[Office rat]

Review by June 19

On Friday there was no peculiarly good news, but NASDAQ grew later and was leading on combined market.

The index of big technological companies grew for 1.1%, NYSE and S&P 500 added 0.3% and 0.5% respectively.

Dow lost under 0.2% and scarcely avoided a new distribution day. It closed session under its 200-days' moving average value within the 5th day running.

Other major indexes support value over its 200-days' average, thereby having transferred this controversial area from resistance into support.

Notwithstanding the volume increase, day results cannot be canceled. The last “quadruple witching” day in March, distribution day was registered.

On Friday leaders avoided recession. Whereas a few shares fell down in a strong volume, other met support in a key average volume or built new foundations.

There was no leader with a big volume decline.

IBD 100 increased for 1.2 %, having decreased its losses down to 1.8 % by the end of the week. Growth shares ranked the best behaved better than S&P 500 with its 1.6% drop down but at the same time much worse then NASDAQ result with the loss as of 1.7%.

Chinese stocks continued performing as leaders of growth.

Fuqi International (FUQI), jewelry manufacturer, added 1.50% and reached 17.63, more than in triple.

Perfect World (PWRD), Bejing developer of on-line games, added 2.50% and reached 29.18 in a huge volume.

Other Chinese stocks – such as Shanda Interactive Entertainment (SNDA), AsiaInfo (ASIA) and American Dairy (ADY) – look much better after recent bounces.

Despite the week of inactive action on the market, at least one leading growth share reached a new maximum. HMS Holdings (HMSY) was growing within five days in succession – four times in a high volume.

On Friday share grew for 0.90 in a heavy volume so to be able to close in 40.06.

Among the most active stocks, Microsoft (MSFT) shows a certain activity. The share was growing within 16 among 19 recent sessions and is higher for 59% against its march achievement. On Friday the security added 0.57 after Goldman Sachs included software company in its list of purchases. Its fundamental features are combined though. Its profit increase as of pretax 42% and ROE as of 53% are great but its EPS rating is just 64. It means that one third of all other stocks shows a faster growth of EPS.

[Office rat]

NASDAQ is growing, RUSSEL among other factors, made DOW decline

By Friday's closure trading moved up because Russel composition was revised and stocks closed in a combined way against the background of increased volume.

NASDAQ closed with 0.5% increase. S&P 500 and NYSE lost 0.1%, Dow fell down for 0.4% having shown the fourth distribution day within recent weeks.

IBD 100 added 1.2% having gained due to major indices within the third day in succession.

Volume grows, stocks decline due to revise of Russel indices. On the last Friday of June volume grew after it had been declining for the most part of the day. NYSE volume increased for 74% and NASDAQ volume grew for 58%. Indirect proof say that Friday's volume increase was related to Russel re-computation.

Widely-known Russell Investments' indexes are recomputed every June. Funds related to Russel were selling or buying stocks in respect of whether they are on the index list.

Till the last trading hour the volume of two exchanges was below an average level.

Whereas other indexes grew, Dow fell down within 8 among 10 recent sessions.

Three shares weight down Dow heavily and they did not relate to Russel. Boeing (BA) fell down for 18% within the last 10 sessions; General Electrics (GE) declined for 13%; and Alcoa (AA) lost 10%.

On the last Friday of month the best growth shares grew or sharply went down in a large trading volume – almost equally.

American Dairy (ADY) added 2.31 and reached 40.96 in triple volume.

Valeant Pharmaceuticals (VRX), which started on Wednesday, lost 1.52 and went down to 24.66 approximately in fivefold volume.

Hawkins (HWKN), the company of chemical branch, added 0.80 up to 22.50 in more than 14-times fold volume growth. The share was added to Russel composition.

Within the last June days news were combined and did not influence much.

Private income rate added 1.4%, above the forecasted rate as of 0.3%.

Savings ratio sharply increased from 6.9% and it is the best result from 1993 year. It makes investors concern about economic slowdown.

Though the news, which impacted stocks, was ambigious. Retail stocks, which would suffer under such a scenario, grew in general.

