Trade Radar

Weekly Review - the correction picks up speed, how far will stocks fall?

2009-07-04T11:25:00.008-04:00

This week a worse than expected non-farm payrolls report knocked the wind out of the sails of the stock market. The fact that the best performing index, the NASDAQ, fell 2.3% shows what a lousy week it was. Meanwhile, the unemployment rate, currently at 9.5%, continues its steady march toward double digits. Against this backdrop, it should not be surprising that consumer confidence, as well as the stock market, fell over the past month.

With the second quarter finishing up earlier this week it is understandable that some profits might be taken after stocks turned in strong performances. The S&P 500 gained 15% and the NASDAQ gained 20%. Ominously, oil gained 41%.

It is no doubt that stocks are now in a correction. The question is: how far will they fall? We look for clues in some of the charts that follow.

The view from Alert HQ --

Charts of some of the statistics we track at Alert HQ are presented below:

The chart above shows our analysis of the universe of stocks we evaluate, roughly 7200 of them. It's pretty clear that weakness has persisted over the last few weeks and performance was at its worst during this holiday shortened week. As lousy as this chart looks, there are still roughly 60% of stocks trading above their 50-day moving average. Not great but not bad. Unfortunately, there is no sign that the deterioration in stock prices is slowing down. Indeed, in order to complete this move, it looks as if the number of stocks whose 20-day MA is above their 50-day MA needs to move lower before we start to see some recovery.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.

Here we see the number of stocks in down-trends increasing handily; the total currently stands at about 28%. With the cross-over displayed on this chart, we are now in the unfortunate situation where the number of stocks in down-trends outnumbers the number of stocks in up-trends. It is surprising, though, that the number of stocks in up-trends actually ticked up slightly this week.

The following chart show SPY, the S&P 500 SPDR ETF. I have drawn two green lines on the chart: the horizontal one is a support line and the descending line shows the down-trend that is being carved out. Put the two together and we begin see a triangle emerge. Falling below that support line would imply that we could see another 9% or 10% decline from that level.

Some bloggers are seeing a head and shoulders pattern developing on the S&P 500. I have circled the left shoulder, the head and what is starting to strongly resemble a right shoulder in light blue. The implication here is also for a 10% drop from the neckline which just happens to be the same horizontal green line forming the base of the triangle.

With respect to moving averages, SPY has dropped below its 50-DMA but is still above its 200-DMA. With the 200-DMA still clearly pointed downward, it's not hard to anticipate a continuing correction at this point

Conclusion --

Our charts show stocks caught in a reversal. The market hit a peak a month ago and has been steadily drooping since. Luckily the NASDAQ is looking much better than the S&P 500 so there is hope this correction will not be too deep.

Economic reports coming up this week are modest so it is unlikely they might light a fire under stocks. We will be seeing the ISM Services report, consumer credit, initial jobless claims, the trade balance and the University of Michigan consumer sentiment index. No big hitters like last week's non-farm payrolls report.

So we have had some unpleasant surprises in several economic reports while most others are slowing their deterioration or even starting to show some small amount of strength. In the meantime, stocks are in a down move that needs to play out before any recovery can begin.

I suspect there will be another week or so of weakness then we will need to throw ourselves on the mercy of earnings season. This week, earnings reports will be light but they will soon be ramping up as the second quarter earnings season kicks off in earnest. Until then, though, there isn't much to reassure bulls and the bears will most likely continue to brazenly roam the Street.

Weekend Winners and Losers - Alert HQ BUY and SELL signals for July 4, 2009

2009-07-04T07:23:00.005-04:00

The latest list of free stock alerts is up and available at Alert HQ.

Each week we scan about 7300 stocks and ETFs, checking fundamentals, performing technical analysis and looking for fresh BUY and SELL signals. Out of this process we generate the following lists:

Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside
Trend Leaders - a collection of stocks in strong up-trends
Cash Flow Kings whose free cash flow yield is 25% or greater
Bollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band
Swing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend.

This week's results --

The stock market ended the first week of the second half with a thud. Consumer confidence declined, construction spending disappointed and layoffs increased way more than expected. Improvements in factory orders couldn't nearly offset the strong negative impact of the jobs numbers. Major averages gave up 2% to 3% on the week.

Here is the detailed breakdown for Alert HQ for this weekend:

Based on daily data, we have 5 Alert HQ BUY signals and 15 SELL signals
Based on weekly data, we have 7 Alert HQ BUY signals and 16 SELL signals
Based on daily data, we have 196 Trend Leaders. 69 new stocks joined the list since Tuesday and only 71 fell off the list since Tuesday.
Based on daily data, we have 75 Bollinger Band Breakouts but we also have 108 Breakouts based on weekly data.
We have 833 Cash Flow Kings
Based on daily data we have 28 Swing Signals of which 12 are BUY signals and 15 are SELL signals. In addition, there is 1 Strong BUY signal today
Finally, we have Trend Busters with 18 signals based on daily data and 36 based on weekly data

Visit Alert HQ and download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you. No matter which preference you have, there are bound to be a few stocks you will want to add to your watch list.

If you're a momentum trader, the TrendLeaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you do favor technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders and Trend Busters on Tuesday and Thursday nights.

'Green Shoots' in the Semiconductor sector?

2009-07-03T17:44:00.005-04:00

For those who are still searching for "green shoots", there is some good news from the semiconductor sector today.

