These projections are the statistical probabilities of long
positions on these equities, based on neural net projections, for the next 5-15
trading days. They are the result of screening for technically
significant retracement and momentum patterns that have been further screened
for value and bullish sector performance. In other words, the
projections are for long positions.
For 12/15/2006
$INDU
$SPX
$COMPQ
Monthly Momentum Positive (OB)
Positive (OB) Positive
Weekly Momentum Negative
Neutral
Negative
Daily Momentum Positive
Positive
Positive
Note: (OS) means oversold and (OB) means overbought. The value to
price estimate (it is not a guarantee, only a cash flow based estimate) can be
defined loosely as a multiplier of price. A number higher than one means the
stock is undervalued using this model and a number less than one means the stock
is overvalued.
The bulls ran amuck in the U.S. equity markets on Thursday, with
financials leading the way (even though their out-performance via other sectors
was virtually assured with all the M & A activity on the Street. What is
interesting is that despite business inventories moving up and signs of a
slowdown are everywhere, transport stocks (DRYS, EXPD, HUBG, and TRN) are
attempting a rebound. Retail stocks of all stripes (CHRS, CHS, CPWM, NSIT, and
PLCE) are also either moving away from consolidation or providing bullish price
extensions. Computer systems (NCR, NICE, RACK) also showed a similar trend.
Staffing services (ASF, KFY, and RHI) also reversed to the upside. The
automotive and trucking OEMs (CMI, LEA) also reversed again yesterday, as well
as the specialty chemical companies (ROG, PX). The lone apparel maker (SRR),
the lone ethical drug and medical products company (JNJ), and the lone
conglomerate (ITT) also followed suit.
Electronics and semiconductors (GLW, LRCX, TNL, and UCTT) also
reversed course yesterday, along with one restaurant (PFCB). Internet and
internet brokerage (TRAD, UNTD) also made the list today. Healthcare products
and instruments (CLZR, VOLC) also made the list.
We saw nice patterns in NCR and in UTCC, but the nets only liked
one. WITS also scored well on the basic pattern analysis, but the nets did not
like the result.
Here is what the nets saw today:
Value/Price estimate 7 day ATR %( 7 day
ATR)/Close
UCTT 5.10/1
84.6%
2.26
0.56
4.27
That’s it for now. The real problem with the current market in
trading pattern swings is that we are in a fairly strong and extended bullish
run. If the transports continue to pull themselves of the mat, there might be
some opportunities there also if the patterns keep showing up (and apparently
despite all the doom and gloom we keep hearing). Retailers, if you recall in
the summer, were considered doomed, and then stocks like KSS blew the doors off
many of its peers. The key thing to realize is that one must trade the patterns
and act accordingly. Consistency in approach is what wins in the end as long as
the analysis is sound. We are trying to keep our end of the bargain on both
counts.
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