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Market Sentiment, Sunday, 05/30/2004

Ready for the Weekend
By James Brown

Friday's action was mixed and witnessed some mild profit taking but stocks ended the week on an up note. Meanwhile investors were eagerly leaving early for the long Memorial Day weekend after a choppy month. The Dow Industrials ended the week up 2.2% but down 37 points for the month. Meanwhile the NASDAQ Composite added 3.9% for the week and 66 points for the month (3.4%).

Fueling the week's positive move was a steady drop in crude oil from its all-time high on Monday. Oil did bounce a bit on Friday but remained under the $40.00 per barrel mark. Thursday and Friday's markets were also boosted by generally positive economic data. Thursday was the 4.4% GDP reading while Friday unveiled strong consumer spending and a very strong Chicago PMI number.

The rally this week is encouraging but many of the sector specific indices are trading right under resistance. We'd like to see the rally continue but we could be due for a little more rest (a.k.a. consolidation), especially for tech stocks.

Next week is short with the markets closed on Monday for Memorial day. However, the remaining four days of the week could be exciting. Tuesday will bring the ISM report and Thursday unveils the ISM services number and the Factory report. Another potential market mover will be the Thursday night mid-quarter update from Intel (INTC). Yet the spotlight will be clearly focused on Friday's non-farm payrolls report. Conjecture on how strong the jobs number will or won't be will consume the financial media for the next several days. The result of the jobs report could very well set the tone for June.

Judging from the declines in the volatility indices investor sentiment is pretty bullish but the major indices have significant overhead resistance to deal with. Watch those stops losses.

Don't forget to say thank you to all the men and women serving in the armed forces this weekend. Happy Memorial Day!


Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  8679
Current     : 10188

Moving Averages:
(Simple)

 10-dma: 10029
 50-dma: 10246
200-dma: 10064

	
S&P 500 ($SPX)

52-week High: 1163
52-week Low :  946
Current     : 1120

Moving Averages:
(Simple)

 10-dma: 1101
 50-dma: 1116
200-dma: 1085

		
Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1165
Current     : 1466

Moving Averages:
(Simple)

 10-dma: 1422
 50-dma: 1438
200-dma: 1426

		



CBOE Market Volatility Index (VIX) = 15.50 +0.22
CBOE Mkt Volatility old VIX  (VXO) = 15.82 +0.29
Nasdaq Volatility Index (VXN)      = 21.33 -0.17


Put/Call Ratio Call Volume Put Volume Total 1.05 388,547 407,570 Equity Only 0.70 325,223 228,402 OEX 1.16 12,858 14,818 QQQ 1.45 28,509 41,263
Bullish Percent Data Current Change Status NYSE 63.8 + 0 Bear Confirmed NASDAQ-100 38.0 + 2 BULL ALERT Dow Indust. 66.7 + 0 Bear Confirmed S&P 500 60.4 + 1 Bear Confirmed S&P 100 61.0 + 0 Bear Confirmed 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: 0.71 10-dma: 0.96 21-dma: 1.00 55-dma: 1.07 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 1617 1575 Decliners 1192 1453 New Highs 80 79 New Lows 22 14 Up Volume 725M 698M Down Vol. 641M 497M Total Vol. 1392M 1217M M = millions
Commitments Of Traders Report: 05/25/04 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 movement from the commercial traders. It looks like they shifted a handful of money from shorts to longs. Conversely the small traders have rotated some money from longs to shorts. Commercials Long Short Net % Of OI 05/04/04 397,964 417,175 (19,211) (2.4%) 05/11/04 401,365 421,672 (20,307) (2.5%) 05/18/04 394,352 423,258 (28,906) (3.5%) 05/25/04 400,713 420,764 (20,051) (2.4%) 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 05/04/04 137,112 80,201 56,911 21.6% 05/11/04 135,534 76,987 58,547 27.5% 05/18/04 139,647 74,597 65,050 30.4% 05/25/04 136,086 79,060 57,026 26.5% 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 There was a big drop in longs by the commercial traders but it was coupled with a significant drop in shorts too. They remain net bullish on the S&P 500. Small traders have grown net bearish after last week's bullish reading. Commercials Long Short Net % Of OI 05/04/04 316,840 370,781 (53,941) ( 7.8%) 05/11/04 378,696 362,887 15,809 2.1% 05/18/04 390,484 357,157 33,327 4.5% 05/25/04 353,722 336,406 17,316 2.5% 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 05/04/04 119,308 74,407 44,901 23.2% 05/11/04 101,199 94,408 6,791 3.5% 05/18/04 62,216 87,269 25,053 16.8% 05/25/04 91,515 100,759 ( 9,244) ( 4.8%) Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders have upped their long positions and remain net bullish on the NDX. Small traders have likewise upped their short positions and remain net bearish. Commercials Long Short Net % of OI 04/27/04 54,196 33,948 20,248 23.0% 05/04/04 56,931 35,209 21,722 23.6% 05/18/04 58,376 37,528 20,848 21.8% 05/25/04 59,891 37,630 22,261 22.8% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 22,261 - 05/25/04 Small Traders Long Short Net % of OI 05/04/04 10,247 24,764 (14,517) (41.5%) 05/11/04 9,716 21,072 (11,356) (36.9%) 05/18/04 9,843 18,935 ( 9,092) (31.6%) 05/25/04 10,184 20,653 (10,469) (33.9%) Most bearish reading of the year: (14,517) - 05/04/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercial traders are adding to their short positions while small traders are adding to their longs, which is generally par for the course. Guess who is right more often? Yup, the commercial traders. Commercials Long Short Net % of OI 05/04/04 24,296 22,181 2,115 4.6% 05/11/04 22,614 21,507 1,107 2.5% 05/18/04 22,257 22,444 ( 187) (0.4%) 05/25/04 23,578 24,632 (1,045) (2.2%) 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 05/04/04 6,262 8,155 (1,893) ( 9.2%) 05/11/04 7,009 7,640 ( 631) ( 4.3%) 05/18/04 9,098 6,591 2,507 16.0% 05/25/04 9,623 6,614 3,009 18.5% 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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