On the other hand from Briefing.com: Updated: 29-Nov-02 - General Commentary - So the markets put together a relatively impressive move ahead of the holiday. The Nasdaq added 44 points which amounts to a one-day, 3.0% advance. Now total volume traded came in slightly above average levels right around 1.7 billion total shares traded -- not all bad in light of the holiday. Yet the market internals were solidly bullish -- by the end of the session, advancing volume outpaced declining volume by almost 10 to 1. By the end of the day, the Nasdaq closed at 1,488 which matched up well with our final resistance at 1,487 identified earlier today.
So what was the catalyst? Well, on the corporate side, traders appeared to be encouraged by the mid-quarter updates from both Novellus Systems (NVLS) and Sun Microsystems (SUNW). Yet at the same time, the markets also received reassuring economic data -- Jobless Claims were lower than expected, indicating the labor market, while not necessarily strong, seems to be headed in the right direction. Also note that Personal Income and Personal Spending reports were up 0.1% and 0.4%, largely in line with expectations and supportive of continued strength in the consumer.
So when we reviewed the Nasdaq on November 22nd we were taking a broader view of the markets. The general thought in that piece is worth revisiting today. The chart below is a weekly chart of the Nasdaq in which each bar on the chart represents the opening and closing levels for each week going back about 20 months. The purpose here is to get a better sense of the longer-term technical outlook.
Now before we get too far with this weekly chart, we'll just reiterate that our intermediate-term target remains in the range of 1,500 to 1,520. This area encompasses three different notable technical levels: 1) it approximates a swing target off the Nasdaq's recent consolidation, 2) it matches up with a 50% retracement of the index' March to October sell wave and 3) it also happens to approximate the Nasdaq's 200-day simple moving average at 1,497.
Yet going back to the weekly chart shown above, there are a few interesting points there as well. Without making things complicated, you can see the importance of that former resistance we had been watching in the range of 1,419 to 1,423. Now a second obvious take away is that over the past 20 months, that range between 1,423 and 1,613 is reasonably vacant. As we pointed to previously, this is arguably the fundamental difference between the market's perception of 'ongoing recession' and 'potential recovery'.
So we just want to reiterate that resistance in the range of 1,613 and 1,620 will be an important level worth watching on a longer-term basis. It represents obvious straight-line resistance and also matches up with a 62% retracement of the Nasdaq's March to October sell wave.
So where does all this leave us? Well, we have the holiday shortened session coming up Friday. So again, trading conditions should be less liquid as many professionals -- if not most -- will be out. Yet coming off the unusual strength Wednesday, the the very near-term bias should remain higher. Keep an eye out for how the Nasdaq responds to its 200-day simple moving average. Mike Ashbaugh
Close Dow +256.26 at 8931.68, S&P +25.56 at 938.87, Nasdaq +43.51 at 1487.94: While plenty of turkeys will be the center of attention tomorrow, it was a batch of economic data that was the center of attention on Wall Street today... More specifically, we should say a batch of encouraging economic data, which undermined the double-dip recession argument... The reports of note included jobless claims, personal income, personal spending, Michigan consumer sentiment, durable orders, and the Chicago Purchasing Managers Index-- each of which, in its own right, provided some basis to believe that the economy is improving...
In turn, investors found reason to believe that earnings prospects will be improving, too, and expressed their optimism over that consideration by bidding stock prices sharply higher... The bulk of today's gains, in fact, were achieved in the first hour of trading, and strikingly, there was never any concerted selling effort during the session... Bolstered by broad-based leadership, and active participation from influential leadership groups like technology, financial, transportation, retail, drug, biotech, and energy, the major indices moved steadily higher throughout the day...
In the process, both the Nasdaq and the S&P 500 broke through notable resistance points at 1486 and 937, respectively... The latter marked a 3-month high for the S&P while the former represented the Nasdaq's 200-day exponential moving average... Contributing to the Nasdaq's favorable disposition was the strength in the technology sector that stemmed from the reassuring mid-quarter updates provided last night by Novellus Systems (NVLS 37.43 +2.95) and Sun Microsystems (SUNW 3.94 +0.18)... Once again, semiconductors set the pace for the tech sector as evidenced by the 6.7% gain in the SOX Index...
By and large, though, most groups ended higher as weakness in today's session was measured more in terms of which groups were up the least... As it so happens, gold, which is often viewed as a safe-haven area, was the only industry laggard of note... Indicative of the broad-based nature of today's advance, every Dow component ended the session with a gain... Each of the indices, meanwhile, closed just shy of their best levels of the session...
Separately, it was a much different story for the Treasury market, which got undercut by the better than expected economic data, supply issues with the $27 bln 2-yr note auction and, of course, the strength in equities... The 10-yr note, for instance, dropped 48 ticks, bringing its yield up to 4.25% from its previous close of 4.07%... As a reminder, Friday's session is an abbreviated one with the stock market closing at 13 ET... Have a happy and safe Thanksgiving!...DJTA +4.6%, Nasdaq 100 +3.6%, Russell 2000 +3.0%, S&P Midcap 400 +2.9%, XOI +2.2%, NYSE Adv/Dec 2595/675, Nasdaq Adv/Dec 2509/837
Snip from early Wednesday: traders were using the Novellus (NVLS 34.48) mid-quarter update yesterday after the close as one reason. NVLS did not change revenue or earnings forecasts for the fourth quarter, and even had the same forecast for bookings, but they suggested bookings might be 5% higher than the $200 million guidance. Might be. NVLS had $458 million in revenue seven quarters ago when the stock price was at $40, and is looking at revenue of $211 million this quarter. They have a lot further than 5% to go before business is back to where it was. This just shows that when traders are looking for a reason for the market to be up, they can find it.
11:06AM Chartered Semi (CHRT) 6.92 +1.92: Soundview Technology upgrades to OUTPERFORM from Neutral rating and price target of $9 due to multi-year strategically favorable agreement with IBM.
10:54AM Cisco Systems (CSCO) 14.90 +0.45: CSFB initiates coverage with Outperform rating and price target of $17; expects acceleration in sales growth over next 12-18 months.
10:39AM TriQuint Semi (TQNT) 6.18 -0.86: SG Cowen downgrades to MKT PERFORM from Strong Buy due to Agere Optical acquisition dilution and continued weakness in communications.
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+CHRT+CSCO+INTC+KLAC+LLTC+LSCC+LSI+MOT+MU+MXIM+NSM+NVLS+SUNW+TER+TQNT+TXN+XLNX+^VIX+^IXIC++^NDX+^SPX+SMH&d=t
The VIX more closely follows the DJIA than the VXN which is supposed to be more closely aligned to the NASDAQ. On Wednesday the VIX rose while the VXN fell with the strong rise in the market. This could potentially indicate that the DJIA would be more likely to show weakness than the NASDAQ. Gottfried, myself, and others here have noted in the past the correlation between the rise of the VIX and the fall of the SOX and visa versa.
bigcharts.marketwatch.com
Obviously the SOX and the VIX rose on Wednesday but usually if the VIX rises the SOX falls. This did not happen Wednesday but what about tomorrow and the first part of December. Is it possible that the SOX is due for at least some minor corrective action if not more?
Also keep in mind that Les Horowitz has the SOX and NWX trend strengths at 100 for the last couple of sessions.
Message 18282618
You cannot get higher than that so a pullback could be unavoidable soon. Insider selling is also picking up:
insider.thomsonfn.com
Finally the futures for tomorrow indicate a flat to lower open as I write this post:
cme.com
RtS |
