Indices closed down.
S&P 500 @ 2634.56, low 2617.32, high 2683.55
RSI @ 44.34
CMF @ -0.996
Internals were :
Down volume led by 1.66 to 1 in NYSE & 1.61 to 1 in Nasdaq
Declining stocks led by 1.82 to 1 in NYSE & 1.76 to 1 in Nasdaq
Net new 52 wk lows were leading by 62 in NYSE & 40 in Nasdaq
VIX UP 10.28% @ 18.02
Oil @ $67.70
Gold @ $1330.00
AH news...CREE UP 8.64%, SIX UP 5.65%
TXN UP 5.62%, TER Down 10.00%
AH Futures UP
AH Asian Markets Mixed
AH Oil UP
AH Gold Down
About market, TAPE was faced with rising interest rates with 10 year @ 3%, first time in 4 years, Dow slumped 550 points @ low of the day but made some improvement into close. Many leading stocks are being sold off in this slump. Earnings do not have lasting effect.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Saleem,
A couple of things I meant to add to my weekly recap earlier this week but I ran short on time initially and then forgot to talk about them:
1. Part of the reason I've been trying to focus on smaller and undiscovered stocks is that I generally feel the market has priced in the bulk of the benefit from this economic boost. With less to be gained, and risk of declines if economic momentum falters, I prefer to be involved with very specific stories and stocks that the street maybe hasn't fully seen yet.
2. LRCX is probably one of my favorite shorts in the market. With the likely peak in memory prices, equipment ordering could really drop off quickly. Combined lower earnings expectations with a contraction in P/E and you could see the stock at $120 within the year in a bear scenario ($15 EPS x 8 P/E). I think this math translates broadly to semis as many segments are peaking which results in lower future earnings and P/E contraction.
Stocktrader
Hi Stocktrader,
TAPE is certainly challenging, undercurrent of this market has shifted.
Ironically, both LRCX and MU are green today in a sloppy tape.
You are good in short ideas, i will watch how you position, i may just reduce my exposure, today's action is definitely giving me a pause.....
Saleem
Hi Saleem,
Yes, if I had put out these thoughts Monday when I intended, they would play a bit better--yesterday took a chunk out of the market and LRCX already.
In the end, I'm not actually sure that rates are going to sustainably rise, so I'm not too worried long term about the high growth rate companies (although definitely expecting some short term pain). This is really just a semiconductor call in tech, and then broadly-owned stocks more generally that are seeing peak earnings estimates.
Stocktrader
Hi Saleem,
Actually, I think broadly-owned stocks have hit peak P/E, not necessarily peak earnings estimates. So the hard part will be to fight the P/E contraction with higher estimates. That's a tough game to win, especially if you get the earnings part wrong and they decline also.
Stocktrader
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