Tech and Telecom

• Tough Market for Long Investors- Another tough week just ended (June 27, 2008) for the stock market as it tumbled 3% and 3.8% on the S&P and NASDAQ respectively. Declines were broad based as nine out of ten sectors fell, this on top of the 3% weekly loss from the prior week. Four out of the five trading days showed losses, but it was the action on Thursday that made up for the lion’s share of the weekly decline. The main catalysts remain surging oil prices, the struggling financial sector, and concern over a weak economy. Overall the market has lost 8% in June, and over 12% YTD, in a period of high volatility. Clearly this is a tough market for long investors trying to make money, most should be happy with just losing less than the market.
• “Talk Story” about the Market- I have to admit, those that think it is wise to be either a bull or a bear here are doing themselves a major disservice by not studying the past. This market is clearly a range bound market and taking a bullish or bearish side on the overall market is a terrible thing to do.
  
  The correct stance to have is to be bullish in some sectors. Right now, to me, it is clearly obvious that the money is being made in energy stocks or even a couple select medical stocks. The one place you definitely do not want to be right now if you are looking to make money on the long side are the bank stocks which have 80 stocks hitting new 52-week lows. Besides the carnage in the Banks, Insurance, Leisure, Metals, and Real Estate stocks are seeing anywhere from 20 to 30 new lows daily. Now, if you are a bottom fisher trying to get the exact bottom of these stocks then you have suffered some serious damage.
  
• Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
  
• DJIA, SP-500, NYSE, and Nasdaq Breakdown On Very Strong Volume; The SP-600 (SmallCap Index) Is Starting To Show Strong Relative- Well there is absolutely nothing else that can describe Friday other than pure utter disappointment. I am telling you right now that the odds of us starting another leg lower has increased by leaps and bounds after Friday’s breakdown. Why? Because something that happened this time last happened in 2000. After an initial breakdown, some stocks recovered and some created very bullish chart patterns. After initially working, they soon all reversed as around August 2000 the stock market then resumed its trend lower. There is nothing that says that we are going to have a bear market like we did in 2000. However, the 10 new shorts that I have for Monday have the EXACT SAME PATTERNS that I saw in August to September of 2000.
  
• Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
  
• Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.
  
  However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
  
• Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.
  
  After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.
  
  On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
  
• HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
• What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.
  
  I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
  
• Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.
  
  By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
  
• Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)- Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.
  
  I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don't question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
  
• Another Very Quiet Day And Another Very Bullish Day For Our Longs; Fed Meeting Should Produce A One And Done...- It was a very quiet day of trading and until the very last hour appeared to be the lowest volume day the entire year. However, a pickup in action the past hour prevented that from happening. But instead of a rush to buy stocks there was a small little rush to sell. That helped take the indexes off their highs and helped leave them basically flat for the day with most indexes up or down between up .1% and down .2%. The biggest moving index was the SP 600 with a walloping .6% rally.
  
• Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good- It was another overall boring session to end the week but despite the overall boring tone to Friday's session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.
  
  This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.
  
  By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
  
• Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
  
• Low Volume Consolidation After The Big April Fools Rally Is So-Far So-Good; CANSLIM Stocks Setup And Breakout But Volume Is Stil- A weak open after a very poor employment report that showed the US lost 80,000 jobs in March with the unemployment rate moving up to 5.1%. It was a pretty lousy number but considering the fact that we had 25% unemployment after the crash of 1929 it isn't "that" horrible. But the media, with a Republican still in White House, of course, made it sound like all hell was breaking was loose.
  
  Maybe that is why the market could not build on the weakness and instead rallied higher the rest of the day off the lows until 2pm when traders unwound some of their longs into the weekend. Overall though, it was very positive action, following a strong rally on April Fool's Day. That now makes it three constructive sessions in-a-row where stocks have held on to the gains.
  
