The VRTrader.com VR Silver Newsletter - Monday 11/12/2007
"Tools for the High Performance Trader"
Copyright ©2007, All rights reserved.
Redistribution in any form is strictly prohibited.
Leibovit Files | by Mark Leibovit
Monday, November 12, 2007
When All Appears Bleak, Guess What Can Happen?
Economic Data and other events
scheduled for November 12 - 16:
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MONDAY, November 12:
U.S. Veterans Day Holiday - Bonds Closed, Stocks Open
Pending Home Sales for September (3 pm ET)
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TUESDAY, November 13:
Weekly Chain Store Sales (8:55 am ET)
Treasury auctions 3 & 6-month bills (1 pm ET)
Treasury Budget Statement for October (2 pm ET)
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WEDNESDAY, November 14:
Retail Sales for October (8:30 am ET)
Producer Price Index (PPI) for October (8:30 am ET)
Fed Chairman Bernanke Speaks at Cato Institute (9:10 am ET)
Business Inventories for September (10 am ET)
EIA Petroleum Status Report (10:30 am ET)
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THURSDAY, November 15:
Weekly Initial Jobless Claims (8:30 am ET)
Consumer Price Index (CPI) for October (8:30 am ET)
NY Empire State Index for November (8:30 am ET)
Philadelphia Fed Index for November (12 pm ET)
Weekly Money Supply (4:30 pm ET)
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FRIDAY, November 16:
Net Foreign Purchase for September (9 am ET)
Industrial Production & Capacity Util. for October (9:15 am ET)
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Well, I hope you caught Friday evening's NBR interview with Paul Kangas. The predictionsand calls have been extraordinary, but will my luck hold out? Staying in the #1 MarketTimer position and having the kind of success with recommendations as documented on thatprogram is always a tough act to follow. Overall, I believe the 'doom and gloom' we're nowexperiencing is not the prelude to a bear market, but simply another corrective phaseaccompanied by fear and panic. Yes, we could see further weakness, but those who takeadvantage of market weakness here this month will, in my view, be rewarded in 2008. And,so far, there is nothing that has occurred which wasn't indicated as a possibility in theAnnual Forecast Model (VR Forecaster Report):
The Dow Industrials with the help of the Plunge Protection Team (PPT) has managed torecover 150 points after being down 240 points on Friday, but then sold off sharply intothe close. A bearish bias clearly comes into Monday's opening. Volume, however, slowedrelative to Thursday which is a positive. Sentiment is extremely negative which ispositive How we will close is anyone's guess, especially going into a weekend. Volume isheavy, but doesn't appear to be as heavy as yesterday (which was a record) 5.4 billion and3.5 billion on the Big Board and Nasdaq respectively. Breadth is negative. We areapparently in a retesting process of the October lows. Will we get there, double-bottom orexceed those levels? Frankly, I'm surprised we've gone as far as we have.
New subscribers: Check out this link reference the PPT which is posted on the VRTrader.comHome Page:
I recommended the DIA, SPY, QQQQ on Friday night's NBR interview, emphasizing that I'mstill looking for new market highs. Dollar cost averaging may be the wisest approach, butright here is likely a trading buy point as well.
Precious metals, however, look a bit toppy here and that is a concern as equities andprecious metals have been more or less tracking together for the past several years. Doesthis possibly suggest a real rally try in the US Dollar Index? Such a rally will not bepositive for either precious metals or equities, but I suspect it would be temporaryshould it arrive. Why? Interest rates are still going lower here in the U.S., even thoughits a temporary bandaid. December gold settled down 2.80 at 834.70 while December Crudesettled .86 higher at 96.32. Continued supply tightness along with middle east concernsare providing support to crude. The US Dollar finished slightly lower on the day assellers eased up a bit. Again, the contrarian in us says to be careful on the short sidein the dollar as the trade now seems 'too easy'. Whenever sentiment is that stackedagainst an asset class, a rebound is imminent.
Two critical support levels have more or less held in the Dow Industrials and S&P 500,support levels I have previous mentioned herein, i.e., 13,000 and 1450, respectively.Could we see a double-bottom of the October lows (1370 in the S&P 500 (now 1453) and12,517 in the Dow Industrials (now 13,042)? Yes, but we could already be carving out abottom. Bears should be careful here. We easily bounce back to 13,400 in the DowIndustrials and 1490 in the S&P 500. I remain on my TIMER DIGEST 'Buy' signal.
Believe it or not, the one index that did not violate it's prior day low was the Russell2000. Small caps have been taken to the woodshed in spades of late, but the Russell heldits ground. Is this the beginning of a short term bottom for the market or is it just anaberration?
The bad news started early on Friday with news and rumors of more write downs. Anannouncement from Wachovia that its loan loss provision for the fourth quarter would bebetween $500 million and $600 million in excess of charge-offs stoked negative sentiment.Wachovia also indicated that the value of its asset-backed CDOs had declined approximately$1.1 billion pre-tax in the month of October alone. Add to that disappointing earningsreport from Fannie Mae and rumors that Barclays was going to announce a $10 billionwrite-down, and the ingredients were there to generate more selling pressure at the open.Concerns about tech earnings were once again raised by Qualcomm providing earningsguidance for its fiscal first quarter and the fiscal year that was below consensusestimates due to lower handset demand. All of these issues combined to push the indiceslower.
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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 patternsunfold for yourself.
I've extended posting this information on a complimentary basis to Silver subscribers forthe time being. There is no technical service on the planet that posts Positive andNegative VR! Why? Because they are proprietary to VRTrader.com! And, Platinum subscriberscan pull up VR Charts on just about any stock from the home page of my website.
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 greatersignificance in helping to define those lows or highs and important pivot points in themarketplace.
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 as an indication of a change of direction. Use theVRs in conjunction with your other technical indicators and you've added a uniquetechnical tool to your arsenal.
List of Volume Reversals 11/09/07 - Sectors
*** Sectors Positive Volume Reversals ***
Electronics - Semiconductor Equipment & Materials
ACLS - Axcelis technologies Inc
AMAT - Applied Materials Inc
MKSI - MKS Instruments Inc
UTEK - Ultratech Inc
Internet - Service Providers
PCLN - Priceline.com Inc
Leisure - Resorts & Casinos
LVS - Las Vegas Sands
MPEL - Melco PBL Entertainment Ltd
Real Estate - REIT - Diversified/Industrial
ABR - Arbor Realty Trust Inc
DEI - Douglas Emmett Inc
PCL - Plum Creek Timber
PSA - Public Storage
Real Estate - REIT - Healthcare Facilities
HCP - Health Care Prop Inv Inc
VTR - Ventas
*** Sectors Negative Volume Reversals ***
Utilities - Diversified Utilities
DPL - DPL Inc
ILA - Aquila 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.
