Daily Market Comments - 10/31/05

Happy Halloween! And Companies Are Being “Goblined” Up Today!

OK, that pun was a stretch, but today looks like one of the “Merger Mania” days of the 1990’s. And the market is liking what it sees, at least so far today.

Let’s see “Who’s Buying Whom”…

Novartis is offering $5.1 billion for the rest of Chiron it doesn’t already own.

Barrick Gold Corp.unveiled a hostile cash-and-stock offer for Placer Dome Inc., valuing the Canadian gold miner at $9.2 billion.

Spain's Telefonica SA agreed to buy British mobile-phone operator O2 for $31.5 billion, making itself a top player in three of Europe's largest mobile markets.

With this flurry of merger announcements, along with a huge sigh of relief from GM investors as the company decides to maintain its dividend, the market is again moving strongly to the upside, confirming bullish candlestick formations from Friday.

Let’s see what great stock we can “scare” up today…

Oh wow! Perfect…

Our Stock For Review today is RAVN – Raven Industries Inc.

RAVN is gapping out of a basing area on a nice follow-through from a Bullish Engulfing pattern right off the 50-day moving average – on volume 550% above normal. Quoth the RAVN – “Nevermore be poor - buy me”!

Weekly Market Comments - 10/30/05

Special Report – What New Sectors Will Lead In The Next Bull Market?

After a very frightening, scary – even “spooky” day last Thursday, the markets seem to be back on track to the upside.

Friday is showing a healthy kick back up on the DJIA chart, and a nice Bullish Harami on the NASDAQ chart. Both are solid indications the one-day selling spree is over.

Earnings season always brings lots of volatility as companies report their sales and earnings to the public, much more so than in the recent past.

Much of this new volatility is a result of Regulation Fair Disclosure, which was set up to enforce tighter restrictions on information leaks – with the idea of ensuring a level playing field for all investors, and removing the unfair advantage from those with the leaked “inside information”.

New rules and regulations often have unintended consequences. That’s certainly the case with this rule. When companies now report earnings at the same time to everyone, any surprises can cause large gaps of the stock price, both up and down. It takes a brave soul to hold stocks during earnings announcements these days. Sure, you can hit a jackpot, but you can sure “crap out” with surprises to the downside.

The good news? After Monday, this session of earnings announcements will be mostly over. Even better news? There were a LOT of companies reporting better than expected earnings this quarter.

As I said in my last Weekend Market Comments, new bull markets often sound the death-knell of former market leaders and introduce a whole new field of fresh new names to take over the new leadership. If that’s true in the current market environment, we need to know what sectors may be at risk, and which sectors may be about to step up and take center stage as the new market leaders.

As far as sectors at risk, we need to look no further than the sectors containing former market “darlings”. In our current situation, we could certainly understand if energy, homebuilders, metals, etc. took a back seat to other sectors starting to take over as new leaders. These sectors have had huge runs, and could be ready for a long rest.

So that leads us to the next question – what sectors are ready to step up to the plate and become the new market “darlings”? We can get clues in several different ways.

One way is to simply open up the latest Investor’s Business Daily and turn to the Industry Groups page. It’s on page B8 of Monday’s paper. Go down to the “New Highs” list and see what sectors are listed there. These are the current strongest sectors of the market.

Medical is listed at the first sector. Scanning down the list, we see a couple of strong stocks listed in bold – CMX – Caremark RX and ESRX – Express Scripts. We analyzed both these stocks in Stock Fishing last week. The Medical sector certainly has had its share of strong stocks lately, and could be taking over some of the new market leadership.

The next sector listed is Insurance. We also analyzed several stocks in this sector lately – like TWGP – Tower Group (the strongest, and our favorite in the sector), SIGI – Selective Insurance, PHLY - Philadelphia Consolidated (a former Stock Fishing candidate), and BER – W. R. Berkley. RLI - RLI Corp. is another strong performer in that sector and was featured on Stock Fishing lately. Some Insurance companies are actually benefiting from the latest hurricanes since they are now able to raise their premiums, leading to increased earnings and revenues in the future.

Finally, we are now just two days away from the historical “kickoff day” for the new bull market rally. November 1st is this Tuesday! Did Friday give us a preview of what’s to come in the very near future? We’ll start to find out this week.

Daily Market Comments - 10/28/05

Thursday’s Sell-Off Was Scarier Than Anything You Will See On Halloween

We witnessed near-panic selling on Thursday for no apparent reason. That is very scary! Much more scary than any spook, goblin, or witch you may see on Halloween.

As of now, the stock market is acting a little less scary, and is up nicely. But the day is very young.

Thursday’s sell-off makes us think we will test the October lows unless we get a rebound today. If the market ends strongly today, we should see the major index charts form Bullish Harami’s, usually meaning the selling has stopped. Let’s hope that happens, or we may be in for a very, very scary experience!

But even in a “scary” market, we can always find great stocks to buy. Here’s one now…

Our Stock For Review today is MLM – Martin Marietta Materials Inc.

MLM is doing a nice little Bullish Engulfing off a Hammer Candlestick formation, right off the 50-day moving average, on volume 322% above normal. MLM doesn’t look to scary to me!  