• A Market That Moves On No Volume Should Be Treated With Caution- There is an old adage that goes "never short a dull market." I couldn't agree with that more and want to stress that it does not say "go all-in and long a dull market." No, it says, "never short a dull market." If we have to get down to the core of what that statement says it is clearly telling us that when volume is no where to be found the LAST thing you want to do is go short stockA Bullish Week Comes To A Close As Leading Stocks Lead The Market Higher; Volume Was Finally Over The 50 Day Volume Average On F- Friday turned out to be one of the best days without a doubt for the stock market in 2008 as the Nassy led the way with a 2.6% gain. Why Friday? Because this rally came not only on heavier volume but came after the indexes have already had a few up days. This is a confirmation of the follow-through day as volume was sharply higher on both indexes by 20%. Not only did the gains come on higher volume but leading stocks took charge once again as many leading stocks continued to setup in what are now nice looking bases--just a week ago they were not nearly as nice (this is why it is important to ALWAYS follow the market). That is what two very strong accumulation days will do when they are within three days. There are also plenty breaking out to new highs on strong volume and the fact that they are in so many broad sectors is bullish.
  
• Problematic Follow-Through Day Is Not All It Appears To Be; We Have Gone NOWHERE In Two Months, Proving Cash Is King!- A lot of people have recently just gotten used to being in cash as the bear market has finally convinced some that the best side is the sidelines. But as soon as a lot of these people realize it is best to park their cash, all of a sudden we have the market following-through on its rally that started eight days ago on 3/11. That is when the DJIA made its lows, reversing off of them and closing higher at the HOD by the EOD. While every index undercut those lows on 3/17, the DJIA did not and instead held. This has now led to today's 2.16% rally on very strong volume. A weekly chart of the DJIA since 3/11 is very bullish. However, when we take a step back and look at where the index is coming from, it isn't that impressive yet.
  
• Stocks Reverse Hard Selling Off All Session Into The Close, Closing Near The LOD; Lower Volume Eases Selling Pressure But Some L- The morning got off to a good start as the indexes gapped higher and started off strong right out of the gate, with the Nasdaq leading the way higher with a 1% gain. After that, sadly for the bulls, it was nothing but a slightly choppy ride lower with the market selling off the entire way lower with the 1% gain in the Nassy turning into a .9% loss by the EOD. The DJIA closed near the session lows for the second straight session. This was not a bullish session, to say the least.
  
  Despite the losses, there was one bit of good news that can be taken away from this session and that is that volume was lower across the board. In fact, Friday's volume was the lowest turnover of 2008 and shows that institutional investors who make up over 75% of the volume in the stock market were not active at all. Still, you can't get too excited about low volume pullbacks when they come after low volume rallies.
  
• BSC Blowup Proves A Chronic Emailer Wrong And, Once Again, Proves The Power Of CANSLIM; Stock Market Indexes Selloff On Mixed Vo- Please Note: Starting next week this free weekly commentary will only be available at BigWaveTrading.net so be sure to check out the new FREE site sponsored by BigWaveTrading.com where Joshua Hayes and Market Speculator will be regularly posting some additional commentary about the markets.
  
  Today was another day in the stock market that has just gone to prove that cash is in fact king. When you try to play a stock market with a heavy hand or even on margin in an environment like this you either have a serious illness or you just have never taken the time to study history and to have learned that the smartest thing to do is NOTHING. A stock market that is this volatile that has THIS MANY BLOWUP is definitely not a stock market you want to be messing with.
  
• Stocks Selloff On Higher Volume, Helping Send Some Indexes To New 52-Week Closing Lows- Stocks sold off yet again but this time it did so on higher volume which is helping make my point that selling can start off slowly and pickup as it sells off. If you look at the downtrend since last February, you can see that this is the case now as it has been in the past with other market selloffs.
  
  The good news, today, is that, like most sessions recently, the market staged a very volatile and powerful reversal. This time it was to the bull side and it was needed for the trapped longs as stocks looked like they were going to put in another very bearish day of trading.
  
• It's About Time!; Stocks Breakdown From The Triangle Consolidation (NYSE Reverses Its Breakout), On Much Heavier Volume- Well, I guess, all I can say is, so much for that rally. There were a lot of people that were very confident that the lows in this market were seen on 1/22 and 1/23. Those people that believe that is the case still, are living in serious denial about the true problems this market has. Unless you are only focused on the oil, gold, steel, metal, food, ag, machinery, or chemical stocks, there is no way anyone can be serious when they say they are bullish on this market. Everywhere I look I see some big damage that was caused by today's selloff and the reality of the situation is very clear to me. This market is not a market to buy.
  
