Free Newsletter: Stalking Stocks with the Shark - Bulls Given Free Reign - 8/28/08
Greetings Shark Investors:
The major indices were able to post solid, broad-based gains during Thursday’s trading session following though on the previous day’s advances. Despite an early move to back over $120 in oil, early indications were for a flat start to the day, but sentiment improved markedly as we headed towards the opening bell following a better than expected upward revision to second quarter GDP.
Specifically, the new reading on growth showed that the economy expanded by 3.3% instead of the preliminary reading of 1.9%, driven mostly by a 13.2% increase in exports and a 1.7% rise in personal consumption. Also helping the mood early on was strength in the financials following news that MBI had announced an agreement to reinsure $184 billion in U.S. public finance bonds already insured by FGIC.
As such, the market opened the day by gapping strongly higher, basing at its initial highs for the first hour or so before making a series of advances as crude fell sharply off its opening highs, moving back towards the $115 mark as the New York lunch hour approached. From that point on, both the S&P 500 and the Nasdaq continues to creep higher while the Dow spent the remainder of the day right near the highs of the session.
By the close, the indices were able to post impressive gains of 1.5%, on average. Although financials, with an advance of almost 4%, was the clear winner on the day, industrials and consumer discretionary weren’t far behind, moving higher by well more than 2%, while energy was the only major S&P sector to close in the red. Breadth, meanwhile, was quite bullish at over 3:1 to the positive, another indication that the buying during the day was broad-based.
Of course, a thin pre-holiday trading environment didn’t hurt either. We’ve been saying all week long that the low-volume trading sessions ahead of holidays tend to exaggerate moves in either direction, and that was certainly the case today as the bears simply got out of the way and allowed the bulls free reign. That said, the averages were able to improve from a technical perspective, closing above the two short-term lower highs we saw over the past two weeks and approaching lateral resistance from earlier this month.
That said, we’ve also been saying all week long that the low volume also makes moves in either direction difficult to trust. We’ll see if the bulls can continue to move this market higher once traders return to their desks next week and volume starts coming back into this market, but in the meantime, individual investors will be best served by keeping a few things in mind. As we’ve seen so many times over the past 10 months, anticipating the end to this primary downtrend has been a recipe for pain. Respecting the dominant trend and assuming that it will persist – oftentimes longer than seems reasonable – is always the best approach no matter which way the market is moving.
Above all, however, we need to make sure that we don’t start getting caught up in the hope that we have clear skies from here. A market turn will come, and that can happen at any time. However, instead of trying to predict when that will be, we need to react to it. The market will tell us when we’ve had meaningful shift, and that will be characterized by obvious demand, strong leadership, increasing volume and prices that are surging higher.
We saw a bit of that today, but making sure we keep our trades small and our time-frames short continues to be the name of the game.
About Me
- RevShark
- James ‘RevShark' DePorre is widely viewed as one of the nation's top educators of individual investors as well as a gifted stock market commentator. His daily comments help ten of thousands of market participants navigate the market seas. His self-taught methods are geared to help individual investors use their small size and flexibility to gain an edge over the huge institutions that dominate Wall Street. His unique approach isn't just theory. It has allowed him to grow a small stake into many millions. In 1999, Jim founded SharkInvesting.com which continues to operate today with many of its pioneering members. In October 2001, Jim became the featured diarist for RealMoney.com , the paid subscription site of TheStreet.com . Jim has also been featured in numerous publications, including Money Magazine , the Wall Street Journal Online , Fortune , New York Magazine , PC World, Online Investing Magazine , the Detroit Free Press , the San Francisco Chronicle, the Sarasota Herald-Tribune, Manatee Herald-Tribune and Bradenton Herald.
Friday, August 29, 2008
Thursday, August 28, 2008
Free Newsletter: Stalking Stocks with the Shark - Low Volume Bounce Into Resistance - 08/27/08
Free Newsletter: Stalking Stocks with the Shark - Low Volume Bounce Into Resistance - 08/27/08
Greetings Shark Investors:
Although they finished off the highs of the session, the major indices were able to post solid gains on Wednesday in what predictably was another low-volume pre-holiday trading session. Following one of the most directionless sessions we’ve seen in a while, the news wires were quiet as we headed towards the start of the day, and indications were for a slightly lower start to the day. However, sentiment improved about an hour before the bell following the July durable goods report, which showed a month-over-month increase of 1.3% (versus expectations of an unchanged reading), while the ex-transportation numbers rose by 0.7% (versus expectations of a drop of 0.7%). Despite that, the index futures fell back towards the flat line, possibly in response to a spike in oil, which shot to well over $119 per barrel after posting gains of 1% earlier in the morning.
As such the averages began the day in mixed territory, bouncing between positive and negative territory for the first 45 minutes, but began to move higher as the weekly crude inventory report from the Department of Energy approached. However, even though those numbers were bullish for gas and oil – showing a draw versus an expected build in oil inventories, and a draw in gas inventories that was less than had been anticipated – equities showed little reaction, as the averages continued to climb to their best levels of the morning.
After that, the market spent the next 90 minutes basing out, but another wave of buying kicked in just as we entered the New York lunch hour, sending the market to what would turn out to be the highs of the day. While the resource sectors continued to sport solid gains, most of that second push was driven by financials. But by that time, all of the major S&P sectors were well into the green.
From that point, the air began to slowly come out of the market, with the averages giving up about half of their respective advances by the time we were mid-way through the final hour. However, the bulls were able to make a final push into the close, closing the indices with average gains of 0.82% on breadth that, while off its best levels of the day, still showed more than two stocks advancing for every one that declined. Volume, however, was once again incredibly light, with the number of shares that exchanged hands on the NYSE again at the lowest level of the year.
That said, the market undoubtedly had a positive bias, and while it remains dangerous to read anything into the action when we are dealing with such a thin trading environment, that bias allowed a number of individual stocks to act well between the bells. Of course, at the same time, market commentators could barely restrain their delight during the day. Not only did the market move higher, but they had a convenient excuse – the durable goods report – to explain away the action.
However, unlike the serial bottom-callers who seem to never tire of predicting major turns and making bold calls, we have absolutely no idea how long this market will continue to struggle. All we can go on is the action that we see in front of us on a daily basis and the technical condition in the major indices. While there were more stocks that were “working” today, we can’t help but notice that the averages were turned back right at the developing descending resistance trendlines that we’ve been talking about over the past week or so.
The one thing we do know, however, is that, eventually, a new bull market will begin, and if individual investors can keep their focus on capital protection and continue to keep tight stops and short time-frames in a market that obviously continues to struggle, then they will be in a much better position to profit than those who keep on trying to peg an exact bottom. Perhaps the action over the past couple of weeks will turn out have built the sort of base from which this market can move higher once volume start to come back into this market, but the fact remains that we have a long way to go before the indices can even begin the hard work of attacking their primary resistance trendlines.
Wednesday, August 27, 2008
Free Newsletter: Stalking Stocks with the Shark - Averages Finish Lackluster Session Mixed - 08/26/08
Free Newsletter: Stalking Stocks with the Shark - Averages Finish Lackluster Session Mixed - 08/26/08
Greetings Shark Investors:
Indications were for a flat start following the previous day’s big point losses and declines in overseas markets. About the only news on the wires early on were announcements from APC and COH that they had both authorized share repurchase programs, that AEO had beat earnings estimates, but had lowered its guidance for the third quarter, and that the Case-Shiller home price index showed a 15.9% year-over-year decline in home prices versus expectations for a 16.2% drop.
As such, the major indices opened the day slightly to the downside, and spent the first hour or so chopping around the unchanged mark, showing little reaction to some mixed economic data. Specifically, the Richmond Fed manufacturing index showed a reading of -16 versus expectations of -10, July new home sales came in 10K short of the anticipated 525K, and consumer confidence for August came in at 56.9, improving from last month’s reading of 51.9. However, about a half-hour after that data was released, a wave of broad-based buying kicked in, sending the averages to what would turn out to be the best levels of the session.
Unfortunately for the bulls, that updraft proved to be short-lived as the indices quickly moved back towards the flat-line as we headed towards the New York lunch hour. For the next couple of hours, the market continued to churn, as investors greeted the minutes from the most recent FOMC meeting with a resounding yawn. Rising prices, soft labor markets, tight credit conditions and weak consumer demand are issues market players are already very familiar with, so it was not surprising that the news did not result in much of a response.
However, conditions began to deteriorate as we worked our way into the afternoon as financials, tech, industrials and consumer discretionary began to lose steam. Meanwhile, energy rebounded after a mid-morning pullback from highs as concerns began to grow that Hurricane Gustav would threaten energy assets in the Gulf of Mexico next week.
Still, the market was able to recover as we headed towards the closing bell as those same sectors which had seen pressure earlier in the afternoon moved sharply off their lows in the final 90 minutes of the day. By the close, both the Dow and the S&P 500 were able to finish with gains of 0.23% and 0.37%, respectively, while the Nasdaq closed lower by 0.15%. Volume, meanwhile, was once again quite light, but was higher than Monday, which was the lightest volume day so far this year.
Although the action was dreary, one silver lining is that the selling pressures from yesterday eased and each of the major indices was able to close above short-term lateral support levels. That said, the averages continue to look precarious from a technical perspective. The market continues to struggle in this thin trading environment, and even though the intermediate uptrend which began back in July is technically still in place, we are close to putting in another short-term lower low to pair up with the two lower highs we’ve seen since the rising wedges we talked about were breached two weeks ago.
The most important thing that individual investors can do at this point is simply accept the fact that trying to squeeze a profit out of this market continues to be a tall order, and that there just isn’t a whole lot that is working out there right now. As we’ve been saying, at some point, conditions will improve, and we will be able to begin picking out the tremendous opportunities that will be created from all of the turmoil. However, no amount of hope will make that happen any faster. Above all, we need to make sure that we stick to our own personal styles of investing and make sure that we don’t start forcing trades in an uncooperative market.
Greetings Shark Investors:
Indications were for a flat start following the previous day’s big point losses and declines in overseas markets. About the only news on the wires early on were announcements from APC and COH that they had both authorized share repurchase programs, that AEO had beat earnings estimates, but had lowered its guidance for the third quarter, and that the Case-Shiller home price index showed a 15.9% year-over-year decline in home prices versus expectations for a 16.2% drop.
As such, the major indices opened the day slightly to the downside, and spent the first hour or so chopping around the unchanged mark, showing little reaction to some mixed economic data. Specifically, the Richmond Fed manufacturing index showed a reading of -16 versus expectations of -10, July new home sales came in 10K short of the anticipated 525K, and consumer confidence for August came in at 56.9, improving from last month’s reading of 51.9. However, about a half-hour after that data was released, a wave of broad-based buying kicked in, sending the averages to what would turn out to be the best levels of the session.
Unfortunately for the bulls, that updraft proved to be short-lived as the indices quickly moved back towards the flat-line as we headed towards the New York lunch hour. For the next couple of hours, the market continued to churn, as investors greeted the minutes from the most recent FOMC meeting with a resounding yawn. Rising prices, soft labor markets, tight credit conditions and weak consumer demand are issues market players are already very familiar with, so it was not surprising that the news did not result in much of a response.
However, conditions began to deteriorate as we worked our way into the afternoon as financials, tech, industrials and consumer discretionary began to lose steam. Meanwhile, energy rebounded after a mid-morning pullback from highs as concerns began to grow that Hurricane Gustav would threaten energy assets in the Gulf of Mexico next week.
Still, the market was able to recover as we headed towards the closing bell as those same sectors which had seen pressure earlier in the afternoon moved sharply off their lows in the final 90 minutes of the day. By the close, both the Dow and the S&P 500 were able to finish with gains of 0.23% and 0.37%, respectively, while the Nasdaq closed lower by 0.15%. Volume, meanwhile, was once again quite light, but was higher than Monday, which was the lightest volume day so far this year.
Although the action was dreary, one silver lining is that the selling pressures from yesterday eased and each of the major indices was able to close above short-term lateral support levels. That said, the averages continue to look precarious from a technical perspective. The market continues to struggle in this thin trading environment, and even though the intermediate uptrend which began back in July is technically still in place, we are close to putting in another short-term lower low to pair up with the two lower highs we’ve seen since the rising wedges we talked about were breached two weeks ago.
The most important thing that individual investors can do at this point is simply accept the fact that trying to squeeze a profit out of this market continues to be a tall order, and that there just isn’t a whole lot that is working out there right now. As we’ve been saying, at some point, conditions will improve, and we will be able to begin picking out the tremendous opportunities that will be created from all of the turmoil. However, no amount of hope will make that happen any faster. Above all, we need to make sure that we stick to our own personal styles of investing and make sure that we don’t start forcing trades in an uncooperative market.
