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After more than 40 years on Wall Street, Marc Chaikin founded Chaikin Analytics LLC in 2009 to deliver proven stock analytics to financial service professionals and individual investors. With the Chaikin Power Gauge, an alpha-generating quantitative model as its centerpiece, Chaikin Analytics... More
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  • They Threw The Kitchen Sink At The Market On Friday

    Stock Market Analysis and Ideas by Marc Chaikin

    They Threw the Kitchen Sink at the Market on Friday

    The S&P 500 Index closed on Friday at 2,081.18, down 1% on the week. The market traded up to its previous highs through Thursday but was unable to close above the previous peak of 2,117. On Friday, they threw the kitchen sink at the stock market and the result was a 1%+ decline in the major averages, which was accentuated by weakness in cloud computing and biotech stocks.

    Among the factors effecting the market's psychology were:

    • The Chinese government's crackdown on stock market speculators
    • Ongoing concerns over Greece's ability to repay its debts coming due in May
    • Weakness in the German DAX Index
    • And, finally, a glitch that put 300,000 Bloomberg terminals around the world out of commission for almost 3 hours which resulted in a postponement of a sovereign debt offering in England.

    None of these influences directly impact the U.S. markets, except on a very short-term basis; but the end result was profit taking and a breakdown below short-term support levels.

    1st quarter earnings reports, which should be the market's major concern, have come in as expected with a big surge of reports due over the next 3 weeks. While the 64% of 100 or so big companies that have reported so far have beaten analysts' estimates, only 42% have bested top-line sales expectations. This might normally roil the stock market, but that doesn't appear to be the case so far.

    Economic reports have been generally downbeat and the poor price action of the Dow Jones Transportation Index confirms that the economy is not robust. Blame the weather, a strong U.S. dollar and lower crude oil prices but the reality is lower activity on the manufacturing front and a cautious note on consumer spending even though consumer confidence is moving higher.

    Since the stock market has parsed all of the above data and has not capitulated to the bearish case, our expectations are that we will trade in the sideways channel that has been in effect since November. The lower end of this consolidation range is 1,980 on the S&P 500 Index while the upper end is 2,120. Buyers should come into the market at 2,020 - 2,040, the area of the March lows and the 200-day average price for the S&P 500. Below that is the 1,980 support level from the December - January lows, which would represent roughly a 7% correction from the highs established in late February.

    The S&P 500 has held the important 2,040 support level and is in an uptrend until proven otherwise. A break below 2,040, particularly with the bearish price action of the Transportation Index, and a potential head and shoulders top in the NASDAQ Composite Index, would probably trigger a spate of selling so be prepared and watch the 2,040 area closely.

    Click Here for more stock market ideas and analysis from Marc Chaikin.

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase ofany stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness.

    Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

    © 2015 Chaikin Analytics, LLC. All rights reserved.

    Apr 22 1:58 PM | Link | Comment!
  • Market Rejects Bad Jobs Report And Rallies To Upper End Of Recent Trading Range

    Stock Market Analysis and tips by Marc Chaikin

    The S&P 500 Index closed on Thursday at 2,102.06, up 1.7% on the week. The market shrugged off the Good Friday sell-off of 1% in the stock index futures market by reversing off a sharply lower opening on Monday to finish the day up 0.5%. Our supposition last week that the market would reverse by Monday's close proved to be correct, and the major averages finished the week within 1% of recent highs.

    As has been the case for the past 2 months, the stock market has been having an ongoing debate about the following factors' effect on future stock prices:

    · Lower 1st and 2nd quarter earnings

    · The timing of the first Federal Reserve Board rate hike

    · The effect of lower crude oil prices

    · A strong U.S. dollar

    It is a harsh reality, but true none-the-less, that if the economists, Wall Street strategists and portfolio managers who appear on CNBC and are quoted in the press, cannot agree on the impact of these cross-currents on the future direction of stock prices, that you and I should ignore them and focus on what we know.

    The stock market is near its all-time highs, but much hinges on investors' reactions to 1st quarter earnings reports and guidance from management about the balance of 2015. Wall Street analysts have been paring back their estimates for over two months, and it is now generally agreed that the 1st and 2nd quarter earnings reports for the S&P 500 companies will be lower. It is also a fact that a majority of the 18 S&P500 companies that have already reported earnings have bested analyst estimates.

    The S&P 500 held the important 2,040 support level and is in an uptrend until proven otherwise. With the market at the top of a 5-month trading range, there needs to be an impetus from this week's earnings reports to move higher. Other factors that could trigger higher prices would be weakness in the U.S. dollar and higher crude oil prices. A close above 2,110 would be a sign that a move to 2,150 - 2,200 is in progress.

    Click Here for more stock market ideas and analysis from Marc Chaikin.

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase ofany stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness.

    Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

    © 2015 Chaikin Analytics, LLC. All rights reserved.

    Apr 14 5:14 PM | Link | Comment!
  • Let The Technical Indicators Be Your Guide
    Stock ideas and Stock Market Analysis by Marc Chaikin

    The S&P 500 Index closed on Thursday at 2,066.96, up 0.29% on the week. The market shrugged off soft economic reports and the weakness in transportation stocks knowing that Friday's jobs report would write the script for post-Easter trading.

    As everyone is now aware, the number of jobs created in March was a very disappointing 126k vs. estimates of 245k. With the stock market closed for Good Friday and most traders away from their screens, the S&P 500 futures sold off sharply finishing a very truncated trading session down almost 1% on Friday.

    While it is disconcerting to see the effects of the sharp drop in crude oil prices and the strong U.S. dollar, there is nothing really new in these lower than expected jobs numbers. Analysts have been cutting their 1st quarter earnings estimates for two months and the drop in capital expenditures in the energy sector is likely reflected in the poor jobs report.

    With Alcoa kicking off earnings season on Wednesday after the close, the resiliency of the equity markets will surely be tested and company guidance will once again be as important as the actual earnings reports.

    Technically the markets are holding up reasonably well but we will certainly open sharply lower on Monday. By Monday's close, we will see whether investor confidence can withstand a bad report from the volatile and often revised payroll report. My guess is that by Monday's close or Tuesday's early trading we will see buyers come into stocks.

    The key support levels for the S&P 500 Index are 2,040, which is the area of the March low and the 200-day moving average at 2,015. If the market closes below 2,040, be prepared for further declines but be mindful that 1st quarter earnings season usually sees April finish strong after initial weakness.

    Click Here for more stock market ideas and analysis from Marc Chaikin.

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase ofany stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness.

    Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

    © 2015 Chaikin Analytics, LLC. All rights reserved.

    Apr 06 4:47 PM | Link | Comment!
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