Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
The markets took a tumble Friday after being in the green the first few hours of trading depending upon the index. The NASDAQ and Small Caps easily took the brunt of the damage with both down well over -2%.
In fact, the NASDAQ was down -110 points, or -2.6%. That’s a big move for the tech and biotech heavy index. It opened at the high and closed near the lows, not usually a good sign.
Many leading stocks, again especially the biotech, simply broke down. And it was institutional selling as volume was high.
So Yellow Alert flags are up, and your antennae should be too. But take a deep breath and relax. Don’t do anything rash just yet.
First, let’s look at the internals. Total volume was heavy, again due to institutional selling. Up Volume was 28% on the NYSE with advancing issues 35%. Actually not too bad.
But on the NASDAQ, Up Volume was only 11%, which means Down Volume was 89%. If you follow my newsletter, you know that following a 90% Down Volume day, which we narrowly missed, you normally get a rally between 2 to 7 days because selling has been exhausted.
The quality of any rally is key. If we only get a weak bounce on low volume, that will be a ‘dead cat’ bounce. It means the Mom & Pop retail investors are trying to ‘bottom fish’ and guess the short term bottom. You will also have an element of short covering by short term traders who took short positions as we got the correction.
However, if we get a rally on strong volume and broad participation by many stocks (known as positive breadth), it would imply that the pullback has run its course. The advance decline lines are still healthy, but as a bull market matures it becomes more volatile.
We are definitely in a mature bull market, but likely have months if not more, of the primary uptrend. You will have to have a plan to manage around the increased volatility.
We actually took a position in 2 broad ETFs Friday when before the markets rolled over and were still looking positive. We will closely monitor the situation to see if the markets continue to deteriorate or firm back up.
Trading at the open on Monday is usually a Fool’s Game. Give the markets a few hours to develop to see if we do, in fact, get a reversal higher.
Now I would like to address the sector rotation that Tim Reazor and I have identified here at NorAm Asset. There has been a distinct switch from biotechs into energy.
In fact, during the stock rout on Friday, both oil and gold were easily in the green. A good way to invest in rotation themes is positions in related companies.
Energy companies have been showing strength as of late. Earlier this week, we identified an energy stock, Continental Resources (CLR) with very strong growth in both earnings and revenue.
And technically, after moving somewhat sideways for months, it is on the move. CLR has formed the right side of the handle in a ‘Cup & Handle’ formation on increasing volume (see CLR 6 Mo Graph).
For this reason, we took a position in CLR on Thursday morning about an hour after the bell. We purchased the stock at $124.19 and it closed Thursday at $125.97.
Not only did it have a solid day on Thursday and after our purchase, but it closed at $126.05, or up 6 cents on Friday. Doesn’t sound like much, but when a stock is flat or up marginally when the market sells off in broad fashion, that is bucking the trend.
We will be following the evolution of managing this trade for you. This way, you will see how once we put a position on, we manage throughout the lifecycle of the investment until the sale.
For a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com and we would be happy to review positions. We can evaluate your sector exposure and individual stock risk.
The only economic report today is Consumer credit. And we have no companies reporting on the S&P 500.
We have 4 companies reporting in the broader markets. They are all listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at Dan.Stewart@NorAmAsset.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Consumer Credit
Earnings Reports Today:
The Container Store (TCS)
Zep, Inc. (ZEP)
A. Schulman Inc. (SHLM – after market)
Team Inc. (TISI – after market)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
As I write this newsletter we are in the middle of a lighting storm. I do not want to plug my computer into an outlet and running off my battery, so I will be brief.
With the exception of the NASDAQ and Russell 2000 Small Cap indices both which were down almost -1%, the markets finished modestly lower. The DOW finished almost flat and the S&P 500 closed down -.1%.
Declining issues were 60% on the NYSE while Down Volume was 58%. On the NASDAQ, selling was more intense with declining issues 70% and Down Volume 69%. Selling was also more intense on in the small and mid cap sectors.
The markets initially started in the green, but without conviction. As the day wore on, the markets got weaker. Short term traders didn’t want to hold stocks before the release of the Non-Farm payrolls today, and all the plethora of jobs data out today.
So once again it was a defensive day. In yesterday’s newsletter I state that we may put some money to work increasing our equity positions IF the markets acted right. Well, they didn’t, so we didn’t.