Tuesday, August 26, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Gives Back Gains - 8/25/08
Free Newsletter: Stalking Stocks with the Shark - Market Gives Back Gains - 8/25/08
Greetings Shark Investors:
The market kicked off the new week on a sour note on Monday as a round of broad-based selling wiped out all of last Friday’s gains, and more. Indications were for a somewhat soft start to the day early in the morning as worries over the state of the financial sector continued to percolate after word surfaced that South Korean regulators had warned Korea Development Bank to take a “cautious approach” in response to the speculation that they might be interested in acquiring LEH. Meanwhile, sentiment was further dampened by news that the International Monetary Fund had reduced its forecasts for global growth for the rest of this year an next to 3.9% from 4.1%, further reinforcing the notion that the recent pullback in commodities and the resource sectors have more to do with concerns over soft demand rather than the popping of some speculative bubble. Still, while most of the early focus was on the financials, the index futures lost considerable steam as we headed towards the bell, indicating a bout of broad selling at the open.
As expected, the indices opened the day sharply lower and continued to lose ground as the morning got under way. Buyers, meanwhile, failed to respond favorably to a better than expected headline reading on the July existing home sales, which showed a 3.1% month-over-month increase versus the 1.1% increase economists had expected. The lackluster reaction was likely due to the fact that, despite July’s rise, the inventory of unsold homes also moved higher while the median sales price decreased.
After drifting steadily lower all morning, a fresh wave of selling kicked in just as we entered the New York lunch hour on no apparent catalyst, sending the averages to what would turn out to be the lows of the session in a matter of minutes. By this time, whatever buying interest there might have been early in the day was all but gone as energy, the only major S&P sector to trade in the green all day, fell into the red. From that point on, the indices spent the remainder of the day chopping around near the worst levels of the session, finally closing with average losses of 2% on bearish breadth that showed seven losing stocks for every one that gained. In fact, just about the only good thing we can say about Monday’s action is that, once again, volume was incredibly light on both exchanges, indicating that the institutional money still is out enjoying their last vacation of the summer.
We’ve been saying that these low volume days make it extremely dangerous to try and read too much into the action, but at the same time, the major indices are looking awfully precarious from a technical perspective. We pointed out early last week that the failure of the rising wedge patterns we had been pointing out over the past few weeks indicated that market players would likely be shifting to a more defensive posture once again, and judging from today’s action, that process looks to be playing out. We’ll see what the rest of the day holds and how the week develops from here, but the averages are getting close to testing short-term lateral support again, and are in danger of putting in another lower low.
The bottom line is that, as we’ve been saying, individual investors are best served in this environment by assuming that any sustained action to the upside will ultimately fail. We haven’t completely rolled over yet, and one never know what the next day will bring, but for the past ten months, we’ve been reminded again and again that we are indeed in a bear market, and there has yet to be any indication that it has suddenly come to an end. At some point it will, but until then, we need to make sure we remain focused on capital protection and short time-frames.
Monday, August 25, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Sees Decent Gains On Very Light Volume - 8/24/08
Free Newsletter: Stalking Stocks with the Shark - Market Sees Decent Gains On Very Light Volume - 8/24/08
Greetings Shark Investors:
The market was able to close out the week on a high note as buyout speculation in the financial sector and a reversal in oil fueled a broad-based, but low volume, rally. Although the news wires were especially quiet early in the morning and indications were for a flat start to the day, index futures suddenly shot higher on reports that Korea Development Bank had expressed an interest in acquiring LEH. Meanwhile, sentiment got a further boost as oil pared some its recent gains and the dollar strengthened against other currencies.
As such, the major indices gapped higher at the open, climbing higher for the first hour or so to what would turn out to be the best levels of the morning. As could have been expected, energy and materials were the main laggards, showing losses as the day got under way, while each of the other major S&P sectors in positive territory, with financials in the lead. Consumer discretionary also started by posting solid gains on lower oil and decent earnings results from GPS and ANN, but the other sectors weren’t far behind, with industrials, tech, healthcare and staples each well into the green.
After the early ascent, the market began to loose a bit of steam as we headed towards the New York lunch hour, but the momentum picked up once again as the afternoon got under way. The averages were able to work their way back towards the best levels of the day in short order, holding on to their gains and spending the rest of the trading session hovering near highs in a relatively narrow range. By the end of the day, each of the indices posted average gains of 1.43% on breadth that ended up at better than 2:1 to the positive.
Certainly, it was a good day for the bulls. The buying was broad-based and the advance was solid. Of course, we’ll be hearing from pundits and so-called experts about how stocks are terrific values at these levels and how, if such a successful investor as Warren Buffet is starting to buy select banks and is starting to “read more 10-K’s”, we should be buying too.
Without a doubt, there are going to be terrific bargains in this market once all of this turmoil plays out, but with volume being so light – Friday’s session was the lightest of year – it is really difficult to really place much trust in the action. Moreover, even though both the Dow and the S&P 500 were able to reclaim their respective 50 day moving averages, they weren’t able to make progress past what look to be developing descending resistance trendlines.
The biggest takeaway from the day is that we still can’t trust areas that are strong one day to be strong the next. The thing this market continues to lack is solid leadership, but of course, a lack of any clear leaders is the hallmark of a bear market. A strong market will be defined by a handful of areas that are clearly pushing us higher. That certainly isn’t the case right now, and we shouldn’t expect it to be.
We’ll see how things develop from here, but the technical damage we took early this week remains in place. At some point, conditions will improve, but until there’s solid evidence that the trend has changed, individual investors will be best served by sticking to short time-frames and keeping their focus squarely on capital protection.
Greetings Shark Investors:
The market was able to close out the week on a high note as buyout speculation in the financial sector and a reversal in oil fueled a broad-based, but low volume, rally. Although the news wires were especially quiet early in the morning and indications were for a flat start to the day, index futures suddenly shot higher on reports that Korea Development Bank had expressed an interest in acquiring LEH. Meanwhile, sentiment got a further boost as oil pared some its recent gains and the dollar strengthened against other currencies.
As such, the major indices gapped higher at the open, climbing higher for the first hour or so to what would turn out to be the best levels of the morning. As could have been expected, energy and materials were the main laggards, showing losses as the day got under way, while each of the other major S&P sectors in positive territory, with financials in the lead. Consumer discretionary also started by posting solid gains on lower oil and decent earnings results from GPS and ANN, but the other sectors weren’t far behind, with industrials, tech, healthcare and staples each well into the green.
After the early ascent, the market began to loose a bit of steam as we headed towards the New York lunch hour, but the momentum picked up once again as the afternoon got under way. The averages were able to work their way back towards the best levels of the day in short order, holding on to their gains and spending the rest of the trading session hovering near highs in a relatively narrow range. By the end of the day, each of the indices posted average gains of 1.43% on breadth that ended up at better than 2:1 to the positive.
Certainly, it was a good day for the bulls. The buying was broad-based and the advance was solid. Of course, we’ll be hearing from pundits and so-called experts about how stocks are terrific values at these levels and how, if such a successful investor as Warren Buffet is starting to buy select banks and is starting to “read more 10-K’s”, we should be buying too.
Without a doubt, there are going to be terrific bargains in this market once all of this turmoil plays out, but with volume being so light – Friday’s session was the lightest of year – it is really difficult to really place much trust in the action. Moreover, even though both the Dow and the S&P 500 were able to reclaim their respective 50 day moving averages, they weren’t able to make progress past what look to be developing descending resistance trendlines.
The biggest takeaway from the day is that we still can’t trust areas that are strong one day to be strong the next. The thing this market continues to lack is solid leadership, but of course, a lack of any clear leaders is the hallmark of a bear market. A strong market will be defined by a handful of areas that are clearly pushing us higher. That certainly isn’t the case right now, and we shouldn’t expect it to be.
We’ll see how things develop from here, but the technical damage we took early this week remains in place. At some point, conditions will improve, but until there’s solid evidence that the trend has changed, individual investors will be best served by sticking to short time-frames and keeping their focus squarely on capital protection.
Friday, August 22, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Recover From A Poor Open To Finish Mixed - 8/21/08
Free Newsletter: Stalking Stocks with the Shark - Market Recover From A Poor Open To Finish Mixed - 8/21/08
Greetings Shark Investors:
Although the major indices finished Thursday’s trading session in mixed territory, all in all, it was a decent day for the bulls as investors were able to look past a $6 spike in oil and disappointing economic data to take the market higher after an ugly open. Indications were for a sharply lower start to the day following poor action in overseas markets and an early 2% rise in crude prices. Although index futures were able to improve a bit after a slightly better than expected reading on weekly jobless claims, which showed a 13K decline to 423K after last week’s number was revised lower to 445K, the improvement in sentiment after that news was short-lived.
As such, the market began the day by gapping lower, but buyers were waiting in the wings to take the indices off their opening lows during the first hour of trade. After that, conditions worsened once again on the heels of worse than expected readings on the Philadelphia Fed Index, which showed that manufacturing activity in that region contracted for the ninth month in a row, and the index of leading economic indicators, which came in at -0.7%, versus expectations of -0.3%.
However, buyers once again stepped up to the plate, taking the market off the lows for a second time. For the rest of the morning and into the final hour, the market was able to make steady progress to the upside, erasing the early deficit and moving us into mixed territory Although to upside momentum slowed into the close, both the Dow and the S&P 500 were able to close with gains of 0.11% and 0.25%, respectively, while the Nasdaq closed 0.36% lower.
Given the fact that buyers looked past higher oil and a weaker dollar to engineer a respectable intraday reversal is a positive. Unsurprisingly, energy and materials were the big winners on the day, but both consumer discretionary and industrials were also able to post solid gains. Moreover, even though tech, financials, staples and healthcare were the laggards, each of those sectors also finished well off the lows of the session.
At the same time, however, volume was the lightest that it’s been all week, and that’s saying a lot. Certainly, though, we’re sure to hear from so-called market experts that today’s action shows that the selling earlier in the week was simply a minor blip and that the market is ready to resume its move off July’s lows. We’ll see how things develop from here, but the major indices took some undeniable technical damage on Monday and Tuesday, and the action over the past two days, while encouraging, does nothing to repair it.
The bottom line is that individual investors will be best served in this environment by continuing to keep their time-frames short, picking their spots carefully, and taking profits into strength. The market will tell us when it’s time to start building more substantial positions, and that has yet to happen.
Greetings Shark Investors:
Although the major indices finished Thursday’s trading session in mixed territory, all in all, it was a decent day for the bulls as investors were able to look past a $6 spike in oil and disappointing economic data to take the market higher after an ugly open. Indications were for a sharply lower start to the day following poor action in overseas markets and an early 2% rise in crude prices. Although index futures were able to improve a bit after a slightly better than expected reading on weekly jobless claims, which showed a 13K decline to 423K after last week’s number was revised lower to 445K, the improvement in sentiment after that news was short-lived.
As such, the market began the day by gapping lower, but buyers were waiting in the wings to take the indices off their opening lows during the first hour of trade. After that, conditions worsened once again on the heels of worse than expected readings on the Philadelphia Fed Index, which showed that manufacturing activity in that region contracted for the ninth month in a row, and the index of leading economic indicators, which came in at -0.7%, versus expectations of -0.3%.
However, buyers once again stepped up to the plate, taking the market off the lows for a second time. For the rest of the morning and into the final hour, the market was able to make steady progress to the upside, erasing the early deficit and moving us into mixed territory Although to upside momentum slowed into the close, both the Dow and the S&P 500 were able to close with gains of 0.11% and 0.25%, respectively, while the Nasdaq closed 0.36% lower.
Given the fact that buyers looked past higher oil and a weaker dollar to engineer a respectable intraday reversal is a positive. Unsurprisingly, energy and materials were the big winners on the day, but both consumer discretionary and industrials were also able to post solid gains. Moreover, even though tech, financials, staples and healthcare were the laggards, each of those sectors also finished well off the lows of the session.
At the same time, however, volume was the lightest that it’s been all week, and that’s saying a lot. Certainly, though, we’re sure to hear from so-called market experts that today’s action shows that the selling earlier in the week was simply a minor blip and that the market is ready to resume its move off July’s lows. We’ll see how things develop from here, but the major indices took some undeniable technical damage on Monday and Tuesday, and the action over the past two days, while encouraging, does nothing to repair it.
The bottom line is that individual investors will be best served in this environment by continuing to keep their time-frames short, picking their spots carefully, and taking profits into strength. The market will tell us when it’s time to start building more substantial positions, and that has yet to happen.
