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To: Donald Wennerstrom who wrote (55579)2/25/2012 6:47:17 PM
From: Return to Sender
1 Recommendation   of 79948
From Weekly Recap - Week ending 24-Feb-12A modest advance by stocks put the S&P 500 at its best level in about 10 months, the Dow at its highest level in nearly four years, and the Nasdaq at its highest point in more than a decade, but gains were checked by some afternoon selling.

Consistent with recent sessions, early trade was relatively choppy as many market participants showed skepticism about the stock market's ability to keep climbing without consolidative activity following its climb in recent weeks -- the S&P 500 scored a 0.3% gain this week, booking its seventh weekly advance in eight.

Early headlines had little, if any, influence over the direction of broad market trade. As such, better-than-expected earnings from AIG (AIG 28.41, +0.42), Gap (GPS 22.57, -0.95), and JC Penney (JCP 41.72, -0.21) saw mixed reactions.

In a similar vein, there was hardly a reaction to economic data that featured an improvement in the Consumer Sentiment Survey for February from the University of Michigan to 75.3 from the 72.5 that had been posted in the preliminary reading. Economists polled by had expected, on average, that the Survey would improve to just 73.0. Released just minutes later, new home sales during January were said to have hit an annual pace of 321,000 units, which is down from the upwardly revised rate of 324,000 units set in the prior month, but better than the rate of 315,000 units that had been broadly expected.

Despite listlessness in the early going, stocks eventually worked their way higher. The move initially encountered resistance, but stocks were able to overcome it in a second attempt. That allowed the broad market to add incrementally to its multi-month intraday high. Although tech stocks traded with relative strength and settled with a 0.6% gain, the sector never really displayed the leadership necessary to drive a broad market rally.

Strength in the tech sector was partly offset by weakness in the highly influential Financial sector, which lagged for virtually the entire session and settled with a 0.4% loss.

As stocks appeared unable to extend their climb some participants opted to take some profits, dropping the S&P 500 to the flat line before it could find support.

Share volume this session was paltry, reflecting apathy among investors. The final tally on the NYSE was barely 640 million shares. Although volume trends have been low for several months, some question whether or not stocks can continue to climb if there isn't conviction among market participants.

Oil prices extended their climb again -- the energy component closed at a new multi-month high of $109.76 per barrel for a 1.7% gain. That move helped drive the CRB Index to a 0.8% gain for the day and 2.7% gain for the week. That stands as the CRB's best one-week performance of the past two months.

In the backdrop, the dollar dropped to a new two-month low against a basket of major foreign currencies. It was especially weak against the euro, which was quoted at $1.345 for a gain of about 0.6% by session's end.

Advancing Sectors: Tech +0.6%, Utilities +0.5%, Health Care +0.4%, Energy +0.4%, Consumer Staples +0.3% Unchanged: Materials, Industrials Declining Sectors: Telecom -0.1%, Consumer Discretionary -0.1%, Financials -0.4%

..Nasdaq 100 +0.4%. ..S&P Midcap 400 +0.0%. ..Russell 2000 -0.3%.

Index Started Week Ended Week Change % Change YTD %
DJIA 12949.87 12982.95 33.08 0.3 6.3
Nasdaq 2951.78 2963.75 11.97 0.4 13.8
S&P 500 1361.23 1365.74 4.51 0.3 8.6
Russell 2000 828.68 826.92 -1.76 -0.2 11.6

Semiconductors N.V. (NXPI), and FeliCa Networks announced that their collaboration will ensure interoperability between NXP's family of NFC radio controller solutions and the Japan infrastructure compliant with FeliCa.

Marvell (MRVL $16.17 +0.12) reported fourth quarter earnings of $0.21 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.18, while revenues fell 17.5% year/year to $743 million versus the $740.2 mln consensus. Non-GAAP gross margin for the fourth quarter of fiscal 2012 was 54.5 percent, compared to 56.8 percent for the third quarter of fiscal 2012 and 59.4 percent for the fourth quarter of fiscal 2011. Non-GAAP gross margin for fiscal year 2012 was 57 percent compared to 59.7 percent for fiscal year 2011.

Cirrus Logic (CRUS $22.81 +0.58) was upgraded to Outperform from Perform at Oppenheimer and the firm set a target price at $28 saying the company remains a top back-door play on the growth and success of Apple. Since winning an initial audio codec socket in the classic iPod, CRUS now effectively owns AAPL's audio codec business and they do not expect to see any lost share this year.

Thanks Sam and Don for the excellent discussion on ECRI, gas prices and more. I think it is important to note that the bubbles that popped over the last 12, or so, years not one has truly reflated. Factors are at work here that tend to make things seem better to those that are given to perpetual optimism than those who are not. In time all cycles work themselves out and later are repeated though never in quite the same fashion. Bottom line is that although I can successfully show that this recent bull run since the March 2009 bottom is getting longer in the tooth only another severe dip in the market will prove ECRI right to some people. When it does happen it will offer the kind of buying opportunity I hope we will see again soon. But then everybody gets to be right from time to time. RtS

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To: Kirk © who wrote (55571)2/25/2012 6:51:58 PM
From: Sam
3 Recommendations   of 79948
Kirk, I appreciate your reply. The Fed has a handy tool for looking at Industrial Production, so I will focus on that to show you what seems to me to be problematic about what Lakshman is saying.

Here is a graph of the Fed's Industrial Production Index since January 2009:


And here is a graph since January 2000:

Finally, here is a graph from 2002-2007:

Sure the rate of growth appears to slow in the first graph over the past year compared to 2009-10, but that is to be expected coming out of a deep recession. When it picks up, it will pick up quickly, then it will slow down. In fact, Lakshman has noted that very thing in past interviews, using the analogy of an airplane taking off. If you look at the rate of growth coming out of the 2002 recession, it is steep at first, and then it too slows, in fact it flat lines for a number of months before picking up again, then it goes down and flat lines and then picks up again at the end of 2003. In fact, it flat lines several times and even goes down a couple of times between 2002 and 2007 without generating a recession.

I realize that Industrial Production is only one indicator, but the Fed's tools at the link above makes it an easy one to track. I will see if BEA has something analogous to it later, probably tomorrow.

