Inside the market
Market Update 2-25-02
Dow - 10,000 may be to much resistance for the short term
Nasdaq- looks poised to test recent lows...be careful
For the lastest earnings warnings - click earnings warnings
Alert Watch
Tech stocks look particularly vulnerable to test recent lows, many tech charts also look like lows will be penetrated....be very careful....
New Buzz - word Foreward Guidance
This seems to be the key with this earnings season.
While it will be important for a company to meet it
current earnings release projections , what will be
more important will be how it will guide for upcoming
qtrs.
(a company could miss it's qtr badly but if it gives
very sales growth going forward, the stock will likely
pop up nicely, the opposite would apply as well)
With P/E ratio getting all the emphasis again, it's
always a good idea to see what the current P/E ratio is.
Even with the recent downturn in the market you'd be
surprised how high many still are high. Here's a list
of some of the high flyer NASDAQ tech stocks.
This is a great stock screening tool from CBS MarketWatch
*Be sure to click "refresh" to get it updated throughout the day.
It's ranked by current P/E ratio - highest to lowest.
Find up the Best and Worst performing industries and
the best and worst stock within each one.
Here's a great tool CBS Market watch Industry
It used to be that the third Friday of every month,
Options expiration day was a volatile day with many
losses occuring to the downside. But it seems times
have changed (for now) Now many of the options activity
occurs earlier in the week which sets up friday as
an up day. Particularly if that wed and thur prior
are down days. This sets up an opportunity to enter
a long position sometime late thur or early fri.
* Keep an eye on the open interest per each call / put
stock option, wherever the majority lies
(current volume, if your trading intraday) stock prices
will tend to gravitate to that point....
( A good place to find this info is go to the CBOE and
enter a stock symbol in the quote area to check open
interest and prices)
An analogy to this would be...Think of a piece of art
being auctioned off at a auction. The majority of people
there think the art work is valued at least $200. since
this is the majority and they believe this to be true
bidding will generally gravitate to this point. So while
starting bids may start below 200 it will be driven up by
the majority up to the $200 area because of their perceived
valu of the art work.
Consequently if the item bids up well above the $200 price
to say $400,(mostly from the amatures at the bidding table)
the Majority will no longer support the bidding, being that
they now feel the art work is over valued. Now whomever made
that last bid is now stuck and will dish out $400, and
unfortunately in the event they would like to sell would not
be able to find any buyers at that price. The buyer would
likely have to sell the art work at loss of about $200.
Since again the majority perceived value is the $200.........
His/Her only other option would be to hold on to it for
perhaps years and years unitl the art work value rises.
If it does?
So keep an eye on open interest........
Traders TIP ! - did you know many stocks have similar trading
patterns each month, ex... always trade down middle of the month
always trade up the first five days....
Try it analyze a stock you follow , look at the past few months,
look at the same months LY... not all stocks do this, but you
should be able to find many that do.
(another interesting study is stock sectors in relationship
to the seasons , summer winter fall spring.) |