Thursday, August 21, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Bounces Modestly After Recent Weakness - 8/20/08
Free Newsletter: Stalking Stocks with the Shark - Market Bounces Modestly After Recent Weakness - 8/20/08
Greetings Shark Investors:
Although the major indices were able to rebound during Wednesday’s trading session, the path between the bells was anything but smooth and the sector leadership was anything but encouraging. We mentioned in our last Stalking Stocks evening newsletter that, despite the technical damage that the market had seen over the past few days, the averages were a bit extended to the downside and in a position to see some reflexive action in the opposite direction. As a result, indications were for a slightly higher start to the day, with sentiment being further buoyed by better than expected earnings results from HPQ, which reported earnings of $0.86 on $28.0 billion in revenues, versus expectations of $0.83 on $27.41, and guided their fiscal Q3 earnings to $1.01-.03, versus estimates of $1.00.
As such, the market began the day the day to the upside, but unfortunately for the bulls, sellers hit the modest opening strength hard, sending the averages straight into negative territory minutes after the opening bell. Following the poor start to the day, stocks bounced right back to the flat-line, but it wasn’t until the weekly crude inventory report from the Department of Energy was released that the move to the upside really began to gain some steam. This piece of data has really caused some big swings lately, and today’s report was no exception. Despite the fact that oil was in the process of adding to the $2 gain from the previous day, the inventory report was quite bearish for the commodity, showing a build of 9.4M barrels versus expectations of a 1M barrel build. The net result was a quick retreat into the red for Texas Tea, and a strong push higher for equities.
Once again, however, stocks were unable to hold on to their gains, because just after reaching what would turn out to be the highs of the session shortly after that report, they began to lose steam once again, declining steadily as we worked our way through the rest of the morning and into the early afternoon. The action for the next couple of hours was choppy, but essentially range-bound, with the market being supported on the one hand by the resource sectors which had remained strong despite the volatility in crude, but weighed down on the other by financials, consumer discretionary and industrials.
However, just as it was looking like that would be the story of the day, the bulls finally got on their horse in the final hour on no apparent catalyst. While each sector was able to move higher, most of the late move was concentrated in the financials which saw about a 3.5% swing in the later part of the session. By the close, each of the major indices was able to post advances, on average, of 0.47% on breadth that was just barely positive and volume that, while still light, was at the highest levels we’ve seen so far this week.
Obviously, the pricing action in crude continues to be a major factor in the market right now. Probably the most interesting aspect to the trading over the past few days is the fact that the areas which had shown the best relative strength earlier this year are once again in focus after taking it to the chin the last six weeks. Many of the stocks in the resource sector have started to form some interesting set-ups, while the areas which were supposed to lead us higher are once again starting to look shaky – especially the financials which have lost about half of their advance off the July lows.
The takeaway here is that if investors start looking to commodity related areas for leadership, that could mean trouble for a market that has already seen some technical damage recently. We’ll see how things develop from here, but we’ve been pointing out that the current low volume trading environment and precarious patterns in the senior indices means that the bulls will have their work cut out for them.
Greetings Shark Investors:
Although the major indices were able to rebound during Wednesday’s trading session, the path between the bells was anything but smooth and the sector leadership was anything but encouraging. We mentioned in our last Stalking Stocks evening newsletter that, despite the technical damage that the market had seen over the past few days, the averages were a bit extended to the downside and in a position to see some reflexive action in the opposite direction. As a result, indications were for a slightly higher start to the day, with sentiment being further buoyed by better than expected earnings results from HPQ, which reported earnings of $0.86 on $28.0 billion in revenues, versus expectations of $0.83 on $27.41, and guided their fiscal Q3 earnings to $1.01-.03, versus estimates of $1.00.
As such, the market began the day the day to the upside, but unfortunately for the bulls, sellers hit the modest opening strength hard, sending the averages straight into negative territory minutes after the opening bell. Following the poor start to the day, stocks bounced right back to the flat-line, but it wasn’t until the weekly crude inventory report from the Department of Energy was released that the move to the upside really began to gain some steam. This piece of data has really caused some big swings lately, and today’s report was no exception. Despite the fact that oil was in the process of adding to the $2 gain from the previous day, the inventory report was quite bearish for the commodity, showing a build of 9.4M barrels versus expectations of a 1M barrel build. The net result was a quick retreat into the red for Texas Tea, and a strong push higher for equities.
Once again, however, stocks were unable to hold on to their gains, because just after reaching what would turn out to be the highs of the session shortly after that report, they began to lose steam once again, declining steadily as we worked our way through the rest of the morning and into the early afternoon. The action for the next couple of hours was choppy, but essentially range-bound, with the market being supported on the one hand by the resource sectors which had remained strong despite the volatility in crude, but weighed down on the other by financials, consumer discretionary and industrials.
However, just as it was looking like that would be the story of the day, the bulls finally got on their horse in the final hour on no apparent catalyst. While each sector was able to move higher, most of the late move was concentrated in the financials which saw about a 3.5% swing in the later part of the session. By the close, each of the major indices was able to post advances, on average, of 0.47% on breadth that was just barely positive and volume that, while still light, was at the highest levels we’ve seen so far this week.
Obviously, the pricing action in crude continues to be a major factor in the market right now. Probably the most interesting aspect to the trading over the past few days is the fact that the areas which had shown the best relative strength earlier this year are once again in focus after taking it to the chin the last six weeks. Many of the stocks in the resource sector have started to form some interesting set-ups, while the areas which were supposed to lead us higher are once again starting to look shaky – especially the financials which have lost about half of their advance off the July lows.
The takeaway here is that if investors start looking to commodity related areas for leadership, that could mean trouble for a market that has already seen some technical damage recently. We’ll see how things develop from here, but we’ve been pointing out that the current low volume trading environment and precarious patterns in the senior indices means that the bulls will have their work cut out for them.
Wednesday, August 20, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Suffers Technical Damage - 8/19/2008
Free Newsletter: Stalking Stocks with the Shark - Market Suffers Technical Damage - 8/19/2008
Greetings Shark Investors:
It was another ugly trading session on Tuesday as the market took some technical damage on the heels of disappointing economic data, further pressure for the financials, and a bounce in crude prices. Following the previous day’s poor results and losses in overseas markets, early morning indications were for a softer start to the day. Sentiment was buoyed somewhat by better than expected earnings from HD, which earned $0.71 per share on $20.99 billion in revenues (versus estimates of $0.61 on $20.58 billion) and by TGT, which delivered $0.82 on $15.47 billion in revenues (versus estimates of $0.76 on $15.52 billion), but the index futures dipped sharply after the morning’s economic reports.
While housing starts were roughly in-line, but down 11.1% from last month, building permits missed badly, dropping 17.7% to 937K. Meanwhile, PPI inflation data showed an eye popping headline reading of 1.2% month-over-month and a core number of 0.7%. Both were much hotter than expected, bringing the year-over-year tally to 9.8% and 3.5%, respectively.
As such the market gapped lower at the open, but unfortunately for the bulls, the dip buyers were nowhere to be found, as the indices continued to move lower throughout the morning. Financials were once again the sore spot, reaching as low as -4% just as we entered the New York lunch hour. However, that wasn’t the only area to show a loss, as each of the major S&P sectors, save energy and utilities, were in negative territory. Only one of those, materials, was able to pop its head into the green, but only briefly. Meanwhile, the mood was dampened further as the dollar lost ground and oil jumped higher mid-morning, showing a gain at one point during the day of $3 per barrel.
Although the market was able to stabilize and work its way modestly off the lows of the session as we headed into the afternoon, the averages weren’t able to make much progress, drifting sideways in a relatively tight trading range for the rest of the day. By the close, each index lost, on average, 1.14% on breadth that was worse than 3:1 to the negative. Volume, meanwhile, continued to be light, but it did increase over the previous day.
Without a doubt, it was another dismal day for equities, as continuing concerns over the state of the financial sector only amplified the fact that the market got yet another reminder that inflationary pressures and problems in the housing market have not simply disappeared because of the progress in crude and in the greenback.
More important, however, is the technical damage that both the Dow and the S&P 500 saw on the day. We warned last night that those indices were looking precarious as they dipped below the ascending support trendlines that had been in place over the past several weeks, and now those technical levels have been demonstrably breached. That means that market players will likely start to get defensive once again, even if the selling pressure over the past two days has set us up for some reflexive action to the upside.
While we’ve noted that the pricing action in the broader market has been encouraging, we’ve talked frequently about how the lack of leadership, decreasing volume and numerous failed breakouts have been major concerns. As such, those who stayed cautious and maintained short time-frames during this recent uptrend should have the flexibility to move back to the sidelines. At some point, this market will turn back up, but in the meantime, individual investors need to respect the fact that we are in a bear market and make sure their primary focus is on capital protection.
Greetings Shark Investors:
It was another ugly trading session on Tuesday as the market took some technical damage on the heels of disappointing economic data, further pressure for the financials, and a bounce in crude prices. Following the previous day’s poor results and losses in overseas markets, early morning indications were for a softer start to the day. Sentiment was buoyed somewhat by better than expected earnings from HD, which earned $0.71 per share on $20.99 billion in revenues (versus estimates of $0.61 on $20.58 billion) and by TGT, which delivered $0.82 on $15.47 billion in revenues (versus estimates of $0.76 on $15.52 billion), but the index futures dipped sharply after the morning’s economic reports.
While housing starts were roughly in-line, but down 11.1% from last month, building permits missed badly, dropping 17.7% to 937K. Meanwhile, PPI inflation data showed an eye popping headline reading of 1.2% month-over-month and a core number of 0.7%. Both were much hotter than expected, bringing the year-over-year tally to 9.8% and 3.5%, respectively.
As such the market gapped lower at the open, but unfortunately for the bulls, the dip buyers were nowhere to be found, as the indices continued to move lower throughout the morning. Financials were once again the sore spot, reaching as low as -4% just as we entered the New York lunch hour. However, that wasn’t the only area to show a loss, as each of the major S&P sectors, save energy and utilities, were in negative territory. Only one of those, materials, was able to pop its head into the green, but only briefly. Meanwhile, the mood was dampened further as the dollar lost ground and oil jumped higher mid-morning, showing a gain at one point during the day of $3 per barrel.
Although the market was able to stabilize and work its way modestly off the lows of the session as we headed into the afternoon, the averages weren’t able to make much progress, drifting sideways in a relatively tight trading range for the rest of the day. By the close, each index lost, on average, 1.14% on breadth that was worse than 3:1 to the negative. Volume, meanwhile, continued to be light, but it did increase over the previous day.
Without a doubt, it was another dismal day for equities, as continuing concerns over the state of the financial sector only amplified the fact that the market got yet another reminder that inflationary pressures and problems in the housing market have not simply disappeared because of the progress in crude and in the greenback.
More important, however, is the technical damage that both the Dow and the S&P 500 saw on the day. We warned last night that those indices were looking precarious as they dipped below the ascending support trendlines that had been in place over the past several weeks, and now those technical levels have been demonstrably breached. That means that market players will likely start to get defensive once again, even if the selling pressure over the past two days has set us up for some reflexive action to the upside.
While we’ve noted that the pricing action in the broader market has been encouraging, we’ve talked frequently about how the lack of leadership, decreasing volume and numerous failed breakouts have been major concerns. As such, those who stayed cautious and maintained short time-frames during this recent uptrend should have the flexibility to move back to the sidelines. At some point, this market will turn back up, but in the meantime, individual investors need to respect the fact that we are in a bear market and make sure their primary focus is on capital protection.
Tuesday, August 19, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Pulls Back On Low Volume - 8/18/08
Free Newsletter: Stalking Stocks with the Shark - Market Pulls Back On Low Volume - 8/18/08
Greetings Shark Investors:
Although the morning started off in a lackluster fashion, a lack of upside progress, pressure in the financials, and a mid-morning reversal in oil yielded what turned out to be a rather dismal trading session for the market on Monday. The news wires were especially quiet ahead of the opening bell, but early morning indications were for a mixed start to the day following a bit of weakness in overseas market. However, index futures moved off their overnight lows after European averages recovered and LOW posted better than expected quarterly results of $0.64 per share on $14.5 billion in revenues versus expectations of $0.56 on $14.13 billion. Guidance, meanwhile, was disappointing after management said that they expected to earn between $0.27 and $0.31 per share versus estimates of $0.33 in the third quarter.
