Stock Market
All comments and Stock Market Ananlysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 6-22-2009
The market closed quadruple witching Friday with gains late in the day. This is not encouraging, because most traders are leaving early on Friday’s, to enjoy long weekends.
I was traveling Friday, and did not get a good read on the trading. Reading Saturday’s IBD makes it sound like things were without direction. The NASDAQ had its second down week of the current uptrend, and declining stocks led advancers 7-6. The CRB index was down, forming the same pattern as the DOW. As I mentioned Friday, the DOW could be rolling over here, but the commodities should be resilient thanks to China. The 50% retracement in commodities should bring it back to 335, and the 38% retracement would give us 290-300, before we really need to worry.
The underlying market should show its true colors on Monday and Tuesday, as positions unwind from option expirations,
The New High list is loaded with Chinese stocks and some health care stocks.
INSM is biotech company, that has 124 million shares in its float, at $2.47 per share, gives it a market cap of $306 million. At $10 million in revenue and no profits for the last 4 years, this is a lottery ticket. (Note the last quarter shows a profit of $.96 per share, but the gain appears to be from a sale of assets.) Stay away.
PWRD at $29.00 – another Chinese gaming company – the chart suggest a breakout to the $33.00 level, with $37.00 being the historic high. I have not seen the financials on this so be very careful.
CAST – another Chinese company, this one in education. It has 35 million shares in its float, which gives it a $245 million market cap. Its first quarter sales were $11 million, up 32%, and its earnings were up 100% from $.04/share to $.08/share. Stock price went from $6.50 to $5.00 back to$7.00 last week. Next resistance is $9.00.
Stocks could be volatile the first couple of days this week, then we will have the Fed Meeting, and most likely, we wait for earnings the second week of July. The news that will move the market is likely to come from news surprises, in the form of earnings preannouncements.
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