ETF Market Direction Summary: 11-20-2009
It is the weekend before my birthday (i.e., Thanksgiving Day) and I am celebrating early, therefore Friday’s summary will be brief. Although I might get a little bent, I still remain faithfully Hillbent on the Market Direction.
A resurgent (but perhaps temporary) rally in the U.S. dollar prevailed once more over riskier assets such as equities and commodity related securities in the absence of any major economic data or other market moving catalysts.
The bears are just starting to feel their oats once again but lest one get prematurely excited, a weekly perspective is in order. The major equity indices were all negative for 3 out of the last 5 trading days this week. However, they were very reluctant to relinquish any of their gains this week from the extended March 2009 bottom rally: (DIA -0.33%; SPY -0.17%; QQQQ -1.3%, and IWM -0.24%). The relative weakness in the Nasdaq 100 underscores the difficult week for technology stocks. The SMH and IGN were standouts in terms of negative performance.
Price Volume Analysis (PVA) for Hillbent 3000: Judging from Friday’s price-volume trading patterns, bears still remain on the prowl and bulls have stepped back. PDVD dominated the trading session with @ 40%. Granted, the SP-500 and SPY respectively were only down -0.32% and 0.36% on the day after another one of the program trading’s infamous hockey stick saves. This time the market really needed it because $108.75 is a critical short-term support level for the SPY.
PUVU: price up & volume up (most bullish) @ 13.10%
- PUVD: price up & volume down (indicative of distribution and selling into strength) @ 25.17%
- PDVU: price down & volume up (contrarian bullish signal for capitulation and transfer of stocks from weaker hands) @ 19.67%
- PDVD: price down and volume down (most bearish based upon lack of buyers to establish support) @ 40.20%
(*Note that the Hillbent 3000, distinct from the Russell 3000 index, comprises the top 3000 market capitalization stocks with a minimum average daily volume of 100,000 shares and also includes ADRs that fall within these parameters. This group represents at minimum @ 95%+ of the aggregate market capitalization of more than 8000 equity issues trading on U.S. exchanges. We believe that this highly liquid group offers a more accurate tracking model for the U.S. equity markets.)
- Positive Earnings/Guidance:
- Retail / Apparel: AnnTaylor (ANN -1.38%) beat 3Q-2009 First Call EPS estimates by $0.13 with results @ $0.20 per share, but missed on revenues with $462mm vs. $474mm consensus. Gross margin were @ 57.3%, 850 bps higher than 3Q-2008.
- Retail / Apparel: Dress Barn (DBRN +5.65%) posted 1Q EPS @ $0.37 to meet consensus estimates, but reportedly 11% more than the average analyst estimate in a Bloomberg survey.
- Consumer Goods / Food: JM Smucker (SJM +5.37%), the second best performing stock in the S&P 500, reported 2Q earnings 18% above consensus estimates @ $1.22 eps, raised guidance to $3.95-$4.05 vs. $3.65-$3.80 consensus estimates and reaffirmed FY-2010 revenues @ $4.5bn vs. $4.55bn consensus.
- Retail / Home Furnishings: Kirkland’s Inc. (KIRK +18.37%) reported @ $0.23 and crushed consensus estimates by @ 187%. In addition to this, it expects EBITDA in FY-2009 to be "significantly" higher than previous year’s $10.1mm. With @ 8.3% of its float short, an amount equivalent to @ 20% of its 10 day average volume, it was no surprise to see the stock rank the third best performer in the Russell 2000.
- Semiconductors: Verigy (VRGY +7.56%) guided 1Q losses @ ($0.09) vs. Bloomberg’s analyst survey @ ($0.14).