Nevertheless, the market start open the day in positive territory, but sellers were waiting in the wings, hitting the opening strength hard and sending the averages into negative territory just moments after the bell. Although oil moved quickly to the downside as well, any initial buying was concentrated in energy and materials, while tech and consumer discretionary lagged. However, the biggest drag was the result of some heavy selling in the financials, which were being pressured by FNM and FRE on speculation that the Treasury Department may be forced to recapitalize both of those government sponsored entities.
Although the major indices were able to move off their early lows and drift sideways just under the unchanged mark for the rest of the morning, a fresh wave of selling kicked in just as we headed into the New York lunch hour. After stabilizing for a few moments, the downward pressure picked up once again, pushing the averages to losses of well over 1% mid-day. From that point on, the market continued to drift lower for the rest of the day, with the indices ending the session with losses of 1.5%, on average, on breadth that was worse than 2:1 to the negative.
Meanwhile, even though the extremely light volume – which can be attributed to the fact that many market participants are taking expected vacations ahead of the Labor Day holiday in two weeks – makes it difficult to read too much into this action, the most concerning aspect to Monday’s session is the technicals. Both the Dow and the S&P 500 gave up their respective 50 day moving averages, barely finding support at last week’s intraday lows. With this action, both indices are setting up to put in a short-term lower high and lower low. Moreover, they have also breached the ascending support trendlines which had formed, putting this nascent intermediate uptrend in danger of rolling over.
As we’ve been saying, the action of the past few weeks has been encouraging, but given the decreasing volume, lack of leadership and propensity for traders to quickly book profits after individual stocks broke out of promising technical set-ups has made for very choppy conditions. While lower oil and a stronger dollar have given investors the hope that some relief for a cash-strapped consumer may be in the cards, those developments have resulted more from concerns about a global slow-down rather than an improvement for the prospects of the domestic economy. That has, in turn, been evidenced in the continued outperformance in healthcare and staples, areas which attract money in a recessionary environment.
The bottom line here is that Monday’s action certainly demands our attention. While there have been some improvements, we need to proceed cautiously, pick our spots carefully, and make sure that we keep our stops tight. Buyers have moved to buy weakness before, but the big question is if the shorts will begin to press once again. One thing’s for sure, and that is now is not the time for big bets in either direction.
Greetings Shark Investors:
Although the morning started off in a lackluster fashion, a lack of upside progress, pressure in the financials, and a mid-morning reversal in oil yielded what turned out to be a rather dismal trading session for the market on Monday. The news wires were especially quiet ahead of the opening bell, but early morning indications were for a mixed start to the day following a bit of weakness in overseas market. However, index futures moved off their overnight lows after European averages recovered and LOW posted better than expected quarterly results of $0.64 per share on $14.5 billion in revenues versus expectations of $0.56 on $14.13 billion. Guidance, meanwhile, was disappointing after management said that they expected to earn between $0.27 and $0.31 per share versus estimates of $0.33 in the third quarter.
Nevertheless, the market start open the day in positive territory, but sellers were waiting in the wings, hitting the opening strength hard and sending the averages into negative territory just moments after the bell. Although oil moved quickly to the downside as well, any initial buying was concentrated in energy and materials, while tech and consumer discretionary lagged. However, the biggest drag was the result of some heavy selling in the financials, which were being pressured by FNM and FRE on speculation that the Treasury Department may be forced to recapitalize both of those government sponsored entities.
Although the major indices were able to move off their early lows and drift sideways just under the unchanged mark for the rest of the morning, a fresh wave of selling kicked in just as we headed into the New York lunch hour. After stabilizing for a few moments, the downward pressure picked up once again, pushing the averages to losses of well over 1% mid-day. From that point on, the market continued to drift lower for the rest of the day, with the indices ending the session with losses of 1.5%, on average, on breadth that was worse than 2:1 to the negative.
Meanwhile, even though the extremely light volume – which can be attributed to the fact that many market participants are taking expected vacations ahead of the Labor Day holiday in two weeks – makes it difficult to read too much into this action, the most concerning aspect to Monday’s session is the technicals. Both the Dow and the S&P 500 gave up their respective 50 day moving averages, barely finding support at last week’s intraday lows. With this action, both indices are setting up to put in a short-term lower high and lower low. Moreover, they have also breached the ascending support trendlines which had formed, putting this nascent intermediate uptrend in danger of rolling over.
As we’ve been saying, the action of the past few weeks has been encouraging, but given the decreasing volume, lack of leadership and propensity for traders to quickly book profits after individual stocks broke out of promising technical set-ups has made for very choppy conditions. While lower oil and a stronger dollar have given investors the hope that some relief for a cash-strapped consumer may be in the cards, those developments have resulted more from concerns about a global slow-down rather than an improvement for the prospects of the domestic economy. That has, in turn, been evidenced in the continued outperformance in healthcare and staples, areas which attract money in a recessionary environment.
The bottom line here is that Monday’s action certainly demands our attention. While there have been some improvements, we need to proceed cautiously, pick our spots carefully, and make sure that we keep our stops tight. Buyers have moved to buy weakness before, but the big question is if the shorts will begin to press once again. One thing’s for sure, and that is now is not the time for big bets in either direction.
Monday, August 18, 2008
Free Newsletter: Stalking Stocks with the Shark Mixed Session, But More Progress - 8/17/08
Free Newsletter: Stalking Stocks with the Shark Mixed Session, But More Progress - 8/17/08
Greetings Shark Investors:
Despite some early gains in the morning, another pullback for commodities, further strength for the U. S. dollar, and options expiry, the market muddled through what turned out to be a rather lackluster trading session on Friday to finish in mixed territory. Following a 3% bounce earlier in the week, crude prices were on the retreat again early in the morning while the greenback was rising against foreign currencies, and as a result, indications were positive start to the day. Although index futures did pull back from their early highs on the heels of better-than-expected earnings, but disappointing guidance, from retailers ANF and JCP, they were able to recover ahead of the bell after a surprising reading on the Empire State Manufacturing Index, which came in at 2.7, versus expectations of -5.0.
As such, the market opened in positive territory, building on its initial gains in the first few minutes, but falling right back to the unchanged mark within the first hour of the day. Although the indices were able to bounce right back and move back to just under its opening highs, that second trip only allowed the averages to visit those levels briefly before retreating once again as we worked into the New York lunch hour.
After those quick swings, the action died down considerably as the afternoon got under way and the averages drifted sideways in mixed territory. The shift in the level of activity was quite palpable, and was also evidenced in the pace of volume. According to our intraday volume chart (one of our new publicly available features which allows you to track how volume is progressing through the day and compare it against previous days), it was looking like volume would be much higher in the morning, but it quickly lost pace as the afternoon got under way.
Although the troops were able to mount a bit of a charge into the final hour, it wasn’t enough to bring the Nasdaq back into positive territory, but by the end of the day, the indices were able to close with respectable gains, on average, of 0.25%. Still, despite that modest advance, only two major S&P sectors, energy and materials, finished in the red, while consumer discretionary ended up leading with a gain of 1.17%. More importantly, the averages were able to make further technical progress after putting in what may turn out to be another higher low in the middle of last week.
As we have been saying, the overall action continues to be encouraging, but at the same time, it has also been quite frustrating for more active investors. Despite the cheerleading from the financial media and the proclamations from the perma-bulls who are absolutely convinced that we are at the cusp of a new bull market, we are still facing significant problems in the credit, housing and labor markets. While those issues may eventually be what helps this market climb the proverbial wall of worry, we are still faced with a very difficult trading environment. We have been seeing better technical set-ups, but the majority of those set-ups, it seems, have been followed by failed break-outs.
As such, the environment continues to demand short time-frames and tight stops. Without a doubt, the trading has been difficult, but as long as we make sure our primary focus remains on capital protection, we will be in a position to take advantage of the opportunities which will surely come our way as we move forward.
Greetings Shark Investors:
Despite some early gains in the morning, another pullback for commodities, further strength for the U. S. dollar, and options expiry, the market muddled through what turned out to be a rather lackluster trading session on Friday to finish in mixed territory. Following a 3% bounce earlier in the week, crude prices were on the retreat again early in the morning while the greenback was rising against foreign currencies, and as a result, indications were positive start to the day. Although index futures did pull back from their early highs on the heels of better-than-expected earnings, but disappointing guidance, from retailers ANF and JCP, they were able to recover ahead of the bell after a surprising reading on the Empire State Manufacturing Index, which came in at 2.7, versus expectations of -5.0.
As such, the market opened in positive territory, building on its initial gains in the first few minutes, but falling right back to the unchanged mark within the first hour of the day. Although the indices were able to bounce right back and move back to just under its opening highs, that second trip only allowed the averages to visit those levels briefly before retreating once again as we worked into the New York lunch hour.
After those quick swings, the action died down considerably as the afternoon got under way and the averages drifted sideways in mixed territory. The shift in the level of activity was quite palpable, and was also evidenced in the pace of volume. According to our intraday volume chart (one of our new publicly available features which allows you to track how volume is progressing through the day and compare it against previous days), it was looking like volume would be much higher in the morning, but it quickly lost pace as the afternoon got under way.
Although the troops were able to mount a bit of a charge into the final hour, it wasn’t enough to bring the Nasdaq back into positive territory, but by the end of the day, the indices were able to close with respectable gains, on average, of 0.25%. Still, despite that modest advance, only two major S&P sectors, energy and materials, finished in the red, while consumer discretionary ended up leading with a gain of 1.17%. More importantly, the averages were able to make further technical progress after putting in what may turn out to be another higher low in the middle of last week.
As we have been saying, the overall action continues to be encouraging, but at the same time, it has also been quite frustrating for more active investors. Despite the cheerleading from the financial media and the proclamations from the perma-bulls who are absolutely convinced that we are at the cusp of a new bull market, we are still facing significant problems in the credit, housing and labor markets. While those issues may eventually be what helps this market climb the proverbial wall of worry, we are still faced with a very difficult trading environment. We have been seeing better technical set-ups, but the majority of those set-ups, it seems, have been followed by failed break-outs.
As such, the environment continues to demand short time-frames and tight stops. Without a doubt, the trading has been difficult, but as long as we make sure our primary focus remains on capital protection, we will be in a position to take advantage of the opportunities which will surely come our way as we move forward.
Friday, August 15, 2008
Free Newsletter: Stalking Stocks with the Shark - Bulls Bounce Back - 8/14/08
Free Newsletter: Stalking Stocks with the Shark - Bulls Bounce Back - 8/14/08
Greetings Shark Investors:
Despite some disappointing economic data, the market was able to post solid gains on Thursday and recover from the selling over the past two trading sessions. Indications were for a slightly higher start to the day following better than expected results from WMT, which reported second quarter earnings of $0.86 per share on revenues of $101.6 billion, versus expectations of $0.84 on $101.4 billion. However, index futures took a decided turn for the worse after a much higher than anticipated reading on the monthly CPI report.
Despite estimates for a headline number of +0.4% and a core number, which excludes food and energy, of +0.2%, the actual data showed increases of 0.8% and 0.3%, respectively. That, in turn, translated to year-over-year core inflation rate of 2.5%, a reading which is well ahead of the Fed’s stated comfort zone. Moreover, weekly jobless claims were also reported, showing a decrease of 10,000 to 450,000 after last week’s number was revised higher to 460,000. That was worse than the anticipated 436,000 and raised the 4-week moving average to 440,500.
As a result, the market opened the day to the downside, but buyers stepped in right just a few moments after the opening bell to take the market off its initial lows. Despite the fact that oil also bounced after gapping lower, the indices quickly worked their way into positive territory, with the buying accelerating to the upside as oil faltered at the unchanged mark and fell sharply back into the red.
However, the market pulled back from what would turn out to be the highs of the session as we headed into the afternoon after oil bounced off its lows to pare some of its intraday losses. Still, even though things were looking pretty dicey as we headed into the final hour, the market was able to hold on to a big portion of its gains into the close. By the end of the day, the indices gained, on average, 0.77% on breadth that was better than 3:2 to the positive. Volume, however, was very light, and despite the fact that we are in a seasonally slows period, that could be interpreted on an up day such as this that a short-term top may be in the cards.
Nonetheless, the fact that the market was able to remain within its burgeoning intermediate uptrend after testing support, that both the Nasdaq and the Russell 2000 outperformed the senior indices, and the financials and consumer discretionary were the leaders on the day is quite encouraging.
The averages continue to be in good shape from a short-term technical, but once again, we’ve received more reminders of the serious headwinds that the economy continues to face. Certainly, lower oil and a stronger dollar are sucking some money in off the sidelines, but the question is the extent to which the market has been able to price in the problems that still plague the labor, housing, and credit markets.
We’ll see if those issues begin to weigh on the broader market once again, but in the meantime, the bulls certainly deserve some room here.
