Market Discussion

[pinoleropuro]

this is from another news letter

If you were out of the market for the past few months and now you think there is enough confirmation to get back in, my answer would be no. Not in the overall market.

Reason being, that the S&P 500 just started ticking down onto sell signals again, and also the percent of optionable stocks in a positive trend is stuck at 29%. I want that to reverse up to about 35%. Then, we'll really start buying.

This is totally different from all of the pullbacks in the past 5 years.
Markets repeat themselves. All the time. Reason being that no one ever learns. Not from history books, not from anything. They always say, "Oh it's different this time."

But is it?

People usually have something set in their minds and all the proof will still not convince them.

What I can say right now is that things just aren't all that bullish.

EXCEPT for a few sectors. And, those sectors are Machinery, Some Oil Stocks, and some metals and mining stocks.

[la-onda]

shadowtrader update:

http://www.shadowtrader.net/videos/sunday021708st.html

cheers
O.

[David Randolph]

I was just starting to write today's updates when I saw that the US stock markets are closed today due to Washington's Birthday/Presidents' Day holiday.

I'll wait until tomorrow before the open because there can be news out between now and then.

Anyway, I wrote some analysis on the Watch List.

Enjoy your holiday

[terainvestment]

Hi David,

what do you think now about SIMG?
Is a good buying at this price (4,6$)?

Ciao,

Tera

[poli]

Terainvestment:

Concerning SIMG, On my request David did an analysis on October 21st, that you may want to take a look at.  I sold the shares that I had at the end of October for about 15% profit.  I have been keeping an eye on it since and I just bought back in again last week.   The company just entered into an accelerated stock repurchase program of 62 million, to be completed by 6-3-08, and will start an additional 100 million repurchase program over a 3 yr period starting after this accelerated repurchase is completed.  I felt like it was a good time to get back in again.  I will know in the fullness of time. (Looks good so far)  Good health and trading.

Poli

[terainvestment]

Thanks Poli for your great feedback!

[David Randolph]

Terainvestment:

Concerning SIMG, On my request David did an analysis on October 21st, that you may want to take a look at.  I sold the shares that I had at the end of October for about 15% profit.  I have been keeping an eye on it since and I just bought back in again last week.   The company just entered into an accelerated stock repurchase program of 62 million, to be completed by 6-3-08, and will start an additional 100 million repurchase program over a 3 yr period starting after this accelerated repurchase is completed.  I felt like it was a good time to get back in again.  I will know in the fullness of time. (Looks good so far)  Good health and trading.

Poli

Thanks for replying terainvestment's question Poli

By the way, here's the link to that analysis on SIMG.

Feel free to post the share buyback plan information on SIMG's thread, or else I will do that tomorrow or so.

The market is opening pretty strong today, with the SPY trading at $136.4 in the pre-market, after closing at $135.14 on Friday.

It's a good thing that we've avoided a second trip down to $126

Now the relevant line on the chart below is the yellow line. If the SPY manages to close above that line (which today will be standing at $138.35), bears can kiss their arguments goodbye and start buying, because this market will move towards new all time highs above $156.

You know my expectation. We'll see what the future holds.

[David Randolph]

I'm not alone in my comparison with the 1991 recession:

Fed official: 2008 similar to 1991 recession

And the stock market behaved like this:

[la-onda]

shadow update again:

http://www.shadowtrader.net/videos/sunday022408st.html

cheers
O.

[David Randolph]

Interesting article from Mark Hulbert:

Top market-timers still bullish

The late day surge on Friday and consequent respect of the ascending support is one example of one of the reasons I never make intraday decisions in the stock market.

[notbeln]

Recession, recession..

http://biz.yahoo.com/ap/080225/recession_watch.html

[terainvestment]

already priced in.

Italy grows 1,5% on average and when we reached 2% we talked of expansion.
USA grows 4% on average and when it hits 2,5% everybody is panicking.

Strange World!

[tokyopua]

Bond insurer news from S&P causing a great surge in the market in the last 10 minutes.  May be time to rename this thread as we are likely getting that break to the upside in the symettrical triangle, and this looks like it will qualify to get us out of the correction if it holds.   

[tokyopua]

Bond insurer news from S&P causing a great surge in the market in the last 10 minutes.  May be time to rename this thread as we are likely getting that break to the upside in the symettrical triangle, and this looks like it will qualify to get us out of the correction if it holds.   