Daily Market Comments - 10/27/05

What You See Plenty Of In A New Bull Market

The market is continuing to consolidate its recent gains. It’s currently selling off, which is OK in the morning but not the afternoon. We’ll keep close watch on the market for the rest of the day.

We had our first “distribution day” yesterday in this fledging new bull market. As you recall, that’s a higher volume sell-off day than the previous buying day. Not to worry quite yet though, since this type of action is normal when we are bouncing off a short-term market bottom.

What is making us feel more bullish these days is the sight of numerous Bullish Kicker Gap candlestick formations. This is often indicative of a new uptrend blastoff of the market. These breakouts are very bullish, and are a welcome sight after so long a period without seeing any at all.

We saw ISRG do exactly that on Wednesday – and we are seeing another stock do it today.

Our Stock For Review today is ESRX – Express Scripts Inc.

ESRX is showing a nice Bullish Kicker Gap to the upside today on volume 1,059% above normal. I “express” that this great stock is a buy!  

Daily Market Comments - 10/26/05

You Just Can’t Keep A Bull Market Down

The bears tried (maybe one last time) to bring the market down on Tuesday, and for a little while, it looked like they were going to succeed.

But the market index charts formed “W” double bottoms between 2:00 and 3:00 PM, and the market went straight up in the final hour of trading. That’s what a bull market does, folks!

And, after a weak open today, the markets are currently back in rally mode due to news in the energy sector of lower prices there, with the DJIA up 20 points and the NAS up 5 points. This is a little surprising to me, since I thought the markets would meander sideways for awhile and consolidate at these higher levels. But the day is still young.

Another extremely bullish factor, one I’ve not seen in a long time, is plenty of huge gap up moves to the upside. This is often the precursor of the official beginning of a new bull market phase.

The latest stock to do that? ISRG – Intuitive Surgical Inc., gapping up over 19 points today, or 26.55%. Most folks would be satisfied with that kind of return in a year, much less a few minutes!

Let’s see if we can find a stock still within buying range…

Our Stock For Review today is WBSN – Websense Inc.

WBSN is showing a textbook Bullish Kicker Gap to the upside today on great volume. The Bullish Kicker Gap is the strongest candlestick pattern, and is usually an immediate buy. WBSN is moving up on volume 512% above normal too. I think it makes “sense” to snag this stock! 

Daily Market Comments - 10/25/05

Expect A “Day Of Rest” In The Market Today

After Monday’s mega-market advance, we would not be surprised at all to see a day or two of consolidation at these levels.

Monday’s explosion marked the best up day since the last market bottom in April. It also marked a second follow-through day, and may be causing some of the persistent bears to start thinking about throwing in the towel. The only thing missing was lots of volume. But we’ll still take it!

What’s causing this market explosion to the upside? Well, the media claim it’s because of falling energy prices and that the market approved of Bush’s nomination of Ben Bernanke as the next Fed chief.

That may be part of it. But the real reason may be simply that… it’s time! It’s the time of the season for the market to be making a bottom so it can perform superbly from the November to April time frame.

So at this point, we would be looking for great stock buys on any kind of pullback.

Here’s a great stock to buy right now…

Our Stock For Review today is LCAV – LCA Vision Inc.

LCAV is a former market “darling” that seems to be “getting its legs” again. It’s gapping up huge today on volume 2,250% above normal. I think we can “see clear” to buy this little darling again!

Daily Market Comments - 10/24/05

The New Bull Market Is Arriving Right On Schedule

As I have reiterated over and over again, the best time to be in the stock market (at least based on history) is from the November 1 to April 30 time period. And this new bull market is arriving right on schedule, if not a tad early.

Right now, the DJIA is up triple digits, and the NASDAQ is within shouting range of 2,100 again – a crucial area for the NAS. See my Weekend Comments for more commentary on those crucial areas for the major indexes.

Heck, even our former fave of the stock market – battered and bruised TASR – is up almost 23% today on a broker upgrade. That just really bodes well for the market, in my humble opinion.

This train has left the station, folks. Time to get aboard!

In this type of market, it’s hard NOT to make money. But let’s see if we can find an especially promising stock to buy today.

Our Stock For Review today is TWGP – Tower Group Inc.

TWGP looks like a good candidate, since it’s powering out of a nice basing area on volume 492% above normal. Looks like a good time to buy on this breakout.

Weekly Market Comments - 10/23/05

Special Report – Get Ready To Crank Up The Buying Machine

We’ve been saying for weeks that we strongly felt the market was about ready to make a sizable move to the upside. All pieces of the puzzle are now in place for that to happen. And we may have seen the start of a major year-end rally this past week.

Why do we say this? Let’s look at the evidence, one piece at a time.

First, let’s take a look at the technical condition of the market by analyzing the charts of the DJIA and the NASDAQ. The NASDAQ chart is in better shape than that of the DJIA, so let’s start with it.