The Semiconductor Industry Association (SIA) announced today that May semiconductor revenues worldwide were up 5.4% over April. That's the good news. The bad news is that revenues are still down over 23% on a year-over-year basis.

The chart from SIA covering 1996 to the present follows:

As SIA President George Scalise commented, "The May sales numbers reflect the third-consecutive month of sequential growth for the semiconductor industry." He added that "The sequential monthly increases lead us to be cautiously optimistic about a return to normal seasonal patterns for the industry going forward."

Looking closer to home, sales in the Americas have also been up three months in a row. The chart below shows an over 5% gain from February to March with April growth slowing down and May showing another decent pick-up.

An important component of tech sector growth --

Since many observers consider semiconductor sales to be somewhat of a leading indicator for the overall tech sector, it is a welcome sign to see some consistent growth. A return to "normal seasonal patterns" implies even better growth in the months ahead.

After the stinky employment numbers reported on Thursday, any good news we can find is certainly appreciated. Let's hope those "green shoots" in the semiconductor sector continue to sprout.

Humble Thursday: Trend Busters, Swing Signals and Trend Leaders for July 2, 2009

2009-07-02T21:27:00.006-04:00

Well, I've been predicting a bit of a rally but today Mr. Market humbled me. Stocks fell across the board, weighed down by poor employment numbers.

Nevertheless, we need to soldier on. This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ. All are based on daily data.

Today we have the following:

30 Swing Signals -- A week ago we had 300 signals, today one tenth as many. We no longer have a bullish tone in this list: there are only 13 BUY signals and 16 SELL Signals plus 1 Strong BUY.
195 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 68 new stocks that made today's list and 71 that fell off Tuesday's list.
18 Trend Busters of which 3 are BUY signals and 15 are SELL signals

The view from Alert HQ --

Our Swing Signals list reflects how the market has wilted over the last couple of days. After a generous helping of BUY signals in the previous few lists, we have now gone into a sort of hibernation.

On the other hand, our list of Trend Leaders is maintaining a certain level of robustness. That is encouraging but there is one caveat. As I have mentioned in the past, there is quite a bit of filtering on the indicators used to generate the list of Trend Leaders so they tend to lag major market moves by a bit. With the market taking a big hit today, a lack of a quick recovery will certainly see the weakness reach our Trend Leaders.

A day like today reinforces the concept that no indicators are immune to major market moves. When the broad market moves lower, many of our BUY signals go out the window. Conversely, our SELL signals do very well on a day like today. The trick is being able to choose the right signals at the right time. But then that's always been the challenge in the markets, hasn't it?

Using the signals --

So, as a humble practitioner of technical analysis, I admit that every signal can't be correct. Alert HQ can, however, provide a filtered selection of likely candidates from which investors can choose. Remember, if you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Month End Tuesday - Swing Signals, Trend Busters and Trend Leaders for June 30, 2009

2009-06-30T20:56:00.005-04:00

This is a quick post to announce that Tuesday's Swing Signals, Trend Leaders and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

53 Swing Signals -- 37 BUY signals and 13 SELL Signals plus 3 Strong BUYs.
198 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 75 stocks that are new additions to the list and 23 that fell off the previous list.
16 Trend Busters of which 9 are BUY signals and 7 are SELL signals.

The view from Alert HQ --

I have been vacationing the last few days so I will freely admit that I have not been following the little daily dramas taking place in the markets this week. What I can see from today's signals, however, confirms my suspicions as voiced in Saturday's post. At that time I said I thought I was beginning to see stocks begin to pull out of their recent swoon. The number of Trend Leaders has doubled since last week. Swing Signals continue to show BUY signals predominating. Things are quiet with our Trend Busters - they are few in number and more or less evenly split between BUY and SELL signals. So two out of three of today's lists have a bullish bias. I am suspecting that will continue. Keep in mind, though, this is a busy week for economic reports. As long the various employment reports, the ISM index and factory orders show some improvement, I think we will see the rally continue.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Weekend Winners and Losers - Alert HQ BUY and SELL signals for June 26, 2009

2009-06-27T07:45:00.006-04:00

Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside
Trend Leaders - a collection of stocks in strong up-trends
Cash Flow Kings whose free cash flow yield is 25% or greater
Bollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band
Swing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend.

This week's results --

It turned out to be a lackluster week in the markets. The S&P 500 fell fractionally and the NASDAQ was up fractionally, a result of how stocks fought back to erase a big 3% drop on Monday. Economic news was not particularly positive with home sales and jobs disappointing. The week was probably saved by an upside surprise in Durable Goods and a good earnings report from Oracle.

When looking at this week's Alert HQ results, I get the feeling the market is catching its breath for another big move. We are seeing a surge in Swing Signals, the Bollinger Band Breakouts are holding steady with a bullish bias and the Trend Leaders are starting to show some improvement with very few falling off the most recent list. I'm getting the impression that maybe the widely expected correction is not yet underway. We shall see...