- Retail / Apparel: Zumiez Inc. (ZUMZ +9.80%) reported 3Q earnings @ $0.17, which was 21% better than the Bloomberg survey for average analyst estimates. Yahoo Finance reports a short interest ratio @ 13.7 as of Oct-30-2009 or (@ 4.36mm shares or 44.8% of the its float). 2.476mm shares were traded vs. its 20 day average volume @ 522k shares. Very interesting…
- Upgrades: Agriculture (NASDAQ:ANDE); Medical Instruments (MR, CYBX); Tech (NASDAQ:AMSC); Energy (NYSE:HES); Insurance (NYSE:AFL); Retail (NYSE:DDS)
- Healthcare News:
- Merck (MRK +3.20%) led the Dow Industrials after announcing that the Committee for Medicinal Products for Human Use of the European Medicines Agency recommended approval of Elonva, a new fertility drug for women.
- Intuitive Surgical (ISRG -0.80%) was granted approval by Japan’s Ministry of Health, Labor and Welfare to market its da Vinci S System.
- Europe: Goldman Sachs issued a positive outlook for steelmakers, which lifted European stocks in the early part of trading.
- Europe: October Producer Prices in Germany were less than expected and remained unchanged m/m and -7.6% y/y. This marked the eighth straight month of year-over-year declines.
- Asia: The BOJ kept interest rates unchanged at 0.1%. It stated the following: "Japan’s economy is picking up mainly due to various policy measures taken at home and abroad, although the momentum of a self-sustaining recovery in domestic private demand remains weak." Its Deputy Prime Minister Kan emphasized that the economy "is in a mild deflationary phase," which some believe pressures the BOJ to increase its accommodative measures such as increasing its purchases of government bonds to fight deflation. Tempering this statement was BOJ Governor Shirakawa who said inflationary expectations are stable and the financial system is solid with little risk of prices going into a deflationary spiral.
- Negative Earnings/Guidance:
- Personal Computers: Dell (DELL -9.96%) posted 3Q earnings @ $0.23 vs. First Call consensus @ $0.28. Profits and revenues respectively declined 54% and 14.9%.
- Consumer Goods / Electronic Equipment: Sony (SNE -0.67%) extended it profitability target and is now looking for a 10% return on equity by March 2013 vs. its previous target date @ March 2011.
- Communications Equipment: ADC Telecommunications (ADCT -10.99%) was the 3rd biggest laggard in the Russell 2000 after forecasting 1Q revenue @ $250mm to $275mm vs. analysts estimates @ $270.4mm.
- Computer Peripherals: Aruba Networks (ARUN -6.68%) reported 1Q earnings @ ($0.28) vs. estimates @ ($0.04).
- Residential Construction: D R Horton (DHI -15.35%) was the weakest component in the S&P 500, slumping 11 percent to $10.96. It reported 4Q earnings @ ($0.73) vs. consensus estimates @ ($0.27).
- Retail / Apparel: Wet Seal Inc. (WTSLA -8.48%) guided 4Q profits @ $0.07 vs. consensus estimates @ $0.08 per share.
- Consumer Credit News: An S&P report stated that the credit crunch could worsen for U.S. consumers. The report tracks the decline in consumer debt from its peak two years ago and surveys the landscape for future lending standards, reductions in consumer spending, and possible changes in regulations affecting the consumer credit industry. It views the proposed consumer protections which limit fee income as having negative repercussions for consumers. For example, as banks attempt to compensate for lost credit card revenues, they might raise borrowing costs for customers, including those with good credit histories. In addition to this, if interest rates increase due to economic recovery, then many consumers could be priced out of the market for certain lending products.
- Federal Reserve Balance Sheet: The latest report revealed the Fed has increased its balance sheet to levels not seen since December as it added more agencies and mortgage backed securities to its holdings.
- European Central Bank: ECB President Trichet, at a conference in Frankfurt, suggested that the ECB may be ready to end some of the existing stimulus measures in response to the financial crisis. He stated that "any non-standard measure whose continuation would pose a threat to the achievement of price stability must be undone promptly and unequivocally." Trichet has also guided that the ECB probably will not renew its offer of 12-month loans to banks after December while stating that exit from emergency lending measures need not translate into interest rates hikes anytime soon.
