Tuesday, May 09, 2006

Markets Close Mixed On A Boring Tuesday; FOMC Meeting Tomorrow.

It was another pretty boring day, besides the Dow Jones Industrial Averages intraday action, with a lot of sideline sitting by most market participants waiting for the FOMC interest rate decision tomorrow. It is widely expected that they will hike again, for the 16th straight time.

The DJIA led with a .5% gain, the SP 500 rose less than .1%, and the Nasdaq was the laggard with a .3% loss. The DJIA was basically the leader thanks to GM and the Nasdaq the laggard thanks to DELL.

Volume was higher on the Nasdaq and lower on the NYSE. The higher volume in the Nasdaq was called a distribution day by IBD. But, as they said in the "big picture," the volume was much lower than the 50 day volume average. The quiet trade Monday and the volume being much lower than the 50 day volume average allows me to say "this is not a distribution day." I am not counting it as one and if you don't want to either you would be smart too.

Breadth was pretty much even, again, on the NYSE and decliners beat advancers on the Nasdaq by a 9-to-7 ratio.

The IBD 100 managed a gain of .7% today, showing that leading stocks are STILL outperforming the market to the upside. The leading Metal sectors continued their rally today and the Beverages-Soft Drinks group led the industry groups to the upside. The weak stocks on the day were Medical stocks.

Overall, to me, when I look at things, it was a very uninteresting day. But what do you expect with the Fed meeting on the calendar tomorrow. The only thing of interest, once again, is the action after hours.

CSCO (another stock I could care less about) came out with a strong earnings report and this is the first one I can think of for a 4-letter big cap tech stock. CSCO is in a strong uptrend since its 2005 lows and is holding the 50 dma. So if this stock can get some legs going maybe it can help the Nasdaq. But I am not sure if CSCO even matters anymore to the Nasdaq. If DELL and MSFT is any indication, the Nasdaq is slowly forgetting about another old friend and its performance has nothing to do with another old big-cap stock.

So it is up to the Fed tomorrow to light the fireworks. Let's see if Ben brings the good stuff. What is the good stuff? How should I know?

New Swing Longs: TLEO AVII CHRD EXFO CPSS GPRE AAU -- For more info on longs go to Investors Paradise.

New Swing Shorts: NONE

Longs Outperforming Market(number is % gain since purchase): ERS-377 HOM-103 BGC-104 NXG-225 SLW-137 BBD-141 CBG-135 WIRE-216 AUY-166 MNG-194 KNOL-130 LCC-151 CLG-129 RBAK-208 NTO-106 TGB-170 AKAM-128 PEIX-120 ACTG-94 IFO-35 TXCO-61 IVAC-26 VTS-40 CLZR-49 BAS VPRT VIMC-67 LRCX-57 TZOO FTK PKTR KDN-29 PNRG-64 TRAD-58 GLBC ICTG-85 MNST-72 KCS BWLD TYL CAMP WST TMI CIB-35 RMBS ZEUS-71 KEX-61 MTU EFII NGPS-25 BAM-39 MDCC-44 FSTR NMR-51 TOMO-35 MMK KBX LYV WNR QCC BWP SPWR-43 RUTH CUP-34 ANO DIL-40 TMY SIM-59 CGR GBN-60 FMTI SCVL BGO-89 KGC-64 CDE-29 RBY TVIA PPCO DIS MERX-55 CPTS-34 RNWK BEAV-55 BE DTLK NNDS-43 CRUS REFR AOB BWLD SPI USB GNA-29 LTRX-40 CTCI CTEC MEND

Shorts Outperforming Market: NONE

Stocks On Radar Screen: WEL QEE

Longs Gone Wrong: VTIV -- 7% loss. Low volume bounce. Should not have take it.

Disaster Endings To Fine Longs: IMMR -- selling rest with a 6.5% loss. GEMS -- selling rest with an 11% loss.

17 comments:

Joshua_NControl said...

Mac: ECIL and IVAC are both good longs with a cut loss of a close below the 50 dma. You are late so don't buy as much as you would if this was a fresh brand new breakout from a first stage base. GES is not a cup with handle. Far from it. Volume is all wrong.

IFO looks like DXPE and TGC. Will it do what they do? It could. I would agree with your assumption. Very similar indeed.

You are very welcome. Thank you for the kind words.

Joshua_NControl said...

Kelly:

Get back in the two losers? Why? Do you ever see me do that, unless they set up again like AAU has? Why would I want to be long a stock under its 50 dma when historically the biggest winners don't start there safest run under that level?

Why are you short RIMM in a market where 3 out of 4 stocks follow the trend? Don't try to be smarter than the market. Whatever info you have...trust me...everyone else has. You know NOTHING that the big boys don't already know. They knew it months before you did.

Joshua_NControl said...