Greetings Shark Investors:
Despite some disappointing economic data, the market was able to post solid gains on Thursday and recover from the selling over the past two trading sessions. Indications were for a slightly higher start to the day following better than expected results from WMT, which reported second quarter earnings of $0.86 per share on revenues of $101.6 billion, versus expectations of $0.84 on $101.4 billion. However, index futures took a decided turn for the worse after a much higher than anticipated reading on the monthly CPI report.
Despite estimates for a headline number of +0.4% and a core number, which excludes food and energy, of +0.2%, the actual data showed increases of 0.8% and 0.3%, respectively. That, in turn, translated to year-over-year core inflation rate of 2.5%, a reading which is well ahead of the Fed’s stated comfort zone. Moreover, weekly jobless claims were also reported, showing a decrease of 10,000 to 450,000 after last week’s number was revised higher to 460,000. That was worse than the anticipated 436,000 and raised the 4-week moving average to 440,500.
As a result, the market opened the day to the downside, but buyers stepped in right just a few moments after the opening bell to take the market off its initial lows. Despite the fact that oil also bounced after gapping lower, the indices quickly worked their way into positive territory, with the buying accelerating to the upside as oil faltered at the unchanged mark and fell sharply back into the red.
However, the market pulled back from what would turn out to be the highs of the session as we headed into the afternoon after oil bounced off its lows to pare some of its intraday losses. Still, even though things were looking pretty dicey as we headed into the final hour, the market was able to hold on to a big portion of its gains into the close. By the end of the day, the indices gained, on average, 0.77% on breadth that was better than 3:2 to the positive. Volume, however, was very light, and despite the fact that we are in a seasonally slows period, that could be interpreted on an up day such as this that a short-term top may be in the cards.
Nonetheless, the fact that the market was able to remain within its burgeoning intermediate uptrend after testing support, that both the Nasdaq and the Russell 2000 outperformed the senior indices, and the financials and consumer discretionary were the leaders on the day is quite encouraging.
The averages continue to be in good shape from a short-term technical, but once again, we’ve received more reminders of the serious headwinds that the economy continues to face. Certainly, lower oil and a stronger dollar are sucking some money in off the sidelines, but the question is the extent to which the market has been able to price in the problems that still plague the labor, housing, and credit markets.
We’ll see if those issues begin to weigh on the broader market once again, but in the meantime, the bulls certainly deserve some room here.
Thursday, August 14, 2008
Free Newsletter: Stalking Stocks with the Shark - Bouncing Oil Pressures Market - 8/13/08
Free Newsletter: Stalking Stocks with the Shark - Bouncing Oil Pressures Market - 8/13/08
Greetings Shark Investors:
Although it was looking like the bulls were going to be able to engineer an encouraging bounce following some broad weakness in the morning, the market sold off in the final hour to end Wednesday’s trading session in the red for the second day in a row. Following yesterday’s pullback and subsequent negative results in overseas markets, indications were for a slightly softer start to the day. However, a couple of poor earnings results weighed on sentiment as we headed towards the opening bell.
Specifically, both DE and M missed top and bottom-line results by posting earnings of $1.31 per share on $7.07 billion in revenues (versus expectations of $1.36 and $7.17 billion), and $0.17 per share on $5.72 billion in revenues (versus expectations of $0.19 on $5.75 billion), respectively. Meanwhile, June Retail Sales were somewhat disappointing, showing a headline reading of -0.1% and +0.4% when automobile sales were backed out, but failed to have much of an effect on the futures.
As such, the market opened well into negative territory, falling straight down for the first few minutes of the session. Although the averages stabilized somewhat afterwards, the selling began to pick up steam once again after the weekly crude inventory report from the Department of Energy was released. News that oil inventories fell by 316K barrels (verses expectations of a 300K build) and gasoline inventories dropped by 6.4 million barrels (versus expectations of a 2.15 million draw), sent the broader market to fresh session lows and began what would turn out to be a 3% bounce in oil.
Over the next few hours, crude continued to build on its initial spike following that report while the broader market kept falling lower. Although energy and materials were the main beneficiaries and ended up leading on the day, both financials and consumer discretionary were hit hard. However, as we worked our way into the afternoon, oil began to pull back off its highs, triggering a broad-based turnaround. As we approached the final hour, the averages were in mixed territory, and it was looking like the bulls were going to be able to get out of the day with a respectable close. Unfortunately, a fresh wave of selling kicked in as we headed towards the final bell, sending the market back into negative territory. By the end of the day, the indices lost, on average, 0.43%, on breadth that was slightly negative. Meanwhile, volume was light on the Nasdaq, which outperformed on relative strength in big-cap tech names, but higher than it was yesterday on the NYSE.
We mentioned yesterday that the real gut-check for this market would come if and when we saw a reflexive rally in oil, and while it looked like investors were willing to buy this morning’s weakness, the heavy selling into the close doesn’t do a whole lot to engender much confidence. For two days now, we’ve seen a general lack of conviction as buyers shy away from their recent bets in consumer discretionary, financials and industrials. That said, the major indices remain in decent shape from a technical perspective and have so far been able to remain within their burgeoning intermediate uptrends. Moreover, the relative outperformance in both the Nasdaq and the Russell 2000 is certainly a market positive.
At the same time, however, one of our biggest complaints recently remains a major factor. Outside of some strength in tech stocks, the market continues to favor defensive areas. All in all, we are lacking any sort of solid leadership, and that’s going to make it difficult for those who are hoping for a more substantive turnaround. We’ll see if the bulls can hold here, but it may be just a matter of time before the continuing problems in the credit, housing and labor market begin to weigh on the action once again.
Greetings Shark Investors:
Although it was looking like the bulls were going to be able to engineer an encouraging bounce following some broad weakness in the morning, the market sold off in the final hour to end Wednesday’s trading session in the red for the second day in a row. Following yesterday’s pullback and subsequent negative results in overseas markets, indications were for a slightly softer start to the day. However, a couple of poor earnings results weighed on sentiment as we headed towards the opening bell.
Specifically, both DE and M missed top and bottom-line results by posting earnings of $1.31 per share on $7.07 billion in revenues (versus expectations of $1.36 and $7.17 billion), and $0.17 per share on $5.72 billion in revenues (versus expectations of $0.19 on $5.75 billion), respectively. Meanwhile, June Retail Sales were somewhat disappointing, showing a headline reading of -0.1% and +0.4% when automobile sales were backed out, but failed to have much of an effect on the futures.
As such, the market opened well into negative territory, falling straight down for the first few minutes of the session. Although the averages stabilized somewhat afterwards, the selling began to pick up steam once again after the weekly crude inventory report from the Department of Energy was released. News that oil inventories fell by 316K barrels (verses expectations of a 300K build) and gasoline inventories dropped by 6.4 million barrels (versus expectations of a 2.15 million draw), sent the broader market to fresh session lows and began what would turn out to be a 3% bounce in oil.
Over the next few hours, crude continued to build on its initial spike following that report while the broader market kept falling lower. Although energy and materials were the main beneficiaries and ended up leading on the day, both financials and consumer discretionary were hit hard. However, as we worked our way into the afternoon, oil began to pull back off its highs, triggering a broad-based turnaround. As we approached the final hour, the averages were in mixed territory, and it was looking like the bulls were going to be able to get out of the day with a respectable close. Unfortunately, a fresh wave of selling kicked in as we headed towards the final bell, sending the market back into negative territory. By the end of the day, the indices lost, on average, 0.43%, on breadth that was slightly negative. Meanwhile, volume was light on the Nasdaq, which outperformed on relative strength in big-cap tech names, but higher than it was yesterday on the NYSE.
We mentioned yesterday that the real gut-check for this market would come if and when we saw a reflexive rally in oil, and while it looked like investors were willing to buy this morning’s weakness, the heavy selling into the close doesn’t do a whole lot to engender much confidence. For two days now, we’ve seen a general lack of conviction as buyers shy away from their recent bets in consumer discretionary, financials and industrials. That said, the major indices remain in decent shape from a technical perspective and have so far been able to remain within their burgeoning intermediate uptrends. Moreover, the relative outperformance in both the Nasdaq and the Russell 2000 is certainly a market positive.
At the same time, however, one of our biggest complaints recently remains a major factor. Outside of some strength in tech stocks, the market continues to favor defensive areas. All in all, we are lacking any sort of solid leadership, and that’s going to make it difficult for those who are hoping for a more substantive turnaround. We’ll see if the bulls can hold here, but it may be just a matter of time before the continuing problems in the credit, housing and labor market begin to weigh on the action once again.
Wednesday, August 13, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Pares Recent Gains - 8/12/08
Free Newsletter: Stalking Stocks with the Shark - Market Pares Recent Gains - 8/12/08
Greetings Shark Investors:
After a couple of very strong days, the major indices pulled back on Tuesday as more bad news for the financials sector and profit-taking in some recent movers outweighed yet another pullback in commodities and further strength in the U.S. dollar. Indications were for a lower start to the day following news the previous evening that Moody's had downgraded the long-term debt rating of MS and WB said that their had adjusted their second quarter loss downward due to additional expenses related to their sale of auction-rate securities.
Meanwhile, the Financial Times reported overnight that JPM took yet another $1.5 billion in write-downs due to volatile credit conditions, while Oppenheimer joined Ladenburg Thalmann in reducing Q3 estimates for GS. Deutsche Bank also downgrade GS to hold from buy. Finally, UBS was in the spotlight after reporting a much larger than expected second quarter loss, which included $5.1 billion in mortgage-related securities.
Although news that Russian President Dimitry Medvedev said that he had ordered a halt to the military offensive against Georgia helped take oil off its pre-market highs and improve sentiment ahead of the bell, it wasn't enough to ensure a positive open.
As such, the market began the day well into the red with financials, industrials and consumer discretionary leading to the downside. Although the averages were able to stabilize at the early lows, the downside pressure accelerated about an hour into the day after oil began to pare its early losses. However, the market was able to come off its early lows as oil reversed lower once again, making its way into mixed territory as we headed into the New York lunch hour.
For the next few hours, the averages continued to trade in a relative narrow range with modest losses, but about 90 minutes before the close, a fresh wave of selling kicked in, sending them to what would turn out to be the lows of the day just before the closing bell. Although the market was able to recover a bit in the final few minutes, the indices ended the day with losses of 0.92%, on average, with financials leading to the downside with a loss of 4.71%. Consumer discretionary, which has been showing some relative strength lately, was also a laggard, pulling back by 1.37%.
Meanwhile, probably the most notable aspect of Tuesday's trading session, despite the continuing drop in commodities and gains for the greenback, was the lack of enthusiasm investors showed in pushing many of the stocks that have acted so well over the past few days higher. Although volume was on pace to be a bit heavier than it had been, on average, over the past several days, the pace cooled considerably as we headed towards the close and the broader market began to lose steam. If you haven't already, be sure to check out our free volume charting tool we recently added.
Regardless, the indices continue to be in decent shape for a technical perspective. The key will be the degree to which buyers buy any weakness should we continue to pull back. However, the real test will come when commodities, which have become extremely extended to the downside, experience a reflexive rally. The way in which investors react to such a bounce will give us better insight into whether or not we're dealing with a more sustainable counter-trend move.
Greetings Shark Investors:
After a couple of very strong days, the major indices pulled back on Tuesday as more bad news for the financials sector and profit-taking in some recent movers outweighed yet another pullback in commodities and further strength in the U.S. dollar. Indications were for a lower start to the day following news the previous evening that Moody's had downgraded the long-term debt rating of MS and WB said that their had adjusted their second quarter loss downward due to additional expenses related to their sale of auction-rate securities.
Meanwhile, the Financial Times reported overnight that JPM took yet another $1.5 billion in write-downs due to volatile credit conditions, while Oppenheimer joined Ladenburg Thalmann in reducing Q3 estimates for GS. Deutsche Bank also downgrade GS to hold from buy. Finally, UBS was in the spotlight after reporting a much larger than expected second quarter loss, which included $5.1 billion in mortgage-related securities.
Although news that Russian President Dimitry Medvedev said that he had ordered a halt to the military offensive against Georgia helped take oil off its pre-market highs and improve sentiment ahead of the bell, it wasn't enough to ensure a positive open.
As such, the market began the day well into the red with financials, industrials and consumer discretionary leading to the downside. Although the averages were able to stabilize at the early lows, the downside pressure accelerated about an hour into the day after oil began to pare its early losses. However, the market was able to come off its early lows as oil reversed lower once again, making its way into mixed territory as we headed into the New York lunch hour.
