MONDAY MORNING – This Week’s Market Report
ChartPoppers Newsletter Newsletter
Good morning traders! One of our very talented contributors writes a weekly market report, so I figured since I don`t have a viable stock pick for you today, we`d start off the week with a thorough summary of what we can expect to see this week in the markets.
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US Stocks: The sell-off in Wall Street continued Friday, as the major indexes saw losses for the 4th week running, as concerns over European debt problems and US economic strength haunted the market
On the Day : As of Friday`s close, the DJIA lost 172. 93 pts, or 1.57%, to finish at 10,817.65, the Standard & Poor`s 500 fell 17.12 pts, or 1.50%, to finish at 1,123.53, and the NAS declined 38.59 pts, or 1.62%, to end the session at 2,341. 84.
On the Week: the Blue Chip DJIA, the S&P 500 fell more than 4%, and the tech-heavy NAS dove 6.6%.
During the wild swing in equities, Gold continued its Bull Run on safe-haven buying. Gold for Dec delivery, the most actively traded contract, settled up 30.20, or 1.6%, at a new record of 1,852.20 oz.
The precious Yellow metal rose more than 6% on the week, the biggest weekly gain since February 2009.
US Crude Oil price ended the week with a 3.65% loss, its 4th straight weekly fall.
Traders chose to leave the market before the weekend, in case the debt situation in Europe turned sour.
A meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy earlier in the week failed to calm the market as they did not seem to come up with any plan to increase the size of EuroZone`s rescue fund or begin sales of Euro bonds, thus disappointing markets.
Big European banks led the way South, and the US banks followed.
The Financial Select Sector SPDR”>SPDR ETF, which tracks financial stocks on the S&P 500 Index, fell 4.8% Thursday and 2.0% Friday, and the KBW Bank Index ETF fell 5.5 and 3% respectively.
Technology sector was also hit hard, weighted down by Hewlett-Packard (NYSE:PQ”>HPQ) whose shares fell more than 20% after several Wall Street analysts downgraded the stock. The tech-heavy NAS suffered its 1st 4-Day losing streak since June.
Hewlett-Packard`s shares fell 19.9% to a 6 yr closing low at 23.60, and were the biggest drag on the DJIA, a day after the Company said it may spin off its PC business, the biggest in the World, and lowered its outlook.
Worries about an economic downturn in the United States haunted equities. After Morgan Stanley (NYSE:S“>MS) and Goldman Sachs (NYSE:S“>GS) cut their forecasts for Global economic growth Thursday, Citigroup (NYSE:C) and PM”>JPMorgan Chase (NYSE:PM”>JPM) cut their US growth forecasts as the Western economy slows, and officials struggle to stem Europe`s sovereign debt crisis. The latest batch of economic data added to the evidence that the US economy was losing momentum.
The jobs market and housing sector are still struggling, also, manufacturing activities also slowed significantly in some regions.
The Philadelphia Federal Reserve Bank reported that its business activity index dropped to minus 30.7 from positive 3.2 the month before, way below expectation, spooking some investors.
Clearwire (NASDAQ:CLWR”>CLWR) 3.01, +0.70 saw Strong gains of 30% following a report that Sprint (NYSE:S) 3.42, -0.07 will buy the remaining equity in the Company that it does not already own.
Intuit (NASDAQ:INTU) 43.65, +3.35 was among the top performers Friday after beating on both the Top and Bottom lines. The Company announced earnings of 0.02/shr, excluding non-recurring items, which was 0.02 better than the Capital IQ Consensus Estimate of 0.00/shr. Revenues rose 10.4% Y-Y to US$593-M vs. the US$583.7-M consensus. Management issued in-line guidance for full year Y 2012, expecting earnings per share of 2.85-2.94, excluding non-recurring items, vs. 2.85 Capital IQ Consensus Estimate and revenues of $4.19-4.29-B vs. $4.2-BCapital IQ Consensus Estimate.
Treasuries across most of the complex finished little changed with out performance coming from the long bond. Friday`s quiet session saw the 10-yr yield settle at 2.071%.
Next week`s calendar is light until the end of the week, which brings the annual Jackson Hole economic policy meeting next week (Aug 26-28), where central bankers and economists will be discussing the current economic situation.