Or-Kiter:

Bravo for such a great answer and analysis. I agree with it all. The financial academia BS sounds all "smart and all" (done in a sound of a hicks voice). But if you want to make money in the stock market it is best to study history and deal with facts. If you want to make money in the stock market, you will ignore everything you are taught in the college campuses or in a text book. It will only help you know what you are talking about when you are losing money in the stock market. Knowing why stuff works doesn't mean you are going to know how to make money with it.

I say street smart HS drop outs will and do better than college graduates in the stock market. College kids sometimes think they are smarter than the market. tsk tsk, elitist. The market will humble you very quickly.

Market Speculator said...

hey, hey...I am a college grad...

I think most of the ellitest schools do think they can outsmart the market. I definitely think ppl. try to outsmart the market. Its like playing with a match standing over an open pit filled with gasoline.

Anonymous said...

i picked up CPSS at the close yesterday. chart looks pretty. i also was tempted to pick up AAU on the breakout but i am sketched on buying anything with gold until they have a pullback, gold will probably keep going up despite every grandmother now owning it and ill be kicking myself for not holding onto more of it but 26yr highs for gold is getting ridiculous. Kelly, regarding shorts i almost shorted a stock last week MFLX when it broke its 50dma on volume and started rolling over but i was too sketched with them reporting upside(the risk/reward is not in your favor right now to short). this morning it looks like i should have shorted since MFLX is gapping down 10pts pre-mkt, but it could have gapped up 10pts too. thats the risk of shorting right now, you're fighting the upward trend and some stocks could just be consolidating instead of rolling over, its too early to know. read stan weinstein's books "profiting bull and bear markets" to get better understanding on shorts

Anonymous said...

ps- that was me on comment above. out, or-kiter
(i dont have a blog ID b/c ill never remember another password/name for another website(it gets overwhelming)

Anonymous said...

Hi Josh:
Nice "escape" from AVII with stock tanking prior to opening!! LOL You're better than David Blaine.

Hey, it doesn't hurt to be lucky as well as skillful.

Sector has been tough, but this too shall pass.

"A. FRIEND" of your BLOG

Anonymous said...

Hi Joshua.

I've seen a numerous breakouts across the board in the gold sector(ERS has bounced also, but on volume alot lighter then the pullback).

Can you confirm with me that this the idea of laggards making a final push up indicating the correction hitting gold stocks?

Here are some of the breakouts worthy of noteing:
QEE , MNG , AUY , PMU, GLE

Guys - What's interesting here is that all of these are speculative sub $15 stocks, which when looking solely at the charts(with NO other info) look worthy of a buy in some cases.

With this, I would also like ask. Do you have any recommendations on great books on economics?


Thanks heaps. Love your blog.
It is an amazing learning resource and will continue to be so when it goes commerical(which anyone would say, you deserve).




From
An elitist high school kid who you know.

Anonymous said...

avii, i think josh was strictly making a SPECULATIVE technical call on AVII due to yesterdays action) but for newbies dont blindly buy a crappier stocks like AVII..Mr Mkt has been saving people who have bought crappy co's but sooner than later the low-quality stuff is going to get smacked. (AVII spent too much time below its 50dma and 50dma was trending down especially in a strong mkt for me to touch it,

Market Speculator said...

last day to get daily graphs!

Anonymous said...

thanks for the advice staying out of the two losers. CAMP, dissaster today, but the winners such as CUP and DIL, which I took a few porfits from CUP & DIL would you agree to take a few profits here?
RIMM short,,,will watch it closely, if it gaps down below 200 EMA....
What technical do you use to dertermine other than the price above the 50 & 200 EMA, volume,
Finally, which patterms do you think is best to determine entry points?
appreciate all you advice.....SIMPLE the BEST........
Kelly

Anonymous said...

CUP hit a high of 5.5 today...down over 10% to 4.87....I sold all my shares at the 5.15 ? do you try to keep all stop losses at 7% from the new highs?

thanks

Kelly

Joshua_NControl said...

I did not escape the damage. My maket order for 100 went off. So I did get hit by AVII. CAMP, TMTA, MFLX too. Luckily on MFLX most profit was taken.

This is my most dissapointing day this year. Notice, however, no one should have been in AVII or TMTA as they were not IBD stocks. CAMP is a disaster! MFLX already showed many profit taking signals and I was only holding 20% left of original position.

This is my worst day this year. Not on % loss in one day but on a psychological aspect. Lots of dissapointments. I had about four of these days last year. This is my first one this year.

Anonymous said...

i like AZPN action today and considered buying a little today but i am starting to get gun-shy on tech after today's move on nasdaq. this market is spastic. i think ill wait til tomorrow as it seems like i'm having recent buys starting to break down(semi's looking ugly today)

Market Speculator said...

How about HANS???

What a move!

Anonymous said...

anyone else getting tired in this mkt. its becoming harder to hold onto profits on my recent longs. i'm worn out, this spastic sector rotation is tiring. sustainable new breakouts are becoming fewer.

Anonymous said...

HANS is crazy. TIE also keeps running and looks like a climax top. unfortunately, i sold it 2-3months ago before they announced the stock split. it was dumbest sell i've made in years. -or-kiter