Dave's Daily: Groundhog Day... Again
Dave's Daily
By Dave Fry, founder and publisher of
and author of the best-selling book
Create Your Own ETF Hedge Fund.
February 2, 2010
GROUNDHOG DAY... AGAIN
Stocks rose on better pending home sales data (up 1% vs down 17% previously) and homebuilders reported better earnings courtesy of tax benefits and the $8K home buyers' credit. Further, analysts were busy upgrading companies like Alcoa and Exxon. The latter always get the benefit of the previous close to mark their cost vs the opening price like most of us commoners.
Short-term oversold conditions are now officially relieved even with volume running a little below the previous week's selling. Perhaps sellers have exhausted themselves and buyers can come in and squeeze shorts out of their positions. The latter has been the common experience since the rally began in March as every dip has been bought. Breadth today was positive but less so on the NASDAQ as tech is still finding its footing with volume focused on bigger names per WSJ.
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The stock markets were oversold at least from a short-term view. That condition has been cured. There's plenty more economic data on Wednesday including ADP employment report and ISM Services. Also energy inventories will be released and this should prove whether the recent run-up in prices is verified by large drawdowns of supplies.
Cisco's report will be closely watched as well after the bell.
The amazing thing is how off WS analysts have been in earnings forecasts with 80% of companies beating estimates. Were they deliberately low-balling these since they'd been burned on the way down? Trusting them is a mistake frankly.
Let's see what happens and you can follow our pithy comments on
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The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at
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Dave Fry is founder and publisher of
, Dave's Daily blog and the best-selling book author of
Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management
, published by Wiley Finance in 2008. A detailed bio is here:
Dave Fry.