As expected, good enough to bring us out of the correction per IBD definition    Confirmed rally baby! 

Here is the IBD big picture article today.  Note in the end how they basically allude to what David has been saying about the stock market action in the late 90s 

-------------------------------------------------------

Good news for bond insurers sparked a rally late Monday, sending stocks sharply higher.

The NYSE composite jumped 1.6%. The Dow industrials bounced 1.5%, the S&P 500 1.4%. The Nasdaq gained 1%.

NYSE volume grew 8% compared with Friday's level, a good sign on a big up day for NYSE-traded stocks. Nasdaq volume eased 8%.


The move by the NYSE indexes hoisted them above a narrow trading range started three weeks ago, when the market plunged Feb. 5.

The Nasdaq flashed a follow-through day Feb. 13, suggesting a positive shift in direction. But the market failed to make any headway from there, as the Nasdaq clocked a distribution day the next session and the broad market stalled.

Monday's move, fueled by big gains in the session's final 90 minutes, was an encouraging sign of conviction. Reflecting that improvement, we've changed the outlook on today's Market Pulse to signal that the market is now in a confirmed rally.

That means it's time to be up on your watch list. Use IBD's Stocks In The News, IBD 100 and other screens and sections to find top-rated stocks setting up in smooth bases. The Daily Stock Analysis at Investors.com can also help.

You'll still want to see growing strength among leading stocks in the coming days and weeks. A rally never goes far without the support of market leaders.

Monday brought some good news on that front, as the IBD 100 galloped 1.7%. Energy stocks led a big day for Wall Street leaders.

Stone Energy (SGY) gained 2.49 to a 52-week high of 48.65, breaking out of an eight-week cup base in fast trade. The oil and natural gas firm reports earnings Wednesday.

Fellow exploration and production firm Forest Oil (FST) climbed 1.48 to 50.98. The stock may be adding a handle to its cup-shaped base. Forest's earnings and sales growth have accelerated in recent quarters.

Southwestern Energy (SWN) rose 5.89 to a new high of 67.61. The oil and gas producer has improved its profit growth in the past two quarters. Analysts expect the trend to continue when Southwestern reports results on Friday.

EnCana (ECA) cleared a handle in a double bottom. The oil and gas producer's Q4 profit rose sharply, though its results have been uneven.

Elsewhere, agricultural and industrial salt producer Compass Minerals (CMP) blasted to a record high, surging 3.42 to 59.11 in double its average turnover.

Stocks rallied late Friday on bets that troubled bond insurer Ambac could agree to a bailout plan with banks this week. Instead, Standard & Poor's reiterated its top-tier rating on Ambac Financial (ABK) and rival MBIA. (MBI) S&P also removed MBIA from its CreditWatch list.

Both stocks notched big gains on the news. Other financials, including big-name investment banks, also fared well.

Meanwhile, the National Association of Realtors said existing-home sales fell to 4.89 million in January. That reading was down from a revised 4.91-million-unit annual pace in December and at its lowest level in nearly a decade. But the report also beat estimates, offering a rare sign of optimism for the battered housing market.

Lately, fears have grown that the economy could be headed for a recession. Bond insurers and the housing market have fed into those concerns, as a broader credit crisis has weighed on multiple industries, most notably the financial sector.

That said, the market tends to look ahead. Stocks have often rallied in times when the economy looked weak, including in the early 1990s.

Rather than trying to predict what the economy might do next, watch the action of the major indexes and leading stocks. They're the best barometer of the market's health.

Just remember that the leaders of the last uptrend often don't participate in the next one.

Google (GOOG) slid 21.36 to 486.44 in rapid volume. The stock hit a six-month low and now sits 34% off its high. Despite its brand name, Google is not a market leader right now.

==========================

[David Randolph]

When you have this news ...

Energy, food push January's PPI 1% higher
Year-over-year increase highest since 1981; monthly core PPI up 0.4%

... and this other one ...

U.S. consumer confidence plummets in February
Expectations hit a 17-year low on job, economic worries

... and the following green light from a technical standpoint ...



... all in the same day, what you have is the market saying loud and clear that it will go up. It is up to each individual to be with it or against it.