DJIA underperforms tech stocks

Prices broke down the lower trendline. They are printing the first leg of a move to the down side. Just before the long weekend buyers have retreated. I think this phase will last a few weeks unless new elements emerge. This first leg has been fast. First support at 12200-12300. Most stocks printed 20-day lows. The crisis is not over. Good buying opportunities will be out there.

In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.

The stocks object of screening are:
3M Company (MMM), Alcoa Inc (AA), Altria Group Inc (MO), American Express Company (AXP), American International Group Inc (AIG), At&t Inc (T), Caterpillar (CAT), Citigroup Inc (C), E.I. du Pont de Nemours & Company (DD), Exxon Mobil (XOM), General Electric (GE), General Motors Corp (GM), Hewlett-Packard (NYSE:HPQ), Honeywell International Inc (HON), IBM (IBM), Intel Corp (INTC), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM), McDonald's Corporation (MCD), Merck & Co. (MRK), Microsoft (MSFT), Pfizer Inc (PFE), The Boeing Company (BA), The Coca-Cola Company (KO), The Home Depot (HD), The Procter & Gamble Company (PG), United Technologies Corporation (UTX), Verizon Communications (VZ), Wal mart Stores Inc (WMT), Walt Disney (DIS).

Nice links for 25 May

Time To Test the “Emergency Oil Cast System”, from Greg Rehmke (Daily Speculations)

Goldman Oil Bull a Nutcase: Here's Why Crash Coming Soon (Clusterstock.com)

Corporate bonds defaults (FT)

ICE, ICE, Baby, conclusion (Star-telegram)

Web worlds 'useful' for children (BBC)

Credit Crisis Indicators (Bespoke)

S&P 1500 Earnings Revisions (Bespoke)

U.S. Vehicle Miles vs. Real Gasoline Price (Calculated Risk)

Historical Housing Graphs: Months of Supply, Sales and Inventory (Calculated Risk)

Turbulent week for US airlines (FT)

Existing Homes: Months of Supply vs. Real Prices (Calculated Risk)

Know What’s in Your ETF and How the ETF is Calculated (Tradermike)

This Time, Buy in May? (Marketbeat)

Untapped Resources? (Big Picture)

5 Mistakes People Make with their 401 k Plans

Saving for your retirement can feel like a risky thing to do, while being the smartest thing you can do at the same time. With most companies now offering their employees a 401 k plan it’s important you know how to maximize your investment. Your 401 k is your investment, not your employers’. While they will usually have a list of mutual funds from which you can choose, you have to be prepared to maximize your potential earnings. Here are five common mistakes you can avoid and help yourself down the road when you actually do retire:

1. Loading up in one fund. A mutual fund by itself offers diversity. However, it’s easy to throw all your money in just one mutual fund. This is something you want to avoid as each fund will carry with it a different level of risk and security. This is where you take hold of the diversity factor and spread your investment into different funds – not just one.
2. Devoting yourself to the company stock fund. You already work for the company, so you’re already well invested. As Enron taught us, it’s not wise to devote your retirement savings to the company stock fund. If the company goes bankrupt then you’ve lost your savings and your job. Liberal estimates suggest not investing any more than 10 % of your 401 k into company stock.
3. Only investing domestically. With the U.S. dollar weakening, it’s wise to consider investing internationally. This aspect of diversity will guard you against an even steeper decline in the dollar. It is recommended that close to 50 % of your 401 k plan is invested internationally to make your plan as diversified as it can be.
4. Frequently trading outside your 401 k plan. Many people want to be aggressive in their trading habits. It’s foolish to do so outside your 401 k plan because trading in your 401 k is a non-taxable event. Most 401 k plans won’t restrict the amount of trades you do as well.
5. Getting hammered by extra fees. Most company-sponsored 401 k plans will be up front with you about the added fees, but it’s ultimately up to you to know what is out there and what may effect you. Make sure the mutual funds you invest in are no-load mutual funds which don’t cost you a percentage to get in and out of these funds.



This post was contributed by Heather Johnson, who is an industry critic on the subject of Business Cards. She invites your feedback at heatherjohnson2323@gmail.com.

Technology stocks are testing short term supports

Prices are moving within an upward channel. They are now testing the lower trendline. This first down leg has been fast. We have to see how prices react on this support. In the longer term I am positive, prices went up more than 300 points from the low of March displaying strength, but retracing only 50 of the down move started in Oct last year. Technically there are not many elements to make a judgement. Low interest rates will eventually help the US economy to recover. Who knows if markets have anticipated the recovery or this is only a rebound after the first impulse to the downside? Being positive in the longer term, I think all you have to do is to spot low risk entry points to accumulate. This down turn might just provide an opportunity.


In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.