For the next few hours, the averages continued to trade in a relative narrow range with modest losses, but about 90 minutes before the close, a fresh wave of selling kicked in, sending them to what would turn out to be the lows of the day just before the closing bell. Although the market was able to recover a bit in the final few minutes, the indices ended the day with losses of 0.92%, on average, with financials leading to the downside with a loss of 4.71%. Consumer discretionary, which has been showing some relative strength lately, was also a laggard, pulling back by 1.37%.
Meanwhile, probably the most notable aspect of Tuesday's trading session, despite the continuing drop in commodities and gains for the greenback, was the lack of enthusiasm investors showed in pushing many of the stocks that have acted so well over the past few days higher. Although volume was on pace to be a bit heavier than it had been, on average, over the past several days, the pace cooled considerably as we headed towards the close and the broader market began to lose steam. If you haven't already, be sure to check out our free volume charting tool we recently added.
Regardless, the indices continue to be in decent shape for a technical perspective. The key will be the degree to which buyers buy any weakness should we continue to pull back. However, the real test will come when commodities, which have become extremely extended to the downside, experience a reflexive rally. The way in which investors react to such a bounce will give us better insight into whether or not we're dealing with a more sustainable counter-trend move.
Monday, August 11, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Finally Breaks Past Short-term Resistance - 8/10/08
Free Newsletter: Stalking Stocks with the Shark - Market Finally Breaks Past Short-term Resistance - 8/10/08
Greetings Shark Investors:
The major indices surged higher as another big drop in crude and a remarkable gain for the U.S. dollar triggered heavy buying in stocks during Friday’s trading session. Early indications were for a somewhat higher open to the day as both oil and the euro weakened once again and investors looked for a rebound following the previous day’s barrage of bad news and dismal sell-off into the close.
As we mentioned in our last Stalking Stocks evening review, both the Dow and the S&P 500 were able to close at support levels while the Nasdaq was able to remain above it’s 50 day moving average, so it wasn’t too surprising to see investors looking for a bit of a rebound early in the morning. However, index futures moved quickly back towards the unchanged mark after FNM reported a much larger than expected loss for the second quarter, announced that they were cutting their dividend, said that they were increasing their credit loss ratio, and commented that “significant” credit losses would continue well into 2009.
As such, the market opened the day just north of the flat line, but investors quickly forgot the FNM news and turned their attention to the selling in the euro and crude which was quickly accelerating. After bids absolutely disappeared on Thursday late in the day, it’s not too much of a stretch to assume that few were positioned properly to take advantage of any strength, so once the market began to move sharply higher right after the bell and didn’t show any signs of slowing down, underinvested bulls started to scramble for exposure while shorts began to look for cover.
The initial wave of buying continued uninterrupted for almost a full hour before the market began to level off and spend the next 90 minutes basing at highs. But as we entered the New York lunch hour and worked our way into the afternoon, stocks saw progressive waves of buying that kept pushing the averages to fresh highs without any hint of profit taking for the remainder of the day.
By the close, the indices posted average gains of 2.5% on breadth that was a bullish 5:2 to the positive. Only materials and energy finished the day in the red, while consumer discretionary posted a remarkable gain of 4.9%, industrials surged 3.5%, and financials advanced by 3.1%. Just about the only thing negative anyone could say was that volume could have been heavier.
Meanwhile, probably the most encouraging aspect to Friday’s trading was that both the Dow and the S&P 500 were able to move past short-term resistance levels and join the Nasdaq in adding a higher high to the handful of higher lows they’ve seen over the past month. Nonetheless, we need to watch carefully to see if they start to develop the same kind of ascending wedges that we saw back in the March/May intermediate uptrend.
The other thing we need to consider is that, in addition to the numerous hurdles the economy continues to face, lower oil and a stronger dollar may not turn out to be the panacea many are hoping it will be. While higher oil does created inflationary pressures and squeeze consumers’ pocket book, it is also an indication of strong growth and demand. Instead, the bouncing dollar and drop in crude seem to have been triggered by concerns over a more substantial global slow-down.
The big question, however, that we face in the near-term is whether or not the bulls will be able to follow through on Friday’s strength. It’s been quite some time since we’ve seen any sort of continuity from day to day, and as we’ve pointed out on numerous occasions, one of the hallmarks of a bear market is for investors to sell strength and buy weakness. That’s been the winning trade lately, and is the primary reason why we’ve had a paucity of leadership. As such, we need to be watching to see if the breakouts we saw today can hold as an indication that this market may be ready for a more sustainable counter-trend move.
Greetings Shark Investors:
The major indices surged higher as another big drop in crude and a remarkable gain for the U.S. dollar triggered heavy buying in stocks during Friday’s trading session. Early indications were for a somewhat higher open to the day as both oil and the euro weakened once again and investors looked for a rebound following the previous day’s barrage of bad news and dismal sell-off into the close.
As we mentioned in our last Stalking Stocks evening review, both the Dow and the S&P 500 were able to close at support levels while the Nasdaq was able to remain above it’s 50 day moving average, so it wasn’t too surprising to see investors looking for a bit of a rebound early in the morning. However, index futures moved quickly back towards the unchanged mark after FNM reported a much larger than expected loss for the second quarter, announced that they were cutting their dividend, said that they were increasing their credit loss ratio, and commented that “significant” credit losses would continue well into 2009.
As such, the market opened the day just north of the flat line, but investors quickly forgot the FNM news and turned their attention to the selling in the euro and crude which was quickly accelerating. After bids absolutely disappeared on Thursday late in the day, it’s not too much of a stretch to assume that few were positioned properly to take advantage of any strength, so once the market began to move sharply higher right after the bell and didn’t show any signs of slowing down, underinvested bulls started to scramble for exposure while shorts began to look for cover.
The initial wave of buying continued uninterrupted for almost a full hour before the market began to level off and spend the next 90 minutes basing at highs. But as we entered the New York lunch hour and worked our way into the afternoon, stocks saw progressive waves of buying that kept pushing the averages to fresh highs without any hint of profit taking for the remainder of the day.
By the close, the indices posted average gains of 2.5% on breadth that was a bullish 5:2 to the positive. Only materials and energy finished the day in the red, while consumer discretionary posted a remarkable gain of 4.9%, industrials surged 3.5%, and financials advanced by 3.1%. Just about the only thing negative anyone could say was that volume could have been heavier.
Meanwhile, probably the most encouraging aspect to Friday’s trading was that both the Dow and the S&P 500 were able to move past short-term resistance levels and join the Nasdaq in adding a higher high to the handful of higher lows they’ve seen over the past month. Nonetheless, we need to watch carefully to see if they start to develop the same kind of ascending wedges that we saw back in the March/May intermediate uptrend.
The other thing we need to consider is that, in addition to the numerous hurdles the economy continues to face, lower oil and a stronger dollar may not turn out to be the panacea many are hoping it will be. While higher oil does created inflationary pressures and squeeze consumers’ pocket book, it is also an indication of strong growth and demand. Instead, the bouncing dollar and drop in crude seem to have been triggered by concerns over a more substantial global slow-down.
The big question, however, that we face in the near-term is whether or not the bulls will be able to follow through on Friday’s strength. It’s been quite some time since we’ve seen any sort of continuity from day to day, and as we’ve pointed out on numerous occasions, one of the hallmarks of a bear market is for investors to sell strength and buy weakness. That’s been the winning trade lately, and is the primary reason why we’ve had a paucity of leadership. As such, we need to be watching to see if the breakouts we saw today can hold as an indication that this market may be ready for a more sustainable counter-trend move.
Friday, August 8, 2008
Free Newsletter: Stalking Stocks with the Shark - Market Hits Resistance... Again - 8/7/08
Free Newsletter: Stalking Stocks with the Shark - Market Hits Resistance... Again - 8/7/08
Greetings Shark Investors:
Disappointing earnings and economic data, two strong days of gains, a rebound in oil and some good old-fashioned overhead resistance created ideal conditions for a pullback during Thursday’s trading session, and that’s exactly what we got. Early morning indications were for a sharply lower start to the day following news the previous evening that AIG had posted much worse than expected earnings for the second quarter. Although it was unclear whether or not the adjusted numbers they reported were comparable to Wall Street estimates, the market reacted negatively to the news, sending shares lower by as much as 11% in pre-market trading.
Meanwhile June chain-store sales rolled in throughout the morning, which, on the whole, left plenty to be desired. Also weighing on sentiment early on was news that the weekly jobless claims number jumped at a higher than anticipated rate to 455,000, suggesting that the deterioration in the labor market many not only be continuing, but accelerating as well. The one bright spot, if you can call it that, came after the ECB announced that it had held interest rates steady when Jean Claude Tricet, the European Central Bank president, who said that the Euro-zone’s GDP growth in the coming quarters would likely not meet forecasts. Those remarks helped move the greenback off its early lows.
Without a doubt, it was a morning full of dour news, but even though the market gapped lower at the open, there was some immediate dip buying interest throughout the market. Sentiment improved further about 30 minutes after the bell when the Pending Home Sales report showed an increase of 5.3%, well ahead of the 1.0% decline economists had expected. The updraft following that news helped the averages move further off the lows of the session, but the after-glow from that report didn’t last for long. About 90 minutes into the session, news broke that C had reached an agreement with the NY Attorney General over accusations that the bank had misled investors in regards to the sale of auction rate securities, which in turn, reversed whatever early dip buying interest there may have bee.
Although both the Dow and the S&P 500 drifted lower for a little over an hour afterwards, the Nasdaq continued to work its way higher on strong action in several “old-school” tech names such as INTC, MSFT and HPQ. However, buyers once again got on their horse as oil fell sharply off its morning highs and back into negative territory. That move allowed the Nasdaq to finally make its way into the green and took both the Dow and the S&P 500 to what would turn out to be highs of the session.
Unfortunately for the bulls, oil didn’t stay in the red for long. About two hours before the close, the commodity bounced off its intraday lows and back to the levels it was at towards the end of the morning. The response in the broader market was swift and severe as the market began to sell off across the board. As we headed towards the close the downward pressure mounted, turning was had been looking like a mixed finish to the day into an absolute drubbing.
Although the point losses in the averages were notable, probably the most notable aspect to the late action was the brutal reversal in biotech stocks – which up to the point had been just about the only bright spot in a market devoid of any leadership. Meanwhile, there were several small-cap stocks that went into an absolute free-fall as bids completely disappeared. That’s always a tell when it comes to trying to gauge what kind of underlying support there may be as the market moves lower.
The good news is that volume wasn’t all that heavy and the Dow and the S&P 500 were able to hold short-term support in promising looking ascending triangle patterns that have been forming over the past few weeks. However, while the Nasdaq was able to hold above 2350, which had served as short-term lateral resistance recently, that index looks to be consolidating in an ascending wedge pattern, which is typically bearish. We’ll see how things play out as we move forward, but it will be interesting to see what kind of dip buying interest there is tomorrow as market players head into an August weekend as well as how the technical patterns develop as inflection points begin to approach.
Greetings Shark Investors:
Disappointing earnings and economic data, two strong days of gains, a rebound in oil and some good old-fashioned overhead resistance created ideal conditions for a pullback during Thursday’s trading session, and that’s exactly what we got. Early morning indications were for a sharply lower start to the day following news the previous evening that AIG had posted much worse than expected earnings for the second quarter. Although it was unclear whether or not the adjusted numbers they reported were comparable to Wall Street estimates, the market reacted negatively to the news, sending shares lower by as much as 11% in pre-market trading.
Meanwhile June chain-store sales rolled in throughout the morning, which, on the whole, left plenty to be desired. Also weighing on sentiment early on was news that the weekly jobless claims number jumped at a higher than anticipated rate to 455,000, suggesting that the deterioration in the labor market many not only be continuing, but accelerating as well. The one bright spot, if you can call it that, came after the ECB announced that it had held interest rates steady when Jean Claude Tricet, the European Central Bank president, who said that the Euro-zone’s GDP growth in the coming quarters would likely not meet forecasts. Those remarks helped move the greenback off its early lows.
Without a doubt, it was a morning full of dour news, but even though the market gapped lower at the open, there was some immediate dip buying interest throughout the market. Sentiment improved further about 30 minutes after the bell when the Pending Home Sales report showed an increase of 5.3%, well ahead of the 1.0% decline economists had expected. The updraft following that news helped the averages move further off the lows of the session, but the after-glow from that report didn’t last for long. About 90 minutes into the session, news broke that C had reached an agreement with the NY Attorney General over accusations that the bank had misled investors in regards to the sale of auction rate securities, which in turn, reversed whatever early dip buying interest there may have bee.
