Monday, June 23, 2008

Simple Technical Analysis

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Sorry - no chart today. I just would lie to add a few words to my previous post. Last week I pointed to the bullish indicators and possibility of the further development of the up-move. Yet, the same technical indicators started to change its sentiment already on Monday and on Tuesday all of them was bearish and pointed to the down market. As I mentioned already several times: the technical analysis is a constant process and it's recommended to monitor charts constantly to be able to react on the market changes in time.

By following my charts (the same technical studies as always) I may say that now I see begining of changes in the market sentiment away from strongly bearish: I see nice big volume surges during the price drop which may push the indexes higher, the SBV stopped its decline, McClellan moves up and it looks like it on its way to cross zero line, RSI moves up...

So, let's see what the next week will bring us...

SP 500 chart again

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In the previous "S&P 500" post I've talk about mini-version of the October 2007 - March 2008 stock market crash. At the end of this week I may say that I saw further development of this scenario: the market continued its recovery on Monday and then stock market dropped again. The question is - will the market continue following the same pattern by moving now up??? S&P 500

Sunday, June 15, 2008

S&P 500

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Nice week! Why? In the conclusion of my last "Dow Jones" post I stated "I think the market may continue to move down, at least to the point when I see the negative MVO is back to zero line and when the McClellan oscillator becomes red(negative) and starts to move up. The Nasdaq 100 is not as oversold as the DJI and this is one of the reasons why I think we may face further drop." This week I saw exactly what I expected to see, that's why I consider this week as a nice week - from the beginning of the week the Nasdaq 100 pushed the market down and it reversed exactly when MVO become zero and when the McClellan oscillator started to advance and crossed zero line around 14:00 on June 12, 2008.

When I look at the recent drop (since the middle of May) it reminds me the mini-version of the October 2007 - March 2008 stock market crash. You may see on the S&P 500 index:

S&P 500

One of the points that that could parallel the recent drop with October 2007 - March 2008 market crash is that both of this moves down I could split in 3 stages.

During October 2007 - March 2008 market crash:

  1. The S&P 500 and DJI indexes started to move down in the middle of October while the Nasdaq 100 index continued to move up until the beginning of the November. The Nasdaq was still bullish while the rest of the market was bearish.
  2. Then the whole market moved down by the middle of January. The whole market was bearish.
  3. After that the S&P 500 and DJI struggled to move up while the Nasdaq 100 continued to push the stock market down by the middle of March. The Nasdaq was still bearish while the rest of the market struggled with it.

The same in the recent move down:

  1. The S&P 500 and DJI indexes started to move down on May 19, 2008, yet, the Nasdaq 100 has recovered from the initial drop by making new highs on June 5, 2008. The Nasdaq was still bullish while the rest of the market was bearish.
  2. Then the whole market moved down. The whole market was bearish.
  3. The last week the Nasdaq 100 continued to push the stock market down while the S&P 500 and DJI were fighting against this move. The Nasdaq was still bearish while the rest of the market struggled with it.

Coming back to my charts and my technical analysis, by the end of this week I see more positive then negative factors:

  • SBV moves up and for me this is a bullish sign;
  • I see a lot of red MVO over the last to week which for me is a good fuel for the market up move;
  • The VIX (volatility index) is moving down which would points to the bullish sentiment;
  • The MACD, Stochastics, RSI and Advance decline oscillator are in the up direction - I consider it as a good sign;
  • McClellan is above zero (green) - another point in favor of the bullish market.
SP 500 chart

Today I see oversold market and today I expect the further recovery. However, tomorrow the market could become heavily overbought - that's why I consider that the stock market should be monitored and analyzed constantly. It could be come overbought tomorrow or in a month... Plus, I could be wrong and if I do not monitor chart constantly I could find out about that when it's already too late...

Friday, June 13, 2008

Nasdaq 100 Stocks

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The NASDAQ 100 Index comprises 100 of the largest non-financial and non investment publicly traded companies which are listed on The Nasdaq Stock Market Exchange. The Index includes domestic and international companies across major industry sectors including telecommunications, biotechnology,  retail/wholesale trade, computer hardware and software. Together with DJI (see list of DJI stocks) and S&P 500 indexes, the Nasdaq 100 index one of the most watched indexes over the world. The QQQQ (Nasdaq 100 index tracking stock) is the most actively traded ETFs (Exchange Traded Funds).

