Good Weekend to all,

Lets get started and analyze this market to see what occurred this week, and break it down into something with some substance.  The week ending 03/07/08 ended like this.

• DOW Jones Down 370.67 points (-3.02%)
• Nasdaq down 58.77 points (-2.58%)
• S and P 500 lost 8.16 points (-0.62%)
• Russell 2000 up 25.94 points (-3.78%) 
  

According to Nasdaq.com there were 84 new 52 week highs during this past week and 1488 new 52 week lows.  Last week it appeared that the New 52 week lows were starting to gain more momentum and I think we had confirmation on that fact.  I expect this trend to continue, and the should continue in the same fashion as well.

There is a lot of talk about a bottom in place, but I am not one of those who purport a bottom at this time.  The market is trying to tell us in my opinion that it will want to go lower.  You must plan accordingly.

If you look at the chart at the bottom of this commentary you will see that the major psychological indicator that glorystock.com uses (% Bulls) went from 42.0% in the previous week to 41.9% this last week.  Here is how the rest of the Investor intelligence numbers looked that coincide with %Bulls.

• % Bulls= 41.9%
• % Bears= 36.6%
• Bull/Bear Spread= 5.30
• Bull/Bear Ratio= 1.14

Percent Bulls dropped 1/10th of a point which is not indicative of a bottom in a recession.  (Historically closer 30% is the benchmark).  The % Bears went up slightly to (36.6%) which is  more then the Bulls went down, but still is nowhere near the (60% benchmark) seen in a recession.

The markets have been and should continue to be in trouble.  The Dow's best closing high occurred on 10/09/07 at 14164 and change.  This Friday the Dow closed at 11893 a difference of 2271 points or 16.03% off the closing all time high.

The Nasdaq Year to Date closing high was set back on 10/31/07 at 2859.12 and closed this Friday at 2212.49.  This is a loss of 646.63 (-22.61%) points from the 10/31 high.

The S and P had a Year to Date closing high of 1565.15 and currently closed last Friday at 1293.37.  This is a loss of 271.78 points or 21.01%

The Russell 2000's year to date closing high was on 07/13/07 at 855.77 and closed this Friday at 660.11 for a loss of 195.66 points or 22.86%

As we can see the DOW has a bit more resiliency and for good reason too.  I suspect when oil falls, the DOW is going to tumble and catch up to the rest of the market.  We will see.

The coming weekly calendar of economic events looks like this:

• Mar. 10 Wholesale Trade Data 
• Mar. 11 Trade Gap(Deficit) 
• Mar. 12 Crude Oil Inventory 
• Mar. 13 Retail Sales 
• Mar. 14 Feb. Consumer Price Index
  

Long Stock Picks

New for week of 03/02

• CMZ (+1.69%) breaking 12.10 on high volume.
  

From Week of 02/25

•  FMX (-8.6%)   MLHR(-7%) (Excellent Fundamentals) Return on Equity 80+%

Now on the inverse, there are many stocks that are possible shorts on any market strength that brings these stocks close to their descending moving averages.

New for the week of 03/03 (Shorts). 

• ATK(-2.98)  DHR  IIT 

From the week of 02/25

The percents listed below represent the actual loss in equity share price after the stock hit its moving avg and bounced to the downside on the week of 02/25.  Stocks listed below with no percents did not re-test their moving avg's during the market strength for the week of 02/25.

•   TLEO    TROW(-14.04)     EPP(-10.5%)     LFC
•   MKC (-4.32%)    CASY      MYGN

Of course with any short or long position, the overall market trend should be taken into consideration.  If the market continues down the short side of the market is a good place to be (obviously).

Have a great week all.

TT

Good Weekend to all,

Lets get started and analyze this market to see what occurred this week, and break it down into something with some substance.  Week ending 02/29/08 ended like this.

• DOW Jones Down 114.38 points (-0.92%)
• Nasdaq down 30.99 points (-1.94%)
• S and P 500 lost 22.12 points (-1.63%)
• Russell 2000 up 9.66 points (-1.38%) 
  

According to Nasdaq.com there were 272 new 52 week highs during this past week and 514 new 52 week lows.  It appears that the New lows/new high ratio is starting to pick up steam again.  Company financials are not there so I would expect some more downside just on the sole fact that the volume was higher friday then it was any other day of the week and for the record, IBD called this a good distribution day.

It surely took a long time, but the markets finally re-tested their moving avg's and bounced to the downside in a vicious manner.  If you got in the market to go long you are not feeling good now.  TWM, QID,DXD, Short on UWM, and others were all relevant plays and very well may be relevant plays for the nearterm.  If we get confirmation and a follow-through day to the downside we will see serious weakness in equities possibly undercutting the lows of the new year.