  Today, stocks were crushed, as a raft of poor economic data and more subprime BS slammed the door in the face of the bottom-callers. Part of it was due to the consumer as for the third month in four their was no growth in spending. And for those that truly do not grasp how important that is, I hope I can help convince you, along with IBD, that it is indeed very important.
  
• Stocks Sell Off And Then Come Back Before The Closing Bell Ending Mixed On An Overall Very Dull Friday; Enjoy Your Long Weekend- Stocks started the day pretty much where they ended on Thursday but shortly after the open Ben Bernanke (the most CLUELESS fed head ever) talked more about the economic weakness, citing the troubled housing and job markets, ailing bond insurers and a broader credit crunch. This helped stocks erase all of the gains produced by the follow-through day (FTD) in just one and a half sessions. This is not how great rallies start.
  
• Late-Day Bullish Reversal Off The Lows Keeps Stocks From Hitting New February Lows; Volume Remains Below Average, For A Full Sec- What looked like was going to be the session before a possible breakdown turned into a bullish reversal by the close, after word of a bailout of the bond insurer ABK. Now, I am not here to discuss the ethic of CNBC of this news and to be honest I could really care less as I think watching CNBC is a waste of time (I just tried to watch it again, recently, and that lasted 30 days). So if you were watching your charts intraday, the spike looked the same as it did on CNBC. It really doesn't matter what the news announcement was and anyone that thinks that this changes anything must not remember the last time CNBC did this last month. LOL. Different players, same game, with CNBC. You are best to just turn it off.
  
• After A Rough Week For Stocks, Bottom Callers Remind Us How Stupid We Must Be; Stocks End Mixed On Lower Volume- What appeared to be a strong start on Friday turned out to be a big disappointment for the perpetual-bottom callers as stocks closed mixed with volume falling across the board ahead of the weekend. The dull action had to be a bit of a disappointment for all of the people who have been emailing me the past month telling me how stupid all of us trend followers are. Add to that list the crew of Cramer and Marcin and you have a ton of people that have a lot riding on this being the lows.
  
  The best part about all of that is that no matter how wrong I ever am the great thing about this methodology is that we cut our losses when we are wrong. When you go long stocks that move up and go short stocks that move down, it is easy to know when you are wrong. That is whenever you lose money. If you lose money, you are wrong. However, in the world of value, as you lose money, it is supposedly (if you have done your "research") a better buy. So while it is great that your stock rises, it is "almost" (I am being a bit over the top but you should be able to understand that) better that a stock fall as you can now buy it at a cheaper price.
  
• Feel Free To Have Fun With Some Longs But Don't Make Any Long-Term Commitments- One of the most bullish weeks in years came to a close on Friday with most indexes making good gains despite the losses MSFT produced which you would think would ensure that the markets would have closed lower. However, the rest of the market rose steadily, helping to offset the losses in MSFT due to an announcement that they would like to have YHOO. This helped YHOO explode higher by 48% more than making up for the 6% smack MSFT was dealt. The worst part about the MSFT selling was that it was on extremely heavy volume that was even larger than the late October gap higher breakout.
  
• Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
  
• DJIA, SP-500, NYSE, and Nasdaq Breakdown On Very Strong Volume; The SP-600 (SmallCap Index) Is Starting To Show Strong Relative- Well there is absolutely nothing else that can describe Friday other than pure utter disappointment. I am telling you right now that the odds of us starting another leg lower has increased by leaps and bounds after Friday’s breakdown. Why? Because something that happened this time last happened in 2000. After an initial breakdown, some stocks recovered and some created very bullish chart patterns. After initially working, they soon all reversed as around August 2000 the stock market then resumed its trend lower. There is nothing that says that we are going to have a bear market like we did in 2000. However, the 10 new shorts that I have for Monday have the EXACT SAME PATTERNS that I saw in August to September of 2000.
  
• What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.
  
  I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
  
• Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
  
• Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.
  