We have already seen a bit of this, but expect speculation about the US Fed activity to intensify in the coming week as we approach that meeting. Prior to that, econ data of interest includes New Home Sales (Tues), Durable Orders (Wed), and revised GDP and Michigan Sentiment on Friday.
There are also more 70 companies we cover reporting earnings next week, including a number of specialty retailers.
Some of the more interesting reports out next week include: Tuesday: HNZ, WSM; Wednesday: AEO, TOL, AMAT; Thursday: P and Friday: TIF.
Advancing Sectors: None
Declining Sectors: Consumer Staples XLP (-0.2%), Healthcare XLV (-0.3%), Utilities XLU (-0.6%), Telecom IYZ (-1.0%), Consumer Discretionary XLY (-1.1%), Materials XLB (-1.2%), Industrials XLI (-1.2%), Energy XLE (-1.4%), Financials XLF (-1.5%), Technology XLK (-2.1%
Volume and Breadth: about 3 stocks declined for each that advanced on both the NYSE, and the NAs, with a volume of 9.87-B/shrs traded on the 2 exchanges + the AMEX.
The US Major Market Indexes Technical Analysis
Date
Symbol
Price
Technical Analysis
Support
Resistance
20 Aug 2011
QQQ
50.03
Neutral (-0.20)
NIL
50.59
20 Aug 2011
DIA
107.91
Bearish (-0.34)
107.17
113.29
20 Aug 2011
112.64
Bearish (-0.30)
112.26
120.94
Americas
VALUE
TIME
10,817.70
-172.93
-1.57%
08/19
1,123.53
-17.12
-1.50%
08/19
NAS
2,341.84
-38.59
-1.62%
08/19
12,007.50
-179.24
-1.47%
08/19
33,136.90
-109.74
-0.33%
08/19
52,447.60
-686.47
-1.29%
08/19
Europe, Africa and Middle East
VALUE
TIME
2,159.07
-47.54
-2.15%
08/19
5,040.76
-51.47
-1.01%
08/19
3,016.99
-59.05
-1.92%
08/19
DAX
5,480.00
-122.80
-2.19%
08/19
IBEX 35
8,141.90
-175.80
-2.11%
08/19
14,602.30
-368.09
-2.46%
08/19
AEX
274.15
-5.43
-1.94%
08/19
877.43
-15.64
-1.75%
08/19
5,093.75
-102.25
-1.97%
08/19
Asia-Pacific
VALUE
TIME
NIKKEI 225
8,719.24
-224.52
-2.51%
08/19
19,399.90
-616.35
-3.08%
08/19
4,101.90
-149.30
-3.51%
08/19
Red`s Bull Trade Alert: Whole Foods Market, Inc. (NASDAQ:WFM)
Profile: Whole Foods Market, Inc. engages in the ownership and operation of natural and organic food supermarkets. The company offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins. It also provides specialty products, such as beer, wine, and cheese; body care and educational products, such as books; and floral, pet, and household products. As of February 9, 2011, the company operated 302 stores in the United States, Canada, and the United Kingdom. Whole Foods Market, Inc. was founded in 1978 and is HQ`D in Austin, Texas.
Sector: Services, Grocery Stores
Website : http://www.wholefoodsmarket.com
Latest News: What Should You Do With Your Retirement Savings
http://www.fool.com/retirement/general/2011/08/16/what-should-you-do-with-your-retirement-savings.aspx
LTN`s Pattern Recognition Analyst, Paul A. Ebeling, Jnr. ID`d the beginning of a new Bullish trend for Whole Foods Market, Inc.
Shares of WFM closed Tuesday at 59.97, and opened Wednesday at 60.38.
WFM closed the session Wednesday at 62.04 +2.07 (3.45%).
The price range Wednesday was between 60.16 and 62.16.
Volume : 3,450,214/shrs is two times its 3 mo average volume of 1,724,390/shrs.
WFM is trading below it its 20 and 50 Day, and above its 200 Day Moving Averages.
My Technical Indicators augur new Bullish price action in here for a move back to its 52 wk high and above.