EDIT: I just tested the link, and it didn't do exactly what I wanted it to do. You can get to the above graphs by going to the link, search for Industrial Production Index, click on the link, and play with the graph.

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To: Return to Sender who wrote (55580)2/26/2012 9:37:35 AM
From: Sam
1 Recommendation   of 79948
Monday Morning Outlook
Reading the Technical Tea Leaves for Signs of Doom
Traders are tripping all over themselves to buy leveraged volatility vehicles
by Todd Salamone 2/25/2012 9:45:21 AM

Stocks racked up a few new multi-year highs last week, although the major market indexes finished with relatively minor gains. Traders took heart in a generally decent slate of domestic economic data, but steadily rising oil prices sparked some anxiety about the fragile state of the recovery. Plus, the Dow Jones Industrial Average (DJIA) made its first foray north of 13,000 in years -- which prompted a lively round of "too far, too fast?" banter, particularly with the euro zone still teetering on the edge of a recession. However, Todd Salamone wonders whether technicians have grown too gloomy, too fast. With traders touting a laundry list of potentially bearish indicators, Todd runs the numbers to see how accurate these sell signals have been in the past. Meanwhile, Rocky White takes a look back to see how the Dow typically fares after crossing a millennium milestone. Finally, we wrap up with a preview of the major economic and earnings reports for the week ahead, as well as a few sectors of note.

Notes from the Trading Desk: The Truth About the VIX Term Structure
By Todd Salamone, Senior VP of Research

"Volume in a leveraged exchange-traded note that tracks futures contracts in the market's favored anxiety index, the VIX, soared in the last two weeks, as investors bet the recent calm in markets would not last. It forced Credit Suisse, which offers the VelocityShares Daily 2x VIX Short-Term exchange-traded note, to stop issuing shares out of concerns that demand for the security would start to have an undue influence on the price of VIX futures, rather than tracking that market."
- Reuters, February 23, 2012

"Hedge funds have stepped back into the market after a cautious year end, but they're advancing cautiously... Last year, for example, hedge funds were taking a much bigger bet on stocks rising. This time last year their net positioning -- longs minus shorts -- was as high as 51% at Credit Suisse. Today it's 36%, up just slightly from 32% at the start of the year. Cash levels, meanwhile, are higher at about 22% than they were in early 2011, when they stood at 18%."
- The Wall Street Journal, February 22, 2012

As you know, we at Schaeffer's Investment Research use a combination of technical and sentiment tools to gauge the health of the market from a risk and reward perspective. While we're practitioners of technical analysis, and we have much respect for the work of many technicians, we realize that technical analysis is not flawless. Moreover, like any other investor or trader, technicians can sometimes get themselves into crowded trades, leaving them vulnerable to situations in which the market behaves in the exact opposite manner than what their research suggests.

In monitoring various Twitter feeds and media sentiment, it appears the market's current technical backdrop is leading many traders into a crowded short position, which could resolve itself by stocks charging ahead longer than many expect. For example, during the past week, we have seen pullback warnings driven by the following factors:

  1. The Average Directional Index (ADX) of the S&P 500 Index (SPX - 1,365.74) is above 40 and at an extreme, which means the trend is overextended and potentially mature.
  2. The percentage of stocks above their 50-day moving average is more than 80%, suggesting the market is overbought.
  3. The number of market indicators that are diverging as the SPX is making new highs is growing, suggesting the quality of the rally is decreasing. Many point to the recent weakness in the Dow Jones Industrial Average (DJIA - 12,982.95) and the smaller number of 52-week highs. (Side note: Given the weakness of the market from this time last year through March 4, the number of new 52-week highs could increase again over the next few weeks, as comparisons become easier.)
  4. CBOE Market Volatility Index (VIX - 17.31) futures are relatively high as compared to cash VIX, which is being interpreted as bearish among VIX followers.

The technical situation described in the four bullets above is certainly one that warrants attention. But one has to wonder, have these factors already been baked into the equity market? One could argue they are, as traders trip all over themselves to buy leveraged volatility vehicles, in anticipation of a volatility spike driven by a short-term pullback in the market. Our feeling is that leveraged vehicles are playgrounds for speculators, not necessarily hedgers -- suggesting there is still a healthy degree of skepticism among short-term traders within the context of a strong, short- and intermediate-term trend higher.

Moreover, we'll caution that sometimes an indicator gets more play than what it is worth. For example, the VIX term structure that is worrying some traders does not have a consistent track record, as measured by the two-month VIX futures trading at a significant premium to cash VIX. Around the middle of last week, two-month VIX futures were trading 38% higher than cash VIX, which is extremely high, and alarming to some traders.

We observed 36 instances since 2004 when the two-month VIX futures were 25% higher or more than VIX cash, and found that this "bearish" signal is not all that bearish after evaluating the signals. In our study, we could not accept more than one signal over any 20-day period. Per the table below, we found that the market has slightly more than coin-flip odds of advancing three, five, and 10 days later. Beyond 10 trading days, the odds of a decline are stacked against the bears.

After studying each and every signal, we found that this "bear" signal worked nicely from January 2007 through July 2010, but since August 2010, the market has actually advanced eight out of 10 occasions when VIX futures were significantly above cash. Could this signal revert back to being bearish, like the 2007-2010 period? Certainly. At the same time, our point is that the current VIX term structure isn't a "slam dunk" bearish signal, according to our research.

A well-respected, highly-followed trader on Twitter revealed he is short the market and, in conjunction with this revelation, said that the best trades are sometimes the most difficult. We have found this to be true, too, as our best trades are sometimes the most difficult to make. But is the short trade, at present, a "difficult" one?

Through Thursday, the SPX was up 24 days out of 36 in 2012 (67%), the highest percentage of days since 1995, when the SPX began the year up 24 out of its first 36 days. As many (note I emphasize "many") traders place speculative bets on higher volatility amid perceived deterioration in the technical backdrop and a market vulnerable to more mean reversion, short-term short exposure could be viewed as an easy trade to make, given the company.

In our view, short-term long exposure is a difficult trade, given it doesn't seem to be a very popular one with the trading crowd. Moreover, the potential buying power that the 800-pound gorillas (hedge funds) still possess, and the prospect for an unwinding of the speculative bets against the market, suggest the payoff for long positions remains acceptable.