Below you may see the list of the Nasdaq 100 Stocks (companies from the index basket) as of June 14, 2008. This is an outdated listing, yet it may give you the picture of what companies are selected into the Nasdaq 100 index. For real and most recent listing I would recommend visiting the Nasdaq web site.

Ticker   Company    Index Points
ATVI   Activision, Inc.       0.15
ADBE   Adobe Systems Incorporated       1.09
AKAM   Akamai Technologies, Inc.       0.19
ALTR   Altera Corporation       0.4
AMZN   Amazon.com, Inc.       0.98
AMGN   Amgen Inc.       0.45
AMLN   Amylin Pharmaceuticals, Inc.       0.16
APOL   Apollo Group, Inc.       0.74
AAPL   Apple Inc.       1.28
AMAT   Applied Materials, Inc.       0.6
ADSK   Autodesk, Inc.       0.13
BIDU   Baidu.com, Inc.       0.35
BBBY   Bed Bath & Beyond Inc.       0.39
BIIB   Biogen Idec Inc       0.5
BRCM   Broadcom Corporation       0.25
CHRW   C.H. Robinson Worldwide, Inc.       0.17
CA   CA Inc.       0.2
CDNS   Cadence Design Systems, Inc.       0.03
CELG   Celgene Corporation       0.77
CEPH   Cephalon, Inc.       0.05
CHKP   Check Point Software Technologies Ltd.       0.3
CTAS   Cintas Corporation       0.18
CSCO   Cisco Systems, Inc.       1.02
CTXS   Citrix Systems, Inc.       0.11
CTSH   Cognizant Technology Solutions Corporation       0.39
CMCSA   Comcast Corporation       0.66
COST   Costco Wholesale Corporation       0.57
DELL   Dell Inc.       0.56
XRAY   DENTSPLY International Inc.       0.11
DISCA   Discovery Holding Co       0.1
DISH   DISH Network Corporation       0.06
EBAY   eBay Inc.       0.35
ERTS   Electronic Arts Inc.       0.37
EXPE   Expedia, Inc.       0.14
EXPD   Expeditors International of Washington, Inc.       0.08
ESRX   Express Scripts, Inc.       0.12
FAST   Fastenal Company       0.14
FISV   Fiserv, Inc.       0.04
FLEX   Flextronics International Ltd.       0.34
FMCN   Focus Media Holding Limited       0.12
FWLT   Foster Wheeler Ltd.       0.49
GRMN   Garmin Ltd.       0.07
GENZ   Genzyme Corporation       0.79
GILD   Gilead Sciences, Inc.       1.51
GOOG   Google Inc.       3.14
HANS   Hansen Natural Corporation       0.16
HSIC   Henry Schein, Inc.       0.07
HOLX   Hologic, Inc.       0.13
IACI   IAC/InterActiveCorp       0.25
INFY   Infosys Technologies Limited       0.12
INTC   Intel Corporation       1.45
INTU   Intuit Inc.       0.32
ISRG   Intuitive Surgical, Inc.       0.51
JOYG   Joy Global Inc.       0.41
JNPR   Juniper Networks, Inc.       0.15
KLAC   KLA-Tencor Corporation       0.28
LRCX   Lam Research Corporation       0.06
LAMR   Lamar Advertising Company       0.04
LEAP   Leap Wireless International, Inc.       0.2
LVLT   Level 3 Communications, Inc.       0.14
LBTYA   Liberty Global, Inc.       0.19
LINTA   Liberty Media Corporation       0.32
LLTC   Linear Technology Corporation       0.18
LOGI   Logitech International S.A.       0.2
MRVL   Marvell Technology Group, Ltd.       0.6
MCHP   Microchip Technology Incorporated       0.09
MSFT   Microsoft Corporation       3.12
MICC   Millicom International Cellular S.A.       0.61
MNST   Monster Worldwide, Inc.       0.09
NTAP   NetApp, Inc.       0.28
NIHD   NII Holdings, Inc.       0.49
NVDA   NVIDIA Corporation       0.04
ORCL   Oracle Corporation       1.93
PCAR   PACCAR Inc.       0.9
PDCO   Patterson Companies Inc.       0.03
PAYX   Paychex, Inc.       0.32
PETM   PETsMART, Inc.       0.05
QCOM   QUALCOMM Incorporated       2.3
RIMM   Research in Motion Limited       2.22
RYAAY   Ryanair Holdings plc       0.33
SNDK   SanDisk Corporation       0.08
SHLD   Sears Holdings Corporation       0.36
SIAL   Sigma-Aldrich Corporation       0.17
SIRI   Sirius Satellite Radio Inc.       0.26
SPLS   Staples, Inc.       0.3
SBUX   Starbucks Corporation       0.41
STLD   Steel Dynamics, Inc.       0.62
SRCL   Stericycle, Inc.       0.16
JAVA   Sun Microsystems, Inc.       0.12
SYMC   Symantec Corporation       0.28
TEVA   Teva Pharmaceutical Industries Limited       0.17
DTV   The DIRECTV Group, Inc.       0.55
UAUA   UAL Corporation       0.08
VRSN   VeriSign, Inc.       0.2
VRTX   Vertex Pharmaceuticals Incorporated       0.25
VMED   Virgin Media Inc.       0.28
WFMI   Whole Foods Market, Inc.       0.07
WYNN   Wynn Resorts, Limited       0.46
XLNX   Xilinx, Inc.       0.63
YHOO   Yahoo! Inc.       0.04

