today’s tape

No update today…I’ll be back over the weekend to recap the trading from today and Friday.

today’s tape

The markets soared over 2.5% as the FED signaled another rate cut may happen at the next FOMC meeting. As one would expect, this helped lead the financial names higher that have surrendered as much as 75% of their value over the last 6 to 8 months. Many are suggesting today’s move represents a bottom, and the major indices will finally begin their usual year end rally. I wish I had such foresight.

The markets are still trending down and most sectors should not be owned until we see an indication of long term strength. Of course, you can own the agriculture names, as I have been mentioning throughout the current market decline. CF, TRA, POT, MOS, MON and others all exploded today. The solar names reversed yesterday’s gains. SPWR added 15% on strong volume. STP and FSLR are both trading at, or near, 52 week highs.

If you must become bullish outside of these groups, I would consider the stronger infrastructure, mining and technology names. FWLT, RIO and BIDU are examples for each sector.

I still would not own any – that’s right, any – financial stocks. But we should watch to see the movement in a names like LEH. LEH is actually flat over the past month, fighting off the selling that has dragged the banks lower.

If LEH can pass by the $65 level on strong volume and close well above this resistance level from the past three months, that would be a very bullish sign for the financials.

I don’t know what today’s move means. But one day doesn’t make or break a trend.

today’s tape

Boosted by a drop in crude oil prices and Citigroup securing $7.5 billion in foreign capital, the broad markets were able to recapture most of yesterday’s decline. Adding liquidity to C will not solve the financial problems of the banks. C still finished down over 1% on the session, after it surged higher by as much as 7% in early pre-market trading.

We have seen few up days of any magnitude, and the buying suggests noting more than oversold, sudden bounces that will likely continue ti fade away as the sellers regain control. In the absence of a bullish sector leading the market higher, I don’t see how this trend reverses. Other than the fertilizer stocks, the downside risk to most equities outweighs the upside. You can own CF, TRA, POT, MOS and a few others.

The decline in crude oil prices dropped most energy stocks. Specifically, Energy stocks with exposure to natural gas dropped as much as 3% (ECA) during today’s broad market rally. The refinery stocks – TSO, WNR, HOC – were beaten down by 5%. And the OIH continued yesterday’s slide with a 1.5% drop.

Even the solar names sold of as crude oil fell. SPWR and JASO are now getting risky, especially considering the current bear market. Though, FSLR and STP are the two of the strongest stocks you will find in any sector.

Looking at technology, GOOG, RIMM and AAPL all advanced; but without the conviction from months prior, when a 2% move up in the NASDAQ would have sent these names up 6%, I still don’t see any real buying. I still believe these stocks will have another precipitous drop if the major indices continue to fall. The 30 day moving averages of AAPL and RIMM are still acting as resistance.

Even the less volatile tech names (MSFT, INTC and HPQ) do not look very encouraging. And my stock to watch from yesterday, BCSI, dropped 5.5%. Don’t be surprised see other tech stocks drop in the coming sessions.

If you have to be bullish, you can look at the ultra defensive names. I have been mentioning MCD, KO, PEP, MRK, MO and CL often in these daily posts. The strength in these names also suggests that investors’ risk appetites are extremely low.

today’s tape

The NASDAQ has outperformed the S&P 500 during the November fall, but the selling in tech may start increasing.  EMC and VMW are just two names that have been completely broken.  And I think others may follow.  One name to trade is BCSI.

Another classic setup for a bearish trade in an abysmal market.  If the NASDAQ begins to crash again, this stocks may not stop declining until the $25 level.

today’s tape

The markets were supposed to get a lift from better than a expected start to the holiday shopping season.  But you cannot fight the current bear market we are trading in.  The financials lagged all day today, and the selling in the XLF quite intense in the final hour as the ETF reached another 52 week low.

The banks, brokerage houses, homebuilders and mortgage lenders were all crushed again.  These stocks continue to provide an opportunity to make money on the short side.  And if you still have bullish positions in these groups, you might as well stop reading this blog because I can’t help you.

I don’t know how low the markets will fall.  But you cannot own any stocks outside of the agriculture and solar sectors.  MOS, SPWR and FSLR were up today.  TRA, POT, CF and JASO barely traded into the red.  If you have to be bullish somewhere, these are the stocks to own.

You can also own the Gold and Crude Oil ETFs (GLD and USO).  These commodities continue to trade near 52 week highs.  But the oil and gold related stocks should not be owned.  After climbing back to their 30 day moving average, XOM, COP and CVX have retreated back down.  Take a look at the CVX chart.

This is strong confirmation of a bearish trend.  The OIH (oil service stocks) are in slightly better shape, but they are trading in a similar pattern.

If oil falls back to the $90 level (or below), oil stocks may really begin to drop.

Three of the best stocks from 2007 cannot recapture their bullish trends.  AAPL, RIMM and GOOG have remained stronger than the rest of the market, but they are no longer leading the NASDAQ higher.  Here is the three month chart of RIMM.

The $115 to $117 level was formerly resistance in October.  RIMM crashed through that level earlier this month.  It reclaimed the some of its recent losses; but as RIMM touched the $117 – the higher of the day – it dropped $6 in a few hours.

Don’t be surprised if you see AAPL, RIMM, GOOG and the rest of tech catch up with the extended selling in the financials and S&P 500.  The NDX is, amazingly, not trading at a monthly low.

The SPX is in much worse shape.