According to the results of the last week of June, major indexes closed in a combined way, only NASDAQ fixed increase.

Nevertheless, IBD 100 grew for 0.7% within the last week of month and gained against a broad market.

[Office rat]

Review of the US stock market by July, 3

When major indexes experience a strong decline, it causes serious concerns about the market prospectives.

But when this decline happens in a low volume with slight losses among leading growth stocks, it tells about the possibility of a false alert.

Stocks sharply rebounded on Thursday, but the volume was typically low for a session before a long weekend.

NYSE index was leading with its 3% decline; S&P 500 sank below for 2.9%; NASDAQ lost 2.7% and Dow – 2.6%.

The volume was below NYSE for 25% even after the exchange decided to prolong its trading for 15 minutes. NYSE referred to a poor order execution. NASDAQ volume decreased slightly.

On Thursday IBD 100 experienced a decline as of 2.9 %. The week's index of growth stocks lost 2.3% - similarly to week's loss of NASDAQ.

The week closed with the 2.2% decline of NYSE index; S&P 500 lost 2.5% and Dow lost 1.9%.

Negative news established the background in the beginning of the day before the opening of the market. Labor Department with the reference to payroll journal reported about occupation decline as of 467 000, which strongly exceeds the forecast. This report supposes tough problems with consumer expenditures.

Labor report caused movement to protective assets. US dollar consolidated. Gold, which often moves against USD, declined. The value of August gold futures fell for 10,30$, or 1.1 %, up to 931$ per ounce.

Simultaneously, oil price went down approximately for 4% within a day.

Oil, car manufacturing, mechanic engineering and retails stocks declined the most. Data about work positions created a steadily negative mood, even after a surprisingly strong report of factory contracts.
In May factory contracts increased for 1.2% and easily overrun analytics' forecasts. It was the most serious increase in the year and third growth for four months.

But the market neglected this news.

Though leading growth stocks performed steadily.

Green Mountain Coffee Roasters (GMCR) lost 1.61% and got down to 58.45. Other factors reduced a negative effect: the volume was lower than average for 17%; the share stayed above its day's moving average value.

One of the share worthing monitoring is probably Chinese American Dairy (ADY). Though on Thursday it decreased for 1.8% in the volume under average, it builds the main profile of a high, outlined flag – pattern which sometimes causes enhanced increase. Potential entrance point is 44.10.

[Office rat]

The review of the US market by July, 10


If the rule is true that the market clams down before reversal starts, then, Friday's behavior of stocks gives us a hope for a growth.

Major indexes closed in a combined way. The volume fell down and was languid for two major exchanges on Thursday. Trading on NASDAQ was even less dynamic than it was during a preholiday session on July 2.

Leading growth stocks did not move up or down notably.

In general price movement was very slight on the market.

On Friday NASDAQ grew for 0.2 %. Dow and S&P 500 each added 0.4 % whereas NYSE declined for 0.7 %.

IBD 100 added 0.4 %. According to the results of the first July week, the index of growth stocks fell down for 2.4 % and thus it followed broad indexes.

All major indexes stayed lower than its 50-days' average value. S&P 500 and NYSE are still very close to their 200 days' average value. Dow got lower than its 200 days' average value whereas NASDAQ was definitely higher.

NASDAQ is still a leader among indexes in 2009 year; its growth amounts to 11 % for the year. Technologies contributed to its leadership position. It is proved by the fact that Philadelphia semiconductor index grew for 22% this year.

On Friday the value of technology-containing stocks were pushed by Goldman Sachs' forecast. Reuters reported that David C. Bailey from Goldman Sachs raised the evaluation of the US computer manufacturers' segment by changing “neutral” estimation into “attractive”.

In the “note for Client” Bailey emphasized that hardware segment which is depressed now will be No 1 for investments when economy recovers.

He raised the estimation of Dell (DELL) and Seagate Technology (STX) from “neutral” to “buy”.

Due to the news, Dell (DELL) slowly grew for 0.07 up to 13.22 in a double volume. Seagate added 0.47 up to 10 with the volume grow as of 37%.

