[Office rat]

Major indices closed the week by decrease, review of the USA market

On Friday stocks fell down and closed the week of their growth. S&P 500 index declined for 2%, NYSE marked 2.1% decrease, NASDAQ was cut to 1.8% and Dow industry index – for 1.7%. Small-cap companies experienced a heavier decline; S&P 600 index lost 3.2%. NYSE volume grew for 25% and at the same time NASDAQ volume increased for 7% in comparison with Thursday level, on the date when options expire. On March 16 S&P 500 and NASDAQ had a more serious loss. Two days of heavy decline within such a short time is not a good sign. One more reason for trouble is that days of distribution came very soon after the signal for market decline was received on March 12.

These two days of distribution conduced to a negative mood in spite of general growth of the market within the week. Besides, by the date of closure NASDAQ fell down to the average 50-days level. Dow increased for 0.8 % within the week, S&P 500 - for 1.6 %, NASDAQ +1.8 %, +2.4 % NYSE. S&P 600 lost 1.5 %. As it was mentioned before, to a serious extent the market was supported by financial stock’s recovery and in a lesser degree – by growth of technological stocks and other sectors. On Friday drop of these stocks decreased the value of major indices. The same day one of the leaders of recent financial growth - the Bank of America Corporation (BAC) – dropped to 11 %. Branch of the American International Group filed a lawsuit against subsidiary of the BAC - Countrywide Financial – which undertook loan modifications.

Stocks of other major banks also fell down. Techs stocks dropped as well; negative forecast from Sony Ericsson impacted the sector. Cell phone manufacturer reported they expect losses in the first quarter because of falling consumer demand. Ericsson (ERIC) declined for 11 %.

Stocks of power, transport and machinery industries decreased as well. IBD 100 index declined. Leading stocks of IBD index lost 1.2 % and had not increased during the week. Some shares with the highest rank conduced to positive expectations. A few stocks were able to sustain an upward trend.

Starent Networks (STAR) stocks dropped for 1.03 % by 16.25. CL King Shares decreased sharply after a period of sustainable growth. NVE Corp. (NVEC) fell down to 31.14 for 2.59 %. Stocks of sensor devices manufacturer Spintronic lost 21 % from their maximum value achieved within 52 weeks.

Meanwhile, Federal Reserve Chairman Ben Bernanke announced on the bank conference that in future paying bank compensation packages will be under the focus of particular attention. According to him, this policy “can create perverse incentives” which damage banks. His notes came after the discussion about bonuses paid to officers of American AIG.

[Office rat]

On Friday stocks went down and closed the third week of growth

Weekly review of the USA market from March 30

Stock market closed Friday with significant losses, unpromising economic data and tough comments from the major bank officers of the state. NASDAQ and NYSE indices decreased for 2.6 %, S&P - for 2 % and Dow - 1.9 %. Falling stocks overplayed growing stocks in approximate relation 3 against 1. The volume of two major exchanges dropped. But there was no collapse for the best market stocks, and just a few decreased significantly. After having the meeting with Obama a number of CEO managing problematic financial institutions announced moderate forecasts for the March results after two strong months. Normally day loss in the rate of 2% or 2.6% would be too much. But the market is still volatile. Friday decline is not considerable against the day chart. Friday losses could not prevent major indices to register profit within the third week in succession. The week gave Dow index 6.8 % of increase, S&P 500 +6.2 %, Nasdaq +6 % and +5.5% for NYSE index.

The market performed in a positive manner the last week. The volume dropped when prices were falling and the volume grew when the market grew. There were no days of distribution. The market closed after reaching its maximum twice – on Monday and Thursday.

The market gained more than 10% of increase against the session of March 16 – the first distribution day starting from March 12 when correction finished. Some concerns were caused by a too slight grow of IBD 100 index – just 4.4 % within the week – being behind expanding indices. It continued the tendency of current rally. Finally, the market rally will require leaders.

The index of Emergency Medical Services (EMS), declined for 6 %.

Volume of trades increased against the average value significantly but fell by the end of Friday.

The index of Monro Muffler Brake (MNRO) dropped for 7 % in active trading. Stocks of tires shops and services ended 3 weeks growth.

According to economic news, consumers’ revenues decreased for 0.2 % - a little worse than it was expected. Private expenses increased for 0.2 %, after 1% of January increase. РСЕ (personal consumption expenditure deflator), the favorite indicator of the FR for inflation, grew for 1 % in February – more than it was expected. РСЕ core increased for 1.8 % in February exceeding the forecast. Reuters/University of Michigan Consumer Sentiment Index gained 57.3 for March. In February it was 56.3. It is little better than expected but near the worst value of the last 30 years.