ETF 5 Day New Highs:
ETF 5 Day New Lows:
U.S. Equities (DIA, IWM, QQQQ, SPY, XLE, XLF, XLI, XLK, XLU, XLY, BBH, CUT, FAN, FDN, HAP, IAI, IGF, IGN, IHI, IYT, KIE, KOL, OIH, PHO, RKH, SEA, SLX, SMH, SWH, TAN, XME); International Equities (EWC, EWZ, ILF, ISI, EWG, EWQ, EWU, IEV, RSX, VGK, EWA, EWT, FXI, IF, EEM, EWX, GAF, GML, GUR); Commodities (NYSEARCA:USO); Forex (BZF, CEW, CYB, DBV, FXA, FXB, FXC, FXF, XRU); Bonds (BWX, EMB, WIP); Real Estate (FIO, ICF, ITB, IYR, RTL, XHB). (Note * denotes 250 day new low)
The trend tables below reveal more collateral damage to equities and commodities. One key development is the new short-term downtrend initiated by the Nasdaq 100 (QQQQ). Now we must see if this move is sustainable. Other sectors and industries have begun to trade below their intermediate uptrend support levels. If these moves prove sustainable, then the potential downside could be more extended in terms of time and distance.
Wishing everyone a Happy & Blessed Thanksgiving and weekend from Hillbent on the Market Direction and ETF Market Trends™…
ETF Market Trends™ Monitor (11-20-2009)
|U.S. Equity ETFs|
|DIA (DJ Industrials)||103.25||-0.06%||-27.95%||73||up||up||up|
|SPY (S&P 500)||109.43||-0.36%||-31.70%||56||up||up||up|
|QQQQ (Nasdaq 100)||43.44||-0.50%||-28.69%||59||down||up||up|
|IWM (Russell 2000)||58.59||-0.12%||-34.78%||70||down||down||up|
|VXX (VIX Futures)||41.24||-2.64%||28.49%||18||up||down||down|
|XLP (Consumer Staples)||26.88||0.11%||-17.43%||61||up||up||up|
|XLV (Health Care)||30.38||0.66%||-30.20%||89||up||up||up|
|XLY (Consumer Discrtn)||28.69||-0.52%||-23.87%||47||up||up||up|
|CRBQ (Global Commodity Equities)||42.29||-1.31%||-54.99%||38||up||down||down|
|CUT (Global Timber)||17.26||-0.29%||-43.93%||65||down||up||up|
|FAN (Global Wind Energy)||15.21||-2.81%||-34.01%||0||down||down||down|
|FDN (DJ Internet Index)||23.73||-0.54%||-49.42%||70||down||up||up|
|GDX (Gold Miners)||50.80||-0.59%||-6.77%||90||up||up||up|
|HAP (Hard Assets Producers)||33.27||-1.01%||-61.72%||30||up||up||up|
|IGF (Global Infrastructure)||33.87||-0.59%||-61.77%||82||down||up||up|
|IGN (GSTI Networking)||26.12||-1.17%||-59.87%||83||down||down||up|
|IHI (Medical Devices)||50.23||-0.55%||-45.76%||47||down||up||up|
|ITA (Aerospace & Defense)||48.41||0.29%||-64.75%||83||up||up||up|
|NLR (Nuclear Energy)||22.78||-0.35%||-31.76%||63||down||down||up|
|OIH (Oil Services)||117.10||-2.25%||-14.38%||24||down||down||up|
|PHO (Water Resources)||16.22||-0.37%||-16.41%||75||down||down||up|
|PXR (Emerging Mkts Infrastructure)||43.01||0.58%||-54.34%||87||down||up||up|
|RKH (Regional Banks)||77.39||-0.45%||-55.48%||50||down||down||up|
|SEA (Global Shipping)||13.63||-0.73%||-47.56%||62||up||up||up|
|TAN (Global Solar Energy)||9.14||-1.19%||-17.07%||71||up||down||up|