Here is the detailed breakdown for Alert HQ for this weekend:

Based on daily data, we have 6 Alert HQ BUY signals and 13 SELL signals
Based on weekly data, we have 7 Alert HQ BUY signals and 9 SELL signals
Based on daily data, we have 146 Trend Leaders. 55 new stocks joined the list since Thursday and only 7 fell off the list since Thursday.
Based on daily data, we have 288 Bollinger Band Breakouts but we also have 194 Breakouts based on weekly data.
We have 816 Cash Flow Kings
Based on daily data we have 208 Swing Signals of which 197 are BUY signals and 7 are SELL signals. In addition, there are 4 Strong BUY signals today
Finally, we have Trend Busters with 20 signals based on daily data and 59 based on weekly data

Thursday Trio: Trend Busters, Swing Signals and Trend Leaders for June 25, 2009

2009-06-25T19:57:00.003-04:00

This is a quick post to announce that Thursday's Trend Leaders, Swing Signals and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

305 Swing Signals -- Wow! What a huge increase in signals and almost all of them are bullish: 290 BUY signals and 4 SELL Signals plus 11 Strong BUYs
98 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 40 new stocks that made today's list and 28 that fell off Tuesday's list.
20 Trend Busters of which 6 are BUY signals and 14 are SELL signals

The view from Alert HQ --

Another Swing Signals list with Strong BUYs! That's twice this week. There is no doubt that many stocks are bouncing off their lower Bollinger Band. If this can translate into good breadth over the next few days we could see markets taking another leg up.

On the other hand, our list of Trend Leaders dwindled again; however, there is quite a bit of filtering on the indicators used to generate the list of Trend Leaders so they tend to lag major market moves by a bit.

So our Swing Trading Signals are the leading indicators and our Trend Leaders do a good job of confirming a new trend. It is worth keeping an eye on both.

Using the signals --

Remember, if you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Durable Goods Report - tech fundamentals finally breaking downtrends?

2009-06-24T17:12:00.015-04:00

Today's Durable Goods reports surprised to the upside and helped the stock market regain some of the previous few days losses. The following is our analysis of what the report says about the tech sector.

Semiconductors --

In April, Semiconductors put together a surprisingly strong month with Shipments showing a 34% gain over March. This month, Semiconductors gave a little back. The following chart reflects an upward adjustment for April and a very modest drop-off in May. Though the trend is still clearly down, the appearance of a bottom is finally coming into view.

Computers --

This month's outstanding performance belongs to the Computers and Related Products category where New Orders surged 9.4% after dropping mid-single digits in the previous two months. The chart below reflects a downward adjustment in April and the nice move upward in May. This chart shows the clearest evidence of the downward trend finally being broken.

Shipments in this category also seem to be stabilizing and reversing the down-trend. The following chart shows Shipments reaching their nadir back in November 2008 and struggling to maintain a positive direction since then.

A view of the entire tech sector --

Pulling back from individual sub-categories to look at the high tech manufacturing sector as a whole, the following charts look at the Computers and Electronic Products category. This includes computers and semiconductors, computer peripherals, communications equipment, storage, audio/video, navigation equipment, medical equipment and measurement and control instruments.

The good news in the tech sector as a whole is that New Orders were up 2.2% in May. This is twice the Durable Goods headline number that served as a catalyst to propel the stock market higher today. The following chart shows New Orders hitting their low in January 2009, bouncing back and stabilizing at what is a historically low level.

Shipments for the tech sector as a whole, however, are still weak. This next chart shows what could be a bottom but there are really only two data points for bulls to hang their hat on and neither one is especially outstanding. It can be assumed that a large percentage of New Orders may have been canceled and hence never turned into shipments.

Conclusion --

Last month we reviewed a set of similar charts and concluded that tech was making an erratic effort to put in a bottom despite the fact that trends in shipments and new orders appeared to still point downward. This month, the signs are a bit clearer that, indeed, the worst is behind us.

The upswing in New Orders for Computers is certainly good news, especially for companies like Dell and HP. Furthermore, this will have to translate into real shipments in Semiconductors eventually (is Intel on your watch list?). So in this case we should get improvement in two sectors.

The shadow hovering over this sunny scenario, however, is the possibility of order cancellations. Inventories have been dropping for many months now so that risk should be lessening; nevertheless, with today's tightly managed supply chains, an uptick in unemployment or some other macro-economic stumble could pull the rug out from under the sector.

Overall, the picture these charts paint is quite encouraging. If you accept that the worst is now behind us in the tech sector, then it would make sense to be scaling into tech stocks and tech-focused ETFs. Some might argue that the fundamentals do not quite justify current prices but it is clear that growth stories are lurking in this sector and growth is seldom cheap.

Disclosure: long ROM, USD and IGN

One reason big tech will beat this quarter

2009-06-23T21:48:00.006-04:00

Oracle reported earnings after the close today. The news wasn't bad. Revenue and profit were down single digits but earnings per share still managed to beat Wall Street expectations by a couple of pennies.

Signs of things to come?

Oracle's CFO indicated that the company executed extremely well this quarter and that sales of support contracts had a positive impact on the bottom line. The CFO singled out a strong dollar as one reason for the declines in sales and income.

On a year-over-year basis, Oracle's CFO is correct; the dollar is indeed significantly higher now than it was in last year's quarter. This is clear to see on the chart below.

On the other hand, looking at the dollar over the last few months, the chart shows that it has fallen roughly 10% since peaking in early March 2009.

Looking at earnings for the most recent quarter, tech stocks with significant international sales will benefit from the dollar dropping. Year over year, earnings may still look poor but it may not be so hard to beat analyst estimates for the current quarter with exchange rates cooperating as they have been for the last few months.