These two shares have EPS rank lower than 35 which means that the profit of around two of every three shares grow with higher rates.

It was a successful day for many lagging members of the market.

IBD toolmaker was leading among 197 industry groups.

The stocks which are fuel oil price-sensitive - air companies and carriers - were successful as well.

Oil prices closed the week below $60, the first time ever for around two months.

On Friday Chevron (CVX) warned about its decline in revenue.

The last days of the week the market was calm and upward trend is still under pressure.

Investors are recommended to be as careful as possible until the situation is clear rather than to guess the future movement of the market.
As for now, upward tendency will be renewed or the market will move to correction.

[Office rat]

Stock markets demonstrated the third week of growth in succession, but the growth is getting down

Whereas economic news was better than it was expected on Friday, the market did not make profit upon this news.

The stocks stayed within the narrow trading range and closed the session in a combined way.

NYSE was leading for the second day in succession and added 0.6 %. Dow and S&P 500 slightly changed for 0.2 % and 0.1 % respectively. Nasdaq lost 0.3 %.

NYSE volume grew whereas Nasdaq volume lost.

A dull trading allowed NASDAQ to avoid a “distribution day”.

On Friday IBD 100 declined for 0.1 %. According to the week results, the index of growth stocks with the highest ranking fell down for 0.4 % and was behind the major indexes which grew a little.
For the last time upward trend continued on a weak basis because economic data indicated decline but weaker than “it was expected”.
Until a certain moment it seemed to be enough.
Though on Friday NASDAQ bulls demanded something more significant: what about signs of authentic growth?

The answer of economy was languid enough.

Decline of GDP in the second quarter was “less than expected”.

Chicago Purchasing Manager’s Index demonstrated the highest level starting from September but this message was only regarded as warning call given prior to publishing ISM index. On Monday ISM index will be published.

According to GDP and government data, consumer expenses declined below the expectations.

Market analysts believe that a languid recovering is more probable than an acute recovering of V-type.

Among industry groups the stocks of regional auto dealers demonstrated a serious increase on Friday whereas the stocks of gold-mining sector consolidated growth.

The stocks of RV (auto company) traditionally used to be early drivers prior to recovering of the economy but a tough pressure of credit and petrol prices conduce to a negative environment.
Drew Industries (DW), the manufacturer of RV components, added 24 % in a triple volume on Friday. They also reported about the profit of 12 cents per share against a supposed loss in 6 cents. The sales were also above the forecast.

Thor Industries (THO) — the manufacturer of buses and auto parts – added 11 % in the volume above average more than in four times.

Both shares have weak EPS ratings but the group can perform as economic barometer and demonstrate signs of recovering.

On the bottom side, medical shares were negative leaders among main losers of the day.

Several shares of IBD 100 were winning reports back.

HMS Holdings (HMSY) declined for 6% notwithstanding its report on Q2 level.

Two shares, which reported on late Thursday, declined within Friday session. Vistaprint (VPRT) lost 4 % and Synaptics (SYNA) fell down for 33 %.

McAfee (MFE) software manufacturer won the most part of Thursday loss and its growth amounted almost to 5%.
Summing up: Friday, 13 of July, was an extremely hard day for the market and analysis – closing of month, week and crucial data for the USA GDP for the second quarter – all this enhanced market uncertainty sharply.
It is important that the last 5 months (starting from March 9) – we have a continuous growth of stock market. June correction was not successful because 10% is not the figure. Though the basis is still very weak - but it is still declining.
A deep correction is still vital, current rates of purchasing are not attractive.

[Office rat]

The market demonstrated a strong growth of volume over the week closure. Up-trend of the market is seen again
On Friday the market canceled transfer to correction and returned to up-trend state; broad indices showed new 10-months' maximum values.

S&P 500 and NYSE were leaders of growth and each added 1.9%. Dow index followed them with the growth 1.7% and NASDAQ with 1.6%.

The index of the best growth stocks, IBD 100, grew for 1.7% on Friday and 1.2% according to the results of the week.