The NAS chart is showing a rising base since the Piercing Pattern of the bottom made on Thursday, October 13, 2005. It produced a major follow-through day candle on Wednesday, October 19, 2005. Although Thursday and Friday of last week showed dark candles, the seven-day trend is showing an obvious reversal back to the upside. Also, the white candle on the follow-through day has not been violated, which means the dark candle action has not taken the closing price lower than half-way down that previous white candle. Stochastics are strong, and are actually in the overbought area around 80, but still heading up.

What we want to see now on the NASDAQ chart is a quick recovery back above the 100-day and 50-day EMA’s (exponential moving averages). Right now, the 100-day EMA is acting as overhead resistance, so it must blast through that area to be convincing. That would be in the 2,100 area.

The DJIA chart is not quite as “pretty” as the Nasdaq’s.

That chart also shows the bottoming action on 10/13 and the follow-through day on 10/19, but that nice follow-through candle has been violated on the downside. The DJIA is now testing the closing price made on the initial bottoming day, in the 10,200 area. It needs to hold in that area, or the index may be in a bit of trouble. Stochastics came within a hair of 80 before curling back down. But we still think we are seeing bottoming action overall.

We tend to give more “weight of the evidence” to the NASDAQ, since that’s where we like to look for the fastest-growing stocks. So as far as technical chart action, everything looks OK with the follow-through day still intact on the NAS.

Next, let’s take a quick look at the market fundamentals.

As you probably know, earnings are what ultimately drive stock prices higher. And third quarter earnings reports are coming in fairly strong. With about a third of the S&P 500 companies having reported, profits are expected to rise 15.8% vs. a year earlier. A decent number. That is actually an improvement over Q1 and Q2, and the ninth straight quarter of double-digit gains.

What is even more bullish is the fact that, of the companies reporting, a robust 68% have beaten earnings forecasts, vs. just 16% that have missed their estimates. Energy company profits are expected to soar, of course. Also, early guidance on the fourth quarter is looking fairly normal.

Finally, here is the key reason we are more bullish than we’ve been in a long time.

You see, after the bottoming action and the follow-through day for the markets have occurred, there are a few more events you want to see happen before being convinced it’s time to buy again.

One of those main events is seeing individual leading stocks break out of well-formed bases and go on to score solid gains. We analyzed several stocks that did just that last week in our Stock Fishing program.

And one of the premiere market leaders, GOOG (Google, Inc.) closed almost 37 points higher last Friday as it demolished earnings estimates and gapped up out of a 12-week base. SNDK (SanDisk Corp.), another market leader, did even better percentage-wise as it gapped up almost 22% on its own estimate-crushing report. And many other lesser-known companies were in that same situation last week. This bodes well for the near future for the stock market.

New bull markets often sound the death-knell of former market leaders and introduce a whole new field of fresh new names to take over the new leadership. In our current situation, we could certainly understand if energy, homebuilders, metals, etc. took a back seat to other sectors such as tech, biotech, medical equipment, consulting services, etc. These sectors just happen to contain a few of the stocks breaking out last week.

Therefore, again, we think it’s time to “back up the truck” and start buying some of these new names, the new leaders of the new baby bull market which may have already started its birthing process And we will absolutely ferret out those new market leaders on this website. So stay tuned!

Daily Market Comments - 10/21/05

Will This Be The Spark That Fires Up The New Bull Market?

As I am typing these words, Google’s stock (GOOG) is up huge, an enormous 35 points, or 12% for the day. And it has actually backed off the high of the day!

Another stock in the tech area, Sandisk (SNDK) is also up huge, over 8 points or a 17% gain so far in the first few minutes of trading.

These companies blew away their earnings and sales forecasts, needless to say. And I think we will be seeing more of that in these fundamentally exceptional stocks.

The markets themselves are going ballistic too. The DJIA is currently up over 68 points and the NASDAQ is up over 19 points.

GOOG and SNDK’s performance today could be “just what the doctor ordered” to get us going back to the upside today. We believe Thursday’s action was just one last “head fake” of the bears trying to take over the market again. They may be licking their wounds today if current market action persists.

Bottom line, the stage is set for what we’ve been forecasting a few weeks now, the end of this vicious short-term sell-off and the birth of a new baby bull market.

The train may be leaving the station. The first few weeks after a market bottom are often the strongest times of the year to be in the market. Enormous short-term gains, just like those being made as we “speak”, are here for the taking, folks. What kind of gains? How about these:

CREE – up almost 13% today.
BTUI – up almost 16% today.
PDFS – up almost 13% today.
RHI – up almost 10% today
WLT – up almost 8% today

We could go on and on, but I think you get the idea.

Stay tuned to this site – we will turn you on to the names of some of these stocks that will make you smile! Don’t miss out!

Lots of choices today, but here’s a good name now.

Our Stock For Review today is CUTR – Cutera Inc.

CUTR is no slouch today, up over 6%. It’s getting a bump from an Investor’s Business Daily write-up no doubt. That will focus a lot of trading attention on the stock. It looks like it’s forming the right side of a cup base too. Nice time to buy this great stock

Daily Market Comments - 10/20/05

A Big Sigh Of Relief!

Well, now there is no question in my mind.

With Wednesday’s high-volume rally, we can consider this market turnaround to the upside intact. That rally came on the fifth day after the initial rally attempt last week. So Wednesday can be called a follow-through day, and an accumulation day as well. And that is very good news!