We held off adding the ETF positions. Patience is a virtue. Now we do have the ETF trades ready if the markets act right after the release of the Non-Farm payrolls.
In our stock accounts we did, however, add one position that was quite strong in the energy sector. The stock was showing strength and breaking out to the upside.
We will be discussing this stock early next week. We will take you through the evolution of this trade so you can see how we manage a trade once it has been purchased.
For a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com as I would be happy to review for you. I would also be happy to show you exactly how we determine which stocks to invest in, and when.
We have a huge number economic reports today. Virtually all surround employment and the jobs picture.
We have 1 company reporting on the S&P 500, CarMax (KMX). We have 2 other companies reporting in the broader markets, including Fort Worth based AZZ Inc (AZZ). All 3 companies are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at Dan.Stewart@NorAmAsset.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Change in Nonfarm Payrolls
Two-Month Payroll Net Revisions
Change in Private Payrolls
Change in Manufacturing Payrolls
Unemployment Rate
Underemployment Rate
Labor Force Participation Rate
Average Hourly Earnings
Average Weekly Hours
Change in Household Employment
Earnings Reports Today:
CarMax (KMX – before market)
AZZ Inc (AZZ – before market)
Synergy Resources (SYRG)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
A late day rally took the S&P 500 and S&P Mid Cap indices to new highs. We have now broken just above the recent trading range, and if it can hold it will be a bullish sign.
The US major indices were all up around 1/4% with the exception of the Russell 2000 Small Cap index which was up 1/3%. The price gains weren’t on fire and neither were the internals.
Up Volume was 67% on the NYSE and 62% on the NASDAQ. Advancing issues were 56% on both major exchanges.
But after 3 days of rally, a slowdown in momentum isn’t unexpected while the market digest the recent gains. And short term traders will slow bullish sentiment as they book profits ahead of the Friday jobs report. So this consolidation is healthy.
The good news is that we broke above resistance at 1885, which now becomes support. I have attached a graph of the S&P 500 so you can visualize what I am talking about.
If the markets are acting right today and we can hold support, we will likely put some of the cash on the sidelines to work increasing our equity exposure. We will do this using 2 broad ETFs based upon the indices.
For our larger accounts, in addition to the ETFs, we will also take a stock position. The stock we have selected is the strongest of the 4 to 5 stock we have been monitoring.
We will keep you posted as to our progress. Once we establish the position, we will keep you abreast of the position over the course of the trade so you can see the evolution of managing a position once established. Managing the position over the life of the investment is critical.
For a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com as we would be happy to review for you. With a excel file, I can actually plug your portfolio into my Bloomberg Terminal and do an analytics review including backtesting.
It will even tell you your return attribution of your various sectors and even individual stocks. You can then see whether stock replacement is warranted.
Earnings season is essentially over and next season begins shortly. But we do have Micron Technology (MU) reporting on the S&P 500 after the bell today. We have 9 companies in the broader markets, but none of too much significance.
Again, the economic reports out today focuses on jobs, but we also have some manufacturing data as well.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at Dan.Stewart@NorAmasset.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Challenger Job Cuts
RBC Consumer Outlook
Jobless Claims Annual Revisions
Trade Balance
Initial Jobless Claims
Markit US Services PMI
Markit US Composite PMI
ISM Non-Manufacturing Composite
Some Notable Earnings Reports Today:
Micron Technology (MU – after market)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
The markets rallied yesterday on higher total volume. Over the past month, large cap, blue chip defensive stocks have been outperforming the tech heavy NASDAQ, small and mid caps, and especially the biotechs.
In short, the advance has been primarily defensive in nature. Yesterday was different. It was a ‘risk on’ day.
The NASDAQ handily outperformed it 2 big brethren – the S&P 500 and DOW. The NASDAQ was up 1.64% and the Russell Small Cap index was up 1.34%. The DOW and S&P were only up .46% and .7% respectively.
Up Volume was 85% on the NASDAQ but only 73% on the NYSE. Advancing issues won by 76% on the NASDAQ and 71% on the NYSE. So we had the right volume numbers coupled with a broad positive breadth.
The big question is will it last? The short term technical indicators are all flashing green, but the midterm indicators aren’t as strong yet.
For this reason and depending upon the market action today, we may take a couple of positions in some broad ETFs. This will provide quick, diversified exposure, and if the market turns, easy exit.
