Daily Market Comments - 9/30/05

After an outstanding day in the market on Thursday, it looks like we are closing out the month (and the quarter) with a mixed market.

The strongest index over the past few days has been the NASDAQ. This may have been due in part to end-of-quarter “window dressing” by the big money managers, as they try to get the strong stocks into their portfolios. And some of the strongest stocks have been from the smaller-cap markets – the NASDAQ and the S&P 600 in particular.

It will be interesting to see what happens in the market next week, as we get the final quarter of the year under way. As we’ve said before, historically this has been the best quarter of the year to be long stocks – the last quarter usually offers the blast-off to the upside of new bull market trends.

In the meantime, there are always plenty of profit opportunities in the market each and every day. Let’s take a look at one now.

Our Stock For Review today is HOS – Hornbeck Offshore Services Inc.

HOS is breaking out to a new high on volume 1,548% above normal. Looks like a slam-dunk buy on this strength.

Daily Market Comments - 9/29/05

After a weak open, the markets are bouncing right back, for now.

One huge thing in our favor is that September is almost over. This month is historically the worst month of the year for the stock market. The market typically forms a bottom in September or October, and then is off to the races for the best time to be in the market, the November through May time frame.

We may also experience some end-of-quarter “window dressing” by the big money managers, who will pile into the strongest stocks in order to claim they owned them for the quarter.

With these factors in mind, we are still highly confident we are closer to a bottom in the market than a top. So let’s stay alert for new buying opportunities.

In the meantime, there are plenty of such opportunities out in the market today. Let’s take a look at one now.

Our Stock For Review today is CERN – Cerner Corp.

CERN is breaking out to a new high on volume 557% above normal. Looks like a good time to buy on this strength.

Daily Market Comments - 9/28/05

The market indexes may be trying to form double bottom chart patterns.

Both the DJIA and the NASDAQ are showing those patterns, with the DJIA trying to reclaim its 100-day moving average and the NASDAQ attempting to get back over its 50-day moving average.

This process may be bolstered by the fact that gasoline inventories are building up unexpectedly and by economic data showing a sharper-than-anticipated rise in durable-goods orders for August.

The markets need to go up and stay up today to give us a firmer conviction that the market is indeed recovering from the sell-off begun in August. If that does not happen, expect more days of back and forth action until that conviction enters the traders’ minds.

Our Stock For Review today is NWRE – Neoware Systems Inc.

NWRE is about to break out of a high basing on volume 460% above normal. Looks like a good time to buy.

Daily Market Comments - 9/27/05

Well, it seems the “Rita Relief Rally” lasted all of one day.

What with all the hurricane activity (and we now have eleven more weeks to go – two more weeks were added to this year’s hurricane season due to the unusually warm weather), it seems that most consumers are just in a sour mood. Consumer confidence ratings are near a two-year low right now.

And oil prices spiking back up on Monday did not help things at all.

So we are now forecasting at least another day or two of sloppy trading action as we work our way through this general malaise.

But as always, there are LOTS of candidates for our daily Stock For Review. Here’s one possibility today.

Our Stock For Review today is THE – Todco.

THE is continuing up after the nice reversal signal on Monday. THE should benefit from replacing the offshore oil rigs damaged in the recent hurricanes. It’s also moving on volume 319% above normal. Looks like a safe buy.

Daily Market Comments - 9/26/05

As expected, the “Rita Relief Rally” is now underway.

The Houston area is breathing a HUGE sigh of relief as Rita did not cause nearly as much damage as at first feared. Our thoughts and prayers are with the folks in the Port Arthur / Beaumont area however, where Rita caused the most havoc.

But now that Hurricane Rita is out of the way, we can move on to bigger and better (and more fun!) things. Like making lots of money in the stock market.

We are forecasting at least another day or two of strong market action as this relief rally continues. And based on Candlestick analysis, both the DJIA and the NASDAQ are flashing bottoming reversal signal patterns.

There are LOTS of candidates for our daily Stock For Review, but let’s see if we can narrow it down to one.

We are noticing the Retail sector has many stocks rebounding from vicious short-term sell-offs. So let’s pick one from that sector.

Our Stock For Review today is CONN – Conn’s Inc.

CONN is reversing sharply to the upside after a three-day meltdown, and is approaching a new all-time high in price. It’s also moving on volume 643% above normal. Looks like the buyers are smelling a bargain on this one!

Weekly Market Comments - 9/25/05

Market Update

Well, most of us in the Houston area are breathing a HUGE sigh of relief as it appears Hurricane Rita will not wreak the havoc that was predicted before she hit land.  Even before landfall, Rita started breaking up and became much less well-defined.

With that in mind, we would not at all be surprised to see a nice-sized stock market rally early next week. We saw a market rally after Katrina just because it was over! And if it looks like damage from Rita is minimal, we think the odds are good for a big rally.

After all, the markets are in oversold areas once again. Some sectors such as Retail have had nasty short-term sell-offs and are due for a rebound anyway.

The DJIA violated both its 50-day and 100-day moving averages, and is testing its August lows. The chart is showing two white candle Spinning Tops in a row. This chart formation could easily become a “W” double bottom with strength next week.

The NASDAQ is bouncing off its 100-day moving average, with the chart showing a potential bottoming formation with a little bounce to the upside Friday after a Hammer-like candle on Thursday. It could also be forming a “W” double bottom.

