The Group end the week in Awesome fashion setting a new record. 88% of the picks traded were winners, gaining 2.65% for the week. That put the group up 3.41% for the year and an overall win rate of 65%. Fantastic!!!! The other piece of data that is very impressive is no trade has lost more than 3.5%. Great money management!We look forward to everyone’s picks this weekend. I will be flying up to NY to get a sushi fix and attend next week’s campers meeting.
Walmart guided below estimates for the quarter as other retailers indicated that this was the worst Xmas season they have experienced in 40 years. WMT fell almost 7.5% for the day. As one commentator indicated, if they are not buying at Walmart, they aren’t anywhere else. Despite the bad news the RLX reversed its early morning move down to finish up for the day.Tomorrow the employment numbers are expected. The consensus is for job losses of -520K.
Breadth was terrible, with all major sectors down and the Dow Jones is almost exactly flat for the year after a strong start. Oil was down over 11% after a surprise rise in inventories took traders by surprise. With the market so overbought in the short term and bad news by Alcoa and Intel, there was not any interest for buyers to step in and start buying. We saw an all day down day. The index put/call ratio went below 1 yesterday and rarely can a rally can continue its up move when that ratio drops below 1.We will need to see if buyers are willing to step in and start buying the dips as we try to hold supports.
The Fed released their notes this afternoon which suggested that their worries were worse than many thought commenting that "the economic outlook would remain weak for a time and the downside risks to economic activity would be substantial."After the close, Alcoa indicated that they would be cutting upwards of 15,000 jobs, closing more plants and reducing capital expenditures by 50%. This is not surprising as the manufacturing sector has seen its worst decline in decades. Below you will a chart of production tons sold here at our company. You see the drastic decline. The one thing about being involved with a company such as this, you get to feel the working of the real economy. We continue to see a decent number of proposal request, but not many proposals getting turned into projects.
Goldman Sachs feels that at least $2 trillion in treasuries will need to be issued, perhaps more, to meet the various plans being suggested to turn the economy around. One has to wonder how long investors will be willing to buy the offerings with interest rates as low as they are. At the first sign of recovery, we would expect many investors will be looking to take on more risk.
The group ended the 1st week of the New Year and the New Quarter positive with a .76% gain. Nick jumped in his trade today as the market rallied grabbing a 9.29% gain. Colin, took the Silver with his SSO trade earlier in the week giving him a 7.17% winner, and Grant gets the Bronze with a 5.37% gain! Spikers had 60% of this week’s trades winners and all losses were contained with less than 4% risk. Averaging a week similar to this would produce near a 40% gain for the year and never risking more than 4% on anyone trade. Spike Members Sergey, Steve M, Hsin Y, all receive $20 dollar credits this week for outperforming the Bronze Medalist. Last week Max L won a $20 dollar credit as we failed to mention his this during the holiday rush. Congrats to all the winners!!
The markets rallied as we continue to see bad news come in. The Case-Shiller number found housing falling another 18% for October when compared to last year’s October number. The ISM for Chicago came in at 34.1, up from 33.8 in November. The key level is the 50 level, it remains at very poor levels. I know it is poor because we feel it in the steel business. Request for quotes is still coming in but actual projects being released…it’s like a ghost town. Those that are being released the buyers get to name the price they want.US Treasury committed over $6 billion to GMAC and this caused investors to cheer as we head into the new year.Market breadth was strong as advancer led decliners by over 2:1, however we did see NL tick up today, on a day the markets rallied. We do not need to see this number climbing back up the wall. This is the first reading over 200 in many weeks. This may be due to some tax selling and those stocks that are beaten down people are unloading them to take the tax loss. If that is the case the NL should fall back under 200 soon.
With the increased violence resulting from the Israel-Hamas conflict, oil rose by $2. It was reported that Americans are paying $1 billion less a day(yes that’s per DAY) for gasoline compared to what they were paying this past summer. That’s over $365 billion a year… about twice the benefit provided by the stimulus checks sent to tax payers earlier this year. Factor in savings for jet fuel and other transportation areas like trucking, as well as for input costs in the chemical industry and many others, and the savings is enormous. I recently filled my little topless automobile up the other day and had thought the pump clicked off before the tank was full, I had only put $16 dollars in the tank. This past summer it was costing me over $40 dollars to get a full tank. At this rate I might can afford to get me top for my car as we are experiencing some freezing temperatures. The recent holiday action can frustrating if attempting to trade. Technical’s to work well needs market participation. With many traders more than happy to put 2008 behind them, we are likely not to see much participation until the new year arrives. We did have yet another late-day bounce after some selling all morning. The selling action was quick while breadth was better than 2 to 1 negative. There was a lot of poor action on thin trading and then about mid-day the market went to sleepy town, only to awaken a bit to have a nice afternoon bounce. Be careful trying to trade this thinly traded market as prices become much more random and can be pushed around with very little effort.We continue to have no leadership in this market and buyers have yet to have any conviction to bid up for their purchases. We did have a bit of a false side break down that got rejected, we’ll see if buyers can follow the afternoon action up tomorrow with some buying power. Overall market breadth has held up strong over the past few weeks, but we need to see upward progress. I continue to watch the 850 levels closely for support or false side breakdowns.
Jingle bells, jingle bells, jingle all the way! Let us ring those bells for the winners of our Q4 trading competition. Let us ring them again for the annual 2008 winners.
Very light volume and mostly dull day of trading. What action we got was downward pressure. Tomorrow market are only half a day and then will be closed Thursday.The news continues to be poor as The National Association of Realtors reported that sales of homes and condos fell a worse than expected 8.6% for November.Technically we slowing eating thru technical support levels. We will see if Santa can give a little life to this market. I am watching the 850 levels for some support.In the Percent of Upside volume chart, you can see the MA has backed off the 55% levels. We need to see some strong upside soon.This light volume rally has made prices feel like we are endlessly basing and this tires people out. NH_NL continues to flat line. The only way it can tick up is NL to contract. The average NL for the past month has been less than 190. There are only approximate 2% of the stocks within 10% of its 52 week high. Thus you can see the NH number will not expand in great numbers anytime soon. As time passes the 52 week high levels will drop lower and the ceiling will not be as high.