Saturday, January 29, 2011

Weekly Sector Report | 01/28/11 (by Leisa)

Such a day in the market on Friday!  The unrelenting march forward was stopped and then pushed back.  For the week, though, the change was merely a .35% decline.  However, looking at the sector/industry charts, you will note that that there has been some serious damage done to these charts.  Drilling down to individual stocks, the carnage is even more brutal.


We must be ever cognizant that market indices are like a house which goes up brick by brick.  For an index, the bricks are individual stocks and their collective performance.  An index house will eventually roll over once the sector bricks are weakened one by one--but that rolling over is through a successive failures in stocks/sectors. That is why topping is a process. And while the market tops over a period of months (e.g. Financial topped in Feb of 2007 (in fits and starts); Basic Resources topped a full 16 months later), they all seem to bottom at the same time, with October 2008 and March 2009 a collective double bottoming for every sector.


I've been providing a view of the total stock market index.  Let's take a look at that daily chart here (click all images for enhanced viewing):

As we can see by the volume@price bars, we have quite a bit of price memory here.  Note that the last peak is at the bottom of the bar which would offer the next range of support with some worrisome vacuum underneath.


How did our sectors fare over the week?

Here are the top/bottom ten performers at the industry level (This is weekly only):
In days such as yesterday when all the world is going to hell (or seemingly so), spotting divergences is informative (for those of you that trade individual securities v. indices).  For those of you inclined that way, this weekend is a good time to review that information which you can do easily on FINVIZ (though I have prepared my usual report for you which you can find here):
  • Industry subsector performance: You can find the industry subsectors here. (sorted in best to worst).  If you like to see this information graphically, you can do so here.
  • Individual stock performance:  You can find individual issues here (sorted best to worst)--be sure to use the filtering tools to pull out thin capitalizations and low priced stocks--a graphical rendition is found here where you can see the sector + individual notables (the good, bad and the ugly).
  • Short interest change:  You can the change in short interest (in addition to the total short interest here.
  • Relative Volume:  Viewing sectors by relative volume can also be fruitful.  You can find that view here.
Let's see where the short interest changes are:

Whether we had a healthful consolidating pullback or something more will be determined with the passage of time. Many of the sector leaders (e.g. automobiles/parts) have been weakening over the past couple of weeks. Price action has moved ahead of the news. News is now coming out that informs the correctness of the market's anticipation of future events.


The market by its nature is anticipatory; however, we should always remember that its crystal ball is cloudy. It does act decisively when its expectations are not met. We should as well.


I wish you good trading for next week, and I hope that that you find some use from this week's report.

Wednesday, January 26, 2011

The level of utmost importance

Below is the weekly chart of S&P500 – as you can see we are right where the magnificent fallout has started back in September 2008…yes – that is when even the most sold out on "we are fine" utopia (like Kudlow and CO or Maria Bart..whatever her name is…still remember Maria full of …grace cheering from Davos in Sep 2008: "CEOs say we are fine!!!" – f.. it – what else CEOs are supposed to say to bagholders???)

I think if not immediate downside, then at least continuous consolidation at this level – 2 years is nothing for market memory…a lot of people still incredibly happy to "break even" and forget that market has ever existed)


We are on the week 8 on weekly of sell setup.



And looking at daily chart – 13 sequential AND combo  countdawns produced brief selloff/consolidation.  To be fair – RSI on wave 5 does not look bearish…but I don't put too much faith in RSI.  If I still have ability to be excited about anything – that would be linearity of ascent (green arrow) – how, how in the hell is it possible to stick to the straight line for so long???


Sunday, January 23, 2011

Weekly Sector Report | 01/21/11 (by Leisa)

The week saw the broad market index decline 1.05%. Only two sectors, media (+1.3%) and utilities (+.42%), were positive. Here is the weekly profile on the sectors (click all images for enhanced viewing):
For the subsectors, here is a graphic of the top/bottom performers.  GE led the Diversified Industrials with a 4.9% change for the week:
This week short interest changes were reported. Familiar sectors are still on the top 10 list.  I am also including for you the top absolute % changes in short interest so that you can see where the bears are increasing their holdings.
As is usual, I have prepared for you a chart book.  I have a lagniappe for you!  I included chart thumbnails for the 148 subsectors as well as the 24 sectors (in addition to the detailed weekly/daily charts).  Sometimes the bird's eye view helps build perspective.  You can find the chart book here. And finally, I will close with the chart of the total stock market index--both daily and weekly. First the daily, then the weekly. 

