Schaeffer's Trading Floor Blog

At the Close

by 4/27/2005 4:15 PM
Stocks quoted in this article:

If you missed the last three hours of the session, you missed...


Chart Courtesy of Thomson/ILX

Nothing ...Nil...Zilch...The SPX just drifted sideways and waited for the closing bell to end the day.

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Stocks quoted in this article:

Levi says - "I just wanted to get your opinion on the SPY monthly chart. If I'm reading it correctly it seems that we're breaking the trend in since 02."

My response - There is more than one way to define a trend so this question is somewhat tough to answer but here is one perspective. Below is a monthly chart of S&P Depositary Receipts (SPY) which tracks the movement of the SPX.


Created with SuperCharts by Omega Research

Here you can see a simple regression channel that captures the trend from the 2002 bottom. Currently the SPY is trading ever-so-slightly below the lower rail of this channel but would need a monthly close below to confirm the break.


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Stocks quoted in this article:

Sharlee says - "I was struggling to find some reason why the market rebounded after having broken down below some important support levels this morning. I have followed this with interest and have found that at no time does the market decline when the President is speaking. Probably a coincidence, don't you know!"

My response - I have never looked into this but I will keep it on the radar. The impetus I saw being cited for the buying was the drop in oil. And while there was a big move down in oil today, the drop in oil earlier this month did not help the market. In other words, this "reason" seems more like an "after the fact assignment" than a real catalyst...but I have been wrong before...

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Stocks quoted in this article:

Mike says - "Hi, Nick---speaking of oil, am I seeing a double top on the OIH? (Three or six-mo. chart). Also, your comments on the RUT would be appreciated...today's gains seem anemic compared to the other moves IMO. Thanks for your time."

My response - The daily chart of the Oil Service HOLDRS (OIH) does show a double top as highlighted below. However, the monthly chart still shows a solid uptrend in place. When in doubt I tend to give the longer-term trend the benefit of the doubt but that is just me..

Created with SuperCharts by Omega Research

As far as the Russell 2000 (RUT) goes, this weekly chart (with the 10-week and 20-week moving average) is what I am watching...


Created with SuperCharts by Omega Research

The RUT failed to hold support near 600 and has yet to retake this zone. Also note that the 10-week moving average has crossed below the 20-week moving average. This last happened in May of 2004, and while it wasn't the end of the world, it did signal the short-term upside momentum was waning.

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One to Watch - APPX

by 4/27/2005 2:11 PM
Stocks quoted in this article:

The chart of American Pharmaceutical (APPX), which is a specialty pharmaceutical company, just caught my eye...


Created with SuperCharts by Omega Research

Here you can see a rather interesting pattern. The shares gapped higher in early January after the FDA approved one of their drugs. I briefly touched on that in this post while this press release has the details.

The shares spent the next few months consolidating those gains and then bounced off the 50-day moving average in late-March. This small upward move has been consolidating above those recent highs. The company is scheduled to report earnings next Wednesday morning and with a scorecard reading of 8, it might be one to watch. More information on the company can be found on their website.


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