 29.38 -1.61 55 -5 -8 69 -3.26 4.07
BHH HLDRS B2B Internet 2.63 -0.75 54 -2 -4 57 -1.87 4.37
IYR Ishares US Real Estate 115.05 0.03 42 -2 -6 61 -0.55 2.19
HHH HLDRS Internet 53.46 -0.69 40 0 -3 27 -4.99 -11

Money continues to flow out of materials and energy and into pharmaceuticals.

Note About DI 20, DI 40 Scores:

The Demand Indicators measure price and volume movements to gauge institutional demand.  Points are awarded for high volume moves up (institutional buying) as well as light volume selling (indicating healthy consolidation).  The score decreases with low volume buying (indicating demand is waning) as well as high volume selling (institutions dumping shares).  The higher the overall score, the greater demand for the stock. 

Clearly, rotation into big pharma is occurring as evidenced by the DI scores for the HLDRS Pharmaceutical ETF (PPH).  Merck (MRK) and Pfizer (PFE) have moved impressively off the lows, while Johnson and Johnson (JNJ) continues its strong uptrend.  These 3 companies are the largest holdings in the PPH ETF.

Given the broad end of day sell off, I thought I’d post the end day results for ETF Movers as well- note the big end of day sell off in the transportation for the second day in a row.

Ticker Name Price Price % Change Vol % Change DI 20 DI 40 RS % From 50DMA % From 200DMA
PPH HLDRS Pharma 74.6 1.61 348 4 13 56 4.41 3.41
IYT Ishares Transportation 63.72 -2.98 132 -12 -14 71 -4.05 2.43
XLE SPDR Energy 41.63 -1.72 96 -2 -8 89 -1.02 14.87
IYZ Ishares Telecom 23.1 -0.94 86 -1 -1 57 -0.47 0.35
XLB SPDR Materials 29.15 -2.38 72 -5 -8 69 -4.02 3.26
EWJ Ishares Mcsi Japan 10.43 -1.14 70 -6 -4 45 -2.52 1.66
EWS Ishares Singapore 7.42 -1.07 60 -9 -8 71 0.27 6.46
OIH HLDRS Oil Service 92.46 -2.57 45 -2 -5 83 -2.49 11.34
IYM Ishares Basic Materials 48.98 -3.03 41 -3 -2 68 -5 2.32
IGE Ishares Natural Resources 141.94 -2.28 40 -1 -10 83 -2.53 9.95
BHH HLDRS B2B Internet 2.68 1.13 39 -2 -4 57 0 6.35
XLI SPDR Industrial 30.14 -1.21 36 -4 0 65 -1.37 2.59
EEM Ishares Emerging Markets 205.1 -1.82 35 -3 -5 75 -2.15 11.21
RTH HLDRS Retail 91.42 -0.76 29 -5 -6 39 -5.66 -2.94
RKH HLDRS Regional Banks 131.77 -1.37 25 -7 -7 52 -2.73 -2.46
IWM Ishares Russell 2000 Index 119.5 -1.91 24 0 -1 55 -4.25 0.49
State of the Stock Market

Greenspan Saves the Day..

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The Fed threw the market a life preserver today.  Comments alleviating concerns of a more aggressive policy whipsawed the market in the opposite direction, saving the market from drowning and undoubtedly inducing some short covering along the way.  While big reversals like this often mark the bottom of a correction, I see this as more of a knee jerk, relief rally.  It was nice to see the market looking for an excuse to rally, but It will take a couple more days to get a firm sense of the impact of today’s action.  Another day of heavy accumulation would provide the signal to pursue long opportunities with a bit more aggression.

The Nasdaq, once again dangerously close to plummeting below its last line of support, was able to claw its way back above this key level to remain "in the doghouse" that it’s been in for the last couple of weeks.  Should today’s action propel the Nasdaq higher in the coming days (and there’s a good chance it will), it still faces major resistance around the convergence of the downward trend line and the 50 day moving average.  There is much work to be done!

The thing that stands out in the chart of the Dow today is the bounce off that key support level around 10365 or so.  It could be enough to propel the Dow a few hundred points into resistance.  This area around 10365 is so crucial in my opinion.. If we drop below that level, here comes 10,000 and possibly much lower.  The the other important thing to note is the topping formation that both the Dow and S&P may complete in the next few months.  It’s probably more head and shoulders than triple top, but either way you look at it, it’s cause for concern and something to keep an eye on over the next several weeks.  The area around Dow 11,000 will be a major source of resistance should it get that far.

Here’s the longer term view of the Dow which shows the importance of holding at current levels.  The longer term, bull market uptrend is in danger.