Indicator of the Week: Dow 13,000 (And Other Round Numbers)
By Rocky White, Senior Quantitative Analyst

Foreword: Last week -- on Tuesday, to be specific -- the Dow Jones Industrial Average (DJIA) touched the 13,000 level for the first time since the 2008 market crash. Humans tend to think in round numbers, so these even levels are very important. You will often see stocks struggle when reaching a round number, as investors and traders mark that level specifically as "expensive" or "cheap."

For example, you would not be likely to hear a trader say, "12,766 seems overextended for the Dow, and that's when it's time to limit exposure." No, he'll say, "13,000 looks expensive." However, these psychological levels do not always act as barriers. For example, they can also be magnets. Once the Dow gets past the 13,000 level, the next number investors could be eyeing is 14,000, and the market will move quickly and effortlessly up to that level (wouldn't that be nice?).

Below is the Dow since 2006, with the 13,000 level marked. You can see it first overtook this level in 2007, when it chopped around for a while between 13,000 and 14,000. When it fell back below 13,000 in 2008, it retested this level one more time, but was smacked down -- and, of course, the crash ensued. In more recent times, the Dow flirted with 13,000 in the middle of 2011, but never touched it (it came within about 1% of 13,000). So, here we are again at this important round number. Hopefully, the analysis below can help us determine what to expect.

Quantifying the Data: I decided to look at these even levels to see if they have, indeed, been impediments to the market. Specifically, I looked at how the Dow fared after touching an even increment of 1,000. If the Dow struggled at that area, it might go back and forth across the level. In that case, I only looked at the first signal. The Dow first crossed the 1,000 barrier in 1966. Since then, there were 39 times when it went running into one of these psychological barriers.

The results are in the table below. The second table shows typical data for the Dow since 1960, for comparison. It does appear that, in the short run, the market does underperform after running across these even levels. In the two weeks after touching a millennium marker, the Dow averages a loss of 0.42%, and is positive less than half the time. Typically, the market gains an average of 0.28%, and is positive 57% of the time. In the longer run, though, these levels have had little effect.

This Week's Key Events: More Housing, Consumer Confidence Data on Deck
Schaeffer's Editorial Staff

Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.


  • The economic calendar kicks off on Monday with pending home sales. Earnings are due out from Lowe's (LOW), Career Education Corporation (CECO), Cooper Tire & Rubber (CTB), Dendreon (DNDN), Human Genome Sciences (HGSI), Jazz Pharmaceuticals (JAZZ), (PCLN), Savient Pharmaceuticals (SVNT), SINA Corp. (SINA), Southwestern Energy (SWN), Valeant Pharmaceuticals (VRX), and Zagg (ZAGG).


  • Tuesday features the latest durable goods data, the S&P/Case-Shiller home price index, and the Conference Board's consumer confidence reading. On the earnings front, we'll hear from AutoZone (AZO), Cablevision Systems (CVC), Domino's Pizza (DPZ), DreamWorks Animation (DWA), El Paso (EP), FirstEnergy (FE), Kodiak Oil & Gas (KOG), Office Depot (ODP), Sanderson Farms (SAFM), STEC Inc. (STEC), and Universal Display (PANL).


  • On Wednesday, the revised fourth-quarter GDP estimate will hit the Street, along with the Chicago purchasing managers index (PMI), the Fed's Beige Book, and the regularly scheduled crude inventories report. Quarterly results are expected from Costco Wholesale (COST), Finisar (FNSR), Joy Global (JOY), Liz Claiborne (LIZ), PetSmart (PETM), SodaStream International (SODA), Staples (SPLS), and Yingli Green Energy (YGE).


  • Thursday's docket includes weekly jobless claims, personal income and spending data, the ISM manufacturing index, and construction spending. Stepping up to the earnings plate are Big Lots (BIG), James River Coal (JRCC), Foot Locker (FL), Kenneth Cole (KCP), Kroger (KR), Martha Stewart Living (MSO), Motricity (MOTR), and Wendy's (WEN).


  • There are no major economic releases scheduled for Friday, and Genesco (GCO) is the lone earnings report of note.

And now a few sectors of note...

Dissecting The Sectors
Sector Utilities

Outlook: The positive momentum in the utility sector has dimmed lately, as this traditionally defensive group has cooled its heels amid strength in the broader equities market. However, within the context of the longer-term uptrend in the PHLX Utility Sector Index (UTY), pullbacks like the one we're seeing now are not unusual, and we would view these dips as buying opportunities. In fact, UTY recently found support in the $455 area -- a site of former resistance in mid-2011 -- and has now established a foothold atop the round-number $460 level, as well. In addition to the sector's solid long-term technical performance, utilities offer attractive capital appreciation potential, as well as appealing dividend yields (with a number of sector components going ex-div this month). As a result, we view utility stocks as a nice complement to a portfolio that consists of some other names deemed as more "risky." Meanwhile, despite the technical and fundamental appeal, there's still a healthy amount of skepticism surrounding these stocks. We typically don't see this group mentioned in articles that advocate high-yielding stocks, and many analysts remain on the sidelines. Within the utility sector, Southern Company (SO) remains a standout, and the stock's pullback to support in the $44 area could lure a few cautious buyers in from the sidelines.


Outlook: The trend of improving jobs data has continued, with January payrolls surging impressively, and the unemployment rate pulling back to its lowest point in nearly three years. Just last week, we had another upbeat report on initial jobless claims, and consumer-level inflation remains relatively tame -- pointing to an improving fundamental backdrop for the U.S. consumer, and, by proxy, consumer discretionary stocks. On the charts, the SPDR S&P Retail ETF (XRT) remains a technical outperformer, despite a less-than-stellar report on January retail sales. After setting a new all-time high of $58.92 earlier this month, XRT is now solidifying its foothold above formerly staunch resistance in the mid-50s. For those seeking a bullish play in the retail/leisure space, we recommend focusing on stocks in solid technical uptrends that are surrounded by skepticism, which creates the potential for upside surprises. In fact, the potential for big, breakout moves in the retail sector was on clear display last week, when familiar names like Macy's (M), Dillard's (DDS), and Sears (SHLD) all shot higher post-earnings. A few of our current favorites include retailers AutoZone (AZO), Advance Auto Parts (AAP), and Whole Foods Market (WFM), along with restaurateurs Chipotle Mexican Grill (CMG), Domino's Pizza (DPZ), and McDonald's (MCD). With skepticism still lingering toward these consumer-dependent stocks, contrarians can continue to capitalize on situations where sentiment has yet to catch up with the bullish technical performance.