If you look at the chart at the bottom of this commentary you will see that the major psychological indicator that glorystock.com uses (% Bulls) went from 41.6% in the previous week to 42.0% this last week.  Here is how the rest of the Investor intelligence numbers looked that coincide with %Bulls.

• % Bulls= 42.0%
• % Bears= 36.4%
• Bull/Bear Spread= 5.60
• Bull/Bear Ratio= 1.15

If you compare these results to the prior weeks you will notice that bullishness is up a little higher then last week , but the interesting thing is that Bearishness is also up a little higher.  So basically there are more analysts making "a" call on their sentiment and there are less on the bench(neutral).  We will keep an eye on these %'s  because I think they are a great indicator or moderate term direction (1-2 months out)

So what News caused us to go south by the weeks end.  Why economic of course and it is more amazing then ever that the Feds and President are calling for non-recession.  I hope I am wrong.  I hope we shoot out of this hole we have dug, but the market is trying to tell us something.  It ain't happy!  Besides that Cramer needs to start taking his Lithium in higher doses.  It's not working because his Biphasic/Bipolar stock market mentality is back.  Friday, I happened to see this man take out his pointer and tell everyone that there was nothing good in the USA.  That is all said and good, but when the market turned around off its bottom a month ago, he called a bottom and he was praising the Fed.  Now he is back to slamming the fed again.  Jim if you read this your antics are garbage.  Sure your a smart guy, but I think your ego hurts you seriously along with your inability to tell the difference between emotional ganduer and reality.   

The coming weekly calendar of economic events looks like this:

• Mar. 03 ISM Manufacturing index and Construction Spending 
• Mar. 04 Nothing Major
• Mar. 05 Productivity, Factory Orders, ISM Services, Beige Book 
• Mar. 06 Pending Home Sales and Initial Jobless Claims.
• Mar. 07 Feb. Employment Situation

Long Stock Picks

New for week of 03/02

• CMZ breaking 12.10 on high volume.
  

From Week of 02/25

•  FMX   MLHR (Excellent Fundamentals) Return on Equity 80+%

Now on the inverse, there are many stocks that are possible shorts on any market strength that brings these stocks close to their descending moving averages.

New for the week of 03/03 (Shorts). 

• ATK  DHR  IIT 

From the week of 02/25

The percents listed below represent the actual loss in equity share price after the stock hit its moving avg and bounced to the downside on the week of 02/25.  Stocks listed below with no percents did not retest their moving avg's during the market strength for the week of 02/25.

•   TLEO    TROW(-7.6)     EPP(-3.6%)     LFC
•   MKC (-4.09%)    CASY      MYGN

Of course with any short or long position, the overall market trend should be taken into consideration.  If the market continues down the short side of the market is a good place to be (obviously).

Have a great week all.

TT

February 24, 2008 (19:50 CST)

February 18, 2008 (23:50 CST)

Good Morning to all,

Happy Presidents day. 

There is lots to talk about, so let us get started.

Last week, in a real nail biter, we had the market participate in the first follow through day of the year (a move of greater then 1.7% on any US index on higher then normal volume), which is usually some type of signal that it is time to start looking for stocks breaking out of bases.  The unfortunate thing is that the very next day, we chalked up a distribution day (Something that I do not recall happening very often at all) which occurred on higher volume then the follow-through day.

When I looked at the weekly charts Friday night, I was surprised to see that that the Nasdaq was flat on the week especially since that was the index that led the Follow-through rally attempt.  Here is how the week performed ending on Feb. 15, 2008:

• DOW Jones up 167 points (1.3%)
• Nasdaq up 11.05 points (0.40%)
• S and P 500 up 18.07 points (1.3%)
• Russell 2000 up 2.37 points (0.33%) 
  

According to Nasdaq.com there were 103 new 52 week highs during this past week and 352 new 52 week lows.

If you look at the chart at the bottom of this commentary you will see that the major psychological indicator that glorystock.com uses (% Bulls) fell from 41.6% in the previous week to 36.7% this last week.  Here is how the rest of the Investor Intellgents numbers looked that coincide with %Bulls.

• % Bulls= 36.7%
• % Bears= 35.6%
• Bull/Bear Spread= 1.10
• Bull/Bear Ratio= 1.03

If you have the book "Guide to the Markets" written by IBD you can turn to page 91 and really get a gleaning at what these numbers mean and then go down to the chart at the bottom of this commentary and do some comparative analysis of prior weeks.