[Office rat]

On Friday stocks demonstrated a reversal from going down to increasing and transformed morning losses into the growth by the end of the day. Eventually NASDAQ increased for 1.2 %. 1% of growth was granted to NYSE Composite and S&P 500 indices, 0.5% - to Dow industry index. In comparison with Thursday level, NASDAQ and NYSE volume fell down for 23 % and 21 % respectively. Friday provided one more proof of the stock market’s strength. Increased number of purchases started prior to closing promoted major indices to the top of their daily range.

The week increase of NASDAQ was 5 %, of NYSE – 4.4 %, S&P 500 - 3.3 %, and +3.1 % to Dow. S&P 600 index for small-cap companies had shot up for 6.8 %. It was the fourth consecutive week of growth for major indices. In the case of NASDAQ we see the fourth consecutive week of prominent growth. Technological index grew more than for 25% in this period being ahead of NYSE indices. The flow of positive or “better than expected” economic data conduced to a new upward trend of the stock market. Two reports of Friday morning seemed to threaten this tendency. In March employment market lost 663 000 workplaces, unemployment rate reached 8.5% and is expected to grow further.

Unemployment rate went up to its maximum for 25 years, as Department of Labor reports. Analysts forecast that within four or five months we’ll see over 500 thousand of losses of workplaces. Unemployment rate is believed to reach its maximum - 9.5 % - in October, whereas more pessimistic forecast reports about 10% next year. 1 year before a more extended rate, including both part-time and full-time employees, grew from 9.1% to 15.6%. Department of Labor revised January report about workplaces with 86 000 growth.

Institute of Supply Management Index – indicator of economic activity in services sector – went down to 40.8. A slight growth was expected. For the first hour of trades this data declined the market. Research in Motion (RIMM) was leading in techs shares. On the late Thursday BlackBerry manufacturer reported about quarter profit which exceeded estimations.

RIMM increased for as much as 21 % and was the most traded stock on NASDAQ. In the meantime reserves started decline. On the contrary, golden shares such as Randgold Resources (GOLD) and Royal Gold (RGLD) sharply declined within the last days.
Still there are a few opportunities for purchasing shares, because just a few shares formed correct basis and strong start for prices. IBD 100 demonstrated poor 0.2% of growth on Friday and just 1% within a week. Gilead Sciences (GILD) was ahead with 2.28% of increase up to 46.98 in active trading. Medicine manufacturer grew after the positive results of the last stage of clinical testing of the pressure control appliance were reported. Allegiant Travel (ALGT) declined heavily for 3.68 down to 45.42. Airline service operator reported about the pop as of 15.8 % in the year traffic. The level of return of 10-year’s Treasuries increased for 2.90 % from 2.75 % on the market of state obligations on Thursday’s closing.

[Office rat]

April, 13

Stocks closed the second week of growth; Banks, retail business are the leaders

On Thursday stock market finished shortened week by significant increase due to the optimistic forecast by Wells Fargo (WFC). NASDAQ and NYSE indices both grew for 3.9 %; S&P 500 went up with a leap for 3.8 %, and Dow index added 3.1 %. The growth flashed around the market, only four groups from 197 IBD sectors fell down. On the NYSE market the relation between advanced and declined stocks was as of 15 against 2 – due to the plenty of bank stocks and for NASDAQ this relation was as of 5 against 2. The volume of two major stocks grew; here NYSE was leading. It can be explained by huge trading volumes with Wells Fargo and Bank of America (BAC) stocks as well as with other stocks of financial sector. The mere volume of trading with BofA stocks amounted to more than 1 billion of stocks presenting solely the largest volume increase on the NYSE market. Wells Fargo surprised Wall Street having reported about preliminary profit as of 55 cents per share for the first Quarter.

Rise of bank shares was caused by the reaction after their profound recession. Friday increase reversed the week from decline into growth. The volume decreased but it might happen because of the shortened week.
The most positive news is that now major indices have 5 week’s raising history. The lowest indices for many years were supported by the gradually growing market at last. NASDAQ grew for 31 % against its minimum on March, 9th. NYSE grew for 29 % against its minimum on March, 6th; S&P 500 added 28 %, and Dow - 25 %.
Here is one more sign of that economy is getting better: Retails stocks are returning as leading. Aeropostale (ARO) clothing store chain increased for 12 %. In March its comparable sales were beneath the forecast, but the company expects to earn 35 cents per share in the first quarter, much more than the forecast gives. Besides, Buckle (BKE) stocks grew for 10 %. Jos. A. Bank Clothiers (JOSB) increased for 5 % on Thursday and for 20 % on Wednesday.

[Office rat]

The week closed with a slight increase, IBD 100 оutrode the market
Review of the US market by May 4

On Friday the week closed with a moderate increase, low-volume stocks slightly grew.