We are also looking at a few companies poised to breakout to the upside. Taking positions in these will also be dependent on the overall market acting right. We will keep you abreast of a few of these ideas.
For a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com as I would be happy to review for you. With a excel file, I can actually plug your portfolio into my Bloomberg Terminal and do an analytics review including backtesting.
It will even tell you your return attribution of your various sectors and even individual stocks. You can then see whether stock replacement is warranted.
We have a lot of jobs data throughout the week with the big jobs number coming out Friday. But today the economic data includes the ADP Employment Change, MBA Mortgage Applications, ISM New York, and Factory Order.
We actually have 1 company reporting on the S&P 500, Monsanto (MON). We have 8 companies reporting in the broader markets. Some notables are below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at Dan.Stewart@NorAmAsset.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
MBA Mortgage Applications
ADP Employment Change
ISM New York Purchasing Managers Index
Factory Orders
Some Notable Earnings Reports Today:
Monsanto (MON – before market)
Acuity Brands (AYI – before market)
OMNOVA Solutions (OMN – before market)
Texas Industries (TXI)
Gold Resources (GORO)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
The markets rallied yesterday and the reason cited was dovish comments by Fed Chairwoman Janet Yellen. She allayed concerns that rates would rise soon, and treasury yields remained essentially flat on the day.
While total volume increased from Friday’s low volume day, volume was still somewhat muted. Up Volume was 76% on the NYSE and 79% on the NASDAQ. Advancing issues were 76% on both major exchanges.
But the main reason for the rally was ‘Window Dressing.’ This is where mutual funds buy the best performers of the quarter at the end of the quarter. This is so when they give their required disclosures of their top holdings, these performers will be included making you believe they participated in the gains.
I know this because biotechs, healthcare, utilities, and banking were among the best performers until the recent pullback. And they were the best performing sectors yesterday.
Many leading stocks still struggled. We are not out of the woods by any mean. We still need to see a follow through on expanding volume before we can concluded the decline has run its course.
We continue to research new stock ideas, and when the time is right we will share a few. Also, when the overall trend resumes with better internals, we will take positions in selected, broad based ETFs.
With earnings season essentially over name a few stragglers, and next season not beginning for a few weeks, the economic reports and geopolitical events will take center stage. And we have lots of economic reports out this week.
The economic data out today focuses on manufacturing. We also have vehicle sales out as well. We have no companies reporting on the S&P 500 and only 3 in the broader markets. They are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Markit US Manufacturing PMI
ISM Manufacturing
ISM Prices Paid
Construction Spending
Domestic Vehicle Sales
Total Vehicle Sales
Some Notable Earnings Reports Today:
Tech Data Corp (TECD)
Stemline Therapeutics (STML)
Apollo Education Group (APOL – after market)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
The markets rallied on Friday, but beware. First off, it was on very light volume. Second, the rally faded into the close.
We had a big open with strong gains and the DOW was up over 100 points. Then we simply trailed off throughout the day closing near the lows day (see S&P 500 1 Day Graph).
So we didn’t get much conviction at all. This tell me it wasn’t an institutional rally but rather a mom & pop retail rally.
Retail investors were “buying the dip.” There was also an element of short covering by traders locking in their short term gains after shorting the decline.
The markets have had a number of distribution days and caution is warranted. Additionally, small caps have been struggling as of late. Probabilities suggest this pullback hasn’t run its course just yet.
We may in fact open higher at the open based upon futures Sunday night. But it will be interesting to see if the day holds up if we do open higher. Trading early Monday morning is usually a sucker play. Again, volume will be the key.
You need to continue to do research for future stock acquisition, but probably want to hold off on any new buying. In our newsletter articles, Tim Reazor & I will provide a few of our stock ideas we are researching so stay tuned.
The economic data out today focuses on manufacturing. We have no companies reporting on the S&P 500 and 7 in the broader markets. Most are speculative or weak with the exception of Verint Systems (VRNT). That said, VRNT is highly priced by fundamental standards coupled with a weak short term market.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Milwaukee Purchasing Managers Index
Chicago Purchasing Managers Index
US Annual Wholesale Inventory & Sales Revisions
Dallas Fed Manufacturing Activity
Some Notable Earnings Reports Today:
Verint Systems (VRNT)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
The markets continued their choppiness yesterday even after solid economic data. The indices recouped some of their losses and were even in the green early afternoon, but rolled back over going into the close.