Looking into the numbers, there is some good news that can be seen.  First I want to say I am in no way calling a bottom.  I am not saying the worst is over (I do not think it is.)  All I am saying is that the Bullish sentiment is dropping and the farther it drops the sooner the market will find peace with itself.  This does not mean that a rally will not cause the Bulls to push up their percent.  At this point we are not looking at just a correction.  We are looking at a bear market and it will take time for the market to Bottom and move sideways a little before it picks itself up off the bottom and starts behaving again.  Please do not be fooled by Bear market rallies.

Below is a stock that I think may be note worthy to mention. (Please take into consideration the overall market direction, you do not want to be a speculator.)  This analysis will give you insight into what I look for in emerging technicals from emerging companies.

The First company is a Mexican Beverage company,

"Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) is a holding company engaged in the beverage business. Its operating subsidiaries include Coca-Cola FEMSA, S.A. de C.V. (Coca-Cola FEMSA), FEMSA Cerveza, S.A. de C.V. (FEMSA Cerveza) and FEMSA Comercio, S.A. de C.V. (FEMSA Comercio). Coca-Cola FEMSA is engaged in the production, distribution and marketing of certain Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil and Argentina."

This is a defensive issue and looks like it is picking up steam.  Back in 2005 the stocks Qtrly earnings went south in a big way when you compare them to 2004.  Currently is seems as though this company is turning around very nicely given the rest of the markets fundamentals.  This last Qtr beat estimates by 10 cents which was a 20% surprise.  Third Qtr. 2007 reported 0.60 EPS which beat same qtr last year of 0.54 EPS.  This is an 11% increase over the previous qtr.  Not completely a William Oneil stock, but I think it is in a good sector and may be one to watch.(see chart below)

This chart shows that the stock  has broken out of a base at the 38 dollar level.  What this chart does not show you is that the 50 day moving avg. crossed the 200 day moving average to the upside last week.  The 50 day moving average is at 36.61 so this stock is extended a little.  When you look at a chart you will notice that as the stock has pulled back some in the last few days the volume has contracted.  This could be a great sign of things to come technically, so add this one to the list.  If we get a re-test of the 50 day and a bounce to the upside that will be a confirmation  (Take into consideration the overall trend of the market) 

We will see how it goes.

TT

 

Take some notes about this chart.  See that in December, there was a support line that was drawn and in January this same line was violated and acted as a possible resistance level along with the 50 day(10 week) moving avg this week.  I did not notice this until now.  Shows you how observant I have been. 

Regarding the rest of the market, It went this way:

• DOW Jones opened at 12743.11 and closed at 12182.13 for a loss of 560.98 points or -4.4%.
• Nasdaq opened the week at 2413.42 and closed the week at 2304.85 for a loss of 108.57 points or 4.4%
• The S and P opened the week at 1395.38 and closed week at 1331.29 for a loss of 64.09 points or 4.59%

Ok so lets go back in time and see what some people said two weeks ago:

Cramer called a bottom two weeks ago then earlier this week went on to say that Mondays move was just a correction from a 1000 point gain the last two weeks.  Lets see we are down over 55% of that 1000 point gain and the realization of a recession is starting to seep in.  This is going to be very very interesting. 

Please take note that the Percent Bull number(on chart below) from Investor Intelligents squeaked back up a little from 40.20 to 41.60 after that little Bear Market rally.  So please conclude that the so called Pros who write the newsletters have no clue what is going on and are like small bald headed Guys on TV with Napoleon Complex just guessing at market bottoms.  Please notice one thing.  These people never call a top in a Bull Market cause they have no clue how to.  We will cut Cramer a little slack since he is not the only one who may be wrong about the last bottom he called.   We can clearly see that by the increase in bullish sentiment in the numbers out of Investor Intelligents this week. 

Keep in mind that IBD writes that,

"When waiting for a market to complete a correction, watch for the number of Bulls to shrink below 40 percent and the Bears to increase to 30%.  At that point the market can be expected to rally."

It goes on to say,

"In a bear market, the percentage of bearish advisors needs to climb to 55 or 60% before a bottom is reached and an upturn can be expected."

Trust me, I will keep you informed.

One side note to Mr. Kudlow.  How come you keep talking about this Fairy tale called Goldilocks, but keep forgetting to mention the Three Bears. 

Have a great rest of the weekend and a great week ahead.

TT

Good afternoon,

Welcome to another addition of TurboCharge.  If you remember in the last installment, I talked about upside testing and how far we were extended off the 50 day moving averages on all major indices.  We seemed to have pulled back rather nicely to the upside and that was expected.  Does this mean we are out of the woods?  My answer to that question is not by a long shot.  Those still pushing the bull market that does not exist anymore are telling people they need to buy, buy, buy.  The truth of the matter is that more proof needs to be seen in the equity markets to know if we are out of the woods.

