The VRTrader.com VR Silver Newsletter - Monday5/19/2008
"Tools for the High Performance Trader"
Copyright ©2008, All rights reserved.
Redistribution in any form is strictly prohibited.
LEIBOVIT FILES | by Mark Leibovit
Monday, May 19, 2008
Short-term Trading Top Due Here! Maybe More?
Economic Events and Market Reports May 19-23:
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Monday, May 19:
Leading Indicators 10:00 AM ET
4-Week Bill Announcement 11:00 AM ET
3-Month and 6-Month Bill Auction 1:00 PM ET
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Tuesday, May 20:
ICSC-UBS Store Sales 7:45 AM ET
Producer Price Index 8:30 AM ET
Redbook 8:55 AM ET
State Street Investor Confidence Index 10:00 AM ET
4-Week Bill Auction 1:00 AM ET
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Wednesday, May 21:
Bank Reserve Settlement
MBA Purchase Applications 7:00 AM ET
EIA Petroleum Status Report 10:30 AM ET
FOMC Minutes 2:00 PM ET
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Thursday, May 22:
Weekly Bill Settlement
Jobless Claims 8:30 AM ET
EIA Natural Gas Report 10:30 AM ET
3-Month, 6-Month Bill Announcement
2-Year, 5-Year Note Announcement 11:00 AM ET
Money Supply 4:30 PM ET
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Friday, May 23:
Existing Home Sales 10:00 AM ET
Possible early Market Close in Futures Markets today.
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What is a Volume Reversal ™? Please refer to the definition toward the bottom of thisemail which is also posted on the Home Page of VRTrader.com.
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Equity markets have been rallying since both the January and March lows and haverecovered to and found resistance at the major 200 day moving averages. Nasdaq and theMidcap 400, however, have exceeded their respective 200 day moving averages and aresignaling a much stronger market at this time than I expected. Looking back, however,negative sentiment was running very high and the news environment remains dismal at best -both of these are bullish ingredients if you are a contrarian.
Stocks rallied and bonds sank early Friday mroning on a better than expected HousingStarts report. But rising oil prices and a disappointing Consumer Sentiment report sentstocks down and bonds higher during the day. That pattern reversed again into the close.
Head cheerleader and Treasury Secretary Henry Paulson said that financial markets arerecovering nicely from the recent turmoil and the U.S. economy should rebound later in theyear. He adds: "The markets are considerably calmer now that they were inMarch". Glad to see he looked at a chart of the VIX which is at 16.62 versus a highof 35.60 in March. How much do they pay that man for his masterful stating of the obvious?
Housing starts in April rebounded 8.2 percent, following a sharp 13.8 percent drop inMarch. April's 1.032 million units annualized were still down 30.6 percent year-on-yearand came in above the consensus expectation for a 0.940 million units. The April boost wasled by a 36.0 percent rebound in multifamily starts as single-family starts slippedanother 1.7 percent. Permits, which are issued before starts are initiated, also rebounded- by 4.9 percent in the latest month, following a 5.0 percent fall in March. April's 0.978million unit permits were down 34.3 percent year-on-year.
The University of Michigan's preliminary report for May is not pretty. The headlineconsumer sentiment index dropped from an already very low 62.6 in April to a yet lower59.5. Readings this low last occurred in 1980. Weakness in the latest report is centeredin the current conditions component which sank more than 6 points to 71.7. Theexpectations component didn't fare much better, falling a less dramatic 1.6 points but at51.7 is at a low last seen in 1979. To add fuel to the fire, inflation expectationsspiked, jumping 4 tenths to 5.2 percent for the one-year outlook.
Crude Oil surged to a record high on speculation that China's demand for diesel neededto fuel its power plants would rise due to reconstruction efforts after this week'searthquakes and an upward revision of an oil price forecast by investment bank GoldmanSachs from $107 to $141 a barrel for the second half of the year. Crude oil hit a high of127.40.
Bush met with the Saudis, begging them to increase production. Saudi Oil Minister Alial- Naimi says that they will raise output by 300,000 barrels a day to 9.45 millionbarrels a day in June. But OPEC oil production actually fell by 390,000 barrels a day inApril, mostly due to unrest in Nigeria. Saudi Arabia is not even making up the loss, whichis why oil continues to rally. In the long run, Saudi Arabia said it plans to boost oilproduction capacity to 12.5 million barrels a day by 2009. Now that is a big increase inproduction and, if accompanied by a slowdown in demand as we are currently seeing, couldlead to stable or even lower oil prices. But who knows? By then we could be at war withIran? The US will have a new President and maybe a new energy policy. No reason to placeour 2009 bets yet. For now, the trend for oil obviously is higher.
Commodities were solidly higher as June Gold settled 19.90 higher at 899.90. The spotUS Dollar Index was .50 lower at 72.84. The weak dollar was no doubt the catalyst for thecommodity rally. We will see if recent dollar lows are challenged, whch will clear the wayfor more price strength in commodities.
Retailers strugged on Friday even though Nordstrom, Kohl's, and Abercrombie reportedbetter-than-expected earnings results.