The NAS needs to get quickly back above the 2,180 level, otherwise it runs the risk of being in an intermediate downtrend from the recent high of 2,220. So the 2,180 level is a crucial yardstick at this point.

In any event, we are getting closer to the time of the year that has historically been the best few months to be in the stock market – the November to May time frame. So that adds to the case that we are at or near a short-term bottom for the markets.

The bad news is that we have nine more weeks of hurricane season!

Strongest Sectors Of The Market

And the last shall be first.

Formerly strong sectors of the market ended weaker for the week, while former extremely weak sectors of the market are rebounding from vicious short-term sell-offs. Whether or not this represents serious long-term sector rotation still remains to be seen.

Sectors selling off at the end of the week were Energy, including Oil Service, Oil, Natural Gas and Coal, Computer Hardware and Gold. Rebounding and other strong sectors included Airlines, Healthcare, Steel, Networking, Defense, Casino, Disk Drive and Insurance.

It’s always interesting to note what stocks are actually making new yearly highs in a weak market. These are most likely the same stocks that will fly even further in a good market.

Here are some of the sectors and representative stocks that are doing just that right now:  Chinese Tech/Internet (KONG, LTON, TOMO), Biotech/Pharma (BCRX, CBST, POZN, XNPT), Software (LPSN, WSSI), Semis (SIMO, SMSC), Oil & Gas (AEZ, APL, DBLE), Other Large Caps (PD, LEH, RIO, UNH).

In The News

The big news this week concerned the Fed meeting, where Greenspan ignored the plight of any hurricane aftermaths and raised interest rates another quarter point.  And by the language he used, Greenspan indicated he will keep raising rates for the rest of the year. He intimated these hurricanes were merely aberrations, and would not severely affect the economy long-term, despite the near term obvious slowdowns.

That’s it for this week. Get ready for a possible rally in the market this week!

Daily Market Comments - 9/23/05

At the risk of sounding like a broken record, we don’t think this market can make any headway until we get “Rita” out of the way.

The NASDAQ is finding support at its 100-day moving average, while the Dow has undercut its 100-day, but finding support at its August low.

Both indexes are now back in oversold areas, so we could see a bounce soon, especially if Rita weakens significantly or wreaks less havoc than everyone thought it would.

However, even in weak markets there are always good stocks to buy. Let’s see if we can find one today.

Our Stock For Review today is GNSS – Genesis Microchip Inc.

GNSS is bouncing back from a vicious short-term sell-off on volume 228% above normal. We think the selling was overdone, and GNSS could come back strong from here.

Rita is heading our way to Houston, so we may be “out of touch” for the next few days. We have the “hatches battened down”, so we are prepared. But please keep us in your thoughts and prayers!

Daily Market Comments - 9/22/05

I don’t see any big movement to the upside for the stock market, except maybe for energy stocks, until we get Rita out of the way.

She made the “turn” to the northwest, so right now she is heading straight for us here in Houston.

Another area that could see some up ward price movement is the building materials area. Let’s look a stock from that sector now.

Our Stock For Review today is BMHC – Building Materials Holding Corp.

BMHC is breaking out of a high basing area on volume 268% above normal. This one is obviously benefiting from the hurricane, and the need for building materials in its aftermath.

Have a great day – we are “battening down the hatches” to prepare for Rita!

Daily Market Comments - 9/21/05

Well, it seems the Fed’s interest rate hike was not well-received by the market.

Evidently there were a lot of traders hoping that maybe, just maybe, Greenspan would have a little compassion and hold off raising rates at least for this month’s meeting.

Didn’t happen.

So much for compassion from the Fed.

Add to that the uncertainty of Hurricane Rita heading towards the Texas coast (and the oil refineries there!) and you just have a whole bunch of fear, loathing and anxiety on people’s minds right now.

I don’t see the market picking back up until at least we get Rita out of the way.

Anyway, let’s see if we can find a bright spot in the market today.

Our Stock For Review today is OII – Oceaneering  International, Inc.

OII is breaking out of a high basing area on volume 160% above normal. This one could be benefiting from the hurricane activity.

Speaking of which, we are located in Houston, so please say a prayer for us! Rita is scheduled to pay us a visit this Friday, so if you don’t hear from us over the weekend, we are either heading to higher ground or have lost power.

Daily Market Comments - 9/20/05

The market is see-sawing back to the upside today, even with the general consensus that the Fed will raise interest rates at its meeting today. Oil prices are down a buck so far today, so that is helping out as well.  It seems traders are trying to get a jump on everyone else today and take advantage of the one-day weakness in the markets.

We expect the Fed to raise rates today, and any surprise should only propel the market up even further.

Our Stock For Review today is LOGI – Logitech International

LOGI is breaking out of a flat basing area on volume 669% above normal. A very nice buy setup possibility! 

Daily Market Comments - 9/19/05

The market is opening weak today on higher oil prices and in anticipation that the Fed will raise interest rates at its meeting on Tuesday, even with the Katrina aftermath.

Both the DJIA and the NASDAQ are falling sharply back to their 50-day moving average areas today. Stochastics are in the oversold areas, especially for the NASDAQ. So I still think we are closer to buying areas than selling areas.

We do expect the Fed to raise rates on Tuesday, so that should be no surprise to the market. But if the Fed decides NOT to raise rates, that WILL be a surprise and could propel the market up sharply. But don’t hold your breath for that scenario.

Our Stock For Review today is GFIG – GFI Group Inc.

GFIG is breaking out of a flat basing area on volume 461% above normal. A very nice buy set-up possibility!