Outlook: Housing data continues to come in hot-and-cold, as evidenced by last week's mixed reports on new home sales and existing home sales. However, the coolly received data gave the SPDR S&P Homebuilders ETF (XHB) a chance to fill in its bullish gap from Feb. 3, and former resistance in the $19.50 area now appears to be holding as support. The $20 level has been acting as a bit of a speed bump lately, as this round-number area marked the fund's May 2010 peak. On the plus side, XHB still has plenty of room to rally up to $23.25 -- which is half its all-time high, reached only three months after the fund was launched in 2006. Despite the improving price action in the sector, analysts remain overwhelmingly negative, with builders attracting a steady stream of downgrades during the month of February. Within the group, a number of housing stocks pulled back last week after finding new annual highs earlier in the month, providing a potential entry point for sidelined buyers. Some of our preferred names in the sector are Lennar (LEN), Toll Brothers (TOL), Meritage Homes (MTH), PulteGroup (PHM), and D.R. Horton (DHI), all of which sport relatively high short-to-float ratios. Going forward, these names could benefit from upgrades or short-covering activity as the technical and fundamental performance continues to surpass the Street's low expectations.

Prepare for the investing week ahead. Every week, Bernie Schaeffer and his staff provide you with their insight about what has happened and, more importantly, what will happen in the market. We dig deep and show you what's happening behind the scenes, and tell you which indicators are predicting major market moves. If you enjoyed this week's edition of Monday Morning Outlook, sign up here for free weekly delivery straight to your inbox.

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To: Sam who wrote (55582)2/26/2012 10:03:55 AM
From: Return to Sender
2 Recommendations   of 79948
InvestmentHouse Weekend Market Summary

-Stocks start stronger, give up the gains for a mixed close as the slow slog continues.
- Slow overall, but some solid moves from solid leaders.
- Michigan Sentiment Final jumps again.
- New home sales fall in January, but opposite of Existing Home Sales, they do so because of an upward revision in December numbers.
- Geithner says 'no quick fix' for gasoline problem. No there is not, but we would already be 'fixed' if we had taken action back when they last said there was no quick fix . . .
- President pushes algae fuel as he takes credit for higher oil production that had its beginnings before he was even running for President and when he has only 3% of offshore zones closed to drilling.
- Excess money helping fuel higher fuel prices.
- Indices end the week basically unchanged, i.e. still rising but making virtually no overall progress. Individual stocks are the upside key for now as we watch for rollover signs.

Indices try to make a meaningful move but suffer the afternoon dips.

Friday was heralded as the day that the Dow crossed 13K, and surely it did. It moved up to a whopping 13,014. It could not hold it again, however, and faded back below the magical 13K on the close. SP500 was said to have made a new closing high since 2008. Yea verily, it did, but it also did not break above its May intraday high. When you are talking about old highs, you have to talk about where it made it intraday. If you are playing a stock or index, then that makes a difference in a technical sense. Am I splitting hairs? Yes, I am.

There was virtually no change in the market as the indices closed mixed, but they did give up an early gain. We had a bit of that high-to-low action versus the low-to-high action that has been the hallmark of this rally. The low-to-high action is a positive because it shows buyers stepping in whenever there is a dip. We saw that this morning. Stocks open and sold back. There was that first-hour dip, and buyers came in and rallied stocks to session highs and pushed the SP500 to that new closing high. It was really looking good, almost breaking through the prior peak marking that bear market high. It could not quite do it, and it faded at that high. The buyers did not stay around until the close on Friday. It was hardly catastrophic. As noted, the indices are still very solid in their ranges, bumping up against -- or in some instances -- actually moving through the prior bear market highs.

We have the same action of a slow, steady move to the upside even though it was not shared by all of the indices on Friday.

SP500, +0.17%; NASDAQ, +0.23%; Dow, -0.1%; SP600, -0.4%; SOX, -0.2%

As I said, it was a mixed market. It was spread between the growth and the more stoic and staid large cap NYSE stocks and indices as well. It was a definite mixed bag on the day, and it was quite frustrating and boring. The indices are continuing this climb to nowhere. We have heard about the Bridge to Nowhere in Alaska. This is definitely not a move to nowhere, but it seems like it is going nowhere fast. There was an up day followed by a down day. Or a good, solid break to the upside followed by several days lateral. It is hard for the market to put together two (and dare we ask for three?) strong upside sessions back-to-back. I would even settle for every other day. Instead we get the slow slog to the upside.

That does not mean there were not good moves on the day. Some of the plays we were looking at broke nicely to the upside. FOSL is one of those apparel retailers doing quite well. It had a solid 2.5% break to the upside. VFC, another apparel maker, bounced nicely off of the 10 day EMA on rising volume. A very nice pullback to test its breakout, and it started to resume the move. They are out there. They are making upside moves, but it is more of a stock-by-stock basis. They are definitely moving, but the bigger moves are coming on individual names versus the overall market. That says something in itself; perhaps the market is tired. I have been saying that for a while.

Has it slowed the market? Yes. But it has not stopped the market. The move is definitely slower, but it is still moving higher and it has not put in that rounded-look looking top you get before selloffs. KLAC has a very classic-looking rounded top. The stock continued to work higher through late 2011, but as it did, MACD was putting in lower highs even as the stock put in higher price highs. Then there is a round off top spanning early January until basically this week. It broke below the 50 day EMA, and it tried to test on Wednesday and Thursday. Then Friday it broke lower once more. We have the move up on waning momentum, and then the rounding out at the top. Now perhaps we will have the rollover.

That puts this market in what they like to call on the financial stations "a stock-picker's market." That is where you have to get the right names. If you are a fundamental investor, that makes life very difficult for you. That is where technical analysis comes in. Frankly, we are always picking stocks. Every day we go through a big list of possible plays where we might put our money, and we decide whether it is worth it. Of those that are, we decide which have the best risk/reward, the best pattern, and are ready to go. Those are the ones that make it on the report. It is not something new for us, but it is something they like to talk about because it makes things a little more mysterious and supposedly difficult for the average investor. Anyone can do this, however. You do not have to be all that smart; you just have to understand how the market works and understand that it does not work the way you were taught that things should work. But that is a whole other story. While I teach some of it here, I have to teach classes to really get into that.