Bumpy Tuesday - Swing Signals, Trend Busters and Trend Leaders for June 23, 2009

2009-06-23T20:55:00.004-04:00

This is a quick post to announce that Tuesday's Swing Signals, Trend Leaders and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

56 Swing Signals -- 36 BUY signals and 16 SELL Signals plus 4 Strong BUYs.
86 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 19 stocks that are new additions to the list and 90 that fell off the previous list.
180 Trend Busters of which only 12 are BUY signals and 168 are SELL signals.

After Monday's sell-off, Tuesday's bumpy ride leaves stocks flat on the day --

More weakness in the market has prolonged the shrinkage in our list of Trend Leaders. On the weekend we had 157 stocks and ETFs on the list, after today there are only 86. A few weeks ago there were around a thousand. Leadership in this market is getting mighty scarce.

Similarly, our Trend Busters list reflects further weakness as the breakouts to the downside greatly outnumber the breakouts to the upside.

As stocks continue last week's correction, however, it comes as a surprise that our Swing Signals list is leaning toward the positive side with more than twice as many BUY signals as SELL signals and four Strong BUYs to boot. Could this be an indication stocks are finding support at current levels? Many major averages are hovering around 200-day moving averages and are near their lower Bollinger Bands. If economic reports cooperate, we could see this correction begin to turn around. Then again...

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

How to use the TradeRadar software - new slideshow gives you all the basics

2009-06-21T18:19:00.011-04:00

I have contended that the TradeRadar software is very easy to use; however, setting up the chart to generate the indicators may not be immediately obvious to new users. The slideshow below describes how to use the new "Auto" feature as a shortcut. It goes on to explain how to evaluate our indicators and make your final Buy or Sell decision. (Look for the icon that allows you to view in full screen mode.)

Trade Radar Slideshow

View more OpenOffice presentations from Traderadar Operator.

Note that the "Auto" feature can be turned off so you can manually adjust the date range, the filtering and sensitivity if you so desire.

More info --

The following links provide more information and show you where to download:

TradeRadar Help File - more details on how to load data, deeper discussion of indicators and description of the portfolio history functionality
Features page - more screenshots of features not covered in the slideshow
Download page - downloads are always free. Full installs and simple upgrades are available.

If you have further questions, be sure to leave a comment or email me.

Hat tip to SlideShow.net for providing the ability to put presentations on line. This site rocks!

Weekly Review - stocks look tired

2009-06-20T12:18:00.014-04:00

Stocks dropped this past week but thankfully it could not be considered a rout. It is almost unbelievable that for the S&P 500 this is only the third down week we have seen since early March!

Though down like all the other indexes, the NASDAQ was the week's best performer. This was despite a sell-off in Blackberry maker Research in Motion (RIMM) who announced better than expected earnings but delivered an uninspiring forecast and solid but not overwhelming debut for Apple's new iPhone.

On the economic front, the Industrial Production and Capacity Utilization report showed that manufacturing slid again in May after a couple of months of improvement while factory utilization continues to drift at record low levels. The housing market showed more small signs of improvement but it wasn't enough to keep stocks moving up.

The view from Alert HQ --

Charts of some of the statistics we track at Alert HQ are presented below:

The chart above shows our analysis of the universe of stocks we evaluate, roughly 7200 of them. A couple of weeks ago, I said that we can see from these moving average statistics that after a very constructive phase we have been going through a period of indecision. Prior to that I had said things looked "toppy". After this week's modest market decline, these conclusions look ever more accurate. Still, they don't necessarily provide a clear indication of the path forward though the bias does seem to be downward now.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.

While the number of stocks in strong up-trends is not extremely high, it is clear stock prices have been stagnating, with this number moving up and down within a range that is a bit below the middle of our scale.

The number of stocks in strong down-trends is still rather low but it has been increasing slowly for the last few months. As the weakest of the stocks that were caught in the post-March low updraft begin to give up unsustainable (undeserved?) gains, this indicator should indeed be coming off the extreme lows seen a couple of months ago.

The following chart show SPY, the S&P 500 SPDR ETF. I have drawn two line on the chart: the blue line is the up-ward trend line and the magenta line is the first support line.

It can be seen that SPY has violated both lines, dropping below the trend line and dropping below the support line.

Does this mean the market is about to plunge?

It is hard to think we won't see more weakness but it is even harder to think the market will plunge. From a technical point of view, the initial support line was too close to the recent high so it is no wonder it was violated. The trend line is fairly steep, so no surprise that it, too, was violated. Note that the 50-day moving average just crossed above the 200-day moving average. This is generally considered a bullish signal for chart watchers. SPY also approached its 200-day MA but did not break below it, also a good sign.

On the other hand, if SPY doesn't jump over the trend and support lines illustrated above and regain its highs, then we are no doubt headed down to the region around $90 or even $87. That would equate to drops of 2.1% and 5.4%, not very serious pullbacks at all.

Conclusion --

Our charts show stocks range bound with a better than 50% chance of further weakness. The refrain lately among stock market pundits is that investors are now looking for real economic improvement, not just the "less bad" theme.

Accordingly, we will have plenty to chew on this week. The economic calendar is full with Existing Home Sales, the Durable Goods report, New Home Sales, the FOMC rate decision (the statement will no doubt be more important that the actual rate decision), initial jobless claims, the final numbers for Q1 GDP (old news by now), Personal Income, Personal Spending, PCE Core (all liable to market moving for the consumer discretionary sector) and the Michigan Comsumer Sentiment report.