The stocks object of screening are:
Apple Computer Inc (AAPL), Adobe Systems (ADBE), Akamai Technologies Inc (AKAM), Applied Materials Inc. (AMAT), Amgen Inc (AMGN), Amazon.com, Inc. (AMZN), Broadcom (BRCM), Comcast Corp (CMCSA), Costco Wholesale Corp. (COST), Cisco Systems(CSCO),Dell Inc (DELL), EchoStar Communications (DISH), eBay Inc (EBAY), Genzyme Corporation (GENZ), Gilead Sciences Inc. (GILD), Google Inc (GOOG), Intel Corporation (INTC), Sun Microsystems Inc (JAVA), Juniper Networks (JNPR), Microsoft (MSFT), Network Appliance, Inc. (NTAP), Nvidia (NVDA), Oracle Corp (ORCL), Qualcomm Inc (QCOM), Research In Motion Limited (RIMM), Starbucks Corporation (SBUX), Sirius Satellite Radio Inc (SIRI), Tellabs Inc (TLAB), VeriSign Inc (VRSN), Yahoo (YHOO)

Daily links 22 May

A Harsh Assessment of the Brokerages (Marketbeat)

Technical Strength by Sector and Other Market Themes (Traderfeed)

Testimony of
Michael W. Masters (LINK)“Are Institutional Investors contributing to food and energy
price inflation?”

Lost Decade (Random Roger)

Some good links for today 21 May

Oil Producers Mask Decade's Worst S&P 500 Profit Drop (Bloomberg)

Peaked oil (Economist)

Largecap, Midcap and Smallcap Performance (Bespoke)

Sector Relative Strength (Bespoke)

Producer Price Index April 2008 = 0.2%, 0.4% Core (The Big Picture)

May 20, 2008 Investing on the First Day of the Month (CrossingWallStreet)

Analyst Sees More Pain Ahead for Banks (Dealbook)

Third Point Backs Icahn in Yahoo Fight (Dealbook)

Oil price fundamentals (Econbrowser)

THe rise and rise of oil (FT)

The Slippery Slope of Hope (Slope of hope)

Tough to Bank on the Financial Stocks (Traderfeed)

How High Will Oil Go? (Marketbeat)

From Airline Seats to Oil Flows, from Greg Rehmke (Daily Speculations)

XLE prints new highs

These are the stars. Most of the stocks are printing new 20-day highs. XLE has printed 4 consecutive up closes. XOM and VLO have printed 7 consecutive up closes.
It is very different from Airlines (XAL)
and Financials (XLF). I think that buying up here is risky. Momentum is high and you can trade short term volatility breakout techniques or trend following patterns after pullbacks. But I personally do not feel very comfortable in these situations.


TREND ANALYSIS
In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.

Financials breakout the lower trendline (XLF)

Prices are moving lower again on bad news. Many stocks are printing new 20-day lows. This weakness may continue for quite some time. It is important to see now where prices can find support. I am positive on this sector as I think it presents good profit opportunities. There is value here and stocks are badly hit by lack of confidence and uncertainty. To follow. I would wait a reversal pattern to spot an entry point.

TREND ANALYSIS
In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.


The stocks object of screening are:
Bank of America Corp. (BAC), Citigroup Inc. (C), American International Group Inc. (AIG), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS), Wachovia Corp. (WB), American Express Co. (AXP), Morgan Stanley (MS), Fannie Mae (FNM), Merrill Lynch & Co. Inc. (MER), U.S. Bancorp (US), Bank of New York Mellon Corp. (BK), MetLife Inc. (MET), Prudential Financial Inc. (PRU), FREDDIE MAC (FRE), Lehman Brothers Holdings (LEH).

Airline Index (XAL)

Airlines printed a top in January 2007 at 65. Now they are at 21.25. It is a disaster for investors. During the downtrend they have printed also significant rebounds, but fell again to print new lows. MACD is now printing a positive divergence. Is that enough? Trying to spot the low is very difficult here. Many stocks them are printing important multiple divergences. Risk is very high. But I follow this sector with interest.

TREND ANALYSIS
In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.



The stocks part of the Index are:
AirTran Holdings, Inc. (AAI)
Alaska Air Group, Inc. (ALK)
AMR Corporation (AMR)
Continental Airlines, Inc. (CAL)
Delta Air Lines Inc (DAL)
Gol Linhas Aereas Inteligentes SA (GOL)
US Airways Group Inc (LCC)
Northwest Airlines Corporation (NWA)
Ryanair Holdings plc (RYAAY)
JetBlue Airways Corporation (JBLU)
Southwest Airlines Co. (LUV)
SkyWest, Inc. (SKYW)
TAM S.A. (TAM)
UAL Corp (UAUA)

XLK - Technology stocks move up again

However, the day started well to end at the same level of the open. There many strong stocks, that closed at their 20-day high. The market expects that lower rates will eventually put this sector in a good position. Next resistance at $26. Of course there will be correction phases after a 20% up leg from the low of March (pretty impressive!), but they will be opportunities to buy.