Both the S&P 500 and DOW were down mildly, but the NASDAQ was down 1/2%. So investors are still defensive telling me the markets just aren’t ready to rally.
Even if they do, beware of a light volume rally, that would be a trap. You need to wait for confirmation before you put any cash on the sidelines to work.
This means solid volume and broad positive breadth. Patience is your ally, and if you have been following this newsletter, you should have lightened up on your most aggressive.
Now we just need to patiently wait for our re-enter point. This is one of the hardest things to do when investing, but it will be rewarding.
The economic data out today focus on the consumer. We have no companies reporting on the S&P 500 and only 3 in the broader markets. They are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
Personal Income
Personal Spending
PCE Deflator
PCE Core
University of Michigan Consumer Confidence
Fed Revision of Industrial Production
Some Notable Earnings Reports Today:
The Finish Line (FINL – before market)
Advanced Emissions Solutions (ADES)
LGI Homes (LGIH after market)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
Yesterday morning I wrote to be suspect of the market. Well, the market opened with a bang to the upside on a rosy Durable Goods Orders that handily beat expectations.
The rally quickly fizzled giving way to a lukewarm market at best. Then in the afternoon, the US and the EU announced they were going to institute tougher sanctions on Russia.
This was the straw that broke the camel’s back. The markets responded with a broad selloff taking no prisoners. Facebook (FB), my biggest gainer at 10%, was down almost 7% yesterday and would have given up the entire gain if I had not sold. The other stocks would have had a similar story.
I am just happy I took profits on many growth stocks and now have a heavy cash position. Remember, being in cash IS doing something.
The NASDAQ and small caps took the brunt of the damage. The NASDAQ as down -1.4% and has broken through its 50 day moving average (50 DMA). The Russell 2000 Small Cap index was down -1.9%.
Down Volume was 77% on the NYSE but 88% on the NASDAQ. So we almost qualified for a 90% Down Volume day. Declining issues were 66% and 80% respectively. Therefore, selling was broad based but big Blue Chip defensive stocks held up better than the growth names.
Has the damage been done so we can now resume the uptrend? With such a rout, we may actually get a bounce, or relief rally. This is known as a ‘dead cat bounce.’
But if we do not get strong, broad buying ON heavy volume, don’t get sucked in. In fact, I would probably wait and give it a couple of days to see if we get some traction.
I would rather get in a little later (higher) with a discernible uptrend than trying to guess the bottom. If you do this consistently you will have better entry points more often thus increasing your odds of success.
We have a lot of important economic data today. A solid GDP report could actually give the markets a needed boost. We also have Initial Jobless Claims and Pending Home Sales.
We have 3 companies reporting on the S&P 500 and 19 in the broader markets. Some of the more notable companies are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
GDP Annualized QoQ
GDP Price Index
Personal Consumption
Core PCE QoQ
Initial Jobless Claims
Pending Home Sales
Kansas City Fed Manufacturing Index
Some Notable Earnings Reports Today:
Accenture (ACN – before market)
GameStop (GME)
Red Hat (RHT – after market)
Lululemon (LULU – before market)
Winnebago (WGO)
Signet Jewelers (SIG)
Restoration Hardware (RH – after market)
RE/MAX Holdings (RMAX – after market
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
3 26 2014
The markets rallied yesterday, but on suspect internals. Once again the large cap blue chips outperformed the NASDAQ, mid and small cap segments of the markets.
In fact, the NASDAQ and S&P Midcap indices were barely in the green, while the Russell 2000 closed just barely in the red. Total volume was light while Up Volume was 59% on the NYSE, and just 53% on the NASDAQ.
Advancing issues were 57% on the Big Board and just 50% on the NASDAQ. So positive breath was also weak.
Many of the leading growth stocks once again took it on the chin. Yesterday I wrote about selling a few growth stocks to protect gains including Chipotle (CMG). It turned out to be a fortunate move as CMG was down $17.86, or -3%, on high selling volume.
Another stock I took profits on today was natural gas producer EQT Corp (EQT). I purchased on 25/2014 at $94.59. I sold EQT during the day at $101.73 for a 7.55% gain as it was showing weakness and broke through a trendline. Selling was intense and volume was up almost 75% (see EQT Graph).
The stock closed at $99.08 and is now below the century mark. Using the early 1900s famous trader Jesse Livermore’s “Century Rule,” if the stock cannot climb back above $100 quickly, it is most likely headed lower.