What that means is all the previous distribution days are now reset. Wiped out. Just like with our fantastic Houston Astros, this is now a new ball game!

As far as the market index charts are concerned, they are all showing powerful Bullish Engulfing candlestick patterns. What we want to watch for now is that the trading action in the next few days does not violate the engulfing candle. You want to see the indexes trade so that the subsequent action stays in the upper part of that candle.

Also, both the DJIA and NASDAQ are trading back close to their 100-day moving averages. You want to see both indexes trade above that average, and then get back above their 50-day moving averages as soon as possible.

And with the nice little rally we’ve had recently, stochastics are heading back up into short-term overbought areas. So don’t be surprised if we have a few days of sideways action to consolidate this little uptrend and cool the stochastics off a bit.

Needless to say, there are lots of strong reversal stock charts out in the market with this blast back to the upside. Here’s a case in point.

Our Stock For Review today is SAY – Satyam Computer Services Ltd.

SAY is doing a very nice White Marubozu candle gap to the upside today. We like most stocks related to India, since we think there will be lots of growth in that country in the near future. SAY is gapping up from its 50-day moving average on volume 821% above normal. This looks like a good time to take a position in this great growth stock.

Daily Market Comments - 10/19/05

A Critical Day For The Market

As we expected, we saw the market “take a day off” Tuesday.

The problem is, the major index charts ended the day Tuesday with bearish candlestick patterns. Both the DJIA and the NASDAQ charts are displaying Bearish Engulfing-like signals.

As I am typing these words, the markets are staging a strong rebound to the upside. If that action continues, and we end the day towards the high of the day, then I think it’s safe to assume that Tuesday was just a resting day and the three-day rally attempt started last week will resume.

Here are the crucial support areas for both indexes. For the DJIA, keep your eye on the 10,190 area. For the NASDAQ, the critical area of support is the 2,030 area. If these support levels are violated, then we would have to assume the downtrend begun in mid-September is still intact.

And there will continue to be back-and-forth action and perhaps increased volatility as traders weigh great earnings reports against the fear of inflation “spooking” the market right now.

With the recent severe downdraft in the market, a good strategy is to scan for Morning Star signals on fundamentally strong stocks. The Morning Star candlestick pattern can signal the end of the recent downtrend, and perhaps a powerful snapback rally to the upside.

Here’s a case in point.

Our Stock For Review today is LUFK – Lufkin Industries Inc.

LUFK is doing a very nice Kicker Gap signal today, blasting up over 17% on volume 255% above normal. This is actually a continuation signal from the Morning Star reversal pattern that occurred back at $38.  LUFK is trading at $43.50 right now, a gain of 14% in the three days after the Morning Star.

Daily Market Comments - 10/18/05

After a three-day rally attempt, we may see the market rest today.

Also, the fourth day after the initial rally day is the first one you want to consider as a possible “follow-through” day. And the fourth through the eleventh are all possibilities. This is based on years of observing market action at bottoms, and the birth of new rallies, if not baby bull markets themselves.

What we need to see is a big up day on equally big volume. The volume so far on this rally attempt has been anemic, to put it mildly. Until we get the big institutional buyers committed and back in the market, this rally has to be considered a little “suspect”.

But again, we fully expect a year-end rally in the stock market. This market is still oversold, and due a big bounce at least.

Expect to see some see-saw action as traders weigh great earnings reports against the fear of inflation prevalent in the marketplace right now.

And as usual, there are lots of stocks on our radar screens setting up for huge moves to the upside. Here’s one that we see today.

Our Stock For Review today is PPDI – Pharmaceutical Product Development Inc.

PPDI is gapping up and blasting 10% out of a trading on volume 3,633% above normal. This is the kind of action you can expect when some of these companies report tremendous earnings.

Daily Market Comments - 10/17/05

Last week, we may have witnessed the best buying opportunity for the next six months.

The markets are currently rebounding from tremendously oversold areas, and confirming candlestick bottoming signals as well. The DJIA is confirming a Morning Star bottom and the NASDAQ is coming off a Piercing Pattern confirmation.

As we stated in our special “Good News, Bad News” weekend report, all that was missing from last Friday’s market rebound day was volume. But we could certainly see volume coming back into the market today as traders start to sense the bottom of this current vicious downtrend, and don’t want to be “late to the party”.

And we are starting to see a few stocks recover just about all of their recent downtrend action in one day. We mentioned AAPL last week, and today MO is joining the “one day recovery” program, with its 6% + rebound to all-time highs.

I am also starting to see more stocks continuing huge runs, like AVII and HDY in the very small cap area. Just last week, I would have thought these kinds of stocks would immediately succumb to profit-taking. That seems to be changing, which could be very bullish for the market.

There are lots of stocks on our radar screens setting up for huge rebounds. Let’s see if we can pick a good one today.

Our Stock For Review today is TSAI – Transaction Systems Architects.

TSAI is acting very strong today, gapping up to a 5-year high on volume 527% above normal. This looks like a good time to take a position in this excellent company.