The stock`s 52 wk low is 34.04, and 52 week high is 68.00, its P/E ratio is 33.61, its EPS is 1.85, Beta. 1.06, the Div & Yield is 0.40 (0.70%), and the P/C ratio is N/A.
Annual Price Metric + 62.17%
Analysis
Overall
Short
Intermediate
Long
Neutral (0.12)
Neutral (-0.05)
Bullish (0.25)
Neutral (0.17)
Recent CandleStick Analysis Neutral
Open Gaps: None
Support and Resistance
Type
Value
Conf.
resist.
69.24
1
resist.
67.44
2
supp
61.27
18
supp
53.99
4
supp
0.00
373
Chart Indicators
Ind.
short
Inter
Long
EMA
Be
Be
N
MACD
VBe
Bu
N
RSI
VBu
TDD
Bu
Fibs
Be
Be
VBu
Highs
N
N
N
Lows
VBu
Bu
N
Trends
N
N
N
Stoch.
N
1 yr Price Target Price Estimate: 82.00
Earnings Date: F-Y ends 26 Sept 2011
This Week on the Economic Front in the USA
August 23 rd Tuesday
New Home Sales, July (10:00): 310-K expected, 312-K past
August 24 th Wednesday
MBA Mortgage Index, 08/20 (7:00): +4.1% past
Durable Orders, July (8:30): 2.0% expected, -1.9% prior (revised from -2.1%)
Durable Orders -ex T, July (8:30): -0.4% expected, 0.4% prior (revised from 0.1%)
FHFA Housing Price I, June (10:00): 0.4% past
Crude Oil Inventories, 08/20 (10:30): 4.233-M past
August 25 th Thursday
Initial Jobs Claims, 08/20 (8:30): 400K expected, 408-K past
Continuing Jobs Claims, 08/13 (8:30): 3700-K expected, 3702-K past
August 26 th Friday
GDP – Second Estimate, Q-2 (8:30): 1.1% expected, 1.3% past
GDP Deflator – Second Estimate, Q-2 (8:30): 2.3% expected, 2.3% past
Michigan Sentiment – Final, August (9:55): 55.4 expected, 54.9 past
This Week on the Earnings Front in the USA
Earnings season is winding down, this week we preview some housing, retail, media and tech components, as follows; Focus Media Holding Ltd. (NASDAQ:CN”>FMCN); H J Heinz Co. (NYSE:HNZ); Trina Solar Ltd. (NYSE:TSL); Williams Sonoma Inc. (NYSE:WSM); American Eagle Outfitters Inc. (NYSE:AEO); Applied Materials Inc. (NASDAQ:AMAT); Guess Inc. (NYSE:GES); Toll Brothers Inc. (NYSE:TOL); Krispy Kreme Doughnuts Inc. (NYSE: KKD); Omnivision Technologies Inc. (NASDAQ:OVTI); and Pandora Media Inc. (NYSE:P).
Monday, August 22 nd
Focus Media Holding Ltd. (NASDAQ:CN”>FMCN) estimates 0.37 EPS and $162.7-M in revenues; next Quarter estimates are 0.43 EPS and $174-M in revenues. Shares trade around 28.02 and the 52-wk range is 17.71 to 37.58. Focus has managed to avoid the China bashing trades because it established, and investors believe that it is a real company. Valuation is high because growth expectations are long-term.
Tuesday, August 23 rd
H J Heinz Co. (NYSE:HNZ) estimates 0.76 EPS and $2.78-B in revenues; next Quarter estimates are 0.85 EPS and $2.89-B in revenues. Shares trade around 52.20 and the 52-wk range is 45.52 to 55.00.
Trina Solar Ltd. (NYSE:TSL) estimates 0.47 EPS and $599.44-M in revenues; next Quarter estimates are 0.60 EPS and $644.43-M in revenues. Shares are trading around 13.75 and the 52-wk range is 12.75 to 31.89.
Williams Sonoma Inc. (NYSE:WSM) estimates 0.36 EPS and $823.97-M in revenues; next Quarter estimates are 0.39 EPS and $861.24-M in revenues. Shares trade around 28.90 and the 52-wk range is 24.57 to 45.48. The sell-off in this cyclical retailer came on in July when Goldman Sachs raised its ratings.