Dare I say it? Markets seem to have returned to normalcy. Stocks weaken when the economic backdrop dims. Banks are returning TARP money and resuming some measure of independence. Major averages are not showing extreme volatility. A few people are even buying houses.

A pullback seems in the cards now. As long as it is only a moderate pullback it can probably be considered a healthy development, allowing time for the economy to develop a few more signs of recovery which could provide the catalyst for the next move up. In the meantime, stocks are looking tired.

Weekend Winners and Losers - Alert HQ BUY and SELL signals for June 19, 2009

2009-06-20T06:32:00.004-04:00

Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside
Trend Leaders - a collection of stocks in strong up-trends
Cash Flow Kings whose free cash flow yield is 25% or greater
Bollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band
Swing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend.

This week's results --

Markets barely budged this past week. We have seen essentially nine trading days of consolidation in a fairly narrow range. Still, with the exception of the Russell 2000, all the major averages managed to register small gains this week. This quiet trading is reflected in our signals which show no drastic changes one or the other this weekend.

Here is the detailed breakdown for Alert HQ for this weekend:

Based on daily data, we have 3 Alert HQ BUY signals and 48 SELL signals
Based on weekly data, we have 14 Alert HQ BUY signals and 13 SELL signals
Based on daily data, we have 157 Trend Leaders, a big noticeable decrease from last weekend. 45 new stocks joined the list since Thursday and 35 fell off the list since Thursday.
Based on daily data, we have 76 Bollinger Band Breakouts but we also have 167 Breakouts based on weekly data.
We have 838 Cash Flow Kings
Based on daily data we have 98 Swing Signals of which 87 are BUY signals and 5 are SELL signals. In addition, there are 5 Strong BUY signals today
Finally, we have Trend Busters with 27 signals based on daily data and 55 based on weekly data

What Bing might cost Google (it's not peanuts!)

2009-06-19T13:55:00.003-04:00

Part of the excitement over Microsoft's new Bing search engine has been the fact that it seems to be getting a pretty fair amount of traffic.

So far, it seems that Microsoft (MSFT) has gained search share at the expense of Yahoo! while Google's search share has remained relatively steady. If Bing's popularity grows, however, it's bound to make a dent in Google's dominance of search.

So what would be the impact if users began to give up Google (GOOG) in favor of Bing?

Here are a few numbers to consider:

Google derives 99% of their revenue from advertising.
Google derives 69% of ad revenue from "Google web sites". This means Google search and other sites owned by Google such as YouTube. The vast majority of the revenue is derived from search advertising.
According to the most recent annual report, advertising revenue from "Google web sites" was $14.4 billion.
Google's overall share of search according to ComScore's most recent measure for May is about 65%, a 0.8% increase over April.

If Bing begins to gain search share from Google, the financial impact to Google would look something like this:

A 65% search share equates to $14.4B in annual ad revenue for Google. So for every percent of search share that Google loses, it would cost the company roughly $220 million in revenue.

At this rate, Google will not take the Bing threat lightly. Look for Google to respond aggressively if Bing starts to really take off.

Disclosure: no positions

Thursday Trio: Trend Busters, Swing Signals and Trend Leaders for June 18, 2009

2009-06-18T21:37:00.008-04:00

This is a quick post to announce that Thursday's Trend Leaders, Swing Signals and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

87 Swing Signals -- 70 BUY signals and 12 SELL Signals plus 5 Strong BUYs
147 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 35 new stocks that made today's list and 140 that fell off Tuesday's list.
79 Trend Busters of which 8 are BUY signals and 71 are SELL signals

The view from Alert HQ --

It's good to see some Strong BUYs appear on our list of Swing Trading signals again. We've gone at least a week and a half without any Strong BUY or SELL signals. For that matter, the BUY signals greatly outnumber the SELL signals on the Swing Trading list and that might be a hint that stocks are getting ready to rally again.

On the other hand, it is worrisome to see our list of trend leaders reduced to under 150 when just a week or so ago we had well over 500. This is why some say stocks are in a no-man's land, testing the 200-day moving average while trend indicators deteriorate, but so far resisting a serious break to the downside.

Using the signals --

Remember, if you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Troublesome Tuesday - Swing Signals, Trend Busters and Trend Leaders for June 16, 2009

2009-06-16T20:59:00.008-04:00

This is a quick post to announce that Tuesday's Swing Signals, Trend Leaders and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

56 Swing Signals -- 24 BUY signals and 32 SELL Signals but no Strong BUYs or Strong SELLS.
252 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 37 stocks that are new additions to the list and 450 that fell off the previous list.
197 Trend Busters of which only 23 are BUY signals and 174 are SELL signals.

Today's signals paint a troubling picture --

First, our list of Trend Leaders has been decimated in the last two trading days. On the weekend we had 665 stocks and ETFs on the list, after today there are only 252.

Conversely, today we have a big increase in the number of stocks and ETFs on our Trend Busters list. What is worrisome is that a big proportion of those that are breaking to the up-side are inverse ETFs.

So we see fewer stocks in strong up-trends and more inverse ETFs breaking to the up-side. This does not bode well for the market in the near term. Indeed, both the NASDAQ and the S&P 500 broke below their 20-day MA today. We are now coming up on a test of the 200-day MA, which, I guess, should be no surprise after such a steep climb from the March lows. Let's hope this is just a minor correction and not a reassertion of the bear.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Small-Cap 'SuperList' - three stocks exploding to the upside

2009-06-14T08:50:00.018-04:00

Time for another custom "SuperList" stock screen from the TradeRadar database.

