Stock Market Analysis

CONCLUSIONS . Last week stocks moved ahead at a good pace, perhaps encouraged by reports of increased employment. A total of 925 stocks set new highs against fewer than 50 new lows. The day of the heaviest trading volume was Thursday, which happened to be the only losing day of the week. Although unemployment claims may be somewhat reduced from time to time, Americans continue to have about 5 million fewer jobs today than we held at the top of the market in 2007. And it is disturbing that last week’s report of more workers being hired also coincides with reduced aggregate numbers of hours worked. Are we hiring more people but working them fewer hours??

Investors were thrilled by rising prices, as the dollar and treasury bonds rose. For a change, commodity prices were firm, and more optimism was seen in a variety of sentiment gages: The VIX fear indicator touched 12.5 during the week, an exceptionally low level of concern; Put/Call price premiums dipped to the region below .70, also very low. The AAII survey of small investors saw, for the first time in weeks, more bulls than bears. Trader optimism rose to a moderate level.

Stock Market Analysis, 4/29-5/3

Conclusions: It was another impressive week for stocks with the Dow Jones Industrial Average and the S&P 500 setting new record highs. The strongest player among the major sectors was easily technology. This is not too surprising as a prime component, the U.S. dollar, weakened which usually suggests a better export market ahead.

Stock Market Analysis 4/22 - 4/26

Conclusions: The market rose nicely with the Dow advancing 1.1 percent and the small cap Russell 2000 jumping 2.5 percent. The advance was confirmed with three times as many stocks rising as falling and about 500 more stocks hitting new highs as new lows. While new highs may show the market having been on extended run, market breadth is comforting.

Stock Market Analysis

Conclusions: It was a tough week for the market averages as the Dow lost 2.1% and losses exceeding this were common in the small capitalization stocks. Staples, telecommunication and utilities prospered but other sectors declined, with energy and information tech down more than 4%. A total of 920 stocks advanced against 2258 declines, while almost 300 stocks hit new highs while half that number hit new lows. Volume came in as prices declined while Tuesday and Friday advances were on lighter volume. Commodities caught the eye of observers, with indexes down across the board, and gold, copper and tin leading the pullback. These are not good omens.

While the market has maintained a smiling disposition there are growing grumblings. Retail sales were announced this week. American consumers control roughly two-thirds of our nation’s economy and retail sales show us their action, as opposed to opinions, in vivid black and white. Or, perhaps in this case, it would be more accurate to suggest red ink as the primary color. Sales for March fell 0.4%. Often there are valuable insights to find by looking inside the numbers. Regrettably most of the data is flowing with the current of lower sales. This is true with vehicles, electronics and at the gas station.

From James Investment Research, Inc

Stock Market Analysis 4/1 to 4/5

Conclusions: The market fell last week. We haven’t said that very much this year but it’s true. The Dow only fell 0.09% but the S&P 500 fell 1% and the Russell 2000 small cap index fell almost 3%. Strangely, five times as many stocks hit new highs as new lows while 1000 more stocks fell than rose. Transportation and basic material stocks led the decline while more defensive securities are becoming more attractive. It has been a long time since we’ve seen telecom and utility stocks lead the market.

Earnings guidance has not been strong recently. Morgan Stanley reports that recently negative earnings pre-announcements for the first quarter of 2013 have outnumbered positive pre-announcements by 3.5 to 1. The average since 2005 has been 2.3. The last time this ratio was this high was in the third quarter of 2007.

Stock Market Analysis, week of 3/2513 - 3/29/13

Conclusions: Stocks moved ahead last week, with 1,883 advancing and 1254 declining. More than 600 stocks set new highs against fewer than 55 new lows. Generally speaking, volume increased on most advancing days. Commodity indexes and especially industrial metals sold off while energy moved higher. The dollar and bond yields generally moved in favorable directions.

Consumer confidence increased last month as citizens began to realize the slowdown in government spending (Sequester) does not foretell disaster. The administration has lost credibility by claims otherwise. Indeed, our work shows that 29 of the 30 quarterly cuts in government spending since 1946 have preceded stronger GDP growth.

Stock Market Analysis from the week of 3/17/12 to 3/23/12

Conclusions: The markets were down on the week as the S&P 500 index fell 0.24% and small cap stocks declined 0.63%. Commodity based sectors fell the most as both the basic materials and energy sectors were down 1.9%. Defensive sectors such as consumer non-cyclical and utilities were the two sectors that were able to advance on the week. Volume was light averaging only 670 million shares a day.

This was originally posted on 3/11/12

Conclusions: Stocks broke up to new highs but on reduced volume, as almost 2,400 stocks advanced against 840 declined. More than 700 stocks hit new highs against 100 new lows. For a change, lower daily volume was seen on the day that stocks declined, (Monday)-- bullish. Most stock averages gained 2 percent or more, the advance was led by financial and consumer stocks, while utilities and energy stocks lagged. Commodities also advanced, except for gold and corn. The dollar was stronger.