Wiser Trader Stocks and Options Newsletter

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Issue No. 117    March 12, 2007                     Prescott, Arizona                       Systems@WiserTrader.com

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1.0   Trading

     

      The major indices gained an average of 1.2% this week.

 

Index

Last Week

This Week

% Change

DOW

12114.10

12276.32

1.3%

NASDAQ

2368.00

2387.55

0.8%

S&P 500

1387.17

1402.85

1.1%

Russell 2K

775.44

785.12

1.2%

NYSE

8957.97

9094.99

1.5%

Average

 

 

1.21%

 

 

 

1.1 Relief Rally

 

      The S&P 500 in Figure 1A gained 1.1% this week.  All major sectors recovered except home construction and biotechnology.  The average 10-period Williams-%R for the above five indices is -65 with a 200-day moving average of -37.  The range of Williams-%R values is 16 units.  Over the past 10 trading days, the 5-index average was up four days with a net average decline of 3.9%.

 

 

 

FIGURE 1A

 

 

 

      The NASDAQ in Figure 1B gained 0.8% for the week.  Although sentiment has improved, emotions are still high with the correlation between stocks and the major averages running twice as high as normal.  Same store sales, factory orders and the ISM services index were all weaker than expected. 

 

 

 

FIGURE 1B

 

 

 

 

 

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XLQPlus

 

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2.0 Market Analysis

 

      Key industry ETF’s in Table 2A are Biotech and Semiconductors, which confirm the NASDAQ.  Transportation confirms the Dow Jones Industrial Average according to Dow Theory.  Banking and Financials are confirming indicators for the S&P 500.  Gold and Housing are respective indicators for the inverse health of the currency (inflation) and the capacity for consumer spending. 

 

 

Table 2A

Indices, Key Industry ETF’s and Sector SPDR’s

 

1 month

1 wk ago

2 wks ago

3 wks ago

4 wks ago

Dow Jones Industrial Index

-2.4%

1.3%

-4.2%

-0.9%

1.5%

NASDAQ Composite Index

-2.9%

0.8%

-5.8%

0.8%

1.5%

S & P 500 Index

-2.4%

1.1%

-4.4%

-0.3%

1.2%

NYSE Composite Index

-2.1%

1.5%

-4.9%

-0.1%

1.5%

Russell 2000 Index

-2.7%

1.2%

-6.2%

1.0%

1.4%

HGX, Phil. Housing Index

-4.4%

-1.5%

-3.1%

-2.0%

2.3%

IYR, Real Estate

-6.2%

1.2%

-5.7%

-1.6%

-0.1%

GLD, GOLD

-2.8%

0.8%

-5.9%

2.0%

0.4%

RKH, Banking

-2.6%

0.5%

-4.3%

-0.6%

1.9%

IYT, Transportation

-1.7%

0.9%

-7.0%

0.9%

3.9%

SMH, Semiconductors

2.0%

2.8%

-5.3%

3.2%

1.5%

BBH, Biotechnology

-7.1%

-0.7%

-5.1%

-0.6%

-0.9%

OIH, Oil Infrastructure

1.2%

4.0%

-3.4%

2.8%

-2.0%

XLE, Energy

-1.7%

2.4%

-4.4%

1.1%

-0.7%

XLU, Utilities

0.4%

0.4%

-1.6%

1.1%

0.5%

XLB, Materials

1.9%

2.4%

-5.1%

1.8%

3.0%

XLI, Industrial

-1.1%

1.8%

-4.8%

-0.2%

2.3%

XLK, Technology

-2.3%

1.6%

-5.6%

0.3%

1.5%

XLV, Healthcare

-2.6%

1.1%

-3.3%

-1.0%

0.6%

XLF, Financials

-3.5%

1.0%

-4.8%

-1.2%

1.6%

XLP, Consumer Staples

-1.1%

1.3%

-3.5%

-0.3%

1.5%

XLY, Consumer Discretionary

-3.0%

1.3%

-5.2%

-0.1%

1.1%

 

 

 

 

      The volatility indexes and put/call ratio are listed in Table 2B.

 

 

Table 2B

Sentiment

Contrarian Indicator

Current

Last Week

2 Weeks Ago

Complacent

Cautious

VIX **

14.1

18.6

10.6

< 20

> 50

VXN ***

18.9

23.7

15.3

< 30

> 70

CBOE Total Put/Call Ratio

1.16

1.30

1.43

< 0.40

> 0.75

CBOE Equity Put/Call Ratio

0.82

0.80

0.74

< 0.55

> 0.70

**   Above 20 day SMA = Short-term sell signal.

*** Above 20 day SMA = Short-term sell signal.

 

 

 

      Figure 2A compares the major averages with key ETF’s and Sector SPDRs.

 

 

FIGURE 2A

 

 

 

 

 

 

 

 

Table 2C

Market Summary

 

Industry performance is based on the Yahoo Industry Classification System

 

 Major Indices 
 For the Past Week:
 Dow Jones     +1.3%
 NASDAQ        +0.8%
 S&P500 Index  +1.1%
 Russell 2000  +1.2%
 NYSE          +1.5%
 
 30 Year Bond 4.723%
 10 Year Note 4.589%
 FOMC Rate    5.250%
 
 Leading Industries