Today's stock screen starts by looking at stocks that have shown EPS growth. They have sequential quarter-over-quarter growth as well as year-over-year growth. There are currently 617 stocks that meet that criterion.

The list below, however, took that sample of 617 and whittled it down by looking only for those stocks that are currently on both the Trend Leaders list and Bollinger Band Breakout list for this weekend. These stocks are exploding upward.

Symbol	Name	Last Price	Market Cap
MFW	M & F WORLDWIDE CORP.	$25.74	$497,600,000
ATNI	Atlantic Tele-Network, Inc.	$38.46	$585,700,000
BID	SOTHEBY'S	$14.55	$974,600,000

What's driving the gains in these stocks?

For ATNI, it is acquisition news. The company, a cellular system operator, is buying certain wireless properties from Verizon, including wireless spectrum licenses and network assets, serving over 800,000 subscribers primarily in rural areas across Georgia, North Carolina, South Carolina, Illinois, Ohio, and Idaho. Verizon is being driven to divest these properties as part of the regulatory approvals granted for its purchase of Alltel earlier this year. The stock market apparently loves this deal. ATNI increases their size and scale, increases revenue diversification and subscriber base. The deal increases ATNI's U.S. footprint significantly and was apparently done at a reasonable price.

Flash Player 9 or higher is required to view the chart
Click here to download Flash Player now

View the full ATNI chart at Wikinvest

It is more difficult to determine why MFW is breaking out. Back on May 8, the company reported blowout earnings with net income for the first quarter of $51.3 million or $2.64 per share, compared to $12.5 million or $0.58 per share in the year-ago quarter. Since then the stock has moved marginally upward but this week saw huge moves on Thursday and Friday as the stock surged above its 200-day moving average. It isn't like the company is in some currently sexy business. They print checks for bank customers, supply software for financial institutions and, oddly, licorice products for tobacco and food or pharmaceutical processors. Maybe this is a delayed reaction to great earnings.

Flash Player 9 or higher is required to view the chart
Click here to download Flash Player now

View the full MFW chart at Wikinvest

Finally there is Sotheby's (BID). The company is well known as an auctioneer of fine art, antiques and decorative art, and jewelry and collectibles primarily in the United States, the United Kingdom, the People's Republic of China, and France. With this stock, there isn't one big event that is driving the stock price. It appears to be an accumulation of news that is reassuring investors. For example, there have been several auctions that went well recently. Investors may also be focused on early signs of an overall economic recovery which should translate into improved sales for luxury goods vendors such as Sotheby's.

Flash Player 9 or higher is required to view the chart
Click here to download Flash Player now

View the full BID chart at Wikinvest

So here is our list of stocks with surging stock prices but with fundamentals that may actually justify the price gains. It could be worth keeping an eye on these guys.

Disclosure: no positions

Weekend Winners and Losers - Alert HQ BUY and SELL signals for June 12, 2009

2009-06-13T07:46:00.010-04:00

Alert HQ stock alerts - based on a combination of proprietary and standard technical analysis techniques, we identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside
Trend Leaders - a collection of stocks in strong up-trends
Cash Flow Kings whose free cash flow yield is 25% or greater
Bollinger Band Breakouts - stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band
Swing Signals - stocks that have bounced off a higher or lower Bollinger Band
Trend Busters - stocks or ETFs that have violated a current trend.

Based on daily data, we have 3 Alert HQ BUY signals and 16 SELL signals
Based on weekly data, we have 29 Alert HQ BUY signals and 7 SELL signals
Based on daily data, we have 665 Trend Leaders, a noticeable decrease from last weekend. 64 new stocks joined the list since Thursday and 154 fell off the list since Thursday.
Based on daily data, we have 139 Bollinger Band Breakouts but we also have 410 Breakouts based on weekly data.
We have 830 Cash Flow Kings
Based on daily data we have 31 Swing Signals of which 8 are BUY signals and 23 are SELL signals. No Strong BUY or Strong SELL signals today
Finally, we have Trend Busters with 38 signals based on daily data and 42 based on weekly data

Google on TV - is a starring role on the way?

2009-06-12T22:32:00.009-04:00

Microsoft (MSFT) has rolled out Bing, their new search engine, to much fanfare and with a multimillion dollar advertising campaign. But are they fighting last year's battle?

Google (GOOG), as everyone knows, dominates search advertising with its AdWords offering. They are also strong in pay per click through AdSense. The company has struggled with print ads and radio ads and ultimately abandoned both efforts.

One area where Google has persisted is television. The company offers a service that works much like a combination of AdSense and AdWords except the ads are filmed TV commercials.

Like AdWords, an advertiser creates an ad, sets a daily budget and bids on placing the ad on shows or channels that are a good marketing fit. Much like AdSense, the TV networks offer ad inventory at relatively low cost with the expectation that the ads supplied by Google will be relevant to the viewers of the programming.

Google hasn't registered the kind of success they have seen in the search advertising arena but they seem to be committed to expanding the service.

Until recently, the Google TV advertising was limited to the 13 million households that get TV service through the Dish Network. Google has increased coverage this year by making deals with several national cable networks such as CNBC, Bravo, MTV, USA, and MSNBC. Google contends it has increased its reach now to 95 million households. The four major broadcast networks, however, are not yet accepting Google TV Ads.