Weekly Market Comments - 10/16/05

Special Report – It Was A “Good News, Bad News” Kind Of Week

It’s been a “good news, bad news” kind of week. Let’s get right into it.

First, the good news and bad news on the stock market.

The good news? The stock market indexes on Friday!  After a couple of “head-fakes” in the mid-morning and mid-afternoon, both the DJIA and the NASDAQ ended at daily highs. Haven’t seen that in awhile! And that’s exactly what you want to see in a rebounding market.

So what’s the bad news? Lack of volume on the upmove. Ideally, you would like to see lots of volume on a kickback to the upside, especially after a severe sell-off as we’ve seen in the past couple of weeks. And then you want to see another similarly powerful follow-through day – 3 to 11 days later. That type of price and volume action has often signaled the start of a new baby bull market.

And here’s some more “bad news, good news” on the market.

The bad news is the vicious market sell-off itself in the past few weeks. This has destroyed many nice chart patterns of great stocks, and has caused hundreds of traders and investors to start thinking of that horrible five-letter word often associated with the stock market in October - “crash”.

But there is actually some good news along with the bad news. One piece of good news is that the market did the exact same thing back in April that it’s doing now, pulling back ahead of earnings season. As we enter the new earnings season this quarter, expect to see some powerful moves to the upside in stocks with good earnings announcements.

Case in point? Check out the price and volume action of AAPL – Apple Computer - last week.

AAPL did a little “head-fake” of its own last Wednesday, gapping down to its 50-day moving average area on the announcement of its highest revenue and earnings in the company’s history. But it blasted up over 9% on Thursday when cooler heads started to prevail. That move took it back up to a few cents off its all-time high.

One last piece of good news on the market itself. As I’ve said here before, we are now just days away from the best few months of the year to be investing in the stock market. Historically, that time period has been from November 1 through April 30 of the following year.

Did last Thursday mark the bottom of this current downtrend, and set the stage for that new baby bull to be born? Only time will tell, but looking back on this day months from now, we could be saying: “You know, that market bottom was so obvious!”

Next, the bad news and good news on inflation.

The bad news was that inflation, as measured by the CPI – Consumer Price Index - was up a whopping 1.2% for the month of September! That was the highest in over 25 years, since 1980 to be exact.

So why didn’t the stock market crash, and gold go through the roof? Ah, that’s the good news. Excluding food and energy, the CPI figure was up only 0.1%. That was 50% less than economists expected, and very good news since it means the inflation figure is skewed right now due to rising energy prices, but inflation is not creeping into other sectors of the economy.

September retail sales came in better than expected too. That proved the consumer, even after dealing with rising energy prices, suffering through vicious hurricanes, etc. is still spending, despite fears of a slumping economy.

But there’s even good news and bad news on those sales numbers. The 0.2% increase sounds like good news. But the underlying fact is that excluding energy, the number would have been a 0.2% decline – bad news.

So where is all this “inflation” the Fed is worried about, if it’s totally due to those annoying high energy prices? That’s got a lot of people scratching their heads right now!

Next, here’s some bad news and good news about the Fed and rising interest rates.

The bad news? The Fed will raise rates in November and December, and most probably in January too. Some people believe the Fed is just spouting off on their fear of inflation just to “jawbone” the market down – cooling the market off by words alone and then not having to raise interest rates.

We wouldn’t count on that.

We see three more interest rate increases (at the most), and then the Fed will be done. I think it’s a safe bet that will be the exact situation as Greenspan retires on January 31, 2006.

And that could spark one of the biggest stock market rallies of all time.

Think that’s just “crazy, Pollyanna talk”? Go back to 1995 and take a look at what the market did the last time the Fed stopped raising rates.

Lending credence to that scenario is our final piece of “good news, bad news”.

One well-known trader was shocked this week at the MASSIVE amount of negative sentiment in the market right now. Everyone is thinking “gloom and doom”, playing right into the media’s hands, of course.

When the feeling of “gloom and doom” is so thick you can cut it with a knife, it’s often the time to “think contrarian” and get ready to do just the opposite of what everyone else is doing and thinking.

And the final piece of good news is this - this is EXACTLY the scenario that can trigger the year-end rally all the market bulls are hoping for, and have been expecting all year.

Bottom line, we think earnings season will hold lots of surprises to the upside, oil prices will not go to the moon (and may even come back to earth), Iraq will get a constitution (hopefully the media will let us know!), housing prices will not crash, and the world will not come to an end, as the media seems to hope will happen.

Therefore, we think it’s time to “lock and load” – and crank up the buying machine once again. And to continue coming back to this website for ideas on how best to exploit the stock market, and force it to provide a comfortable living for you in the future. 

Daily Market Comments - 10/14/05

So far today, the market is in rally mode. Finally!

As I am typing these words, the DJIA is up 33.69 points and the NASDAQ is up 8.87 points.

The chart of the DJIA is showing a bounce from a bottom Spinning Top formation, and the NAS is displaying a nice gap up from a Piercing Pattern bottom. We may be looking at this day months from now as the absolute best time to have bought back into the market. As of today at least, these are obvious bottoming patterns.

What we need to see is a sharp snapback on huge volume, followed by another one a few days later. Almost every newborn bull market shows that type of action.