The weekly chart (2nd chart) shows no damage to the trend lines, and the daily chart is showing some bumping against its trend lines.  (Note that a 13 EMA on a weekly chart is a 13 week EMA, while on a daily chart it is a 13 day EMA).


I hope you find this information and the weekly chart book download helpful to your due diligence efforts.

Wednesday, January 19, 2011

The Charming Sound of Hungarian "DONTBLONG"

2011-01-19_2104 A study is made of the equilibrium of a capillary liquid that partly fills a container and is in contact with several isolated gas cavities. The conditions of its stability are obtained with allowance for the change in the internal energy of the gas when the free surface is perturbed. The analysis of these conditions is accompanied by the solution of examples.

Translated from Izvestiya Akademii Nauk SSSR, Mekhanika Zhidkosti i Gaza, No. 3, pp. 4–9, May–June, 1984.


That is when change is coming into town – when everyone is overly contempt with New Laws Of Rigged Game – Up Up Up and away…

The only problem with widely expected QE2763 is that laws of physics and math (as "whatever energy was deposited into one bank volt was taken from some other place and might be reclaimed sooner or later" and "billions added to insolvent banks were subtracted from you and me and patience is not limitless" (As oppose to human stupidity according to Einstein)….anyhow – enough of this Hungarian Mumbling – just thought it might be appropriate after me misbehaving all around blogosphere yesterday…


Now – on a little more serious and sober note – take a look at VIXometer's chart – this "complacency level" of around 15 has provided quite a burst in volatility energy in the pas and it is holding now since the end of last damned year.

Also, deserving attention that HUGE falling wedge – patterns of such duration and magnitude cannot be faked – they WILL resolve according to traditional technical believes – the hardest question to answer because of duration is WHEN.


I'd say my expectancy was to go short last week, then I re-evaluated it to the beginning of this week – and I slowly building long puts position…yet again…





The Answer I'd like to know … are we seeing disconnect between falling dollar and market not capable of rallying on that normally reliable tidal wave?





P.S. NOTY ask me what are those formulas at the top of the post – I have NO IDEA!

Sunday, January 16, 2011

Weekly Sector Report | 01/14/11 (by Leisa)

The broad market advanced .73%.  Much is being made of how January starts as a great prognosticator for the balance of the year.  Statistics for the first week in January and what that bodes for the entire market abound, along with analogs, ideologues and all manner of other 'stuff'.  History repeats, rhymes, and more often reminds that we never step into the same river twice, but most times our feet will get wet, sometimes the river has run dry and sometimes we just might drown.  I find that to be a useful mental model as an antidote for over generalizations and wild prognostications.


Here is how the major sectors performed (click on all images for enhanced viewing):

From the subsectors, here is a view of the best/worst performing areas:
I have created a chart book for you which you can find here. Asset Managers is the second best subsector.  Let's take a look at the sector chart:
  There are many constructive charts in this space (so long as the market remains hospitable!).  I created a chart book for you for the names in this space for those interested.  You can find it here. Let's close with looking at the broad market chart. I'm including both a weekly and a daily chart.
The weekly chart remains in the overbought area.  On the daily chart, the daily is making a new high without the oscillator--a bit of negative divergence. As you can see from the broad sectors, money is moving into new sector leadership...and so long as this broad index moves up, that also denotes new money coming in.
I wish you good trading this week.

Wednesday, January 12, 2011

Not caring – feeling GOOD!

"Did you ever notice how difficult it is to argue with someone who is not obsessed with being right?"

Dr Wayne Dyer



If you ask me – this is the only way to make it day to day in this pathetic enterprise called "Free US Equities Markets" – everyone knows now it worth nothing, it means nothing and it continue to exist with the sole purpose of playing governments of Creditor Nations for the fools ( How stupid they really are to expect that US debt will ever be repaid or be worth anything more than a paper it printed on?)

May be there is yet another reason for markets still to be open – casino manager also known as "portfolio managers" (or for people who understands - "People worse than Car Sales Folks") – have to get paid… so they became self sufficient and keep playing the game pass the graveyard…


It feels so really good to be completely disconnected from what is going on, I don't even feel sadness for the country I called home for the most of my adult life…screw that


Ubi panis ibi patria

Although "bread" is getting very hard to come by, that what happens in every empire right before it implode…slaves from mass media call it "get ready for different times"


Speaking of market – I might just try to take yet another trade, short this time – by the end of the week – I think overall we will keep climbing up, but short term going into end of January – beginning of February there is a good chance for SPX to see 1200. 

