::: Today’s Market Action :::
Leave it to the calm and upbeat Bernanke to spoil the bears attempt to send this market into the much anticipated, all so elusive correction. I’m not sure what the stats are on this but I’m sure that 80 – 90% of the time that Bernanke provides commentary on the economy, the market gets a boost. Today, it was a big boost. A broad market rally with volume a bit better than yesterday. Oh and in case you missed the headlines on CNBC all day, the Dow is at another record high. I’ve been leaning to the bearish side over the past couple and played the odds of the market taking out support very soon. Once again, that isn’t happening so I’m forced to take a more neutral position by adding a couple long plays. If the Nasdaq can break above 2509 with volume I’ll take it a step further – paint me bullish.
::: Major Indices Performance – The Numbers :::
(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day Feb 14th 2007
Volume wasn’t great in S&P and Dow but there was accumulation across all indices today.
Nasdaq: UP 1.16% today with volume 5% BELOW average
Nasdaq ETF (QQQQ) UP 1.69%, volume 17% ABOVE average
Dow: UP .69%, volume 1% ABOVE the average
Dow ETF (DIA): UP .67%, volume 2% BELOW the average
S&P ETF (SPY): UP .66%, volume 4% ABOVE the average
Russell Small Cap ETF (IWM): UP .09%, volume 45% ABOVE the average
::: SelflInvestors Leading Stocks :::
The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base. Leading stocks didn’t beat out the Nasdaq in price performance but volume was very good.
Summary:
* Advancers led Decliners 296 to 126
* Advancers were up an average of 1.82% today, with volume 19% ABOVE average
* Decliners were down an average of 1.31% with volume 22% ABOVE average
* The total SI Leading Stocks Index was UP .87% today with volume 20% ABOVE the average
::: Where’s the Money Flowing :::
Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading. The only way that I know of to gauge 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. For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html
* Current Leading Sectors/Industries (over last 30 trading days):
Materials, Aerospace/Defense, Water, Transports, Realty, Utilities
* Current Lagging Sectors/Industries (over last 30 trading days):
Commodities, Oil
* Today’s Market Moving Industries/Sectors (UP):
Broad rally today – semis, transports, broadband, clean energy, technology and broker/dealers all up with volume today
* Today’s Market Moving Industries/Sectors (DOWN):
Oil, Commodities, Real Estate
::: 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 and most likely breaking out of a base or consolidation. Today’s stock is Titanium Metals (TIE), one of the highest rated stocks currently tracked by SelfInvestors.com
ABOUT: Titanium Metals Corporation (TIMET) is a producer of titanium sponge, melted products and a variety of mill products for aerospace, industrial and other applications. For the commercial aerospace industry, the Company supplies titanium products to manufacturers of commercial airframes. Outside of aerospace markets, the Company manufactures a range of products for customers in the chemical process, oil and gas, consumer, sporting goods, automotive, power generation and armor/armament industries. Approximately 15% of the Company’s sales revenue, during the year ended December 31, 2005, was generated by sales into industrial and emerging markets. TIMET markets and sells its products in the United States, the United Kingdom, France and Italy.
FUNDAMENTALS: TIE has consistently been one of the highest rated stocks that I’ve tracked over the past couple years and it remains so with a slow down nowhere in site.. This is a company that became profitable for the first time in ’04 and is coming off a year in ’06 in which proftis nearly tripled. Rising profit margins and ROE indicate this is a company that continues to run on all cylinders. TIE receives a near perfect fundamental score of 30/30.
TECHNICAL: After running up more than 40 fold in 3 years, TIE needed to carve out a big base in order to shake out the weakest holders of the stock and begin a new run. The time for a new run is now. After reporting outstanding earnings yesterday, the stock broke out this morning and looks poised to tackle the all time high around 45. Given the steep base, I’d be looking to take my profit up around those levels.
SELFINVESTORS RATING: With a total score of 54/60 (29/30 for fundamentals, 25/30 for technical), TIE is one of two highest rated break out stocks.
Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation. Please do your own research and make a personal decision based on your own tolerance for risk. I currently do own a position in TIE.