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ANNUAL FORECAST MODEL:
Full Annual Forecast Model charts and commentary for 2008 can be viewed by clicking onthe VR Forecaster link on the left side of the Home Page and then click on 'Click to View2008 Report'. You will then be prompted to enter your username and password. For the restof you, don't miss the opportunity to subscribe to this special report and mid-year updatethat long ago vindicated OUR claim that it represents a 'blueprint to the future'. If youhad been a subscriber, you would have known ahead of time that the market in 2007 wouldlikely nosedive in February/March, rally to June, the nosedive into mid-August, then rallyinto early October and the sell-off into the third week of October - followed by a choppyNovember. You have also known that the market could be weak into April 14, 2008 and topout on or about April 30, 2008. What's next? Subscribe today and see for yourself!
Remember, folks, there is no price too high for good information!
DAILY VR LIST:
Editors note: As you may have noticed, we have been posting our daily VR list for bothSilver and Platinum subscribers. Silver subscribers who find this useful should upgrade toPlatinum where you can pull
down VR charts for many securities and watch the patterns unfold for yourself.
There is no technical service on the planet that posts Positive and Negative VR! Why?Because they are proprietary to VRTrader.com!
http://www.volumereversaltrader.com/vr_platinum/GetVRChart.asp
A Volume Reversal ™ is change from a Rally day to a Reaction day accompanied by anincrease of volume or a change from a Reaction day to Rally day accompanied by an increasein volume. Volume Reversals
™ coming off intermediate lows or highs have greater significance in helping to definethose lows or highs and important pivot points in the marketplace.
How do you use this list? VRs are buy and sell triggers and are particularly useful indefining lows or highs in stocks and stock
indexes. Traders find them particularly useful, especially coming off market extremes asan indication of a change of direction. Use the VRs in conjunction with your othertechnical indicators and you've
added a unique technical tool to your arsenal.
Below is VRTrader.com's exclusive VR list (Volume Reversal tm):
What is a Volume Reversal? There are several proprietary subtleties to the VolumeReversal ™ algorithm, but essentially a Volume Reversal ™ is a change from a Rallyday to a Reaction day accompanied by a increase of volume or a change from a Reaction dayto Rally day accompanied by an increase in volume. Volume Reversals ™ coming offintermediate lows or highs have greater significance in helping to define those lows orhighs and important pivot points in the marketplace. The Volume Reversals ™ presentedhere provide you with a unique research tool that may have trading (short-term)significance, but it also may have 'trend changing' (intermediate) significance as well.The sector Volume Reversals ™ show where big money is possibly affecting an entiregroup of stocks. The stocks listed under the group have posted Volume Reversals ™ alongwith the group as a whole. The individual stocks listed have posted Volume Reversals ™on their own and are valid plays as well.
To see a visual representation of Volume Reversals ™, please go our CurrentPortfolio section and click on any recommended stock. Or, if you would like to get a VRChart for a specific symbol, please click here. Please note that not all symbols may becurrently available.
The Volume Reversal ™ is a registered trademark and can only be used or quoted afterreceiving express written permission from VRTrader.com and Mark Leibovit.
List of Volume Reversals 5/16/08 - Sectors
*** Sectors Positive Volume Reversals ***
Diversified Services - Technical Services
JEC - Jacobs Engineering Group
URS - URS Corp
Electronics - Diversified
APH - Amphenol Corp
DLB - Dolby Laboratories Inc
HOKU - Hoku Scientific Inc
Health Services - Health Care Plans
CVH - Coventry Health Care Inc
HUM - Humana Inc
MGLN - Magellan Health Services Inc
UAM - Universal American Corp
UNH - UnitedHealth Group Inc
Health Services - Home Health Care
AMED - Amedisys Inc
LNCR - Lincare Holdings Inc
Health Services - Medical Appliances & Equipment
EXAC - Exactech Inc
ISRG - Intuitive Surgical Inc
PMTI - Palomar Medical Tech
WMGI - Wright Medical
Manufacturing - Industrial Equipment & Components
B - Barnes Group Inc
*** Sectors Negative Volume Reversals ***
Electronics - Semiconductor - Memory Chips
SNDK - Sandisk Corp
Real Estate - REIT - Office
BXP - Boston Properties Inc
Suggestions? Comments? on the newsletter service. We would like to hear from each andeveryone of our subscribers. Our email is mark@vrsurvey.com.
DISCLAIMER
This newsletter is a publication dedicated to the education of stock traders. Thenewsletter is an information service only. The information provided herein is not to beconstrued as an offer to buy or sell securities of any kind. The newsletter picks are notto be considered a recommendation of any stock but an information resource to aid theinvestor in making an informed decision regarding trading in stocks. It is possible atthis or some subsequent date, the editors and staff of VRTrader.com may own, buy or sellsecurities presented. All investors should consult a qualified professional before tradingin any security. The information provided has been obtained from sources deemed reliablebut is not guaranteed as to accuracy or completeness. VRTrader.com staff makes everyeffort to provide timely information to its subscribers but cannot guarantee specificdelivery times due to factors beyond our control.