The other markets pretty much kept the trends they were following for the week as well.

Dollar. 1.3456 versus 1.3367 euro. It was a tough week for the dollar, and the closed lower again. It was a multi-month low versus the dollar (or a high versus the dollar, whichever way you want to look at it). It broke the dollar below its recent range in the index. The dollar stopped rising against the yen, and that has fueled this quick drop on Thursday and Friday in the DXY0. Of course it is down sharply against the euro as well.

The dollar should be getting stronger, in theory, if the U.S. economy is supposed to be stronger in the future. There is that offsetting problem of the eurozone. Money is moving back to the continent after spending time in the U.S. That is one of the reasons why the dollar is losing ground versus the euro. They are selling dollars in favor of buying euros.

Bonds. 1.98% versus 1.99% 10 year U.S. Treasury. Bonds were up overall on the day, although the 10 year posted a very modest gain. Bonds are holding in their range. They have a little triangle set up, and they bounced this week. We will see if they can make a breakout. That would be counterintuitive to a stronger economy in the U.S. and a stronger recovery in Europe. Bonds would be stronger if there was worry about the economic future here, in Europe, or both. The fact that they are rallying would suggest some kind of problem down the road. It is important to note that they have not broken out and they are at the bottom of their range. While they may be rebounding this week, we have to the see if it is just a relief move or something more significant. Right now it does not suggest that it is anything terribly serious. If this pattern forms up a bit better and bonds start to make the breakout, that suggests something is out there that we have to worry about yet again.

Gold. 1,776.30, -9.90. Gold was off on the session. It took a breather after a very solid move up on the week. This week saw it resume the breakout from the channel formed from the fall off 2011 into early 2012. There was the breakout, the test, and then a great move to the upside this week. There was a little giveback on Friday. That is perfectly normal after a good week to the upside

Oil. 109.76, +1.93. Oil continues higher, painfully so. Quite the breakout on the week. Indeed, it was an impressive three-week move for oil. We were looking for a test but it was not showing up at the end of the week. Why not? There is stress from Iran and its issues with Israel, as well as other problems in the Middle East that keep tensions higher with respect to oil. Also there is the possibility of sanctions against Iran by the eurozone coming later. Iran is making it clear that it does not view that as a friendly act. No kidding.

There is also the dollar and its decline. As we used to see and talk about a lot in the past, oil tends to rise as the dollar weakens because it is nominated in dollars. It takes more dollars to buy every barrel of oil when the dollar value declines. You do not hear much about this right now as to why oil is high, but that is a very good reason why the moves are accelerating to the upside. The dollar is accelerating its decline against other currencies. It takes more dollars to have the same value for a barrel of oil. This despite the fact that there is a lot of oil in the U.S. right now. The President is taking credit for making the increased oil production possible. I will talk about that more later, but it is absolutely crazy. That is like a newly-elected mayor cutting the ribbon on a completed 20-story building that a company built and saying, "Thanks to the policies I have implemented, we were able to build this." A lot of it was built well before the mayor ever showed up. That is exactly what happened with the additional energy production we have now.


Internally it was rather boring on Friday.

Volume. NASDAQ -7.2%, 1.6B; NYSE -17%, 581M. Volume fell fairly sharply.

Breadth. NASDAQ, -1.2:1; NYSE +1.2:1


SP500. The SP500 is bumping right at that old post bear market high from 2011. It could not take it out. It fell back, but it put in that closing high that got everyone excited. Again, that does not mean much because it did not take out those old highs. It is still bumping, still working on it, and still not there.

DJ30. Same story with the Dow. It moved to a nominal new high, but then it faded back and was unable to close out the deal. Up on the week, yes, but still struggling to extend this break above those July 2011 highs.

NASDAQ. NASDAQ was up as well. It continues to try putting a little distance between it and those prior highs, but it is not making much headway. A nice 1-2-3 pullback during the week, a nice break to the upside on Thursday, but it could not consummate it on Friday. Very similar to last week.

SP600. The small caps were down a bit, struggling right below the prior peak. Moving now in a four-week lateral range, trying to get out of there. Not looking bad or rolling over, but we do see MACD falling lower, as with the other indices. It is making a lower high as the indices bump and try to put in that higher high. A bit of loss of momentum.

SOX. Last night I talked about the SOX and its nice pullback to the 20 day EMA. It tried to put in the bounce on Friday. It could not consummate it and fell back. Not a catastrophic rollover; it is still sitting above the 20 day EMA. It can still make the move, and we will see if it does. The semiconductors could provide a big boost for this market. If they get back on track and make more of these solid 3-4 session upside moves, that would really goose the other indices to the upside.


Semiconductors/Technology. I want to discuss those that I said were key and that we needed to watch. BRCM is attempting to hold at the 20 day EMA, make a higher low, and then try to push through the October 2011 peak. Very important test for BRCM because it is one of those AAPL-related semiconductors. Speaking of AAPL, it was up again. It posted a 1%+ gain on the day. It is right below this prior reversal-day peak. This will be an important test for AAPL. It has come right back up to that peak. The question is will it consolidate, make a higher low and break higher? Will it move right on through or will it reverse? Lower volume. MACD is still trying to make a move. It is nothing definitive yet. It is maybe just a bit low. We will see. This is a very important test for AAPL.

KLAC has put in that rounded top. It looks to be heading lower. That is the problem with chip equipment. NVLS has a rounded top. It is trying to hold the 50 day EMA, and it may do it. We will see. There is some trouble in semiconductors, but there are also good tidings there as well. Stocks such as BRCM are holding the line.

Retail. Retail remains solid. VFC had a nice break to the upside. It gave us the entry we were looking for. RL is trying to set up again for the new break to the upside. FOSL broke to a new rally high after that surge. It has given us the entry we were looking for as well.

