Monday, October 8, 2007

Monday Morning Market Review: 2007-10-08

Scoreboard

INDEX

10/5/07

CLOSE

ALL TIME HIGH

% CHANGE

YTD

% CHANGE

52 WEEK

S&P 500

1557.59

1557.59 (10/5/07)

9.8%

15.4%

Dow Jones Industrial Average

14066.01

14087.55 (10/1/07)

12.9%

18.7%

INDEX

P/E

TRAILING

P/E

FORWARD

DIVIDEND

YIELD

S&P 500

18.1

16.6

1.8%

Dow Jones Industrial Average

16.9

16.1

2.1%



Trend Analysis



Trend ***

S&P 500

DJIA

Primary

(200 day MA)

Up

Up

Intermediate (50 day MA)

Up

Up

Short-term (10 day MA)

Up

Up

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend

*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Richard Russell’s PTI


Russell’s PTI is Bullish

Facts & Interesting Tidbits

  • The DJIA is up 9.5% from its mid-August low.
  • The DJIA was up 1.2% for the week, its fourth straight weekly gain.
  • The DJIA reached a new record close of 14087.55 on Monday.
  • The DJIA hit a new intraday high of 14124.54 on Friday.
  • The S&P 500 closed at a record high on Friday.
  • Volatility has increased - between July 19 and late September, roughly half the trading sessions freatured swings in the S&P 500 of at least 1%. By contrast, in all of 2005 and 2006 combined there were less than 60 trading days in which prices moved more than 1%. (Source: Wall Street Journal)


The Bottom Line

Markets hit record highs last week as investors hope the worst is over. A positive employment report drove the market higher on Friday. The market continues its bullish trend. The Dow continues to lead the way as investors are favoring large multi-national businesses.

Monday, October 1, 2007

Monday Morning Market Review

Scoreboard

















Trend Analysis


S&P 500
Primary Trend = UP
Intermediate Trend = UP
Short-term Trend = UP

NOTE: I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Richard Russell’s PTI = BULLISH

Facts & Interesting Items
· U.S. Stocks Have Biggest September Gain Since 1998 on Rate Cut
· The S&P 500 gained for the 5th straight quarter

The Bottom Line
The Fed helped stocks with a .50% rate cut in September. Since then, stocks have clearly been trending up. How will Q4 unfold? I only wish I knew! However, at the moment the market is clearly in a bullish trend and this market is favoring the large cap blue chip stocks. The DJIA is only 0.7% below its record close of 14000.41 set on July 19th. This should be an interesting week as we watch and see if the DJIA will break through and hold above the 14000 level.

Friday, September 28, 2007

Links for 2007-10-01: Dow Hits New High

U.S. Stocks Rally, Sending Dow Average to Record (Bloomberg):
  • U.S. stocks rallied, sending the Dow Jones Industrial Average to a record, as investors speculated the worst may be over for banks and construction companies hurt by subprime mortgage losses.
  • The Dow's record caps a six-week recovery from a slump that helped wipe out almost $2 trillion in U.S. market value. The 30- stock gauge added 191.92, or 1.4 percent, to 14,087.55, above its previous closing high of 14,000.41 set on July 19.
  • The Standard & Poor's 500 Index increased 20.29, or 1.3 percent, to 1,547.04, 0.4 percent shy of a record.
  • The Nasdaq Composite Index gained 39.49, or 1.5 percent, to 2,740.99, the highest in six years.
David Gaffen @ MarketBeat: It’s often helpful, in times like this, to look at what speculators are doing, as extreme positions taken by maddened crowds generally serve as nice indicators of exactly what not to do, and with that, there’s a bit of contradictory evidence at this moment. Small traders, which normally includes retail investors, turned bearish this past week, going short S&P 500 futures by about 25,000 contracts, for the first time since March 20. Schaeffer’s Investment Research analysts note that small traders turning bearish has proven to be a bullish signal, with average returns of 3.5% in the S&P 500 for the next 20 trading days.


Comments

Go back 4 to 6 weeks ago... If you were listening to the media you would have thought we were months or years away from new highs in the stock market. What happened to all of the concerns related to the housing market, the slowdown in consumer spending, and reduced corporate spending? I guess the market just doesn't care about all the doom and gloom predictions in the financial media. What is the action of the market telling us? When in doubt, follow the trend! In spite of the negative news (dollar reaches new low, housing situation, oil at new highs, etc.) the market keeps climbing.

In his latest newsletter John Mauldin looks at whether it is possible for the US economy to be in a recesion while the US stock market continues to rise. John's letter points out that the market's rise this year has been dominated by the more global sectors which consist of the large multi-national businesses. Many of these companies make more than 50% of their earnings outside the US and the global economy is doing well. This provides some insight into why the market continues to rise in the midst of so much negative news.

Friday, August 17, 2007

Jim Cramer on why the worst is yet to come...

Jim Cramer provides a simple explanation of the subprime-lending crisis in New York Magazine. Check out Mr. Cramer's article, Bloody and Bloodier, to read why he thinks the subprime-lending crisis is worse than you think, and could crush financial and real-estate markets for years.

Wednesday, August 1, 2007

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