|XME (Metals & Mining)||48.74||-0.41%||9.78%||90||up||up||up|
|International Equity ETFs|
|EWC (MSCI Canada)||25.77||-0.58%||-54.01%||85||up||up||up|
|EWW (MSCI Mexico)||47.05||-0.57%||-51.46%||54||up||up||up|
|EWZ( MSCI Brazil)||75.09||-1.00%||-36.86%||71||down||up||up|
|ILF (Latin America 40)||46.97||-0.97%||-29.41%||68||down||up||up|
|ISI (S&P 1500)||49.08||-0.16%||-51.80%||93||up||up||up|
|EWG (MSCI Germany)||22.30||-1.28%||-70.66%||41||down||up||up|
|EWQ (MSCI France)||25.90||-1.45%||-57.20%||67||down||up||up|
|EWU (United Kingdom)||16.49||-1.38%||4.22%||82||down||up||up|
|IEV (S&P Europe 350)||39.41||-1.20%||-34.96%||76||down||up||up|
|VGK (Vanguard Europe)||50.84||-1.17%||-3.99%||71||down||up||up|
|EWA (MSCI Australia)||23.30||-0.94%||-30.97%||64||down||up||up|
|EWH (MSCI Hong Kong)||15.86||-0.31%||-61.88%||90||down||up||up|
|EWJ (MSCI Japan)||9.30||0.65%||44.22%||67||down||down||up|
|EWM (MSCI Malaysia)||10.96||0.55%||-52.39%||67||down||up||up|
|EWS (MSCI Singapore)||11.36||0.71%||-40.12%||64||up||up||up|
|EWT (MSCI Taiwan)||12.35||-0.16%||-45.31%||83||down||up||up|
|EWY (MSCI South Korea)||46.15||0.85%||-41.54%||85||up||up||up|
|FXI (FSTE China)||44.59||-0.18%||-38.39%||94||down||up||up|
|IF (Indonesia Fund)||10.08||0.20%||-59.30%||67||down||up||up|
|IFN (India Fund)||30.50||0.36%||-6.72%||42||up||up||up|
|EEM (MSCI Emerging Mkts)||40.65||-0.42%||-22.35%||60||down||up||up|
|EWX (Emerging Small Caps)||46.01||-0.60%||-78.02%||50||down||up||up|
|GAF (Middle East & Africa)||60.02||-0.89%||-44.92%||100||down||down||up|
|GMF (Emerging Asia Pacific)||72.26||-0.40%||-18.36%||23||up||up||up|
|GML (Emerging Latin America)||77.14||-0.95%||-29.32%||68||down||up||up|
|GUR (Emerging Europe)||43.04||-0.76%||-45.06%||84||down||up||up|
|DBB (Base Metals)||20.68||0.93%||-58.71%||100||up||up||up|
|UNG (Natural Gas)||9.01||0.78%||-19.82%||88||down||down||down|
|BZF (Brazilian Real)||26.84||-0.37%||-3.37%||80||down||up||up|
|CEW (Emerging Currency)||22.07||-0.45%||19.81%||13||down||up||up|
|CYB (Chinese Yuan)||25.31||0.04%||17.20%||83||lateral||lateral||lateral|
|DBV (G10 Currencies)||23.35||-0.43%||0.19%||85||down||up||up|
|FXA (Australian Dollar)||91.71||-0.42%||-38.85%||90||down||up||up|
|FXB (British Pound)||164.66||-0.93%||66.08%||61||down||up||up|
|FXC (Canadian Dollar)||93.19||-0.63%||17.41%||70||down||down||up|
|FXF (Swiss Franc)||97.83||-0.47%||-49.87%||68||down||up||up|
|FXM (Mexican Peso)||76.68||-0.16%||-75.31%||96||up||up||up|
|FXY (Japanese Yen)||111.57||0.06%||-51.28%||52||up||up||up|
|ICN (Indian Rupee)||25.12||0.36%||-56.44%||100||down||up||up|
|UUP (U.S. Dollar)||22.44||0.40%||-18.73%||38||down||down||down|
|XRU (Russian Ruble)||35.55||-0.20%||49.76%||71||up||up||up|
|AGG (Investment Grade)||105.15||0.02%||-22.20%||71||up||up||up|