Medical/Healthcare. ISRG looks to be making a new break to the upside. HNSN is another stock that we have played in the past. It looks like it could try to make a break to the upside. It has some serious resistance, but I just want to point out stocks that look to be coming around.

Manufacturing. HOLI had a nice break to the upside on Thursday and Friday. IR had a very nice flag pattern back to the 10 day EMA. We still have great stocks in great position to move higher, and they are moving higher. It is hard to bet against this kind of market.

What makes this kind of market run? Liquidity, baby. It has been the pump all along. Liquidity has fueled this recovery since basically day one. The turn at the bottom was from massive liquidity pumped into the system. For the initial rally, QE1 is what turned it. None of those other programs worked; QE1 brought stocks off of the bottom. Then we had the 2010 test. They did not know if there would be a QE2, and then it was announced in August. An inverted head and shoulders. The announcement was the catalyst, and shortly thereafter the market took off on another run up through early 2011. We knew that QE2 was ending in June, and the market started to falter ahead of that. It topped. It put in a head and shoulders. There was no QE3 announced, and the market sold off. Europe started to burn. With no QE3 the U.S. fell. The U.S. was in trouble, and then they announced twist. Twist rescued the market off of the lows. It was not enough to send it higher, however, because we still had the European problems. Then the Fed, the ECB, and four other world central banks got together and created dollar facilities for European banks. Thus we have had the move from mid-December to the present based on that liquidity.

We are back at the highs. We have had great runs and we are still having great runs thanks to the continued liquidity. As long as we have these good leaders moving, we can play them to the upside. Liquidity really drives the market.


Treasury Secretary Geithner says 'no quick fixes' to gasoline price issue. If we started at some point in the last 30, 20, or even 10 years we would not, again, be having this discussion.

There's gold (black gold?) in them thar' swamps! President takes credit for increased oil production, makes more claims about 'green' energy.

ECRI still calling for a mid-year recession.

Recession call made September 2011, forecasting a recession by mid-2012. You won't know you are in one until about 6 months later.

Definitive data show no recovery, indeed things are getting worse:
-Annualized GDP peaked in Q3 2010. By Q2 2011 it fell to 1.5%. The last read was 1.6%. Since the peak it has flat-lined at 1.5%.
-Personal Income is down.
-Overall sales are down (recall the inventory surge in Q4 2011 GDP number?)
-Industrial Production is at a 22 month low.

This pushed the Coincident Index to a 21 month low (see chart). In the last 50 years this has equaled a recession.

Why is sentiment up? Central Banks have printed trillions in currency. As I discussed last week, that is why we have had the economic lift we have had. Not stimulus, not real growth, just extra money.

Money Velocity: Trillions of dollars out there but velocity is at a record low in the US and near record lows in China and Europe. The money is not getting used but going into the financial markets just as it did in, for example, 1999 when the Fed pumped all that Y2K money into the economy and it was put in the stock market.

Personal disposable income: Negative for the past five months!!

Economy Summary Video



Sentiment is starting to play in the market. The VIX was up slightly, but it closed very low at 17.3. There was a decline in bulls and a rise in bears. This is markedly different from the spike we saw in bulls and the decline in bears over the last two weeks. Bulls came in at 51.1% while the bears rose to 26.6%. The 51.4 is up from 54.8 the prior week. The bears were at 25.8. Not a huge spike, but even as the market moves higher we are getting some issues with respect to how well the market is behaving. So much so that the slow move, even though it is to the upside, is getting a lot of people nervous. Bears are rising and bulls are falling from pretty steep levels, and that could suggest an interim top. Perhaps not a top of the rally, but an interim top.

The put/call ratio bumped up to 1.09. That is only on the CBOE, not the combination of all the put/call exchanges that, for instance, Investor's Business Daily uses. On IBD, the put/call ratio looks like it was around 0.84, but we do not have the latest numbers on that yet. We will have to see when it comes out over the weekend, but it will most likely be up. That shows that people are nervous. Does this mean that a bunch of speculators are out buying puts? No, although we have been buying some as the positions present themselves. We bought more positions today on KLAC to the downside, but that is different versus the big money managers buying puts for protection for a decline. They are anticipating a pullback, and it seems like everyone is anticipating it. What happens when everyone anticipates something? It tends to do the opposite, at least for a while. Thus the uptrend continues for now.

VIX: 17.31; +0.51
VXN: 18.27; -0.14
VXO: 15.44; +0.16

Put/Call Ratio (CBOE): 1.09; +0.11

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 51.1% versus 54.8%. After a quick and big spike higher bulls are right back down near that 50% level where it held for several weeks. Hit the highest level since April and May of 2011, the peak of the post-bear market high. Now the indices are back at that level and so are the bulls. All the more reason to watch this action at the prior highs. 35% is the threshold measuring bullish versus bearish action. Six weeks the bulls were below bears. A powerful sentiment signal but now dissipating. Highs from April and December (60% readings spanning December through early May 2011). The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 26.6% versus 25.8%. Back up a bit but still lower than the 28.7% three weeks back. As with bulls, a quick and big break upside, but now right back down. After spending weeks at 30%ish, bulls are faltering big time. Not at a bearish level but they are growing more confident even as the market hits the prior highs and is not blasting on through. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


Stats: +6.77 points (+0.23%) to close at 2963.75
Volume: 1.602B (-7.18%)

Up Volume: 937.03M (-322.97M)
Down Volume: 679.7M (+187.71M)

A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Advancers led 2.44 to 1

New Highs: 110 (+12)
New Lows: 8 (-15)


Stats: +2.28 points (+0.17%) to close at 1365.74
NYSE Volume: 581M (-16.76%)

Up Volume: 1.77B (-880M)
Down Volume: 1.61B (+520M)

A/D and Hi/Lo: Advancers led 1.21 to 1
Previous Session: Advancers led 2.6 to 1

New Highs: 162 (+30)
New Lows: 3 (-1)


Stats: -1.74 points (-0.01%) to close at 12982.95
Volume DJ30: 89.4M shares Friday versus 120M shares Thursday.


Next week there is a lot of economic data. Monday brings Pending Home Sales. Tuesday is Durable Orders, Case/Shiller, and Consumer Confidence. Wednesday there is the second estimate of GDP and Chicago PMI. Very important. Thursday is Initial Claims, Person Income and Spending, and the ISM Index for February. All will be important, particularly in light of the ECRI reiteration of the call for a mid-2012 recession. That is just the situation we have.