  However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
  
• Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.
  
  After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.
  
  On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
  
• HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
• Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.
  
  By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
  
• Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)- Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.
  
  I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don't question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
  
• Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
  
• Another Very Quiet Day And Another Very Bullish Day For Our Longs; Fed Meeting Should Produce A One And Done...- It was a very quiet day of trading and until the very last hour appeared to be the lowest volume day the entire year. However, a pickup in action the past hour prevented that from happening. But instead of a rush to buy stocks there was a small little rush to sell. That helped take the indexes off their highs and helped leave them basically flat for the day with most indexes up or down between up .1% and down .2%. The biggest moving index was the SP 600 with a walloping .6% rally.
  
• Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good- It was another overall boring session to end the week but despite the overall boring tone to Friday's session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.
  
  This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.
  
  By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
  
• Earnings Growth In This Semiconductor Company Is Taking Off- Earnings Growth In This Semiconductor Company Is Taking Off Everyone that loves to make money knows that growth in earnings and sales is very important in the best stock. For those that are looking to put their money in a relatively cheap technology stock that is showing some huge recent growth in EPS and sales look no further than Marvell Technology Group (MRVL). MRVL is an Electronice-Semiconductor Manufacturing stock that designs analog, digital, mixed-signal and microprocessor ICS for storage, telecom/data, and consumer markets. Recently on June 3rd the company introduced the 88NV8120 PCI Express-based NAND flash controller for use in both PC’s and Mobile Internet Devices. It is very cool products like this that now has the stock making investors a lot of money since the January lows. And I doubt the price gains are finished right here. MRVL has recently shown some amazing EPS growth with EPS growing 17%, 567%, and 380% the past three quarters. Not only is the current growth fantastic the expectations are even better. For 2009 and 2010 analyst expect this companies EPS to grow 116% and 16% respectively to .95 and 1.10 per share.
• What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.
  
  I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
  
• Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
  
• Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.
  
  However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
  
• Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
  
• Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.
  
  After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.
  
  On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
  
• HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
• Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
  
• Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.
  
  By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
  
• Affiliated Computer Services Is a Cheap Stock Ready to Make New Highs- Affiliated Computer Services Is a Cheap Stock Ready to Make New Highs I have noticed that the computer-technology services sector has been gaining some interest as a lot of stocks are starting to show up on my scans based on strong price performance. One stock in the group that has caught my attention is ACS. ACS is a tech service company in Dallas, TX that provides information technology services with a focus on transaction processing and program management services that continues to see consistent and steady growth. The kind of growth needed for a higher stock price. The fundamentals are not perfect but they are strong enough to keep the stock growing, with EPS growing 3%, 21%, 13%, 10%, 14%, and 4% the past six quarters. Matching the earnings growth, sales have been even more, steady rising 14%, 6%, 6%, 10%, 10%, 8%, 6%, and 7% the past eight quarters. Estimates for 2008 and 2009 have been risen recently to expectations of 3.51 and 3.95 per share. This is a 10% and then 13% growth rate estimates and if they continue to rise that is the future expectations that help stocks rise.
• Time to sell WDC?- Last year I predicted that Western Digital (WDC) would make a move into the 20s. I ended up selling WDC late last year because a number of analysts were pushing the stock back down to the low 20’s (probably so they could buy more).
• Why You Should Short Companies Doing A Share Buyback- Am I the only guy who believes that stock buybacks are a waste of shareholder money and a management diversion? Theoretically, if the earnings yield (inverse of P/E) is higher than the after tax interest rate, buybacks add to the EPS number. Buybacks are dilutive otherwise. (This provides no information on the value of the company.) Here’s why I don’t like buying companies doing stock buybacks, and would rather short some of them: * Some of the announced buybacks never happen. * P/E multiple compression. A dividend or a buyback is a cash flow to the investor right now, versus a possible higher return later on through future profitable growth. According to the classic Gordon growth model, a company’s price earnings multiple is proportional to the retention ratio. Well, a buyback is another way to return cash to the shareholders (or a lower retention ratio). Lower rates of reinvestment suggest lower future growth rates, and hence a lower multiple.
• Juniper Continues to Grow Confidently-

  Juniper is probably my favorite company in the networking equipment segment.