In any event, we can always find interesting stocks to buy. And there a LOTS of great charts today! Here's one now...

Our Stock For Review today is TTI - Tetra Technologies Inc.

TTI is doing a beautiful continuation pattern from a Dragonfly Doji / Hammer formation, on volume 171% above normal. This looks like a sure bottom for this stock, with lots of room to move on the upside now.

Daily Market Comments - 10/13/05

Is today the “Day Of The Bounce”?

The markets are tremendously oversold and are certainly due for at least a technical rebound at this point. And right now, both the DJIA and NASDAQ are “in the green”, after a weak open.

That’s the good news. Now here’s the bad news.

The market was already gloomy with worries about rising inflation. And the negative bias was compounded Thursday when the Labor Department said that prices of goods imported into the U.S. climbed 2.3% in September, the highest in 15 years; economists surveyed by MarketWatch expected a gain of just 0.9%.

The Fed continues to believe inflation is the greatest concern to the economy. So another interest rate increase is a virtual certainty on November 1.

But, after surveying the market this morning, we are finding pockets of strength and a few good charts. For example, there are several very nice chart setups in the Biotech area.

But our Stock For Review today comes from the Tech area, and should be well-known to everyone - AAPL – Apple Computer Inc.

AAPL is recovering nicely from a sharp short-term sell-off, one we feel was overdone. It has already “filled the gap” back to the upside, on volume 192% above normal. This looks like a great time to take a position in this excellent company.

Daily Market Comments - 10/12/05

The NASDAQ chart is just a picture of doom and gloom. Seven dark candles in a row showing the index going down, down, down.

Nobody in their right mind would be getting excited about this market. Or would they?

The thing to constantly keep in mind is we are getting closer and closer to the best buying times of the year for the stock market. These down days are simply creating more and more bargains for when the market bounces back strongly to the upside. And that could happen at any minute. Even today.

The stochastics for the NASDAQ are almost at rock bottom – they can’t go much lower. Of course, they can STAY at rock bottom for long periods of time. But that situation usually creates a “coiled spring” setup for the market indexes to launch violently back to the upside. So be ready!

As always, you can find special situations or pockets of strength in the market each day.

Let’s see if we can find an example right now.

Our Stock For Review today is HUBG – Hub Group Inc.

HUBG is gapping up strongly from a little “W” double bottom on volume 1,078% above normal. That is incredible strength in this weak market environment!

Good Investing!

The Daryl
http://www.tradeyourwaytowealth.com   

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Daily Market Comments - 10/11/05

The stock market is getting a little bump today due to good news from Alcoa, IBM and Genentech.

Both the DJIA and the NASDAQ opened strongly today. But the market is currently mixed, with the DJIA up 22 points and the NAS down 10.

At this point, we are not trusting this market until we see a nice, high-volume rally to the upside, with a follow-through day a few days later. The market is currently in “distribution” mode, with high-volume selling going on. Not what you want to see in a healthy market.

We always use these periods of market weakness to take special notice of any individual stocks bucking the trend and acting strong in the midst of weakness. These stocks quite often are your new market leaders when the bulls take control again.

Let’s see if we can find an example today.

Our Stock For Review today is TRLG – True Religion Apparel Inc.

TRLG is doing a nice Kicker Gap “Scoop” Pattern to the upside on volume 587% above normal. Looks like a good time to buy this fundamentally strong stock on this rebound.

Daily Market Comments - 10/10/05

The stock market is trying to decide what it wants to do today – so far it’s acting kind of “wobbly”.

After opening with a positive bias, it headed strongly to the downside. But now it’s already bouncing back to the upside. Who knows how it will end the day?

We are getting close to third quarter earnings announcements. So expect some interesting moves in stock prices for the next few weeks – both on the upside and the downside, as these announcements surprise investors and traders either positively or negatively.

Our feeling here at Trade Your Way To Wealth is still that we are much closer to a market bottom than a top. So continue to keep your powder dry and be ready to start buying at a moment’s notice.

As always, we are seeing compelling stock chart setups on fundamentally strong stocks each and every day.

Let’s look at one of those now.

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

GFIG is gapping up nicely from the convergence of its 30-day moving average and its lower Bollinger Band, on volume 389% above normal. Looks like a great time to buy this fundamentally strong stock on this rebound.

Weekly Market Comments - 10/9/05

Market Update

October is sure turning out to be a “spooky” month for the markets.

Take the stock market. Please.

Sorry, couldn’t resist. And my apologies to Henny Youngman. But the market this week has been, as we say in Texas, “pug-ugly”. At least it was on Tuesday, Wednesday and Thursday.

After two attempts at rebounds in September, both the DJIA and the NASDAQ have cratered back down to the lower areas we saw way back in July. And both indexes are at crucial areas of short-term support. Not to mention the fact that the charts of both the major indexes are now showing down-trending channels.

About the only piece of good news right now is that we are right at the bottom of those channels, at oversold levels. So we may see at least a bounce next week.

For the DJIA, the key area now to keep in mind is 10,200. For the NASDAQ, the number to remember is 2,050. These areas should now act as support levels for each of the indexes.