Where do go from here? The indices are basically up at the old highs, unable to push further but not falling. As I said earlier, this is what they call "a stock picker's market," and we have seen some really great stocks moving to the upside. The indices are not rolling over at least not yet. Since they are not showing signs of that rounded top rollover, we are not going to bet against them overall right now. We are not that comfortable with a lot of new positions, but they keep showing themselves so we will keep taking them. We will let our positions run as long as they will. If any get in trouble, we will take some off of the table as we have been doing. We are not letting them get out of hand on us.

What does that mean for the coming week? A lot of data. We still have to keep that eye on the exit just in case things turn. Typically you get a rollover. Typically, as noted on Thursday, it takes awhile for this to work through the system. But the initial moves can be sharp as we saw in February. You get the climb and then, boom, a sharp selloff. But then you almost always get that recovery. If it does not make it, you are done and it will sell off. But this was a classic ABCD pattern. You have the strong move, the pull back, the bounce to a lower high. Then there is the sell off to a lower low, and then you have a rally right back up to the prior peak. That is what ABCD does and what you are looking for. That was the top. It tried again. Not bad, but that was false. It did not have the MACD with it. It was already in some trouble and it rolled over. We were worried at the time, and it proved to be correct.

We have not had the selloff yet. It may come up next week. You do not know. At some point there will be a punctuated selloff. Do we get out now and just wait for it? You can, but you might miss some action. You always get to that last point where you say, "Should I stay or should I go?" That is the question. But we are investors/traders and we have to take advantage of what the market gives. If we see moves like VFC, we want to take advantage of those because they can make us money even if the market is getting ready to top. We just have to be careful. It behooves us to watch the exit, watch our positions, and be pretty ruthless with taking stops as we have been. We are protecting our gain. We are not letting any of it go, and we are still making money to the upside. We will continue to do that. But we are fully cognizant of the fact that the indices, while they are breaking through the old highs, are not showing great strength. We watch for topping, we watch for any sharp pullbacks, but we can wait for a bounce to exit. That is typical these situations. You get a pullback and a bounce, a pullback and at bounce.

Even though we get selling, let us keep our heads. Protect your positions, but to not totally panic if we cannot get out of everything. Just wait for your time, and you typically get a better exit point. Then we will get better setups to the downside as well. Those stocks that broke down will rebound and fail, and we can get more downside entry points and make money to the downside as the upside folds up shop.

I hope that makes sense to you. Have a great weekend, and I will see you on another busy Monday. It is another week where we watch and see if this is the one where the move runs out of juice.

Support and Resistance

NASDAQ: Closed at 2963.75
3026 from 10/2000 low
3042 from 5/2000 low

The 10 day EMA at 2937
The 20 day EMA at 2900
2888 is the May 2011 peak and post-bear market high
2879 is the July 2011 peak
2862 is the 2007 peak
2841 is the February 2011 peak
2825 is the 2007 closing peak.
2816 is the early April 2011 peak.
The 50 day EMA at 2804
2754 is the October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
The 200 day SMA at 2668
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2572 is the November 2-11 gap down point
2555 is the mid-August 2011 peak
2546 is the early September 2011 gap down point
2535 is the November island reversal gap point
2532 is the early August gap down point
2469 is the November 2010 low
2441 is the November 2011 low
2331 from October 2010 low and the August 2011 intraday low
2305 from the August 2010 peak (summertime base)
2139 is the May and June 2010 low

S&P 500: Closed at 1365.74
1370 is the August 2007 low
1371 is the May 2011 peak, the post-bear market high

1364 is the March 2007 low
1357 is the July 2011 peak
1344 is the February 2011 peak
The 20 day EMA at 1344
1340 is the early April 2011 peak
1332 is the early March 2011 peak
1325-27 is the March 2008 closing low and the May 2006 peak.
1318.51 is the May low
1313 from the August 2008 interim peak
The 50 day EMA at 1311
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
The 200 day SMA at 1258
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1075 is the October 2011 intraday low
1099 from the mid-July interim peak

Dow: Closed at 12,982.95
13,058 from the May 2008 peak on that bounce in the selling

12,876 is the May high
The 20 day EMA at 12,836
12,754 is the July intraday peak
The 50 day EMA at 12,576
12,391 is the February 2011 peak
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The 200 day SMA at 11,999
The June low at 11,897 (closing)
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak
9938 is the August 2010 low

Economic Calendar

February 22 - Wednesday
- MBA Mortgage Index, 02/18 (7:00): -4.5% actual versus -1.0% prior
- Existing Home Sales, January (10:00): 4.57M actual versus 4.63M expected, 4.38M prior (revised from 4.61M)
- Up 4.3% in January. Down 5% in December, revised lower. 5% - 4.3%= net negative.
- Inventories: 2.31M unites. Lowest March 2005.

February 23 - Thursday
- Initial Claims, 02/18 (8:30): 351K actual versus 355K expected, 351K prior (revised from 348K)
- Continuing Claims, 02/11 (8:30): 3392K actual versus 3450K expected, 3444K prior (revised from 3426K)
- FHFA Housing Price I, December (10:00): 0.7% actual versus 0.7% prior (revised from 1.0%)
- Crude Inventories, 02/18 (11:00): 1.633M actual versus -0.171M prior

February 24 - Friday
- Michigan Sentiment - Final, February (9:55): 75.3 actual versus 73.0 expected, 72.5 prior
- New Home Sales, January (10:00): 321K actual versus 315K expected, 324K prior (revised from 307K). -0.9%. 5% revision upside in December.