The overall advance decline lines are still healthy, but if the small and mid cap sectors continue to underperform, we could begin to see a divergence. This will be one of your early indicators that this bull market is getting closer to its finale.
We are ok at present, but the advance decline lines, the number of stocks above various moving averages, and the moving average ratio of Up to Down Volume will all be good early indicators of broad market direction. Lowry’s Technical Research is one very good source of independent buy-side data for this, and a subscription I value.
We have numerous economic reports today including mortgage applications and durable goods orders. We have 1 company reporting on the S&P 500, Paychex Inc (PAYX).
We have 8 stocks reporting in the broader markets. Some of the notable companies are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
MBA Mortgage Applications
Durable Goods Orders
Durables ex Transportation
Capital Goods Orders
Capital Goods Orders Shipped
Markit US Composite PMI
Markit US Services PMI
Some Notable Earnings Reports Today:
Paychex Inc (PAYX)
Rex American Resources (REX – before market)
Francesca’s Holdings (FRAN)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management
3 25 2014
The DOW ended the day yesterday with only mild losses. But don’t be fooled, there was much more weakness in the broader markets underneath the surface.
This is especially true for the NASDAQ, midcaps, and small caps. The S&P 500 finished down about 1/2%, while the NASDAQ was down over 1%.
Down Volume was 65% on the NYSE but 79% on the NASDAQ with total volume heavier on the NASDAQ. Decliners led advancing issues by 63%, or less than 2 to 1 on the Big Board, but was 74%, or almost 3 to 1, on the NASDAQ.
Many leading growth stocks struggled throughout the day. The biotechs really took it on the chin for a 2nd day in a row.
The markets may have further on the downside before this is all said and done. For this reason, I was quick to protect profits and limit a loss of my aggressive growth names, and to raise cash and keep my powder dry.
Although I love Chipotle’s (CMG) fundamentals and growth story, it sliced through its 10 day moving average (10 DMA). Make no mistake, this is a volatile growth stock.
So I sold my purchase of 3/3/2014 for a 5% gain (see Chipotle Graph). Likewise, I sold my Facebook (FB) purchase of 1/10/2014 for a 10% gain just as it was breaking down through its 50 DMA (see Facebook Graph).
I also limited my losses by selling my most recent purchase on 3/18/2014 of Under Armour (UA) for a -4.28% loss.
This is a perfect example of how most stocks move with the tide of the markets. The growth stocks simply move more in either direction.
I will likely re-enter some of these positions as some point, but as some may not be the “new” leaders. Market leaders rotate over time.
Now I have written recently of Michael Kors (KORS) as a possible addition but was being patient as the markets weren’t acting right.
KORS was down -5% at one point during the trading session, but closed down -3.44%. So when and if I decide to take a position in KORS, it will be at a lower entry point, or at least a less risky time when the market is trending higher.
This is why it is so important that you determine the market direction first, and if in an uptrend, then add stocks showing leadership. For now though, I have cash on the sidelines. I will patiently wait for the markets to establish a discernible, measurable trend. And I will have my “new” stocks (some likely “old” stocks) ready.
We have a lot of important economic data today, especially on the residential housing front. We have 4 companies reporting on the S&P 500 and 12 in the broader markets. Some of the more notable companies are listed below.
Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. We have a financial and market focus.
I hope you enjoy the show. If you have any investment questions you would like discussed on the air, just e-mail me a danny@thewallstreetshuffle.com and we will address your questions.
If you have any specific investment questions in which you would like personal advice, e-mail me at dstewart@old.noramassetmanagement.com and I will be happy to respond.
Dan Stewart CFA®
NorAm Asset Management
Economic Reports Today:
House Price Index
S&P/CaseShiller 20 City Index
S&P/CS Composite
S&P/CS Home Price Index
New Home Sales
Consumer Confidence
Richmond Fed Manufacturing Index
Some Notable Earnings Reports Today:
Carnival (CCL – before market)
McCormick (MKC – before market)
Walgreen (WAG)
PVH Corp (PVH – after market)
Neogen (NEOG – before market)
HDS Suppy Holdings (HDS)
Five Below (FIVE – after market)
The information presented is for educational and entertainment purposes only. Opinions and information expressed are based upon information considered reliable. However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.
Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.
Investments involve risk and unless otherwise stated are not guaranteed.
