Schaeffer's Trading Floor Blog

Index Check

by 3/2/2005 2:04 PM
Stocks quoted in this article:

I was just checking out my index graph and noticed it has continued to evolve...

This morning we saw weakness across the board...which was reversed with a bit of buying...and now we see that the broad market indices have slipped back to breakeven while commodities firm up...


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Stocks quoted in this article:

The major indices are still holding gains but pulling back from their intraday highs. At the sector level, here are today's top and bottom performing Exchange Traded Funds (ETFs)...

Top Performing Sector Exchange Traded Funds:

  • Oil Service HOLDRS (OIH) = +1.73 percent
  • iShares DJ US Energy (IYE) = +1.33 percent
  • Energy Select Sector SPDR (XLE) = +1.26 percent
  • iShares GS Natural Resource (IGE) = +0.94 percent
  • Biotech HOLDRS (BBH) = +0.83 percent
  • iShares GS Software Index (IGV) = +0.60 percent
  • iShares S&P SmallCap 600 Index (IJR) = +0.54 percent
  • iShares DJ US Financial Svcs (IYG) = +0.52 percent

Bottom Performing Sector Exchange Traded Funds:

  • iShares DJ Select Dividend Index (DVY) = -0.16 percent
  • iShares Lehman 20+ Year Treas Bond (TLT) = -0.19 percent
  • iShares DJ US Cons Goods (IYK) = -0.22 percent
  • iShares DJ US Real Estate (IYR) = -0.28 percent
  • Semiconductor HOLDRS (SMH) = -0.34 percent
  • streetTRACKS Wilshire REIT Fund (RWR) = -0.41 percent
  • iShares C&S Realty Majors (ICF) = -0.50 percent
  • iShares GS Semiconductor (IGW) = -0.51 percent

In a reversal of what we saw yesterday, oil services and energy are the top performing groups while semis are lagging the action. For the most part though, most sectors aren't showing too much movement.

Note: If you are not familiar with ETFs, make sure you read the Education and FAQ sections in our ETF center.

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Stocks quoted in this article:

Following up on the post below...I agree with everything I said below, but I had some hesitations on posting it due to interpretations. At face value, it might be construed that I am predicting a breakout that will be followed by large gains. And while that is a possibility (anything can happen), I think there is too much complacency for it to be that "easy".

Way back in October, I showed the chart below that highlighted the peak in early 2004...

Created with SuperCharts by Omega Research

The abridged text below is from the commentary that accompanied the chart, and fits with the current scenario...

    The point I am focusing on is that each initial peak was followed by at least one retest. On two of the situations, the "retest" actually took out the initial high. I suspect this was enough to draw in the final round of bulls and exhaust the buying pressure....The bulls get drawn in on the "breakout" but this uses up the bulk of the demand...However, the situation above has potential to whipsaw both the bulls and the bears, and that has definitely been the habit of the market this year.

In other words, a breakout doesn't have to "lead" to anything but you never know how much money is sitting on the sidelines willing to chase momentum...that is the point I was hoping to get across...


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Pondering a Post - Part I

by 3/2/2005 1:00 PM
Stocks quoted in this article:

Note - I had typed out the post below and was just getting ready to publish it on the site when a thought hit me...But before I get to that, read what would have been the post, and I will follow up on it in just a minute...

For the personal bias is that risk is not being given its due respect. And from emails I have received, I know that many of you feel the same way. However, what seems "logical" and what actually happens in the market are not always the same thing.

As I was pondering what might happen should the indices start to breakout, one quote keeps running through my mind....

Markets can remain irrational longer than you can remain solvent

~John Maynard Keynes

I know I have posted that before, but I have always found it helpful to keep that in mind along with the old adage - don't fight the tape...

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Chart Chatter - SPX and DIA

by 3/2/2005 12:10 PM
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As promised, here are updated charts of the "majors"...

Created with SuperCharts by Omega Research

The bulls bounced the indices from their morning lows but have yet to overtake major resistance, though the fact that the SPX was able to overtake last week's highs hints at momentum. The key now is to see if the bulls can hold today's upside. As far as what a breakout would mean, I covered this yesterday so I won't belabor that...


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