The volume of major indices sharply increased because of mass expiry of options enhanced trading volume.

Up-ward trend has renewed its movement. According to our system of analysis, buying of growth stocks is quite acceptable, when they leave correct basis or other key points (for example, after bouncing from 10weeks' average value)
Still there are the reasons to be careful. As we told the last week, last bull markets which directly followed large bear markets, resulted in large deep corrections lasting longer than the last current up-ward tendency.

S&P 500 still has five distribution days last weeks though Friday took one day away for NYSE.
Stocks started their increase at once on Friday's opening in the list of all four major indexes.
Positive news about real estate market pushed the share.

National Association of real estate agents informed that after market sales of houses moved up for 7.2% in July. It was the fourth growth in succession. News was above estimations which went around 2% growth.

Stocks of house-building industry sharply increased and the growth amounted to 5% approximately. While shares with weak fundamental properties such as Toll Bros. (TOL) and KB Home (KBH) each added around 3%; the stocks made it in the volume under average.

The best performance was demonstrated by the member of IBD 100 list – Brazil company Gafisa(GFA). It made a beeline in volume for 10%, twice as higher as average. The whole rating of this company is 99 – the best possible rating.

Though stocks are far from the point of correct entrance.

The market was also supported by speech of Federal Reserve Chairman. According to him, economy's return to growth within the nearest time is quite probable.

Oil prices went up to highs of 2009 year.

Expectations and forecast

Despite an extensive growth and optimism of Friday, general market situation is evaluated in terms of instability and high volatility. A considerable 2days' decline followed by a strong growth – all this often points its vicinity to the market's peak and as a result, to reversal.

I still expect a durable deep correction. Next week trace how market behaves as strong news is published – in particular, books of durable goods and consumer trust.

[Office rat]

October 17, 2009. Energy Market Weekly Review

On Friday, oil prices reached their maximum level, of the last 12 months, on Friday the price of the barrel of oil rose by $0.95 to the level of $78.53 per barrel on the New York Mercantile Exchange, so oil prices over the past eight trading days have increased by 12,9%, thus for the past week by 9,4%.

If we consider the fundamental factors carefully, we can see that they show that the energy market instruments are gaining strength. US dollar falls rapidly against the basic currencies basket, investors seek refuge from possible and further decline of the US dollar purchasing power and find it, in particular, in oil.

Investors express extremely high optimism due to emerging of macro-economic data. On Friday, the Federal Reserve reported an increase in industrial production in September by 0.7%, the rate exceeded the experts consensus forecast.

Industrial production growth has given confidence to traders, because this field of business consumes about 65% of raw materials in the country. The Ministry of Energy has given information on commercial stocks of crude oil and petroleum products on Thursday, they can be characterized as fairly positive. For the week that ended on October the 9th, commercial crude oil stocks increased by 0.4 million barrels, whereas petrol stocks have decreased by 5.2 million barrels; the Ministry data showed the most significant decrease in petrol stocks over a year. Petroleum processing sector's capacity declined from 85% to 80.9%, due to scheduled maintenance of part of US oil refineries. Perhaps the declining trend in petroleum and distillate will persist for several weeks, which would also support price levels.

US Banks oil traders show rather aggressive interest in oil over the last months of this year. In their opinion the price of a barrel could go up to $ 95 by the end of 2009, if the US government, Europe and Asia continue to stimulate national economies. Yet OPEC is not going to increase production volumes of raw materials after significant cuts, that will also support prices. Nearest OPEC cartel meeting is scheduled for December 22 in Angola, it is clear that by this date, we can see a few more bursts of buyers activity.

Oil found support level around $ 75 and due to the unusually low temperature in October settled in the north-eastern part of the United States, oil traders expect increased demand for heating oil by US consumers as well as speculators. DTN-Meteorlogix predicts storms coming in the north of the US in the beginning of a new week, that would support the speculators. In the short-term period Brent crude oil will stay below $76.2 with a possible rebound to $72.0 and further to $79.98.


Dmitry Stepanov, GK Broco analyst

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This 'weekly' analysis isn't quite weekly.