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 6-24-2009
The DOW closed down 16 points, Tuesday in a quiet day of trading. Most of the inventory the market makers had must be gone.
The news of the day was existing home sales up 2.3%, while prices went down 17% from a year ago, and second, Boeing delaying the 787, again. Neither story could drive the market, so we wait for Wednesday’s Fed meeting results, which will be released at 1:15 EST.
From the technical side, the VIX, (fear factor) traded down .59, but was an inside day as compared to Monday, making it meaningless. One technical analyst focused on the market’s bad breadth. Monday had up volume vs. down volume on the NYSE, 14 to one to the downside. The NASDAQ was 8 to 1 down. That is the second time in six days, and does not bode well for any advance.
I did chuckle when I heard the following indicator, while traveling this past weekend. The Fruit of the Loom indicator – watch companies that sell underwear. The theory goes; people do not buy underwear when cash gets tight, and so it is one of the first items needed when we go back to work. Watch Sears? How about Victoria’s Secret? Oh Boy!
Of the three stocks on the New High list, only STAR has the minimum 100,000 share daily volume, needed to have the liquidity to trade. The problem is market cap again. The company has 70 million shares in the float, yielding a $1.6 billion market cap. The company will barely make a dollar a share, meaning $70 million earnings this year. Mathematically, this means 23 years before you pay for the company. Be careful. The overhead targets are $25.00 and then $32.00.
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