On Friday NYSE was leading and marked 1% of increase which happened due to the rise of oil and gas stocks. Dow and S&P 500 added 0.5 %; Nasdaq closed almost without changes - 0.1 %.

NYSE volume decreased for 25 % and Nasdaq - for 23 %.

The US market had a few of incentives for movement because the most part of major international exchanges were closed for 1 May holiday.
The growth of University of Michigan consumer confidence index and a number of stabilization signs in industry served as new indications for market proving that the economy started consolidating.
The same factors seem to influence rise of oil prices which grew for 2.08$ up to 53.20$ per barrel. This 5-week’s peak point in oil prices caused growing of power-generating sector.

Oil-related sectors were among leaders of the day. But essentially there is no one shares pretending to be the market leader. Many of them are just recovering after huge losses of recent months.

In general, leaders achieved good results.

Chinese company Longtop Financial (LFT), software engineer for business purposes, added 2.54 and reached 26.20. The share broke through the key level 26.09 which is the entry point after bounce from 10 week’s moving average.

VistaPrint (VPRT), online supplier of services and products, grew for 2.91 up to 37.26 in large volumes. The company reported on late Thursday and its forecast for year left analysts’ expectations behind.

Beacon Roofing Supply (BECN) increased sharply for 1.21 up to 17.11, also in active trading, broke through 15.15 level – purchase point.

But the member of IBD 100, Buffalo Wild Wings (BWLD), fell for 2.22 down to 36.82. This is their third decrease in succession in large volume.

The upward market trend is still safe. Nasdaq registered its 8th rising week in succession though for modest 1.5 %.

Other major market indices demonstrated the dynamics similar to its behavior within 7 recent weeks.

The last week Nasdaq became the first market index among growing indices which broke 200-days’ moving average.

Two months of rapid growth can give a respite to May.

IBD 100, the index of the best market shares, increased for 2.8 % within the week. It is a positive consolidation after the period of underrun from other indices.

As a rule the best shares of rise won in bull rally.

Though anomalous rally has its historical precedents. Our research of post-crisis bull rally of 1932, 1938, 1975 and 2002 year show that the best leaders in these rallies appeared after the general market growth had begun.

My opinion remains the same: the market growth within the last two months significantly lost contact with actual economy which is still down. Before the growth continues at least one week of decline is required.

[Office rat]

After all, 9 weeks' growth of NASDAQ interrupted

Review of the US market by May 16

On Friday the market finished a volatile week with moderate losses.

NYSE fell for 1.2%, S&P 500 lost 1.1 %, Dow declined for 0.8 %, and Nasdaq – for 0.5 %.

The volume of major exchanges fell down. Taking into account that Friday was expiration day for options, this decline was strange. On the other hand, it is better when the market drops torpidly.

Energetic and financial sectors dominated among losers of the day.

From May 8 to 15 NASDAQ lost 3.4% and stopped its 9 week's of continuous increase. The same week took 5% from S&P 500, 5.6% from NYSE Composite and 3.6% - from Dow industrial index . NASDAQ and NYSE faced resistance in its 200 days' moving averages. Besides, all indices closed near minimum points of their week's discretion.

Though trading volume was lower than the volume of preceding week due to the expectation of normal correction.

Leading growth stocks were under pressure but managed to take over the market on Friday.

IBD 100 index increased up to 0.1%, index fell for 3.5% within a week – on the level of leading indices or better.

IBD index of economic optimism of the best growth stock was behind of the market within the most part of current upward trend.

A number of leading stocks demonstrated growing dynamics.

Red Hat (RHT), developing company of open source operating systems, added 1.74 up to 19.86 due to rumors about its selling to IBM company. Its stocks passed key exit point of 19.26. But profit of the company in the last quarter increased for 10%, and analysts forecast EPS (earnings per share) decrease within the future four quarters.

After such a long growth certain market consolidation could be expected. Now, when upward trend of the market is under pressure, one should think carefully before purchasing of any share and ready to fix profit in some cases.

On preceding “main day” of the market indices heavily bounced in the beginning but took a long pause before a new growth started. At that time a lot of new attractive growth stocks.

Counting market distribution days does not cause concerns. April 14 and 22 distribution days are removed from counting.

Since the market grew a lot, these days are not in the focus of attention anymore. Besides, in the view of low market volatility it is sensible to take into account smaller changes of indices on the event of removing distribution day from accountancy.

What are the leading groups according to the results of the week?

In fact protective papers played this role and included stocks of commercial education and provision related branches.

Tobacco as classical protective branch was the fifth strong group of the week.