Trade well…



Saturday, January 08, 2011

Weekly Sector Report | 01/07/10 (by Leisa)

The first week of the new year saw the broad market index advance 1.05%, and some big winners and losers among the sectors.  Let's take a look (click on images for enhanced viewing):
Automobiles and Parts was the big sector winner.  GM (+5.75%) and F (+8.8%) were big contributors along with  LEA (+7.18%) and MGA (14.83%).  HOWEVER, the auto parts stores had a drag of a week. Big sector losers were Gold Miners and Platinum and precious metals--largely a reaction to the USD's strength.  Here are the top/bottom performers (using sub-sectors):
Home Construction experienced a surge with KBH's good news.  This sector is heavily shorted and the bears got caught with their hands in the honey jar.  I created a chart book for you with the short interest and the weekly charts.

Let's take a look at the broad market index:
There is some negative divergence between the oscillator and the price action; however, the daily chart is not extended relative to the trend line.  Earnings will be coming out soon and will feed the charts with new information.  As we know, it is not the news, but the market's reaction to news that is instructive.

For your weekly research, I've prepared a chart book for you on the major sectors as well as some weekly change in price and short interest on subsectors. You may download it here (9.1mb). Disclosure:  I have no positions in any stocks mentioned.

Thursday, January 06, 2011

A-B-C's of all mighty Dollar

This is that wonderful time of the year again and I am not talking about Holidays, but damn FLU SEASON – and if there is anything I would never miss – these are 2 things bad fight and good flu.  My head is spinning and that is probably why I cannot make too much sense out of market action lately (at least now I can blame flu for that)


And, I think that is mostly because Dollar is in corrective A-B-C on daily and it might move up good 4-5% (But don't expect market to go down – we all witnessed total disconnect of the dollar and a broad market during what we expected to be corrective market moves down during currency run ups.


OK, here is 2 variant of the same daily UUP chart, I am off to buy more Teraflu and I am making a mental note not to forget to pee before I go to bed…

2011-01-06_1847 2011-01-06_1847_001

"Linearity of these waves is nothing short of amazing, same straight moves since the very beginning of Quantive Easing though Monetary Diarrhea

Tuesday, January 04, 2011

Bye Bye Blackbird?

Gold ended the day down 2.41%, with silver even worse at a negative 3.02% on the day. Whether or not this will be a meaningful pullback ahead and a clue that the dollar is once again ready to move up remains to be seen, but as discussed for the past few days, the possibility of margin calls on these PMs could prove fruitful for shorts. We'll see. There are several valid arguments fundamentally and cyclically in both directions here and I'm thinking we're too early into the year to really know much at all. I *do* think if there is any panic selling, this will be the place we'll see it.  There was an obvious risk-off trade happening today, but if that translates into a nice pullback for the INDU or SPX is up for grabs.  SPY ended with an inside candle on nice volume, for what it’s worth.

Just a few charts, and many, many thanks to everyone who keep the plates spinning on the blog each day.  Best to you all tomorrow and beyond. 


bdi_12_4 iwm_12_4 

hg_12_4 yg_12_4

Meanwhile.. what’s the deal with the Blackbirds?  O_o


Sunday, January 02, 2011

Weekly Sector Report | 12/31/10 (by Leisa)

The last week of the year saw the broad market index eek out a .03% increase. However, we know that the action is in the sectors, so let's see which cylinders are firing in the market's motor (click on all images for enhanced viewing):
Basic Resources, Oil and Gas and Telecommunications were the winners.  Healthcare, Personal and Household Goods and Travel and Leisure were the losers for the week.  Taking a look at subsectors, here are the 10 top/bottom performers:
I was interested in the Mobile Telecommunications sector's performance.  There are some interesting chart set ups in that sub-sector.  I created a chart book for you with the Communications Equipment tickers which you can find here . You can also visit FINVIZ to get a deeper profile for the names in this sector by clicking here. Short Interest:  Here are the sub-sectors with the highest short interest.  Note that short interest is updated 2x per month.
To close, I want to present a chart of DWCF, which is the Dow Jones Total Stock Market includes all US listed stocks that have a readily available quote.  You can see a linkable version of this chart here.

I created a chart book for you, which you can access here.

Best wishes for the New Year!