Although both the Dow and the S&P 500 drifted lower for a little over an hour afterwards, the Nasdaq continued to work its way higher on strong action in several “old-school” tech names such as INTC, MSFT and HPQ. However, buyers once again got on their horse as oil fell sharply off its morning highs and back into negative territory. That move allowed the Nasdaq to finally make its way into the green and took both the Dow and the S&P 500 to what would turn out to be highs of the session.
Unfortunately for the bulls, oil didn’t stay in the red for long. About two hours before the close, the commodity bounced off its intraday lows and back to the levels it was at towards the end of the morning. The response in the broader market was swift and severe as the market began to sell off across the board. As we headed towards the close the downward pressure mounted, turning was had been looking like a mixed finish to the day into an absolute drubbing.
Although the point losses in the averages were notable, probably the most notable aspect to the late action was the brutal reversal in biotech stocks – which up to the point had been just about the only bright spot in a market devoid of any leadership. Meanwhile, there were several small-cap stocks that went into an absolute free-fall as bids completely disappeared. That’s always a tell when it comes to trying to gauge what kind of underlying support there may be as the market moves lower.
The good news is that volume wasn’t all that heavy and the Dow and the S&P 500 were able to hold short-term support in promising looking ascending triangle patterns that have been forming over the past few weeks. However, while the Nasdaq was able to hold above 2350, which had served as short-term lateral resistance recently, that index looks to be consolidating in an ascending wedge pattern, which is typically bearish. We’ll see how things play out as we move forward, but it will be interesting to see what kind of dip buying interest there is tomorrow as market players head into an August weekend as well as how the technical patterns develop as inflection points begin to approach.
Thursday, August 7, 2008
Free Newsletter: Stalking Stocks with the Shark - Bulls Build Further - 8/6/08
Free Newsletter: Stalking Stocks with the Shark - Bulls Build Further - 8/6/08
Greetings Shark Investors:
Although the early part of Wednesday’s trading session was bumpy, buyers got on their horse mid-afternoon to push the market into positive territory and allow the averages to build on the previous day’s big gains. Following what was by any measure a very strong day for the bulls, indications were for a lower start to the day as market players considered another round of mixed earnings reports.
As we approached the bell, investors were bidding shares of CSCO higher after that company beat earnings estimates by a penny and maintained their guidance for the rest of the year. However, sentiment was dampened on news that PCLN said that gross bookings for the third quarter would not grow at the pace Wall Street was expecting (even though they beat both top- and bottom-line estimates and increased its guidance) while WFMI missed just about every metric imaginable. Financials were also in focus early on after FRE lost $1.63 per share (versus an anticipated loss of $0.41), cut its dividend by 80% and more than doubled its provision for credit losses.
As such, the market opened the day modestly lower, and spent the first hour of the session in a narrow trading range as traders awaited the weekly oil inventory report from the Department of Energy. Although crude prices initially moved higher following an unexpected 1.6 million barrel rise in crude inventories (versus expectations of a 100,000 barrel build) and decline in gasoline inventories of 4.3 million barrels (versus an expected 1.1 million barrel decrease), the commodity quickly reversed, falling once again to multi-month lows at under $118.
That turnaround allowed the market to move off what would turn out to be the lows of the session, with the Nasdaq moving into positive territory while the Dow and the S&P 500 hovered right around the unchanged mark. Although the market was unable to make much progress for the next few hours, a wave of broad-based buying kicked in about two hours before the close, pushing each of the averages well into the green. Although they finished a bit off the highs, the indices ended the day with average gains of 0.63% on positive breadth but decreasing volume. Probably the most interesting aspect to the day is that the upside follow-through we saw came despite a reversal of yesterday’s leader/laggard relationship. This time around, it was energy and materials which led the market higher while financials and consumer discretionary lagged. The one standout, however, on the day was tech, which added another 1.41%, bringing its three-day advance to just under 4%. Also, defensive names were strong once again, as consumer staples gained 1.07%.
We mentioned in our last Stalking Stocks newsletter that yesterday’s rally had placed the bulls back in the driver’s seat and had set the market up to put in another higher low. The question, however, was if the averages would be able to move past the short-term resistance levels defined by the recent high two weeks ago. While the Nasdaq was able to do just that, albeit on a down-tick in volume, both the Dow and the S&P 500 are still bumping up against those levels.
Be that as it may, the short-term technical conditions in the indices favor more action to the upside, and the issue is quickly turning to whether or not investors will start to feel like they might miss out on another playable counter-trend move if they don’t start putting pulling some of their capital in off the sidelines. Despite all of the problems facing the economy, we’ve seen a handful of such bounces develop over the past several months. With investors shifting their focus to different areas on an almost daily basis, it’s going to take some hard work if that’s going to happen. Difficult, however, doesn’t mean impossible.
Greetings Shark Investors:
Although the early part of Wednesday’s trading session was bumpy, buyers got on their horse mid-afternoon to push the market into positive territory and allow the averages to build on the previous day’s big gains. Following what was by any measure a very strong day for the bulls, indications were for a lower start to the day as market players considered another round of mixed earnings reports.
As we approached the bell, investors were bidding shares of CSCO higher after that company beat earnings estimates by a penny and maintained their guidance for the rest of the year. However, sentiment was dampened on news that PCLN said that gross bookings for the third quarter would not grow at the pace Wall Street was expecting (even though they beat both top- and bottom-line estimates and increased its guidance) while WFMI missed just about every metric imaginable. Financials were also in focus early on after FRE lost $1.63 per share (versus an anticipated loss of $0.41), cut its dividend by 80% and more than doubled its provision for credit losses.
As such, the market opened the day modestly lower, and spent the first hour of the session in a narrow trading range as traders awaited the weekly oil inventory report from the Department of Energy. Although crude prices initially moved higher following an unexpected 1.6 million barrel rise in crude inventories (versus expectations of a 100,000 barrel build) and decline in gasoline inventories of 4.3 million barrels (versus an expected 1.1 million barrel decrease), the commodity quickly reversed, falling once again to multi-month lows at under $118.
That turnaround allowed the market to move off what would turn out to be the lows of the session, with the Nasdaq moving into positive territory while the Dow and the S&P 500 hovered right around the unchanged mark. Although the market was unable to make much progress for the next few hours, a wave of broad-based buying kicked in about two hours before the close, pushing each of the averages well into the green. Although they finished a bit off the highs, the indices ended the day with average gains of 0.63% on positive breadth but decreasing volume. Probably the most interesting aspect to the day is that the upside follow-through we saw came despite a reversal of yesterday’s leader/laggard relationship. This time around, it was energy and materials which led the market higher while financials and consumer discretionary lagged. The one standout, however, on the day was tech, which added another 1.41%, bringing its three-day advance to just under 4%. Also, defensive names were strong once again, as consumer staples gained 1.07%.
We mentioned in our last Stalking Stocks newsletter that yesterday’s rally had placed the bulls back in the driver’s seat and had set the market up to put in another higher low. The question, however, was if the averages would be able to move past the short-term resistance levels defined by the recent high two weeks ago. While the Nasdaq was able to do just that, albeit on a down-tick in volume, both the Dow and the S&P 500 are still bumping up against those levels.
Be that as it may, the short-term technical conditions in the indices favor more action to the upside, and the issue is quickly turning to whether or not investors will start to feel like they might miss out on another playable counter-trend move if they don’t start putting pulling some of their capital in off the sidelines. Despite all of the problems facing the economy, we’ve seen a handful of such bounces develop over the past several months. With investors shifting their focus to different areas on an almost daily basis, it’s going to take some hard work if that’s going to happen. Difficult, however, doesn’t mean impossible.
Wednesday, August 6, 2008
Free Newsletter: Stalking Stocks with the Shark - Broad-based Rally Spurs Market Higher - 8/5/08
Free Newsletter: Stalking Stocks with the Shark - Broad-based Rally Spurs Market Higher - 8/5/08
Greetings Shark Investors:
Following three straight days of losses, the major indices were able to rally strongly Tuesday on falling commodity prices, better than expected economic data and a Fed that failed to deliver any surprises. Although there is typically little movement ahead of FOMC interest rate decisions, indications were for a strong start to the day as oil dropped nearly 2% ahead of the bell as it became increasingly likely that Tropical Storm Edouard will not be threatening energy assets in the Gulf of Mexico.
As such the averages opened the day well into positive territory. Financials and consumer discretionary were the early leaders, and even though each of the major S&P sectors were in the green, weak crude kept energy and materials at the end of the line for the second day in a row. Although the market gave up a portion of its initial gains shortly after the bell, an unexpected increase in the ISM non-manufacturing index, which came in at 49.5 – a reading that, while indicative of contraction, was better than what economists had anticipated – sent the averages sharply higher.
Although it is typical for investors to do some positioning ahead of an FOMC interest rate decision, the market will usually enter a narrow trading range ahead of the news. However, that was far from the case today as the broad-based move higher, which began at the bell, continued straight though the morning and in to the early afternoon.
As was expected, the Fed left interest rates unchanged at 2%, but instead of having anything really new to say, they basically punted by acknowledging the problems the economy is currently facing, but saying that they expect inflationary pressures to moderate and for growth to resume at a more sustainable pace in the coming quarters. After some very typical whipsaws following the news, the market resumed its upward trend, moving higher straight into the close. By the end of the day, the indices finished with average gains of 2.87% on breadth that was right at 5:2 to the positive and decent volume.
Taken in isolation, a Fed statement that highlights a tight credit market, a continued contraction in housing, high energy prices, elevated inflation expectations and weak economic growth certainly wouldn’t lead anyone to expect such strength, but that’s exactly what we got. The thinking is that these issues and concerns are already so well known that the market was able to cheer a Fed that essentially stayed out of its own way.
Regardless of the reasons, the fact remains that the bulls were in complete control during the trading session. Each of the major S&P sectors closed higher with financials and consumer discretionary in the lead with gains of well over 4%. Even energy, which was the only sector to dip into the red mid-day, clawed its way back to finish up 0.76%. Meanwhile, one of the more interesting aspects to the day was breakouts in traditional “recessionary” plays such as WMT, MCD and JNJ. We’ve been pointing out a lot recently how the lack of any sort of leadership has been making it difficult for active investors to find any dominant themes to play, but if one is developing, it’s the movement of capital out of commodity related areas and into defensive groups.
Be that as it may, the bulls were able to step up to the plate and set us up for another higher low. However, short-term overhead resistance is looming again, and it remains to be seen if they have what it takes to move the averages past those levels this time around.
Greetings Shark Investors:
Following three straight days of losses, the major indices were able to rally strongly Tuesday on falling commodity prices, better than expected economic data and a Fed that failed to deliver any surprises. Although there is typically little movement ahead of FOMC interest rate decisions, indications were for a strong start to the day as oil dropped nearly 2% ahead of the bell as it became increasingly likely that Tropical Storm Edouard will not be threatening energy assets in the Gulf of Mexico.
As such the averages opened the day well into positive territory. Financials and consumer discretionary were the early leaders, and even though each of the major S&P sectors were in the green, weak crude kept energy and materials at the end of the line for the second day in a row. Although the market gave up a portion of its initial gains shortly after the bell, an unexpected increase in the ISM non-manufacturing index, which came in at 49.5 – a reading that, while indicative of contraction, was better than what economists had anticipated – sent the averages sharply higher.
Although it is typical for investors to do some positioning ahead of an FOMC interest rate decision, the market will usually enter a narrow trading range ahead of the news. However, that was far from the case today as the broad-based move higher, which began at the bell, continued straight though the morning and in to the early afternoon.
As was expected, the Fed left interest rates unchanged at 2%, but instead of having anything really new to say, they basically punted by acknowledging the problems the economy is currently facing, but saying that they expect inflationary pressures to moderate and for growth to resume at a more sustainable pace in the coming quarters. After some very typical whipsaws following the news, the market resumed its upward trend, moving higher straight into the close. By the end of the day, the indices finished with average gains of 2.87% on breadth that was right at 5:2 to the positive and decent volume.
Taken in isolation, a Fed statement that highlights a tight credit market, a continued contraction in housing, high energy prices, elevated inflation expectations and weak economic growth certainly wouldn’t lead anyone to expect such strength, but that’s exactly what we got. The thinking is that these issues and concerns are already so well known that the market was able to cheer a Fed that essentially stayed out of its own way.