TREND ANALYSIS
In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.

The stocks object of screening are:
Microsoft Corp. (MSFT), AT&T Inc. (T), Cisco Systems Inc. (CSCO), Google Inc. (GOOG), Intel Corp. (INTC), International Business Machines Corp. (IBM), Apple Inc. (AAPL), Verizon Communications Inc. (VZ), Hewlett-Packard Co. (HPQ), Oracle Corp. (ORCL), Qualcomm Inc. (QCOM), Dell Inc. (DELL), Texas Instruments Inc. (TXN), Corning Inc. (GLW), EMC Corp. (EMC), eBay Inc. (EBAY), Yahoo Inc. (YHOO), Sprint Nextel Corp. (S), Motorola Inc. (MOT), Applied Materials Inc. (AMAT), Automatic Data Processing Inc. (ADP), Adobe Systems Inc. (ADBE), Tyco Electronics Ltd. (TEL), MEMC Electronic Materials Inc. (WFR), Western Union Co. (WU), Electronic Arts Inc. (ERTS), American Tower Corp. (AMT), Symantec Corp. (SYMC), NVIDIA Corp. (NVDA), Juniper Networks Inc. (JNPR), Xerox Corp. (XRX), Agilent Technologies Inc. (A)stocks

Financial Blogs Links for 20 May

Trading Insights to Start the Market Week (Traderfeed)

Transports At New Highs; A Look At Its Members (Bespoke Investment)

Volatility Levels Likely to Go Up Again (WSJ)

Four at Four: Breakdown Lane (Marketbeat)

Is the Dollar Bounce Over? (naked capitalism)

Microsoft revives Yahoo race (FT)

Reconciling Estimates: Biofuels and Food Prices (Econbrowser)

The Market By Days of the Week (CrossingWallStreet)

REAL HISTORY (The Capital Spectator)

USA National Gas Temperature (GasBuddy.com)

SPDRs Portfolio

I like SPDRs. They are a great way to invest in sectors without being committed to the single stock and company events. Diversifying you can reduce risk. Not all sectors are covered. You can find many ETFs that can serve this purpose.
I propose a portfolio of SPDRS that I will update from time to time.

Consumer Discretionary SPDR (XLY)
Consumer Staples SPDR (XLP)
Energy SPDR (XLE)
Financials SPDR (XLF)
Health Care SPDR (XLV)
Industrials SPDR (XLI)
Materials SPDR (XLB)
Technology SPDR (XLK)
Utilities SPDR (XLU)

In the figure you can see the performance of SPDRs in the past 6 months. Energy (XLE) and materials (XLB) have outperformed the market by far. I would not risk including them in the portfolio; this bubble can burst any time. The most interesting are the following, but in particular financials. This sector will eventually come back.

Portfolio:
Utilities (XLU) 16 May $40.78 20%
Financials (XLF) 16 May $26.39 20%
Consumer Staples (XLP) 16 May $28.49 20%
Industrials (XLI) 16 May $39.28 20%
Technology (XLK) 16 May $25.37 20%

I will compare the performance with the S&P.

Some good links 18 May

Fed's Lockhart on "Decoupling" (Calculated Risk)

Up is Down? (Daily OPtions Report)

Oil bubble (Econbrowser)

Guest Post: Did The Black Swan Fly Over Bubbleville? (naked capitalism)

The Psychology of Market Volatility (Traderfeed)

May 15, 2008 Oil and the Price at the Pump (CrossingWallStreet)

Oil & Gas Equipment & Services ETF (Bespoke Investment Group)

Beat the Market with Hot-Anomaly Switching? (CXO ADvisory Group)

Yahoo Inc (YHOO)

Prices managed to close the down gap opened with the bearish reversal island.

You know that Icahn seeks control of Yahoo!'s board of directors.
In response to Icahn's letter Thursday calling Yahoo's board "irresponsible" for not accepting Microsoft's merger offer, Yahoo chairman Roy Bostock replied:"Yahoo!'s independent directors focused on one central goal: how best to maximize stockholder value"."We would be prepared to enter into a transaction that valued Yahoo! at $37 per share". as we all know this was not accepted and MSFT walked away. YHOO is now continuing to actively and expeditiously explore strategic alternatives. What are these alternatives?
Markets are betting that something will happen. The MSFT deal is still in the air. And for a good reason: a lot of sure money for shareholders, not hopes and intent declarations of creating value in the future.

See also the article with Bostock's letter text at
LINK