  Yesterday, Juniper (NASDAQ: JNPR) reported its results for Q4 and fiscal 2007 that ended December 31, 2007. Q4 revenue was $809.2 million, up 36% y-o-y and 10% sequentially. GAAP net income was $122.9 million or $0.22 per share on a diluted basis, up 73% y-o-y and 44% sequentially.

• Time For Private Equity At Yahoo-

  Predictably, Yahoo (Nasdaq: YHOO) posted a 23% drop in its 4Q07 profit and forecasted 2008 revenues that were below the Street’s expectation. The stock was down over 10% in after-hours trading. The market cap has eroded to the tune of $25 Billion in the last two years. So how do we play the stock going forward?

• Microsoft: Masterful Maneuverings-

  Microsoft has been on the roll, lately. First it froze Facebook, and now it has made an unstoppable bid for Yahoo! while the latter is struggling to regain its stride. To finance this high value Yahoo! deal, Microsoft is expected to borrow money for the first time in its history. And recession worries and subprime crisis notwithstanding, lenders will be falling all over themselves to provide them with this debt financing. Masterful maneuverings from Redmond’s strategists!

  While other tech Companies were reporting disappointing results, Microsoft came out with solid fiscal 2Q07 results and guidance for the next couple of quarters. Revenues grew to $16.37 billion, increasing 30% y-o-y, boosted by strong computer sales which drove the sales of its Vista operating system and Office software. Net profit grew by 79% y-o-y, to $4.7 billion. Profit per share was $0.50 compared to $0.26 per diluted share in the year-ago period. This surpassed the Street’s estimates of $0.46 a share.

• Cisco Hits New 52-week Low-

  Yesterday, Cisco (Nasdaq: CSCO) reported its financial results for Q2 2008 that met analyst estimates but forecast a slow Q3 reflecting cutback in technology budgets in the US. This news sent its stock plummeting to around $23 after hitting a 52-week low of $22.30 on January 23. Market cap is around $140 billion. This morning, the 52-week low number has changed to find a new low of $21.77.

• Cadence Crashes. Now What?-

  Cadence (NASDAQ: CDNS) reported its Q4 results on January 30, 2008. The quarter’s revenue at $457.9 million showed a 6% year on year growth over $431.0 million reported the previous year and a 14% sequential growth (over $401 million Q3 revenue).

  The stock took a major beating as Q4 revenue was below market expectations of $470.3 million. On January 31, the stock fell to a new 52 week low of $9.89 – a 53% erosion of market value from the previous day close of $15.16. It has since recovered marginally and closed at $10.69 with a market cap of $2.9 Billion, its lowest in the last decade, yesterday.

  

• What This Weekend's Announcements Mean for the Market-

  I was bargaining on a quiet week as there were only a handful of economic releases and no major earnings reports. But credit and liquidity issues ravaged the financial markets and resulted in plenty of white knuckles and shaky knees, climaxing on a particularly sour note on Friday and not quite delivering the birthday present I was hoping for.

  Struggling to contain a crisis of confidence in credit markets, the Federal Reserve announced a new Term Securities Lending Facility (TSFL). The Fed will lend up to $200 billion of Treasury securities to primary dealers for a term of 28 days (rather than overnight) against collateral including federal agency debt, mortgage-backed securities of Fannie Mae and Freddie Mac and private AAA-rated residential mortgage-backed securities.

• Broadcom: Aggression in the Cell Phone Market- By Vijay Nagarajan, Guest Author We have so far looked at Broadcom’s Enterprise Networking business, Broadband Communications business, and the Bluetooth and WLAN components of its Mobile and Wireless Business. I will now look at its cellular mobile business which, in my mind, is the make-or-break component for the company. The cellular space is Broadcom’s avenue for [...]
• Broadcom: Enterprise Networking Business- By Vijay Nagarajan, Guest Author In the previous articles in this series, we looked at the strengths and weaknesses of Broadcom. We also looked at the pros and cons of its broad portfolio of products and its growth by acquisition. Going forward, I will start to dissect the company’s enterprise networking products business. The enterprise networking [...]
• Interdigital: Valuation-

  “Seventy Five dollars! That cannot be,” was my own reaction when I first glanced at the result of my valuation of my analysis. The number sounded outrageous compared to the current stock price of IDCC - $20.13 after hour on Jan 30^th, 2008. It was also 65% above my highest estimate of what QCOM may be willing to pay for IDCC. $75 as IDCC’s stock valuation just did not seem to add up.