Sunday, June 8, 2008

Dow Jones

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Crazy week - drop down - strong recovery on Thursday - even stronger drop on Friday. I have mentioned in my last "Technical Analysis" report about oversold market and we saw the decline. Yet, the Friday drop was somewhat unexpected. Majority of the technical indicators were bullish after the market close on Thursday. The Friday's crash proved one more time the importance of the intraday charts monitoring. Even if the market makes a strong move against the position, those of the traders who watch the charts on intraday basis have time to close the position in time with acceptable losses and even in some cases with small profit.

The Friday drop was very scary for many traders - I see very high volume on that day. It looks like many traders were dumping their positions in the fear of the recession. I think the memory is still fresh about October 2007 - February 2008 volatile stock market.

Even the Nasdaq 100 and the S&P 500 indexes still close to its high levels (the Nasdaq 100 is only about 3% and the S&P 500 is about 5% below it's highest levels), even the S&P 500 and the Nasdaq 100 is still far away from the January 23rd and March 17th lows, the Dow Jones Industrials scares everyone. Over the last couple of weeks the DJI index has dropped for about 7% and it's only about 4% to the January and March resistance levels.

I do not think we have right to say the the stock market is in the recession based on the Friday crash and strong decline in the Dow sector. If we take a look at other US indexes we will see that the Dow 30 is the only index that substantially moved down:

  • Nasdaq 100, Nasdaq Composite, Amex Composite, Dow Jones Transport, Dow Jones Utilities, S&P 400, S&P 600 and the Russell 2000 are still at the top and very close to the May highs;
  • S&P 500, NYSE Composite, S&P 100, Russell 1000 and Russell 3000 have dropped, yet still far away from the January resistance level.

I think it's a little bit premature to create panic based on the Friday's drop. We had strong two months recovery (since the middle of March to the middle of May) and it's in the nature of the stock market to release some oversold pressure.

By looking at my technical indicators I see the growing oversold pressure which may push the market up. I see nice volume surges during the market down move on May 21-22, on June 3-4 and on June 6. Especially, I see strong oversold levels on the DJI. Yet, I think the market may continue to move down, at least to the point when I see the negative MVO is back to zero line and when the McClellan oscillator becomes red(negative) and starts tomove up. The Nasdaq 100 is not as oversold as the DJI and this is one of the reasons why I think we may face further drop.

Dow Jones Industrials chart