As far as current resistance levels - here are the key numbers to remember: For the DJIA, 10,570 is the area of short-term resistance, and 10,700 and 11,000 for the mid-term and longer-term, respectively. For the NASDAQ, the area of short-term resistance is around 2,150, and 2,180 and 2,220 for the mid-term and longer-term, respectively.

Looking on the bright side, we are three weeks away from the beginning of the time that has historically been the best months of the year to be in the market. Typically the market will form a short-term bottom in either September or October, and then take off in November, December and January.

However, there are factors at play that may keep this from happening this year.

According to an article I read in yesterday’s Investor’s Business Daily, we are one or two interest rate increases from an inverted yield curve, that is, short-term rates would be higher than long-term rates. This situation has been an almost unfailing indicator of a recession.

The market has certainly not liked the hawkish comments coming from the Fed this week. Adding a spark to that fire was the Friday jobs report, which showed that even with two hurricanes, job losses were less than expected. That means a strong economy, and surefire interest rate increases ahead from the Fed.

As you probably know, the stock market itself is a predictive indicator of what the economy will look like six to nine months from now. And it is definitely not liking what it sees, at least for now!

But, using contrary logic, the time to start thinking about buying is when things look the bleakest – when everything and everybody is foretelling “gloom and doom”. That time may be right now.

A highly successful stock picker and money manager said today that Friday was your best chance to buy in the next six months. It may be time to crank up that truck again. You know – the one you “back up the truck and buy”.

Strongest Sectors Of The Market

Not much to say here this week, with the market broadly lower in almost all sectors.

There were a few pockets of strength, but you had to be very nimble (or be clairvoyant!) to play them.

Security stocks skyrocketed Friday on the alleged terrorist plot to attack the New York City subway system. But most of those stocks came quickly back to earth.

Some of the Retailers came to life this week, with same store comparisons looking very nice. Lots of Bullish Kicker Gaps in that sector.

Another strong group this week was a small group of companies having anything to do with keeping the dreaded avian flu at bay. President Bush met with vaccine makers, urging them to boost flu vaccine output to prepare for the threat of an avian flu pandemic.

There are several companies in that area acting strongly even before Bush’s meeting, and my TYWTW Members know my favorite one in that area. I am analyzing that whole sector, and have other promising companies in mind. I’m thinking about preparing a Special Report revealing those companies just to my Members.

In The News

Gold flirted with an 18-year high this week. December gold rose to $477.70, and spot gold closed at $474. That was just shy of its January 1988 high.

Gulf of Mexico facilities are coming back online after the hurricanes a lot faster than expected. The refineries are running again, even the Port Arthur, Texas one maintained by Valero Energy (VLO). That may be a good stock to watch next week.

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

Daily Market Comments - 10/7/05

After a little half-hearted bounce to the upside on the open, the market is already starting to weaken once again.

The market is not liking the recent comments coming from the Fed at all. Their hawkish statements about raising interest rates non-stop is not what the market wants to hear!

In fact, I read a very interesting, and scary, article this morning. The article opined that we are one, or maybe two, interest rate hikes away from an inverted yield curve. That means short-term rates would be higher than long-term rates. An inverted yield curve is one of the best predictive indicators of a recession.

It is our opinion that pushing us right into a recession is a much greater danger than inflation any day.

We saw many great chart setups on the strong market open, but some are quickly disintegrating with the current weakness.

Here’s one that’s holding up fairly well though. We like it for the long term too.

Our Stock For Review today is NFLX – Netflix Inc.

NFLX is gapping up into a Rising Method-like pattern on decent volume. Looks like a good time to buy the stock of this popular company.

Daily Market Comments - 10/6/05

October is shaping up to be a “typical” October, a very spooky month for the stock market.

Something has sure “spooked” the market lately, with broad sell-offs the past two days.

The good news? The market usually bottoms in September or October and takes off like a scalded dog in November and December. So keep your chin up and your powder dry for new buying opportunities.

Right now, doom and gloom is in control of the markets. You must train yourself to think contrarian in this situation. Because just when the gloom and doom is the thickest, that’s when the market will take off to the upside.

But even in a weak market, there are usually pockets of strength to exploit. For example, today I am seeing lots of the Retail stocks gapping up strongly from very oversold areas.

Let’s look at one of those now.

Our Stock For Review today is CTRN – Citi Trends Inc.

CTRN is gapping up huge from extremely oversold conditions today, on volume 708% above normal. Looks like a great time to buy this fundamentally strong stock.

Daily Market Comments - 10/5/05

Well, it appears we are still locked into a trading range for the stock market.

After a great start on Tuesday, the market basically “fell off a cliff” starting at 1:00 PM EST. Evidently it did not like the hawkish comments from the Fed.

And it’s not looking much better today so far. Today’s bad news? A report showing a sharp slowdown in the service sector growth, largely due to Hurricane Katrina. Add to that some company earnings jitters, and you don’t have the formula for an up market day.

We are at a crucial juncture for the market. The DJIA needs to hold at the 10,400 area and the NASDAQ at the 2,120 area. These are the short-term levels of support for the respective indexes.