Still, it is known that TV advertising works. Google TV ads now make targeted television advertising available to small companies for a mere few thousand dollars. Adding to the attraction for advertisers is Google's ability to supply data. Google is able to provide real-time data on viewers via Dish set-top boxes. They provide info on how many people watched an ad, how long an ad is watched before the channel is changed and whether it was watched on a DVR. Advertisers can easily determine where response is best and reduce advertising on those shows or channels where the results are not meeting expectations.

Being an Internet company, Google is well aware that users are increasingly watching TV shows online. Consequently, the company is setting up agreements to run their ads on online shows. So far, this initiative is in a beta stage and, significantly, the company has not yet partnered with Hulu, one of the most popular TV viewing sites. It can be assumed, though, that Google will not lag in the Internet channel for long.

Conclusion --

If Google can gain more traction among advertisers with their TV ads, it will be easier for them to increase their reach across more TV channels and networks. With marketing budgets under pressure during this recession, it seems like a good time for Google to press their case. Their current advertising systems seem to be a good fit for TV and this seems to represent a good way to extend their business in a new direction. With their market share in search advertising maxing out, Google could use a new venue to exercise their strengths.

In the meantime, Microsoft is nipping at Google's heels with Bing and has not yet even begun to think about TV. Google's ability to pioneer new advertising channels like this should continue to keep it ahead of its competitors.

Hat tip to InfoNgen.com and Inc.com for background used in this post

Thursday Trio: Trend Busters, Swing Signals and Trend Leaders for June 11, 2009

2009-06-11T21:27:00.003-04:00

This is a quick post to announce that Thursday's Trend Leaders, Swing Signals and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

23 Swing Signals -- 11 BUY signals and 12 SELL Signals plus 3 Strong BUYs
755 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 190 new stocks that made today's list and 197 that fell off Tuesday's list.
24 Trend Busters of which 4 are BUY signals and 20 are SELL signals

Sad to say there are no Strong BUYs in our list of Swing Signals today.

If you're wondering what large-cap tech is doing these days, sort our Trend Leaders list by market cap. You'll see everyone's favorite tech stocks there including stodgy old Microsoft that is actually the center of buzz and controversy these days now that they have introduced their new search engine Bing.

Remember, if you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader, our Swing Signals may provide some good trading ideas.

Formal release of TradeRadar software version 4.1 now available

2009-06-10T22:13:00.007-04:00

This post is to announce that the full install of TradeRadar version 4.1 is now available. For those who have never used TradeRadar, this will provide all the components necessary to install and run this most recent version of the software.

The two screens that have been updated are now displayed on the Features page. The Download pages now provide both the 4.1 upgrade and the 4.1 full install. In addition, the latest help file is available for your review.

New Features in version 4.1 --

The major new features in this version include the following:

Auto checkbox – automatically sets up the chart for the type of signal you are looking for. Select either BUY signal – smooth or SELL signal – smooth. Click the Update Chart button and the software will automatically try to find the best chart setup.
Classic Trend – For a BUY signal using daily data, for example, this chart feature shows the line that could be drawn connecting the cyclic peaks made by the daily high prices. When the stock closes above this trend line, you would have a classic trend reversal. This is different from the TradeRadar slope or trend calculation that is related to daily closing prices.
"Signal in the Zone" indicator – For a signal to be valid, it has to be in the "zone." This new Dashboard indicator describes whether the TradeRadar signal is sort of in the zone, solidly in the zone or completely out of the zone. This is very important for confirming the analysis derived from the other TradeRadar indicators.

As mentioned above, you can check out screen shots and read the help file on our Features page. For more detailed descriptions of the new features, check out our earlier post "Advance Release - TradeRadar Stock Analysis Software version 4.1"

Feedback welcome --

Try the new version of TradeRadar. Let us know how it works for you. Feel free to leave your opinions in the comments or email TradeRadarOperator directly (see the Contact Me box in the left sidebar). I am always happy to respond to questions on the install process or any other issues you may encounter.

Tuesday Swing Signals, Trend Busters and Trend Leaders for June 9, 2009

2009-06-09T21:03:00.002-04:00

This is a quick post to announce that Tuesday's Swing Signals, Trend Leaders and Trend Busters are now available at Alert HQ. All are based on daily data.

Today we have the following:

23 Swing Signals -- 8 BUY signals and 15 SELL Signals but no Strong BUYs or Strong SELLS.
762 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 158 stocks that are new additions to the list and 286 that fell off the previous list.
14 Trend Busters of which 5 are BUY signals and 9 are SELL signals

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

Advance Release - TradeRadar Stock Analysis Software version 4.1

2009-06-08T21:57:00.007-04:00

Tonight I'd like to announce the advance release of the TradeRadar stock analysis software version 4.1

Three new features --

The major new features in this version include the following:

Auto checkbox – This probably what many have been waiting for. The Auto checkbox tells the software to automatically set up the chart for the type of signal you are looking for. For those who are new to the software, figuring out how to choose the start date for analyzing a BUY signal or SELL signal can be difficult. This little checkbox lets the software handle it all for you.

