::: Today’s Market Action :::
With robust earnings out of Costco, Pepsi and McDonalds its clear the consumer remains alive and well, with an ever expanding waistline. That was enough to kick start the market in the morning and the Dow added fuel to the fire in the afternoon with its "goldilocks" beige book report, further indicating a soft landing. Inflation is in check, manufacturing remains strong and the consumer continues to spend spend spend all despite continuing cooling in the housing sector. It all seems a little too perfect doesn’t it? No question this market is currently priced for perfection and is fragile up at these levels, but as of today there is still no indication of topping action. The only negative in today’s action is that volume could have been a bit better.
(Note: volume averages are based on the average over the past 50 days)
Data as of end of day
Nasdaq: up 1.64% today with volume 14% ABOVE average
Nasdaq ETF (QQQQ): up 1.66%, volume 11% BELOW the average
Dow: up .81%, volume 36% ABOVE average
Dow ETF (DIA): up .74%, volume 16% BELOW the average
S&P ETF (SPY): up .87%, volume 11% BELOW the average
Russell Small Cap ETF (IWM): up 2.02%, volume 10% BELOW the average
::: SelflInvestors Leading Stocks :::
SelfInvestors Leading Stocks did fantastic today, further validating today’s move.
* Advancers Leading Decliners 282 to 38.
* Advancers are up an average of 2.12% today, with volume 9% ABOVE the average
* Decliners are down 1.02 % with volume 45% ABOVE average
* The total SI Leading Stocks Index is up 1.75% today with volume 13% ABOVE the average
* Where’s the Money Flowing *
Many investing websites just provide leading industries based on price performance alone.. without the volume, this can be misleading. The only way that I know of to guage industry/sector strength WITH volume levels is through the analysis of ETF’s. A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing). Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.
* Leading Sectors/Industries: HomeBuilders, Software, Retail, Technology and Consumer Services (no changes here for the past several weeks)
* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy AND Gold (also no changes here for the past several weeks)
* Today’s Market Movers (UP) – Homebuilders led the way again today (that’s a bit of a scary thought). Retail was also a big mover as was Energy and Software.
* Today’s Market Movers (DOWN) – No significant down movers today.
** Stocks **
The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average. Today’s stock is American Oriental Bioeng (AOB), a Chinese ADR.
ABOUT: American Oriental Bioengineering, Inc. is engaged in the development and production of plant-based pharmaceutical (PBP) products and plant-based nutraceutical (PBN) products. PBNs, also referred to as dietary supplements or nutritional supplements, are essentially prophylactic or preventive, in contrast with the PBP products. PBPs, composed of leaves and roots of one or more plants, have certain medicinal function and treat one or more illnesses or symptoms of illnesses. Twenty-eight regional representative offices throughout China are primarily responsible for servicing the Company’s distribution platforms and monitoring the markets. Products include UrinStopper Patch and UrinStopper Capsule introduced, during the year ended December 31, 2005. In April 2006, the Company completed the acquisition of Guangxi Lingfeng Pharmaceutical Company Limited, a pharmaceutical company specializing in the manufacture and distribution of plant-based medicines in China.
FUNDAMENTAL: While the company can be fairly inconsistent in its earnings growth from quarter to quarer, it has grown from 30 – 50% in each of the last few years
TECHNICAL: Cleared a 5 month base on Oct. 9th which is part of a much larger nearly one year base. The stock looks poised to take out all time highs of 7.68 within the next couple weeks.
SELFINVESTORS RATING: With a total score of 51/60, AOB is considered a top breakout stock.