ETF Movers

Today’s ETF Movers

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I remember looking at the ETFs around mid day and seeing a whole lot of red, with big volume, so today’s reversal was mighty impressive and the kind of move that hints at a correction bottom.  We’lls see how it shakes out over the next couple of days.  Anyway,  here are today’s ETF movers:

Up With Volume:

SPDR Consumer Discretionary (XLY)  Up    .7%,    Volume up 291%
HLDRS Telecom (TTH)                     UP .86%,      Volume up 155%
Ishares Small Caps (IJR)                   Up .75%,      Volume up 110%
Ishares Emerging Markets (EEM)        Up .68%,      Volume up  80%
HLDRS Retail (RTH)                          Up 1.05%,    Volume up   72%
Ishares Lehman 20+ Yr Bonds (TLT)    Up .84%       Volume up   66%
SPDR Financial (XLF)                        Up 1.3%       Volume up   56%
Ishares Real Estate (IYR)                   Up 1.45%      Volume up  60%

Down With Volume

SPDR Energy (XLE)                 Down 1.49%, Volume up 83%
HLDRS Internet (OIH)              Down  .7%,   Volume up 69%

Blog

Doggone, what will they think of next?

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.. and I thought the brightest minds in this country were hard at work on the really important stuff like stem cell research, HIV, fuel cells, etc.  Nope, try "petworking".  Huh?  Had to pass this story along from Wired.

Collar Cultivates Canine Cliques

If you’ve ever longed for a way to monitor your dog’s social life, map out its buddy network and sense who its true friends really are, you might have been waiting for SNIF.

The Social Networking in Fur, or SNIF, project is a wearable computer system for dogs that allows their owners to monitor the animals’ behavior and capture their social networks.

The technology, designed by a group of researchers at MIT’s Physical Language Workshop, also gives dog owners the chance to "petwork," or network through their pets.

Link to the whole story.

ETF Movers

Today’s ETF Movers: Transportation Derailed

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Just one notable move to the upside today in the Ishares Mexico ETF (EWW)  which is up again today 1.01% with volume 47% above the average.

Transportations stocks are getting hammered today and that’s reflected in the Ishares Transorportation ETF (IYT) which is down 2.79% with volume 407% above average.

Energy ETF’s also taking another hit today:

SPDR Energy (XLE)             Down 1.1%, Volume up 54%
HLDRS Oil Services (OIH)    Down 1.19%, Volume up 38%

Uncategorized

thanks to the few who voted..

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Just wanted to thank those who voted in the Market Sentiment poll – a resounding 9 of 9 are bearish!  Time to aggressively pursue long positions!

I thought a poll would be a nice addition until I discovered the wonderful pop ups associated with it.  Static advertising is one thing, but pop up ads just make me angry.  Maybe one day I’ll shell out the few bucks to install an ad free poll, but considering less than 1% of the visitors vote maybe not….

ETF Movers

Today’s ETF Movers

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I’ve always liked using ETF’s for tracking money inflows/outflows which can give you a quick heads up on sector rotation.  Using using index charts such as the Philadelphia Indexes are good for tracking price, but don’t give any volume information.  Volume is key because it indicates the conviction behind the move.  ETF’s, which trade like stocks provide this key info.  Over the past several weeks I’ve been developing an ETF tracking system which will be included as part of premium membership at SelfInvestors.com in a couple weeks.  What I’d like to do here each day (or every couple of days) is post the ETF’s making notable moves.  Here are today’s movers:

Moving Up With Volume:

SPDR Consumer Staples (XLP)  Up .61%,    Volume up 161%
Ishares Software (IGV)            UP 1.06%,  Volume up 114%
Ishares Mexico (EWW)            Up 2.59%,  Volume up 129%
Ishares Realty (ICF)                 Up .63%,  Volume up 104%
SPDR Healthcare (XLV)            Up .82%,   Volume up 90%
SPDR Financial (XLF)               Up .53%     Volume up 63%
HLDRS Pharma (PPH)              Up .64%     Volume up 60%

Moving Down With Volume

SPDR Energy (XLE)                 Down .76%, Volume up 143%
Ishares Austria (EWO)             Down 1.04%, Volume up 100%
HLDRS Oil Service (OIH)         Down 1.46%, Volume up 69%
Ishares Malaysia (EWM)           Down .59%, Volume up 43%

State of the Stock Market

Not Impressed

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Just short lived short covering or something more?  That’s the question after today’s big move up from oversold conditions.  You’d think with the broad based rally throughout the day,  that volume would have swelled.  Not the case.  Volume levels were disappointing, indicating institutions continue to be less than enthusiastic about putting cash to work.  Today’s move was a move in the right direction, but until we see some heavy volume up days, nothing has changed.  A cautious approach remains the best strategy.

The Nasdaq managed to reclaim critical support around 2000, but as you can see, volume was below average.  Suprising, considering the magnitude of the gains.

The Dow continues to hold above support around previous consolidation and the 200 day moving average at around 10,375.  This is a very important area of support for the Dow and will be watched closely.  If it can’t hold there, a drop to 10,000 becomes highly likely.

The S&P also remains above key support of previous consolidation (around 1160 – 1165) and the 200 day moving average at 1150.  Should today’s bounce continue for a few days, it may hit resistance of the 50 day moving average at 1195.  I would expect both the Dow and S&P to yo yo between their respective support and resistance levels for a couple weeks before the next big move in either direction.  One thing is clear though.. the technical action indicates an ornery market and that doesn’t look to change for some time.