Classic Trend Line – This is best explained using an example. For a BUY signal using daily data, this chart feature shows the dotted line that could be drawn connecting the cyclic peaks of the daily high prices. If the price closes above this Classic Trend Line, it is considered a reversal to the up-side. This is different from the TradeRadar slope or trend calculation that is related to daily closing prices. (Note: Classic Trend Lines are what our Trend Busters list is based on)

"Signal in the Zone" indicator – located right next to the Signal Strength indicator on the Dashboard screen, this indicator shows whether the trailing edge of the signal on the lower chart is below the horizontal green line. If the signal is above the green line, the indicator is red. If it is less than 20% below the green line, the indicator is yellow. It it’s more than 20% below the line the indicator is green. This is used to confirm the analysis derived from the other TradeRadar indicators. If this indicator isn't green, don't believe the signal!

Download version 4.1 upgrade

Tonight, the upgrade is being made available. Those of you who have already installed a prior version of the software can use this download to upgrade their current installation to the latest version.

For now, the new software can be downloaded only from this blog post. Click on the following link: Download version 4.1

Extract the the files in the downloaded zip file into the folder where you originally installed TradeRadar and you should be ready to go.

Full install on the way --

The full install of version 4.1 should be available later this week in the Download section of this site. I'll provide a post on this blog to let you know when it's ready.

Feedback welcome --

Questions, comments and any other feedback is welcome. Leave a comment or email me directly.

Weekly Review - building toward better things?

2009-06-07T18:11:00.010-04:00

Today I spent a big chunk of time building a door frame for a storeroom in my attic. This is part of the never-ending renovation of my 100 year old house. Besides the fact that it has kept me from focusing on my usual Weekly Review post, it got me thinking about the economy.

I started things today by ripping out the stuff that was falling apart. Then I putt up a rough opening with 2X4's and proceeded to the finish work. There was cutting and trimming, adding shims to make sure everything was plumb. Yes, some things needed redoing. By the end of the day, the door itself still wasn't hung but most of the heavy lifting was done.

So how does a door frame equate to the economy? Look at the chart below. Plenty of missteps and redos. But little by little, something decent is taking shape in the stock market. Likewise in the economy, the things that were falling apart are little by little being replaced. With the help of the Fed and the Treasury, some 2x4's have been put in place to reinforce the sagging banks and financial system. The government is now applying the shims as new approaches to regulations are debated to straighten out a financial system that had gotten out of kilter. In any case, the foundations for a resurgence in the economy are slowly rising. The bullishness in the chart below, therefore, is seemingly justified.

The chart above shows our analysis of the universe of stocks we evaluate, roughly 7200 of them. We can see from these moving average statistics that after a very constructive phase we have been going through a period of indecision. Though the charts of the major averages are looking like there was a bit of a bullish breakout this week, our statistics show we are still somewhat range bound.

The next chart provides our trending analysis. Looking at the number of stocks in strong up-trends or down-trends based on Aroon analysis reveals a market that is in neutral but with a tendency toward improvement. While the number of stocks in strong up-trends is not extreme, the number of stocks in strong down-trends is very low.

So the economy and the stock market do seem to be building toward better things. The Non-Farm Payrolls report showed a much smaller number of layoffs than expected. Construction spending surprised to upside. It's true, the unemployment rate is hitting multi-decade highs and many retailers are still limping along but everything can't be fixed at once.

Just like my old house, there is still a good bit of construction necessary to restore this economy to its former glory days. But we're making progress.

Performance Review - TradeRadar 'Strong BUY' Swing Trading Signals on a streak

2009-06-07T11:13:00.008-04:00

It's been a few weeks since I introduced the Strong BUY signal to the TradeRadar Swing Signals list. What kind of performance are we seeing?

I am pleased to say that the results have been pretty good. As you can see in the following chart, there isn't a loser among them.

Symbol	Name	Date of Signal	Original Price	Most Recent Price	Gain/Loss
ARST	Arc Sight, Inc.	5/16/2009	$14.85	$18.19	22.0%
KIRK	Kirkland's, Inc.	5/16/2009	$6.19	$9.56	54.0%
DBRN	The Dress Barn, Inc.	5/16/2009	$14.23	$16.58	17.0%
ONCY	Oncolytics Biotech, Inc.	5/19/2009	$1.65	$1.68	2.0%
HOOK	Craft Brewers Alliance, Inc	5/23/2009	$1.96	$2.07	6.0%
KKD	KRISPY KREME DOUGHNUTS	5/26/2009	$3.45	$3.63	5.0%
PENN	Penn National Gaming, Inc.	5/26/2009	$30.39	$32.10	6.0%
AIG	AMERICAN INT'L GROUP, INC	6/4/2009	$1.64	$1.71	4.0%
MSSR	McCormick & Schmick's Seafood Restaurants, Inc.	6/4/2009	$6.50	$6.75	4.0%
NBXH	Morgan Stanley	6/4/2009	$5.50	$5.50	0.0%

During this time when these signals were being generated, we have sort of had the wind at our backs. The market has been going through a bit of a trading range, which is good for this kind of signal, and early during this last week we had a breakout above the range. These factors helped the gains in the list above.

What is striking, however, is the consistent quality of these signals. This is a small sample, but it does seem that the methodology we have for generating Strong BUY Swing Trading Signals does a good job of finding stocks that are generally in an upward trend that are about to make a move from the vicinity of their lower Bollinger Band to their upper Bollinger Band.

Keep in mind that we announce a new batch of Swing Signals every Tuesday and Thursday evenings and on Saturday mornings. Not every batch finds a Strong BUY signal so when we do find one, it is significant.

Keep an eye on the Swing Signal page at TradeRadar Alert HQ. Let's see if we can keep this streak going!