|BWX (Int’l Tsy Bonds)||59.29||-0.42%||-9.76%||71||up||up||up|
|EMB (Emerging Markets Bonds)||102.67||-0.08%||63.35%||49||up||up||up|
|HYG (Hi Yld Corp)||86.22||-0.02%||-25.15%||65||up||up||up|
|IEF (7-10 Yr Tsy)||91.81||-0.04%||-37.79%||38||up||up||down|
|JNK (Hi Yld Bonds)||38.06||-0.05%||-3.26%||15||up||up||up|
|MBB (Mortgage Bonds)||107.86||0.23%||-5.27%||100||up||up||up|
|MUB (Nat’l Muni Bond)||102.62||0.04%||-22.66%||78||up||down||up|
|SHY (1-3 Yr Tsy)||84.16||0.02%||-35.03%||25||up||up||up|
|TIP (Tsy Inflation Protect)||105.65||-0.01%||-28.97%||60||up||up||up|
|TLT (20 Yr+ Tsy)||95.12||-0.02%||14.83%||68||up||down||down|
|WIP (Int’l Inflation Protect)||57.56||-0.17%||-21.75%||73||down||up||up|
|FIO (Industrial Office)||22.33||-0.23%||70.70%||29||up||up||up|
|ICF (Cohen & Steers)||49.20||-0.65%||-33.60%||53||up||up||up|
|ITB (Home Construction)||11.61||-2.85%||90.31%||29||down||down||up|
|IYR (DJ US Real Estate)||43.05||-0.76%||-33.62%||43||up||up||up|
|REM (Mortgage Reits)||14.79||0.07%||-2.57%||58||up||down||up|
|REZ (Residential Index)||29.21||0.31%||-52.52%||94||up||up||up|
|RTL (Retail Index)||20.06||-0.74%||-87.00%||21||up||up||up|
*PMI measures strength of % daily trading range on scale of 0 to 100
**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend
***Vol% measures % change in daily volume vs. average daily volume
Market Momentum Diary: 11-20-2009
|% Stocks > Mov Avg||20-Day MA||50-Day MA||200-Day MA|
|Daily Market Stats||NYSE||Nasdaq|
|52 Week New Highs||74||26|
|52 Week New Lows||3||8|
Hillbent Market Direction Resources
Key Market Moving Events for the week of 11-23-2009 to 11-27-2009:
- Monday (11-23-2009)–> Existing Home Sales; Earnings (ADI, BJS, CPB, HPQ, TSN)
- Tuesday (11-24-2009)–> GDP; Corporate Profits, S&P Case Shiller Home Price Index, Consumer Confidense, FHFA House Price Index, Treasury Auctions (4-week, 5-year), FOMC Minutes, and Earnings (HNZ, HRL, MDT)
Wednesday (11-25-2009)–> Durable Goods Orders, Personal Income & Outlays, Jobless Claims, Consumer Sentiment, New Home Sales, EIA Petroleum Status Report, EIA Natural Gas Report, 7-Yr Note Treasury Auction, and Earnings (DE, TIF)
Thursday (11-26-2009)–> Markets are closed for Thanksgiving Day! (which begins with a rigorous morning workout followed by quality time with family & friends to express gratitude for our blessings; and indulgence in lots of turkey, football, beer/wine, and a well-deserved nap)
- Friday (11-20-2009)–> An early close, but do not ignore the Fed Balance Sheet and Money Supply reports scheduled to be released @ 4:30 pm EST.
Postive & Negative Earnings Surprises: Refer to Hillbent’s earnings summary report for a detailed analysis of positive & negative earnings surprises
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