OT: An article and a chart I made that might be helpful for short term trading in the semiconductor stocks based on the 5 day TRIN:
Optionetics Articles
MORNING WATCH, May 9
optionetics.com
By Frederic Ruffy, Optionetics.com
5/9/2003 6:00:00 AM
Stocks are set to move higher in what should be a relatively quiet final day of trading for the week. There are no major earnings or economic reports scheduled for release today. For the week, the Dow Jones Industrial Average ($INDU) has fallen during three of four trading sessions and given up roughly 90 points. The Nasdaq Composite Index ($COMPQ) has fallen 14 points, or 1%. Friday morning, index futures were moving, however, and one hour before the start of trading, futures were indicating a 22-point gain for the industrial average and a 10-point advance in the Nasdaq Composite Index.
Semiconductor stocks are set to move higher after Intel (INTC) said it expects an improvement in the PC-industry. Shares of the world’s largest chipmaker gained ground in overseas trading after Chief Operating Officer Paul Otellini reportedly said that the company is seeing a “slight” improvement in the personal computer industry and that the telecommunications sector is stabilizing. INTC was up 2.5% in Germany prior to the opening of US exchanges.
Meanwhile, shares of Nvidia (NVDA) were also moving higher. The company, which makes the chips used in Microsoft’s Xbox game consol, said late Wednesday that sales in the current quarter could rise 18% to $478 million. Analysts were expecting sales of less than $425 million. Shares of Activision (ATVI) could also trade higher after the company released its latest earnings late-Wednesday. The video game-maker posted its first quarterly loss in two years, but said sales will top estimates in the current quarter. ATVI was up more than 5% in overseas trading.
The healthcare sector might see an uptick in volatility. Shares of Johnson & Johnson (JNJ) were moving lower while a California jury tries to determine whether to award damages to family members of a man who died while taking J&J’s Propulsid heartburn medication. Johnson & Johnson told the jury that the medicine was not the cause of the death. Meanwhile, shares of Genzyme (GENZ) could trade lower on news that it will eliminate its tracking stock because market conditions have reduced the stock’s ability to raise needed capital. Finally, Imclone (IMCL) shares are set to move sharply lower on news that Auditor KPMG LLP wants to further review the company’s finances. Imclone is in the midst of an insider-trading scandal.
Although stocks are down only modestly this week, some technical indicators suggest that stocks have become oversold in the short-term, which means that the selling has perhaps been overdone and stocks could bounce higher. For example, the Trader’s Index ($TRIN), which measures the volume going into advancing and declining issues, rose to 2.32 on Thursday. Readings of 2.25 or more often indicate oversold conditions in the stock market. Meanwhile, the key CBOE put-to-call ratio, which measures the daily ratio of puts and calls on the Chicago Board Options Exchange [CBOE], jumped up to .98 Thursday. Readings of 1.00 or more from the CBOE put-to-call ratio often occur when investors have become excessively bearish, and just before a bounce in the stock market. Therefore, given the high readings from the Trader's Index and the CBOE put-to-call ratio, it wouldn’t be surprising to see stocks improve Friday and finish the week on a strong note.
Frederic Ruffy
Senior Writer & Index Strategist
Optionetics.com ~ Your Options Education Site
And the 5 day sma TRIN vs SOX chart
investorshub.com
My point is that short term the market became oversold yesterday so today's advance will probably stick for a while longer than just today.
RtS |