The NDX could hit the 1,900 level by the end of the week if the selling is not contained.  Add it all up, and this market may only get worse from here.

today’s tape

I will return with regular updates on November 26.

today’s tape

The DOW and S&P 500 broke below their respective support levels, and we may still trade lower in the coming sessions.  Though it tried to reclaim the 13,000 level, the DOW finished today at a three month low.

And, again, it was distressing news from the banking sector that dragged the major indices lower.  Goldman Sachs lowered its outlook on C and the banking sector in general.  WM, WB, BAC will continue to trade lower in the near term.  CFC dropped 12% on almost twice its normal volume as the debt to insure its debt jumped by 30%.  The mortgage and housing stocks continue to trade like they are headed to zero.

On the 14th I provided 5 financial names worth shorting as the market has now turned bearish.  Two trading days later, these names have already lost 3 to 11% of their value.

Do not get sucked into believing fools like the baking analyst at Citigroup, Tobias Levkovich.  He asserts that the selling in the banking stocks is overdone.  It’s nice to know there will always be people trading on the other side.

The selling in the metal, mining and infrastructure stocks has accelerated since the initial drop in the market.  This only confirms that every sector is either bearish, or probably will become bearish soon.  The drops in the once bullet proof Chinese stocks has also increased.  ACH and JRJC are just two names that have rolled over after surging all year.

We will see a spike in the markets eventually and it may be quite large, but the trend is down.  In fact, it may come tomorrow after the FED reveals the notes from the last FOMC meeting.  Still, it’s unwise to trade against the trend of this market.

today’s tape

The markets were nearly unchanged this week, and we haven’t seen any true recovery from the sharp sell off from early November.  Friday, the major indices traded wildly above and below the unchanged levels.  The DOW had a one day range of 175 points, but we did see some late day buying to keep the DOW above and S&P 500 above their 13,000 and 1,450 respective support levels.

After rallying earlier in the week, the financials sold off the past three sessions, collectively giving up about 6%.  The XLF is in closing in on the lows of the the year with the potential to break even lower.  And it also doesn’t help when the CEO of Wells Fargo publicly claims that the housing market will become the “worst since the Great Depression.”  The mortgage lenders, banks housing and investment banking stocks will probably continue to trade lower.  Do not own them.

Then again, there is very little one should own at the moment.  There are only three types of stocks you can own at the moment.  The first group are the solar companies.  FSLR, JASO, STP and SPWR have avoided the collapse that has plagued most stocks.  I have mentioned these names often since this blog’s inception, and they continue to perform.

The agriculture stocks have zig and zagged the past 5 trading sessions; however, names like MON, TRA, CF and MOS have not broken their strong trend lines.  And if the markets can recover somehow the agriculture sector could easily rally again.  Also, the earnings of DE on Wednesday may some type of affect on this group.

The last group of stocks you can own, which is also the safest, are the consumer staples and so-called “ultra defensive stocks.”  Take a look at the XLP (consumer staple ETF) against the S&P 500 from the past month.

Notice the recent, growing divergence. As the markets have crashed, names like PG, KO, CL, PEP, CLX, MO, MCD, MRK and JNJ have all started to trade higher.  These stocks will be the best performers if the markets continue to fall or become range bound.

Next week’s trading will likely have light volume.  Wednesday is only a half-day and the markets will be closed on Thursday for Thanksgiving.  But this doesn’t mean the markets won’t have any big moves.  Though, if there isn’t any additional, distressing news from the banking sector, and if commodity prices remain stable, we could see the markets try and advance to again of their current support levels.  The key level on the S&P 500 to watch is about 1490.

Long term, I remain bearish on the markets.  And though I never make predictions, investors should have a defensive game plan as we head into 2008.  It appears the 2007 stock market is desperately trying to hold onto its last bullish remains.

future stock(s) to watch

Yesterday, I gave you the financial groups to short and that turned out well. Today, I turn to the retail names. JCP dropped 5% after a weak earnings report and reduction in their 4th quarter outlook.

The strength of the consumer has been questioned as the economy has weakened. To that end, look at names like TIF, RL, COH and ANF to short.

today’s tape

The markets ended lower for a second straight day, just two days removed from a brief oversold bounce on Tuesday. I continue to assert that the market has more downside potential at the moment. The major indices were broken last week and virtually every major sector is now trending lower. This does not preclude the major indices from having large moves higher in the very near term. The DOW is closing in on the 1300 support once again.

If we break through this support from August the markets will start to free fall. However, if we can hold this level, we may see the S&P 500 test the 1500 level again.

The markets were led down by the commodity related names as the price of crude oil, gold and other metals continue to retreat from their recent 52 week highs. These sectors were leaders for most of the year, providing a boost to the broad market against the weak financials. Now, names like FCX, XOM, SLB and CLF have turned bearish.

But of course, the financials did their part to drag the markets down, as well. The major banks continue to be sold at an accelerated pace. WM, C, WB and WFC all lost 4%. The investment banks dropped 2 to 4%. The housing and mortgage stocks also traded much lower.

The two remaining sectors that have yet to be broken are the solar and agriculture stocks. The solar stocks had strong performances against today’s weak market. Specifically, the selling that lowered FSLR and JASO (after running up to their earnings reports) has stopped. The growth in this sector is tremendous. This is likely providing support as the markets have faltered. The agriculture group may succumb to the widespread selling if the markets have not reached a near term bottom. CF, POT and MOS are trying to hang on to their 30 day moving averages.

As I mentioned a few days ago, the safest names to own are the ultra defensive stocks.  MO, KO, MCD, MRK and PG all traded higher today.

Tomorrow should be another volatile session. The November options are expiring, and investors may be cautious heading into the weekend.