[Office rat]

Third month of increase: The last trading hour market increased due to the volume growth and closed May

US stock market review by May 29

Final increase marked positive mood of investors on Friday.
NASDAQ grew for 1.5% in the final trading hour having demonstrated its day growth in fact by this rapid movement. NYSE, S&P 500 added 1.4 % and stocks of industrial Dow - for 1.1 %.

The volume of two major exchanges grew and raised the last hour too.

Closing short positions and increasing commodities prices served as the main reasons of growth. But on the whole closing of the week was optimistic especially if to take into account moderate trading within the week.

On Wednesday NASDAQ had higher volume of sales, its 5th distribution day within the last weeks.
Still the index replied by growth within two next sessions, both in increased volume.

The week growth of NASDAQ is 4.9 %, its best week value from the beginning of April. NYSE moved for 3.7 %, S&P 500 +3.6 %, +2.7 % Dow.

At the same time major indices closed the third month of growth in succession.
Week growth of NYSE was rather high, therefore distribution day - May 13 – may be excluded from calculating.

Despite a strong growth of broad market, growth stock did not demonstrate notable results on Friday.
A number of growth stock reached a higher volume. In many cases they just continued forming consolidation figures. On Friday IBD 100 added 1.2 %.

Starent Networks (STAR) achieved maximum value for 17 months. Manufacturer of wire-free appliances grows after it was corrected up to 10 week's moving average value.

Some growth stocks continued correction.

Quality Systems (QSII) went below 50 days' moving average value Stocks four-time lost 5 % after quarter report which demonstrated that sales disappointed investors.

Stocks of public health sector were among the weakest on Friday.
Stocks of transport companies were leaders of the day.
Baltic Dry Index, indicator of commodities delivering cost – and indicator of industrial activity at the same time – achieved its maximum October point. Chinese demand for ironstone exceeded parlays.

The market was tuned in increase when the government revised GDP value of the first quarter for a rise. But the report about industrial activity of Middle West was not encouraging.

The market faces several negative factors including accruing sale of government obligations, rising oil prices and concerns about growing inflation in the future.

In fact, weakness of stock environment was to a significant extent a response to a leap of yield of government notes. On Friday yield of 10 years Treasuries fell down for 17 points thereby erasing week's growth.

USA dollar demonstrated a strong decline perhaps due to a reason that investors are looking for safer assets.

[Office rat]

According to the results of the week, IBD 100 is behind the broad market




On Friday stocks closed in a combined way in a lower volume after a strong recovery from morning losses.

While loosing 1.6% within a day, NASDAQ compensated the most part of losses having lost only 0.2%. S&P 500 added 0.1% and Dow - 0.3%.

Within the first several hours there was a high volume accompanying strong sales. By the end of the day NASDAQ volume fell down for 17% and NYSE – for 30%.

Major indices closed the week with a slight increase.
NYSE supported by rapidly growing commodities and demonstrated the best growth – just 1.1%.
S&P 500 grew for 0.7 %, Nasdaq – for 0.5 % and Dow – for 0.4%.

The market also recorded distribution day – decreasing of the volume growth on Wednesday with a slight decline on Thursday. The volume increased on that day as well.

A number of top-ranked growth shares had sales.

On June 1 wireless communication provider Neutral Tandem (TNDM) demonstrated a new maximum value after it bounced from 10-weeks' moving average. The last week this share experienced a heavy drop, in particular, on Monday, Wednesday and Thursday.

Chinese software manufacturer Longtop Financial (LFT) passed 28.84 – its recovery point, but lost 4% on Friday. Though the previous day it strengthened a little. After loosing huge 15% it met support of 50 days' average and won back the most part of its losses.

Whereas the most part of major growth shares avoided serious problems, IBD 100 lost 2.1% for the week.

According to the results of recent four weeks, index won from the broad market.

It was a long-awaited consolidation of growth shares' indices. But growth index was behind broad indices from March 12 to May 8.

Under common conditions growth shares must be leading stocks of the market.

Though against the background of falling prices – or financial panics – after active sales of shares any subsequent growth is to be caused by the growth of the most underestimated stocks attracting strategic investors. As a rule, real leaders appear later.

Let's have a look at Taser International (TASR) manufacturer, one of superstars of the market in 2003 – 2004 years.

When bursted technical bubble caused bear market, investors should have been waiting until 2003 March – the start of real bull market. And even then 4 months were required for Taser to take leadership.

Let's compare the situation with today's market. 3 months after current confirmed upward tendency begun more leaders appeared. Foundations are forming and stocks start their growth. Some of them face problems but there is no wave of massive falls.


This is not the guarantee of future profit yet. You still need to choose a correct moment for entrance, take inevitable losses as granted and trade in harmony with the market state.