February 27 - Monday
- Pending Home Sales, January (10:00): 1.0% expected, -3.5% prior

February 28 - Tuesday
- Durable Orders, January (8:30): -1.4% expected, 3.0% prior
- Durable Orders -ex Transports, January (8:30): 0.2% expected, 2.2% prior
- Case-Shiller 20-city, December (9:00): -3.6% expected, -3.7% prior
- Consumer Confidence, February (10:00): 62.5 expected, 61.1 prior

February 29 - Wednesday
- MBA Mortgage Index, 02/25 (7:00): -4.5% prior
- MBA Mortgage Purchases Index, 02/25 (7:00): -4.5% prior
- GDP - Second Estimate, Q4 (8:30): 2.8% expected, 2.8% prior
- GDP Deflator - Second, Q4 (8:30): 0.4% expected, 0.4% prior
- Chicago PMI, February (9:45): 60.0 expected, 60.2 prior
- Crude Inventories, 02/25 (10:30): 1.633M prior

March 1 - Thursday
- Initial Claims, 02/25 (8:30): 355K expected, 351K prior
- Continuing Claims, 02/18 (8:30): 3425K expected, 3392K prior
- Personal Income, January (8:30): 0.4% expected, 0.5% prior
- Personal Spending, January (8:30): 0.3% expected, 0.0% prior
- PCE Prices - Core, January (8:30): 0.2% expected, 0.2% prior
- ISM Index, February (10:00): 54.5 expected, 54.1 prior

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To: Sam who wrote (55581)2/26/2012 6:18:12 PM
From: marc ultra
5 Recommendations   of 79948
Personally, no matter what happens going forward I think the ECRI's September call was an unmitigated failure made far worse by the dramatic urgency communicated during Lak's media appearances following the call. They didn't say indicators are suggesting a possible recession sometime in the next year though Lak has said in the interim it would take a year before we'd know if the call was wrong. No, instead he talked of a wildfire contagion spreading downward thorough the indicators. He also said and had on their PR that unemployment would likely go to double digits and just for emphasis it said "if you think things are bad now, you ain't seen nothing yet."

Ever since their own WLI has been steadily improving and jobless claims which is pretty coincident has impressively improved along with all the other indicators which can be quibbled about in terms of importance.

For someone like me who became extremely bullish around Sept 22nd with a successful retest of the correction lows, and had plowed a lot of money into stocks then, the ECRI's call which I felt I had to take seriously given their past history and aura of infallibility was horribly disruptive and caused me to give up major gains along with worthless hedges I put on. The fact is they have never backed down one iota and instead doubled down keeping an interview from 2008 on their site just to show how some improvement short term would be normal.

Well it's virtually March now, the economy has continually improved and stocks have soared from what was a Sept bottom that was exacerbated by their own call at the time. I think Lak and the ECRI are the biggest losers of 2011 and the last 6 months and will frankly deserve it if they lose some of those 6 figure amounts they were getting in fees and subscription.

Lak reminded me of psych experiments that have shown that people believe testimony that is communicated with certainty and confidence even though there is no correlation between that confidence and whether the testimony is actually correct or not. I get the feeling they might have been hoping the call would get bailed out by Europe which instead also improved. I think they became trigger happy from their long leading indicators and made the call from some temporary disruptions at the time which were already about to improve. If you say how great your black box is and nobody else can look inside because they wouldn't understand it anyway, then your black box better be right or you sound like the guy behind the curtain

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To: Sam who wrote (55570)2/27/2012 9:26:15 AM
From: Jerome
2 Recommendations   of 79948
>>>He repeats his recession call,<<< Seems like everybody is predicting something.

He is probably going short on a lot of stocks.

Warren Buffett, this morning said hr doesn't pay any attention to what economists predict.

Think of it this way...In looking at the US economy there are probably a thousand significant data points to be considered. (from box car loadings, to the drought in Texas,and booming automobile sales and the warm spring in Vermont. Any one reading these posts could emphasize certain data points and ignore other significant data points to buttress an initial prediction.

My motto is "pay attention to what is happening in the market right now" . Long term predictions are for gypsies, and palm readers.

Right now we are in a bull market with tech stocks in the front row. Just figure out where in this tech market your money would be the most comfortable. Its not that complex.

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To: pcyhuang who wrote (55060)2/27/2012 11:02:25 AM
From: pcyhuang
1 Recommendation   of 79948
MU @$8.60 Moves On

Elpida Memory Inc. (6665.TO) on Monday filed for bankruptcy protection with the Tokyo District Court. The decision by Japan's last maker of dynamic random access memory, or DRAM, chips marks a major turning point for the country's beleaguered semiconductor industry and could have a substantial impact on the global DRAM sector. With Elpida struggling, MKM Partners said DRAM manufacturer Micron Technology Inc. (MU, $8.61, +$0.66, +8.30%) seems set to emerge in a stronger position.

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To: pcyhuang who wrote (55586)2/27/2012 11:38:38 AM
From: Donald Wennerstrom
2 Recommendations   of 79948

SNPMarketScopeViewsNews2012-02-27 11:11:23.000


(MU)Analyst Hans Mosesmann says leading DRAM supplier Elpida filed for bankruptcy protection this morning, as co.'s debt burden was too significant. Notes Elpida represents 12%-14% of DRAM market depending on the quarter, and along with the struggling ProMos (1%-2% share), he could see upwards of 15% of DRAM supply either come off line or shift to other uses. Says he's long argued current DRAM supply environment is not sustainable given that pricing is below cash cost for second-tier Asian suppliers. Says Elpida news supports that view.

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To: Donald Wennerstrom who wrote (55587)2/27/2012 3:15:59 PM
From: Woody_Nickels
   of 79948
Wow! Two loser vaporchip/trailing edge companies
combining. Now that's something I can risk money
on. Sure.


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To: Woody_Nickels who wrote (55588)2/27/2012 6:09:49 PM
From: Donald Wennerstrom
   of 79948
Well now Woody, I think its tough for all of us to pick some of these stocks at the right time and make some money over the relatively short term while the news media(and those who contribute) bombard us every day with visions of nirvana or doom and gloom. Also, their advice is sometimes short term, medium, or long term. Then people like us are left to our own devices to figure out how to make some money. On top of all those problems, we have the instant messages from around the world each minute, hour and daily that drive prices.

However, let's look at MU. We could have bought MU for as low as 3.97 the first full week in October and sold today at the close for today of 8.56(up 7.7% for the day) for a gain of 115% in just 5 months. Who knows where MU will go tomorrow or further into the future, but all "we" had to do was buy and sell at the right time. This type of stock action goes on all the time as documented in charts and tables posted on this thread every week.

I try to figure it all out myself every day, and sometimes I win and sometimes I lose. I just wish my win/loss ratio was a hell of a lot better than it is.<G>


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