Wednesday, August 24 th
American Eagle Outfitters Inc. (NYSE:AEO) estimates 0.11 EPS and $650.78-M in revenues; next Quarter estimates are 0.27 EPS and $766.95-M in revenues. Shares trade at 11.10 and the 52-wk trange is 10.80 to 17.46.
Applied Materials Inc. (NASDAQ:AMAT) estimates 0.33 EPS and $2.68-B in revenues; next Quarter estimates are 0.33 EPS and $2.66-B in revenues. Shares trade around 11.00 and the 52-wk range is 10.27 to 16.93. The stock has lost 33% off of its high value, and it is now valued at low earnings multiples as are so many Key technology stocks.
Guess Inc. (NYSE:GES) estimates 0.81 EPS and $656.38-M in revenues; next Quarter estimates are 0.85 EPS and $689.92-M in revenues. Shares trade around 31.00 and the 52-wk range is 30.44 to 51.53.
Toll Brothers Inc. (NYSE:TOL) estimates 0.03 EPS and $406.28-M in revenues; next Quarter estimates are 0.07 EPS and $439.22-M in revenues. Shares trade around 15.23 and the 52-wk range is 15.13 to 22.42.
Thursday, August 25 th
Krispy Kreme Doughnuts Inc. (NYSE:KKD) estimates 0.06 EPS and $92.26-M in revenues; next Quarter estimates are 0.06 EPS and $94.87-M in revenues. Shares trade around 7.37 and the 52-wk range is 3.55 to 10.08.
Omnivision Technologies Inc. (NASDAQ:OVTI) estimates 0.72 EPS and $276.59-M in revenues; next Quarter estimates are 0.82 EPS and $306.37-M in revenues. Shares trade at 24.15 and the 52-wk range is 18.42 to 37.04.
Pandora Media Inc. (NYSE:P) estimates 0.00 EPS and $60.26-M in revenues; next Quarter estimates are -0.01 EPS and $68.23-M in revenues. Shares trade around 13.20 and the post-IPO trading range is 11.00 to 26.00. This mark Pandora`s 1st earnings report. Many question the model, as the more it grows, so grows its costs. The Big Q; are estimates by analysts representative of reality Stay tuned…
For the complete list go to: http://biz.yahoo.com/research/earncal/20110822.html
____________________________________________________________________________
The Most Asked Question last Week
The Big Q: Red, are speculators buying all of the Gold
The Big A: No, the big buyers are central banks… not just the speculators
The World Gold Council reports that demand in Asia remains high for Gold. This was seen in Q-2 where total Global Gold demand measured 919.8 tons, almost a record demand at US$44.5-B.
The Top markets were India and China, accounting for 52% of the total Bar and Coin investment and 55% of Global jewellery demand.
The Gold council is also calling for demand to be high 2-H of Y 2011.
Indian and Chinese demand grew 38% and 25% respectively during Q-2 of Y 2011 compared to the same period in Y 2010, the growth is due to increasing levels of economic prosperity, high levels of inflation and forthcoming Key gold purchasing festivals.
The investment demand driver is the European sovereign debt crisis, the downgrading of US debt, inflationary pressures, and the fragile economic outlook in the West.
Here is the Key driver, yes, individuals and industry buys Gold, but the World`s central banks have the ability to influence the Gold markets more than any others.
And central banks are likely to remain net purchasers of Gold; purchases of 69.4 tons during Q-2 of Y 2011 demonstrated that central banks are turning to Gold to diversify their reserves.
The ETF also demand continues. SPDR”>SPDR Gold Shares (NYSE:GLD) just hit a new all-time high at 177.90. The SPDR”>SPDR site noted that its Tons are 1,271.98, Ounces held are 40,895,586.88; and the value is now $73-B +.
We are hearing "gold mine nationalization" from Venezuela, and fears of the same for the white-owned mines in South Africa, and so the miners share prices are not following the Gold price North.
Market Vectors Gold Miners ETF (NYSE:GDX) is down 0.5% at 60.45 and the 52-wk range is 49.57 to 64.62.
The more volatile and speculative Market Vectors Junior Gold Miners ETF (NYSE:GDXJ”>GDXJ) is down 2% at 35.18 and its 52-wk range is 28.06 to 44.86.
