I was asked to post today's commentary so that is what follows. We use to post it now and again but I think it has been some time since I have. Let me put one of the comments in context. When talking about about the durable goods orders I said "who knows?" This may seem a little flippant, but I've mentioned several times in the commentary that the durable goods orders number is too volatile to make much use of it. Anyway, pre-market commentary for July 27th:
Crude oil inventories increased slightly again this week, however, gasoline inventory dropped for the 4th consecutive week. The gas inventory isn't a concern yet, but deserves keeping track of.
Existing Home Sales were a little stronger during June than economist estimated, but still dropping a small 0.6% from May. Home sales have maintained remarkable strength through this entire economic slowdown.
The Employment Cost Index (ECI) for the 2nd quarter is released at 8:30 AM ET. In the face of rising unemployment the ECI loses some of its impact, since much of the pressure to increase costs gets relieved. Economists estimate a 1% increase which is a 4% annualized increase, just about the same as has been the trend the last few quarters.
Durable Goods Orders is released at 8:30 AM ET. Economists estimate a 0.9% decrease. Last month it had a strong increase....who knows?
Weekly Jobless Claims is released at 8:30 AM ET. The 4-week moving average is at 415 thousand. The trend has been to make higher highs and higher lows.
The Conference Board has a monthly help wanted index. It will be released at 10:00 AM ET. The index has not had an up-tick since last December, and really has be trending steadily down since a year ago last March. The index was at 60 in May, down from 82 during May 2000. Since this is a Conference Board number we can assume that the Federal Reserve pays close attention to this number. They also feel that we won't see an upturn in employment payrolls until after we see an upturn in this index......we'll keep an eye on it.
On Wednesday after the close there seemed to be better upside stories. Homestore.com (HOMS), beat earnings estimates by 2 cents, and guided higher. GoTo.com (GOTO) beat by 11 cents and guided higher. HotJobs.com (HOTJ) did 12 cents better than estimate while also guiding higher. Harmonic (HLIT) also beat by a wide margin, 10 cents, and beat the revenue estimate. All four of these stocks were up nicely in the aftermarket.
Affymetrix (AFFX) beat estimates by 5 cents and WellPoint (WLP) beat by 4 cents. Corning (GLW) beat by a nice 10 cents but they still see a "very significant decrease in the long-haul market in North America," however the stock did trade up in the after hours market.
CYTYC Corp (CYTC), beat by 1 cent, but failed to give any guidance going forward.
Networkers, F5 Networks (FFIV) and Foundry Networks (FDRY) both beat estimates but both traded down after hours on the continued cloudy picture. Brooks Automation (BRKS), beat by 1 cent, plus beat on the revenue estimate, however, they see a bad 4th quarter.
Compaq (CPQ), had in-line earnings but warned about lower revenue for the 3rd quarter. During the conference call the company seemed rather upbeat, however traders didn't give value to the company pinning its future hopes on the release of a new Microsoft operating system (XP), and Intel's new Pentium IV.
MedImmune (MEDI) reported in-line earnings but also short on the revenue, the stock was down in the after market.
Thursday, before the open earnings of interest include; Apache (APA), Bergen Brunswig (BBC), Celera Genomics (CRA), Celgene (CELG), Concord EFS (CEFT), JDS Uniphase (JDSU), International Flavors and Fragrances (IFF), Sylvan Learning (SLVN), Ultratech Stepper (UTEK) and WorldCom (WCOM). After the close, Advanced Fiber Communcations (AFCI), American Power (APCC), Amgen (AMGN), Electronic Arts (ERTS), Exodus Communications (EXDS), Gilead Sciences (GILD), Human Genome (HGSI), International Rectifier (IRF), Lightbridge (LTBG), Mentor Graphics (MENT), Qualcomm (QCOM) and VeriSign (VRSN).
We got our bounce, enough to move the markets internals back to mixed, siding more on the negative. The screened stock ratio was much more bullish moving up to 7.5 to 4.7 favoring buying, this moves the risk back down to moderate.
I'm still a little worried that we haven't see the end of this selling wave, but looking over our intermediate term list I saw a lot of stocks bouncing on support zones. A few of those stocks made the top of the stock screening, (ACF, DFXI, DHI, LNCR, MTG and NYCB). Speaking of support, I'll again be watching for support in XOMA today.
Our weekly newsletter for intermediate term trades, Savvy Trader Growth Stock Journal, will be coming out in the next few weeks. In the meantime, we are keeping a data history on the 20 stocks the newsletter tracks. These 20 stocks are ones that remain in an up-trend and get repeatedly screened as they cycle between support and resistance. The fundamental primus of the newsletter is that one can buy and sell, using buy and sell stops, without being tied to a computer screen all day.
Biotechs, healthcare and specialty retailers were the strong groups again. I think about 18 out of the 20 watchlist stocks are stocks we have had the last few weeks. A tribute to just how fast they can recover.
Below is the watchlist for July 27, 2001. The alert price is approximately 20 cents above the previous days high, depending on the recent movements. This alerts us to the potential movement of the stock. For more information see the Strategies link. Double click on the symbol to view a current graph.
(Watchlist) |
