Note: I am taking a few days off to spend the upcoming
holidays with my family. My next letter will be Monday.
Wishing everyone who celebrates a Happy Passover and
I cannot decide if the selling -- thus the accelerated
selling late in the day -- was due to the end of the
quarter or just because the market statistics have been
so poor of late. The quarter turned out to be a volatile
chopfest, but at least we did finally see active managers
outperform the S&P. That was a change I thought
might come to fruition when the calendar turned to 2015,
and it has. I for one welcome it.
Before we get to the statistics, I want to point out that
the S&P finds itself right back at that uptrend line I
have been drawing in for the last several weeks. I
realize most folks won't use this line, they will use
those twin lows around 2040 as their "stop," but I am
going to watch this line since it has been a good spot
for rallies for the last three weeks. If we fail to rally
from the line, it would be a change in the market.
As I sat at my desk watching the final trading of the
day, I was struck not just by the up-and-down action of
the market over the course of the last few months, but
how the follow-through days are getting fewer and farther
between. Think of it like this: We had a two-week
correction in early December. That was followed by an
almost two-week rally. The next decline took place over
just one week.
The next rally lasted two days before retreating. That
decline was a mere week. Then we had a rally of just over
a week and a decline of just over a week. That was
January's action. Then came February, where the trend
lasted for four weeks to the upside.
Then it was a week of downside, almost two weeks of
upside, but now it was three days of downside, one day of
upside and so on. The rallies are shorter and the
declines are shorter time-wise. It made me go back to the
fall of 2008. Let me preface this by saying I do not
envision a 2008-type decline in the market. How could we
get that with the zero interest rate policy? But let's
take a look.
September 2008 was essentially choppy until midmonth, and
then Lehman went under and we collapsed. That collapse
lasted about four weeks. But now look at mid-October. Up
for two days, down for two days. Up for three days. Down
for a week. Back up for just over a week. In early
November, we finally caught a trend when we slid for
three weeks (similar to February this year).
Then it was up for a week, down for a few days, up for
two days, down for a few days, etc. Right through year's
end. I have not taken this into the year 2009 because I
just wanted to show three or four months, similar to what
we have now in time.
I grant you, the volatility then was massive compared to
now because the daily percentage moves were significantly
more extreme. But the roller-coaster effect was quite
similar. In January 2009 the market let go again to the
downside in order to get us out of that up-and-down.
Eventually our market will have to push out of this
roller coaster, too. I'd like to think it will be to the
downside so that we can flush out weak holders and
finally rally well, but I've been waiting since December
and it hasn't happened yet.
I don't know about you, but I sure hope we don't get
I was asked to follow up on the chart of CurrencyShares
Euro Trust (FXE), an ETF to be long the euro. You might
recall I originally thought it could rally to $110, but
it stopped at $108 and retreated. I think it is entirely
possible that in the next few days the FXE finds another
low and rallies again. The key will be if it can rally
past $108. If I am correct on a euro rally, then it ought
to help the energy stocks that we discussed last evening.
The McClellan Summation Index for the NYSE is not
up or down; it's flat. Nasdaq's is still heading
down and will require a net differential of +1.1 billion
shares to get it to stop its decline.
Helene welcomes your questions about Top Stocks and
her charting strategy and techniques. Please send an
email directly to Helene with your questions. However,
please remember that TheStreet.com Top Stocks is not
intended to provide personalized investment advice. Email
We looked at Pfizer (PFE) not long ago and there
is still an unfulfilled target on the stock around $36-
$38. Quite frankly, I'm surprised it hasn't gotten there
yet, but I still believe it will. It's just taking its
time doing so!
I am tempted to like the chart of Lazard (LAZ)
because it would be a big breakout if it could get up and
over that resistance line, but part of me wonders why it
hasn't yet done so. For now, I am willing to give it a
chance, but if it trades back under $51, I would not
stick around to see if it wants to rally again. If it can
break out, the target would be $60-$63.
They just opened a Fresh Market (TFM) near my
house and I have been meaning to get over there to see
what the fuss is about. When it comes to the chart, I
have not been a fan of this for quite some time; I recall
perhaps six or eight months ago my preference was
Whole Foods (WFM) over TFM. But TFM has now gone
sideways since November. If it can get up and over $42,
I'd be impressed and consider it a nice breakout with a
target around $48. Right now, I'd use a stop under
We have looked at Gilead (GILD) a number of times
in the last six or eight months, and mostly I have not
been a fan. At one point, I was downright bearish on it,
but lately I have thought it would just go sideways.
Well, if it breaks this line ($97.50) I'd have to go back
to being a bear on it and looking for a downside test of
the spike low in the upper $80s. In fact, unless the
chart can get back up over $103, that's the way I'd lean.
Let's see if this rally can stick around.
We have the employment report coming when the stock market is closed.
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Want more than one service? Sign up to one of our packaged services and take advantage of amazing savings!
After the Bell
Before the Bell
TheStreet Top 10 Stories
Winners & Losers