Regardless of the reasons, the fact remains that the bulls were in complete control during the trading session. Each of the major S&P sectors closed higher with financials and consumer discretionary in the lead with gains of well over 4%. Even energy, which was the only sector to dip into the red mid-day, clawed its way back to finish up 0.76%. Meanwhile, one of the more interesting aspects to the day was breakouts in traditional “recessionary” plays such as WMT, MCD and JNJ. We’ve been pointing out a lot recently how the lack of any sort of leadership has been making it difficult for active investors to find any dominant themes to play, but if one is developing, it’s the movement of capital out of commodity related areas and into defensive groups.
Be that as it may, the bulls were able to step up to the plate and set us up for another higher low. However, short-term overhead resistance is looming again, and it remains to be seen if they have what it takes to move the averages past those levels this time around.
Tuesday, August 5, 2008
Free Newsletter: Stalking Stocks with the Shark - Headline Numbers Hide Carnage - 8/4/08
Free Newsletter: Stalking Stocks with the Shark - Headline Numbers Hide Carnage - 8/4/08
A sharp drop in crude prices and better than expected economic data failed to inspire buyers as stocks continued their recent retreat during Monday’s trading session. Following the previous day’s poor action, losses in Asian markets and volatile trading in Europe, early indications were for a slightly lower start to the day. Even the Personal Income and Spending Data, which showed that income rose by 0.1% (versus expectations of a 0.3% decline) and spending increased by 0.8% (versus an estimated 0.5% rise), did little to improve sentiment ahead of the bell.
As such, the market opened the day in negative territory, but sellers were standing by, sending the averages sharply lower for the first 90 minutes to what would turn out to be the worst levels of the day. The early downdraft was broad-based, with much of the pressure concentrated in the financials and materials while the scant buying interest that was out there was concentrated in the more defensive sectors, healthcare and staples.
After that, the market was able to stabilize a bit for the next hour or so, but just as we were heading into the New York lunch hour, news that the tropical storm in the Gulf of Mexico would likely neither strengthen nor threaten energy assets sent crude prices nose-diving, which in turn shot the averages quickly back towards the unchanged mark. That news helped take the financials, industrials and consumer discretionary higher, but it also put additional pressure on energy and materials. Meanwhile, defensive names remained in the lead.
Unfortunately for the bulls, however, a drop to the lowest levels seen in over two months for crude failed to be the panacea many were hoping it would be, because after struggling, but failing, to reach into positive territory, the averages turned right back downward, giving up a large chunk of the ground it had just gained.
From that point on, the action remained choppy, but the leader/laggard relationship that had established itself remained firmly in place for the rest of the day. A spurt of buying in the late afternoon stoked hopes that the market might be able to close in the green for the first time since the middle of last week, but a fresh wave of selling that lasted right into the close sealed the deal on another poor day.
Certainly, the losses for the indices – 0.79% on average – were notable, but the headline numbers do little to convey the absolute carnage many of the year’s best performing areas saw. There’s been plenty of talk about how consumers and businesses alike have been pressured by record high energy prices, and the implication is that a pullback in crude would help alleviate some of that pain. However, $120 for oil is still pricey, especially when we remember that’s about double what it was towards the end of the last bull market. Furthermore, despite all of the hand-wringing about the evil-speculators and their nefarious plans to stick it to us by artificially inflating the price of crude, many are now starting to realize that dropping energy prices explicitly points to softening demand and a slowing global economy.
Still, regardless of the reasons, investors continue to find themselves facing a market that is still struggling and pricing action that leaves a lot to be desired. The major indices are once again looking precarious from a technical perspective. Short-term lateral support levels are fast approaching, and the bulls are going to need to step up here pretty soon. The FOMC interest rate decision on Tuesday might be the catalyst that will set the stage for another higher low, but without any leadership and a general lack of decent chart set-ups, the bulls are going to have their work cut out for them if they want to turn the tide.
Monday, August 4, 2008
Free Newsletter: Stalking Stocks with the Shark - Stocks Continue To Pull Back - 8/3/08
Free Newsletter: Stalking Stocks with the Shark - Stocks Continue To Pull Back - 8/3/08
Greetings Shark Investors:
Although the major indices finished off the worst levels of the session, the market limped into the weekend on Friday as it continued to pull back from overhead resistance. Following the previous day's abysmal close, indications were for a lower start to the day on the heels of an astonishing second quarter loss of $11.21 per share from GM, $8.54 lower than had been expected. Although disappointing earnings news from other influential companies such as JAVA and NYX also weighed on sentiment, the index futures got a big boost an hour before the opening bell following a slightly better than expected reading on the monthly jobs report, which showed that the economy had lost 55,000 versus an expected 75,000 loss.
However, even though the averages were able to start the day slightly north of the flat line, sellers hit the minor opening strength hard, sending each major S&P sharply lower in the first few minutes of trading. Unfortunately for the bulls, the move lower accelerated shortly thereafter after news that Israeli Deputy Prime Minister had said that Iran was "on a path toward a nuclear breakthrough" sent oil prices about 3% higher in the matter of a few minutes.
That move, however, proved to be quick, because just it began to lose a bit of steam, the pressure was on for the commodity once again as investors used that pop to unload long positions and/or push some short positions. As such, oil began to back off and the averages started to stabilize at what would turn out to be the worst levels of the session.
From that point on, the indices were able to drift a bit higher as the weekend approached and the action died down considerably. Energy names spent the rest of the session working their way lower while materials, industrials, tech, staples and consumer discretionary simply drifted sideways. However, news that LEH had announced further efforts to delever their balance sheet and unload about $30 billion in mortgage-related assets in a move similar to the one MER had pulled earlier in the week pushed financial stocks higher straight into the close. The net result was a veritable standstill for the broader market, with the indices losing an average of 0.5% on breath that was about as flat as you can get and volume that was average, but on the light side.
Without a doubt, the ability of this market to put in a higher lower earlier in the week was a definite positive, but short-term overhead resistance has proved to be a difficult thing to overcome. The bulls have a few things going for them right now as the greenback has found some support, oil, despite being very news-sensitive, is being sold on strength, and financials continue to attract bottom-fishers. Even the recent economic data, while not encouraging, still isn't at levels typically associated with a more significant slowdown.
Be that as it may, the major indices have yet to show any real technical improvement. Sure, we're off the lows still, but the averages have been forming what is known as bear flags – a pattern in which stocks rise in an ascending channel with parallel ascending support and resistance trendlines while in a broader downtrend on decreasing volume. While such technical formations aren't necessarily useful from a "predictive" standpoint, they do give important insight into investor psychology and are worth our attention.
The bottom line here is that the ball continues to be in the bulls' court, but sooner or later, they are going to have to step up to the plate, show some conviction in their buying, and push the averages past short-term resistance on volume. If they can so that, then maybe we can start talking about a more sustainable counter-trend move.
Greetings Shark Investors:
Although the major indices finished off the worst levels of the session, the market limped into the weekend on Friday as it continued to pull back from overhead resistance. Following the previous day's abysmal close, indications were for a lower start to the day on the heels of an astonishing second quarter loss of $11.21 per share from GM, $8.54 lower than had been expected. Although disappointing earnings news from other influential companies such as JAVA and NYX also weighed on sentiment, the index futures got a big boost an hour before the opening bell following a slightly better than expected reading on the monthly jobs report, which showed that the economy had lost 55,000 versus an expected 75,000 loss.
However, even though the averages were able to start the day slightly north of the flat line, sellers hit the minor opening strength hard, sending each major S&P sharply lower in the first few minutes of trading. Unfortunately for the bulls, the move lower accelerated shortly thereafter after news that Israeli Deputy Prime Minister had said that Iran was "on a path toward a nuclear breakthrough" sent oil prices about 3% higher in the matter of a few minutes.
That move, however, proved to be quick, because just it began to lose a bit of steam, the pressure was on for the commodity once again as investors used that pop to unload long positions and/or push some short positions. As such, oil began to back off and the averages started to stabilize at what would turn out to be the worst levels of the session.
From that point on, the indices were able to drift a bit higher as the weekend approached and the action died down considerably. Energy names spent the rest of the session working their way lower while materials, industrials, tech, staples and consumer discretionary simply drifted sideways. However, news that LEH had announced further efforts to delever their balance sheet and unload about $30 billion in mortgage-related assets in a move similar to the one MER had pulled earlier in the week pushed financial stocks higher straight into the close. The net result was a veritable standstill for the broader market, with the indices losing an average of 0.5% on breath that was about as flat as you can get and volume that was average, but on the light side.
Without a doubt, the ability of this market to put in a higher lower earlier in the week was a definite positive, but short-term overhead resistance has proved to be a difficult thing to overcome. The bulls have a few things going for them right now as the greenback has found some support, oil, despite being very news-sensitive, is being sold on strength, and financials continue to attract bottom-fishers. Even the recent economic data, while not encouraging, still isn't at levels typically associated with a more significant slowdown.
Be that as it may, the major indices have yet to show any real technical improvement. Sure, we're off the lows still, but the averages have been forming what is known as bear flags – a pattern in which stocks rise in an ascending channel with parallel ascending support and resistance trendlines while in a broader downtrend on decreasing volume. While such technical formations aren't necessarily useful from a "predictive" standpoint, they do give important insight into investor psychology and are worth our attention.
The bottom line here is that the ball continues to be in the bulls' court, but sooner or later, they are going to have to step up to the plate, show some conviction in their buying, and push the averages past short-term resistance on volume. If they can so that, then maybe we can start talking about a more sustainable counter-trend move.
Friday, August 1, 2008
Free Newsletter: Stalking Stocks with the Shark - Poor Economic Reports Trigger Profit Taking - 7/31/08
Free Newsletter: Stalking Stocks with the Shark - Poor Economic Reports Trigger Profit Taking - 7/31/08
A weaker than expected Gross Domestic Product number and higher than expected unemployment claims started the market off on a sour note. The bulls made a good attempt at a bounce mid-day and even had lower crude oil prices to help but they faltered in the final hour of trading and we closed very poorly.
The problem for the market at this point is a lack of good leadership. Financial stocks have had a huge bounce and now have seemingly run out of gas. There is some strength in biotechnology stocks but other than that we just don’t have any sectors or groups right now that buyers feel they must own.
For much of the year oil and commodity related stocks provided a safe haven for those who wanted some long exposure but those groups have all broken down in recent weeks and have left us with nothing other than big bounces in badly beaten down financials.
Many are calling for a market bottom at this point and maybe they will finally get it right for a change. However even if they do there is little upside momentum to embrace right now. We need some strong stocks to lead that eventual cause a rally to broaden out. Without leadership we will likely be stuck in a trading range at best.
Make sure you stay very selective and don’t rush to put your capital at risk without making sure that the chart patterns justify it. It is very choppy out there and remains a difficult trading envrionement.
The Nasdaq edged lower today on a slight pick up on volume. It was a volatile day of action with the bulls closing poorly after an attempted bounce. Technology names were pressured with GOOG and AMZN leading to the downside. Technically, the index remains in its trading range, but resistance is lurking above.
A weaker than expected Gross Domestic Product number and higher than expected unemployment claims started the market off on a sour note. The bulls made a good attempt at a bounce mid-day and even had lower crude oil prices to help but they faltered in the final hour of trading and we closed very poorly.
The problem for the market at this point is a lack of good leadership. Financial stocks have had a huge bounce and now have seemingly run out of gas. There is some strength in biotechnology stocks but other than that we just don’t have any sectors or groups right now that buyers feel they must own.
For much of the year oil and commodity related stocks provided a safe haven for those who wanted some long exposure but those groups have all broken down in recent weeks and have left us with nothing other than big bounces in badly beaten down financials.
Many are calling for a market bottom at this point and maybe they will finally get it right for a change. However even if they do there is little upside momentum to embrace right now. We need some strong stocks to lead that eventual cause a rally to broaden out. Without leadership we will likely be stuck in a trading range at best.
Make sure you stay very selective and don’t rush to put your capital at risk without making sure that the chart patterns justify it. It is very choppy out there and remains a difficult trading envrionement.
The Nasdaq edged lower today on a slight pick up on volume. It was a volatile day of action with the bulls closing poorly after an attempted bounce. Technology names were pressured with GOOG and AMZN leading to the downside. Technically, the index remains in its trading range, but resistance is lurking above.
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James “ RevShark ” DePorre is widely viewed as one of the nation's top stock market investment advisors. A self-made multimillionaire, he is president of both Shark Asset Management, Inc., and Shark Investing Inc., and has been a featured writer for Jim Cramer's TheStreet.com and RealMoney.com since 2001. A pioneer in educating investors online, DePorre joined Herb Greenberg in 1995 to found AOL's The Shark Attack trading site, which quickly became a premier destination for serious traders. In 1999 he founded Shark Investing, which has evolved from its chat room roots into a full service educational and financial content website.