This correction could actually be good for us in the long run. Both the DJIA and the NASDAQ were overbought short-term based on stochastics, and a quick snapback down could spook the market “unbelievers” and set the stage for a nicer run to the upside.

But even in a weak market, you should always be aware of the stocks showing strength, or especially those stocks totally ignoring the market weakness and blasting to the upside.

Here’s an example of one doing just that today:

Our Stock For Review today is BEAV – BE Aerospace Inc.

BEAV is totally ignoring the current market weakness and is blasting out of a little cup-and-handle base, on a Kicker Gap candlestick signal no less! And on volume 469% above normal. Looks like a great time to buy in this situation.

Daily Market Comments - 10/4/05

The market is acting much more bullish today as the price of crude oil skid to a weekly low.

Combine that with a sharper rise than expected in August factory orders and you have a strong case for this market to end the day on a high note.

I am the most bullish right now than I have been in a long time. As I was reviewing charts last night, I noticed something that happened in August that set up this bullish scenario even further. My esteemed Mastermind Group Members will know exactly what that is as soon as they review the Stock Fishing videos I produced last night.

There are TONS of excellent chart setups out there today – it’s getting hard to decide which ones will provide the most profit for us.

Here’s just a small sample:

Our Stock For Review today is IRIS – Iris International Inc.

IRIS is soaring today with a big breakout above its prior trading range on volume 403% above normal. Looks like a great time to buy on this strength.

Daily Market Comments - 10/3/05

So far the first trading day of the final quarter of the year is opening mixed – with the DJIA down and the NASDAQ up.

The “Concern of the Day” is the latest manufacturing report, which showed more strength than expected. This is raising fears the Fed will continue raising interest rates to quell anything that smacks of inflation.

Hey Stock Market! Read my lips!

Barring a major catastrophe, the Fed will raise rates this month and next month. Get used to it.

Even while the Fed keeps raising rates, we can always find exciting profit opportunities in the market each day. Let’s take a look at one now.

Our Stock For Review today is SMTS – Somanetics Corp.

SMTS is soaring today with a big breakout above its prior trading range on volume 1,346% above normal. Looks like a great time to buy on this strength.

Weekly Market Comments - 10/1/05

Market Update

The post-Hurricane Rita market rally we predicted last week happened just about right on cue.

Both the DJIA and the NASDAQ gapped up and ran out of the gate on Monday. Then, after a couple of false starts on Tuesday and Wednesday, both indexes scored healthy gains on Thursday, with both recovering their respective 50-day moving averages. They extended those gains even further on Friday, albeit on fairly low volume. Still, a very healthy week for the market!

Historically speaking, September is the weakest month of the year for the stock market. And we certainly saw some short-term lows for both the DJIA and the NASDAQ in September.

For the DJIA, the key area to keep in mind is 10,380. For the NASDAQ, the number to remember is 2,100. These areas should now act as support levels for each of the indexes.

As far as current resistance levels - here are the key numbers to remember: For the DJIA, 10,700 is the area of short-term resistance, and 11,000 for the mid-term. For the NASDAQ, the area of short-term resistance is around 2,180 and 2,220 for the mid-term.

So what months are the best ones to be in the market? We are almost right there! Typically the market will form a short-term bottom in either September or October, and then take off in November, December and January.

Take a step back for a moment and think about the strength of this market.

Let’s pretend it’s one year ago. Where would you think the market would be a year from now if you were told that, this time next year, we would be looking at $70 oil, that one of the most important energy-producing areas of the country would be hit by two powerful hurricanes, and that most of New Orleans would be under water?

Well, first of all, you might of considered that scenario as something out of a science fiction movie, something that could not possibly happen in real life.

Then, on further reflection, you might have thought if that scenario came true, the market would be in the tank, to say the least!

Well, consider this. Even in this very real scenario, the S&P 600 and the S&P MidCap 400 are less than 2% from all-time highs! And the NYSE composite, which tracks all the stocks on the New York Stock Exchange, is 0.5% shy of a record close.

So how will the market act on GOOD news?

Strongest Sectors Of The Market

The long-moribund Technology sector is coming back to life.

The Philadelphia Semiconductor Index (SOX) jumped over 1.9% as it solidly reclaimed its 50-day moving average.

Security software firms, chipmakers, chip equipment makers and data storage companies were among the top performing industry groups.

Also, Natural Gas stocks headed towards the stratosphere as natural gas prices soared despite the high gasoline inventories caused by increased importation.

In The News

The big news this week was the market action itself after Hurricane Rita did not turn out to be the Beast That Wiped Out Houston. This little rally could be the start of something big!

We are very near the “sweet spot in time” for the stock market. Third quarter earnings announcements are coming up soon, and they should be accelerating over second quarter earnings. And this will be the twelfth quarter in a row with over double-digit earnings growth for the entire market.

Those earnings announcements could certainly be the catalyst that propels this market sharply to the upside in the upcoming strongest months of the year for the market bulls.

The Fed is obviously noticing this strong economy. Even in the aftermath of Hurricane Katrina, the Fed raised rates, and is giving all kinds of indications the rates will be raised again in both November and December.

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