When considering the demand jewelry Tiffany & Co. (NYSE:TIF) comes to mind. TIF`s shares trading down 8% at 59.10 now, and the 52-wk high is 84.49, but it is a bright spots in the last earnings season. That raised guidance might need to be tempered, but if the jewelry market is growing you can count on Tiffany figuring out to win there. TIF reports this Friday.
Below are Q-2 Y 2011 statistics on Gold, as follows; 1. Global Gold demand in Q-2 of Y 2011 totaled 919.8 tons, down 17% from the Strong levels of 1,107 tonnes in Q-2 of Y 2010.
2. Gold demand in value terms grew by 5% Y-Y reaching $44.5-B, the 2nd highest Quarterly value on record and only a bit behind the $44.7-B in Q-4 of Y 2010.
3. Q- 2 of Y 2011 Global investment demand was 359.4 tons, down 37% Y-Y from 574.2 tons in Q-2 of Y 2010, the 2nd highest Quarter in history.
4. ETFs saw solid net inflows of almost 51.7 tons, above the average of 41.4 tons.
5. Demand for Gold bars and Coins was 307.7 tons, up 9% from a year earlier.
6. Jewelry demand was + 6% from a year earlier at 442.5 tons. In value terms it was a 34% gain to $21.4-B with India, China and Turkey representing 59% of Global jewellery demand.
7. Technology demand was up by 2% at 117.9 tons, at a record gain to $5.7-B + 28%.
8. Gold supply was 1,058.7 tons, a 4% decline due to an increase in net purchasing by central banks.
9. Mine production rose by 7% to 708.8 tons.
10. Central banks buying up 400% + from Q-2 of Y 2010.
11. Recycling activity was down 3% at 429.3 tons.
Do not be surprised when you see the CME announce another margin requirement hike each time the Gold price bests a psych mark. Stay tuned…
Red`s Edge and in the Trenches
Reflect and Resolve to Make Money
The area that I believe to be of great importance to those of us who have a keen interest in trading markets is how to better Play the Game of trading and investing.
The 1st thing to do, IMO, is to reflect on what was done last year and how well it was done. I believe it will be the common denominator that some stuff was done well and some not so well. That said it would be a good plan to work to be better at what was not done so well in this New Year.
Looking into the past may be helpful to put together Resolutions that will bring positive changes that bode well for future action in the markets, in order to set up for continuing success.
The common areas that most all traders/players work on to improve in order to continuously post good Percentage and Money records are:
1. Formulate a Trading Plan for their business; this is a business, though many of refer to it as a Game.
2. Follow and fine-tune the Trading Plan along the way. 3. Learn to Cut Losses 4. Stop Cutting Profits 5. Manage your money; remember Your Money and Your Responsibility.
6. Education, Education and more Education, Knowledge is Power.
7. Last but not least are; never enter a position without a Way Out (aka Exit Strategy) Lumped into 1 Key Trader/Player Resolution and followed will likely lead to improved trading results.
That said, always strive to do your best, use the best tools, be patient with yourself and be happy.
Each new day comes with new opportunities, challenges, and changes.
All the best, Paul A. Ebeling, Jnr.
PS: if you look at yourself as a player/trader, and you like doing it, then it is Key to understand what makes you "tick"; plus it is very helpful to understand the motivations for your actions and their timing in the entering and exiting positions. It is very important to strive to remove the emotion and focus on the business of trading the markets to win. When you acquire the discipline and the tools to remove the emotion you are on the way to winning and perhaps winning Big. PE
– – – – – – – – Traders, I hope you have a great Monday! I`ll be in touch shortly with some more Market News, and a new trading idea is on the cusp, so stay close to your in-box! – – – ChartPoppers Newsletter Admin.
This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. ChartPoppers . com is a wholly subsidiary of Allan James Group, Inc. While ChartPoppers has not been compensated for the distribution of this particular email, any future email regarding a specific company will be the result of an advertising and promotional campaign for which ChartPoppers .com receives compensation. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this newsletter as the basis for any investment decision. ChartPoppers does not hold a position in any of the companies mentioned in this report.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. 214-280 Nelson Street | Vancouver | BC | V6B 2E2 | Canada
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