In this week’s edition you will find:
- Where We Are
- What Was Important About Last Week
- What We Are Watching For This Week
- A Word On Discipline
Where We Are:
Taking a look at the broader market:
The holiday shortened week gives little evidence to support a strong bias.
As the indexes climb above their 50-day MA’s we are encouraged to see Telecom, Energy and Biotechnology establish new highs.
But the broader picture portrays a damaged bull trying to regain its footing.
Though conditions lean slightly toward a positive environment for longs, it’s not enough to take a full swing at.
We’ve taken advantage of setups in Energy, as mentioned for subscribers, but few stocks are meeting our strict fundamental guidelines.
April tends to be a strong month for the indexes. We want to take things on a day-by-day basis, keeping an eye on price and volume for further clues.
The Dow Industrial Average
($INDU), +1.7%, claws its way back above the 50-day MA.
The S&P 500
($SPX), +1.6%, regains its 50-day MA.
($COMPQ), +2.1%, closes at the gap left from early March’s downpour, and also conquer its 50-day MA.
($RUT), +1.6%, trades above its 50-day MA for the second week in a row as it shows relative strength against the other major indexes.
Volume indications confirm an uptrend with a Follow Through Day in the books backed with an additional accumulation day across the indexes.
Key chart action for the week:
Charts courtesy of Stockcharts.com
The U.S. Dollar Index slides to a new low for the year, trading well below its major MA’s.
The Gold & Silver Miners Index moves further above its major MA’s, coming closer to knocking out a bearish head-and-shoulders pattern.
The Consumer Index and Cyclical Index trade comfortably above their major MA’s.
The Technology Index recovers above its 50-day MA, with much work to do before regaining highs made for the year.
The Semiconductor Index consolidates in a trading range, closing just above its 50-day MA.
The Banking Index hugs its 200-day MA, trading below its 50-day MA.
The Broker Dealer Index trades between its 50-day and 200-day MA’s.
The Retail Index finds resistance at its 50-day MA.
The Software Index moves closer to a new high.
The Telecom Index hit a new high.
Healthcare cruises north of its 50-day MA, moving closer to a new high.
Biotechnology hit a new high.
REIT’s struggle below the 50-day MA and above the 200-day MA.
Transportation hugs its 50-day MA, with much to recover before regaining a new high.
The Energy Index broke out to a new high.
What Was Important About Last Week
Immucor (BLUD) reported third quarter earnings of $0.21 per share, $0.02 better than consensus. Revenues rose 21.3% year over year to $57.1 million versus consensus of $55.1 million.
Micron (MU) reported a second quarter loss of $0.07 per share, $0.06 worse than consensus. Revenues rose 16.5% year over year to $1.43 billion versus consensus of $1.47 billion.
The ISM non-manufacturing business barometer (a measure of production growth in the services sector) declined to 52.4 in March from 54.3 in February. The consensus expected a rise to 55.5.
The ISM Manufacturing index fell to 50.9 in March from 52.3 in February. The consensus expected a smaller drop to 51.1.
What We’re Looking For This Week
Key earnings releases:
- MONDAY: Schnitzer Steel Industries, Inc. (SCHN)
- TUESDAY: ALCOA Inc (AA)
- WEDNESDAY: Bed Bath & Beyond Inc. (BBBY), Christopher & Banks (CBK), Genentech, Inc. (DNA), Research In Motion Limited (RIMM)
- THURSDAY: Commerce Bancshares, Inc. (CBSH), Fastenal (FAST),
- FRIDAY: General Electric (GE), Infosys Technologies LTD (INFY)
On the economic front we have potential market movers with:
- MONDAY: none
- TUESDAY: none
- WEDNESDAY: Crude Inventories, FOMC Minutes, Treasury Budget
- THURSDAY: Export Prices ex-ag., Import Prices ex-oil, Initial Claims
- FRIDAY: Core PPI, PPI, Trade Balance, Mich Sentiment-Prel.
- The Growth Stock Landscape
- What We Like – What We Have
- This Week’s Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS
This Week’s Word On Discipline:
“When things are steep, remember to stay level-headed.” – Horace