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Market Sentiment, Tuesday, 04/06/2004

Stocks Catch Their Breath
By J. Brown

Stocks finally paused after an eight-day sprint higher from their late March lows. Overall the profit taking, which was focused on tech stocks, wasn't that bad and certainly overdue. Wall Street's focus is turning to earnings season and so far the first stocks out of the gate are stumbling. Aloca (AA) missed by 2 cents while Nokia (NOK) pre-announced an earnings warning that profits would fall toward the low end of their guidance. This is not encouraging news but investors seem hopeful that these "misses" are stock-specific. Currently First Call predicts that earnings this season will be up 17% to 20% over last year.

The focus tomorrow will be on YHOO's and RIMM's earnings reports after the closing bell and GE's report on Thursday. My concern is that the market has bounced so strongly from its March lows that investors will use any news (good or bad) as an excuse to take profits. Thankfully April is historically a bullish month and a number of market forecasters believe positive earnings news will actually fuel the next leg higher in stocks.


Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  8145
Current     : 10570

Moving Averages:
(Simple)

 10-dma: 10352
 50-dma: 10458
200-dma:  9862

	
S&P 500 ($SPX)

52-week High: 1163
52-week Low :  862
Current     : 1148

Moving Averages:
(Simple)

 10-dma: 1125
 50-dma: 1133
200-dma: 1061

		
Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1018
Current     : 1493

Moving Averages:
(Simple)

 10-dma: 1449
 50-dma: 1460
200-dma: 1390

		


Volatility indices gapped higher at the open but faded lower
through most of the session.  They remain near their lows and 
suggest investors remain confidently bullish.

CBOE Market Volatility Index (VIX) = 15.32 +0.35
CBOE Mkt Volatility old VIX  (VXO) = 14.49 +0.61
Nasdaq Volatility Index (VXN)      = 22.23 +1.12




Put/Call Ratio Call Volume Put Volume Total 0.82 846,971 692,316 Equity Only 0.69 728,128 505,325 OEX 1.61 18,173 29,200 QQQ 1.26 193,327 243,849
Bullish Percent Data Current Change Status NYSE 74.1 + 1 Bull Correction NASDAQ-100 53.0 + 3 Bear Correction Dow Indust. 83.3 + 0 Bear Confirmed S&P 500 76.8 + 0 Bear Confirmed S&P 100 79.0 + 0 Bull Correction Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend
5-dma: 0.78 10-dma: 0.76 21-dma: 1.31 55-dma: 1.14 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points.
Market Internals -NYSE- -NASDAQ- Advancers 1116 1015 Decliners 1721 2078 New Highs 129 127 New Lows 35 12 Up Volume 629M 540M Down Vol. 1070M 1170M Total Vol. 1716M 1768M M = millions
Commitments Of Traders Report: 03/30/04 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Not much change in the commercial traders' positions this past week. Small traders turned a little less bearish. Commercials Long Short Net % Of OI 03/09/04 418,394 433,237 (14,843) (1.7%) 03/16/04 454,635 449,505 5,130 0.6% 03/23/04 401,456 418,732 (17,273) (2.1%) 03/30/04 407,987 420,624 (12,673) (1.5%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 03/09/04 155,947 88,317 67,630 27.7% 03/16/04 159,054 115,023 44,031 25.3% 03/23/04 130,648 89,943 40,705 18.5% 03/30/04 130,112 81,937 48,175 22.7% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Almost the same holds true here. Commercial traders edged up their short positions but not by much. Small traders turned a little less bullish. Commercials Long Short Net % Of OI 03/09/04 431,623 485,268 (53,645) ( 5.9%) 03/16/04 472,809 574,241 (101,432) ( 9.7%) 03/23/04 268,647 294,930 (26,283) ( 4.7%) 03/30/04 265,492 305,797 (40,305) ( 7.1%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 03/09/04 135,233 76,558 58,675 27.7% 03/16/04 192,136 96,691 95,445 33.0% 03/23/04 131,879 59,210 72,669 38.0% 03/30/04 123,494 59,550 63,944 35.0% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Whoa! Commercials turned bearish on the NASDAQ just before it broke out over resistance. Unless that's a typo by the COT it will be interesting to see how that number changes next week. Small traders turned more bearish. It's been a painful week for everyone here. Commercials Long Short Net % of OI 03/09/04 57,368 46,082 11,286 10.9% 03/16/04 68,285 54,899 13,386 10.9% 03/23/04 52,014 34,017 17,997 20.9% 03/30/04 52,749 67,967 (15,218) (12.6%) Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 13,386 - 03/16/04 Small Traders Long Short Net % of OI 03/09/04 15,533 8,070 7,463 31.6% 03/16/04 27,859 18,333 9,526 20.6% 03/23/04 9,884 12,887 (3,003) (13.2%) 03/30/04 8,928 16,551 (7,623) (30.0%) Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Very little change in commercial traders' positions while small traders pared back their longs. Remember, these numbers are prior to the jobs report on Friday. Commercials Long Short Net % of OI 03/09/04 26,867 12,845 14,022 35.3% 03/16/04 32,317 17,514 14,803 29.7% 03/23/04 23,048 22,119 929 2.1% 03/30/04 23,642 22,180 1,462 3.2% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 03/09/04 7,053 19,159 (12,106) (46.2%) 03/16/04 10,002 20,970 (10,968) (35.4%) 03/23/04 8,344 6,734 1,610 10.7% 03/30/04 7,020 6,711 309 2.3% Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03


 

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