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The Growth Stock Investor is a trader/investor who applies a fusion of fundamental, technical, and quantitative strategies for market timing, growth stock selection, and risk management.
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  • Daily Report December 21, 2010 0 comments
    Dec 20, 2010 11:25 PM | about stocks: SPXCF
    Market Analysis

    Market Summary

    Today we was a bit of a zig zag day, ending positive for the most part. We see that the expansion of new lows is still present, and positive breadth was not strong, not even over 60% for the most part. This is leaves room for caution in the current state of the market. In the NASDAQ we saw slightly more issues advancing, but with the volume backing the decliners. This shows us a slightly false positive day, that may have been more negative than positive. Again, we should be cautious of the market right now, especially in its over extended position.

    Lately we have seen a disparity between the NASDAQ and NYSE in terms of price and breadth. We must remember what comprises these indexes. The NYSE has many bond and other interest rate based securities in it. For that reason, we have seen the NYSE very weak as of late with bonds trending downward. Remember, never just look at the numbers, but understand why. In this way you can make the best appropriate decisions.


    Sometimes we can get so caught up in slight changes, ratios, divergences, and our latest technical analysis tools, that we can lose sight of the big picture. For this I often make this chart one of the last I look at. The point and figure helps reduce noise, and gives a clear indication of supply or demand, up trend or down trend. Here we see a clear uptrend, confirmed multiple times, and with a catapult breakout recently occuring, providing a base from which we can advance.

    In our intermediate term timer (not shown here), we have been diverging from the market. It is in the overbought area, and has been declining over the last week. As of now, it is not signaling a change in trend, but the decline despite higher prices is something to note.

    Sector Analysis


    Here again we see that the defensive sectors are the strongest, with a little inflationary flare. This defensive sector rotation has been going on for over a week now, and is something we noted in a few previous reports. With Industrials and Tech falling below the S&P, we may be entering into the late stage of the business cycle where commodities and inflationary sectors dominate, as well as slight shifts beginning towards defensive sectors.

    Equity Analysis


    Altera Corp has a decent technical position as of right now. We saw a low volume controlled pullback to the 20 SMA, with good support on the moving average. This stock seems to be fighting the downtrend and a possible candidate for swing trade to the upside.


    As you can see, earnings are trending upward with backing revenue. Currently, earnings growth is in the triple digits, however, it is expected to decline over the next quarter to or two. Also, ROE is very attractive with ALTR.

    Again, not the greatest stock as far our model, but one for a possible swing trade.


    Positions: None

    Themes: Market Analysis Stocks: SPXCF
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