The people at Investors Business Daily were not impressed with Thurs. move up and went as far as saying,  "even though the volume was good and the move was strong, we ended on weakness so it was not a follow-through day."  Personally, I was surprised they did not call a follow through day.  With this being said, we will go over the move last week and where we stand.

• According to my charts, the DOW Jones opened last week at 12205.71 and closed the week at 12743.19 for a net gain of 537.48 points or(4.4%).  Keep in mind that the 50 day descending moving avg. is at 12960 now.
• The Nasdaq opened the week at 2325.84 and closed the week out at 2413.36 for a net gain of 87.52 points or(3.6%).  Keep in mind that the 50 day moving avg. is at 2539.35, so the Nasdaq is still 4.9% below its 50 day.
• S ans P 500 started the week at 1330.70 and ended the week at 1395.42 for a net gain of 64.72 or(4.8%).  Keep in mind this indicy is still 32.64 points or 2.3% below its descending 50 day moving avg.
• Russell 2000 started the week at 687.74 and ended the week at 730.50 for a net gain of 42.76 points or(6.2%).  This indicy is only 7.81 points below its descending 50 day moving avg.  That is a whole 1.0% below.

Currently we are at a critical point in this market.  I have been saying, if we bounce off these moving averages to the downside, we are going to have a serious leg down.  Since the Russell is the closest to its descending 50 day moving avg, I think this will tell us much earlier what the markets sentiment is going to be.  If the Russell starts to lose steam first I think that will be telling since it out-performed the rest of the market by at least 1% to the upside in the last week.

Historically, the Smallcaps never lead the way out of a bear market, so please keep that in the back of your mind.  Usually the it is the Largest of the Large Caps. 

With this in mind, we look to the next week and the important economic numbers that are going to come out. They are as follows:

• Feb 4.  Factory Goods
• Feb 5.  ISM Services
• Feb 6.  Productivity Pool
• Feb 7.  Initial Jobless Claims
• Feb 8.  Wholesale Inventories

The Superbowl is about to start and currently there are a few things in the news that might play a hand in market movement tomorrow. 

• Looks like Citigroup is going to cancel 161,000 credit cards following "Risk Review." 
• Ford Recalled 225,000 cars.  (Seems they need to learn how to build cars again.)

Till Next time gang,

TT

Good afternoon,

Hope you all are having an uneventful weekend.  Last week, we had the bounce off "a" bottom, I was looking for.  Is this "the" bottom, all I can say is I am not sure.  If I had to guess, I would say, no this is not the bottom.

Though we bounced on Wed., and rallied hard, it was very short lived.  According to our friends at Investors Business Daily, we should look for a possible "Follow Through" day anytime next week. 

Regarding the bounce, I am still thinking that if we do get some more upside testing this week, we are still very far extended below our 50 day moving averages on all major indices.  If you look at the charts you will see as follows:

• DOW Jones is still 827.46 points below Descending 50 day Moving Avg. (7%)
• Nasdaq is still 245.81 points below Descending 50 day Moving Average. (10%)
• S and P 500 is still 108.09 points below its Descending  50 day Moving Average. (8%)
• Russell 2000 is still 57.27 points below its Descending 50 day Moving Average. (8%)
  

For any hopes of a Bull Market to restart, the resistance mentioned above is going to take a ton of influence to break through to the upside.  Cramer in his infinite brilliance was quoted as saying,

"What do you get when you have a 600 point swing (300 point positive gain)out of a bounce off a previous low"
 
He went on to say "A Bottom."  I know he did not say "the" bottom, but I will say that I believe his sentiment and context was "The Bottom", because he started talking about buying stocks again.  This is one character who gets tossed too and fro in an attempt to seem wise,  and it was rather interesting to see Rick Santelli call him out on the carpet.  See thecall out here here.   I agree that we need more guys like Rick Santelli to tell people the way it really is.  The only problem is the networks would not tolerate truth.  When accountability is what is needed, it gets over shadowed by lies and that is the unfortunate realization that we live with.

Ok I am done harping.  To see the morphological characteristics of Weds. reversal click here.  It was very very interesting and should help people who are learning how to read charts.  This was a classic reversal, so study this and know it.

This was a rather short commentary for me, I am not sure were the market will lead.  I am still looking for the Move to the 50 day moving averages and a serious Bear market confirmational bounce off to the downside if and when we get there.  If we break through these MA's on high volume and we also have more 52 week highs then 52 week lows then we may have something to change my bearish stance.  Until then, we have the same old same old.  Have a great week and good luck

TT