• Akamai Key to Net’s Future-

  On Feb 6, Akamai Technologies, Inc. (NASDAQ: AKAM) reported its Q4 and 2007 financial results that were way above its guidance, driven by unexpected strength in media and entertainment. In after hours trading, Akamai shares went up 87 cents, or 2.9%, to $30.60.

  I had earlier covered Akamai as part of the Online Video Beneficiaries series. I have also done an interview with its founder, Tom Leighton.

  Q4 revenue grew 46% y-o-y and 14% q-o-q to $183.2 million. GAAP net income went up 48% q-o-q to $35.9 million or $0.20 per diluted share. For full year, revenue grew 48% to $636.4 million. GAAP net income grew 76% to $101.0 million, or $0.56 per diluted share. GAAP gross margin was 74%, four points lower than 2006, but in line with its guidance.

• Media Industry Worth Watching in 2008- 2007 was a not a pleasant year for the Media Industry. Most of the Media stocks including IAC, Walt Disney, News Corp. and Time Warner have undergone correction between 10% to 40%. Except Walt Disney, all other stocks are trading close to at their 52-week lows. Most of the companies have reported below the Street’s [...]
• Major Trends Driving Storage Vendors SanDisk, Seagate- With the booming digital content adoption, storage vendors are predictably showing strong performance. Sandisk is also benefiting from the convergence device movement, as the devices are becoming increasingly storage-heavy. Weaker consumer market notwithstanding, I think, both movements would continue. On January 28, SanDisk Corporation (NASDAQ:SNDK) released its Q4 and 2007 financial results. An earlier post is [...]
• PDF Offers Value, Finds Scaling Difficult- I reiterate – not much has been happening in the EDA space. With Cadence having crashed earlier this month, the industry continues towards its bleak financial future, unless it takes necessary decisive steps. (Read more on Future of EDA and Future of EDA Addendum). Yield is one of the big problems facing the EDA industry – [...]
• Motorola in Pain- Motorola has had a new CEO since January 1, 2008. Zander is gone. Greg Brown is at the helm. And now there is talk of breaking the company up into pieces, spinning off the mobile handset unit. Carl Icahn also continues to lobby for a position on the Motorola Board. On January 23, 2008, Motorola, Inc. [...]
• Interdigital: Valuation Roadblocks- By Vijay Nagarajan, Guest Author As I looked at the positives of QCOM acquiring IDCC, I threw a number between $35 and $45 as a possible sale price. This price was based on a mix of historic data projection, IDCC’s current stock price and the perceived value to QCOM. I revisited the topic recently to do [...]
• Forbes Column: How To Dig Out Yahoo’s Treasures- More on the same topic. My Forbes column How To Dig Out Yahoo’s Treasures provides commentary on Yahoo’s earnings later today.
• Sunpower Seems Unreasonably Slaughtered- Sunpower’s (SPWR) Q4 stock performance has been scary as the company’s stock reached heights of $160/share in intraday trading and then plummeted on general market madness and company outlook to $73/share recently. It is worth looking at the company to see what has been going on. Sunpower reported Q1 2008 revenue of $224.3 million and GAAP [...]
• Accenture Should Roll-Up Indian Services Companies-

  Is Accenture (ACN) still in the body-shop business model? Yep. Why ruin a good thing when it’s working, some would ask. And India continues to be a strong leverage point for Accenture’s outsourcing activities, with a new consulting center opened in the last quarter. This was also reflected in the 40% increase in staff being strongest in India and the Philippines (41% increase YoY Q1).

• Polycom Surprises Wall Street- Yesterday, Polycom, Inc. (NASDAQ: PLCM) reported its results for Q4 and fiscal 2007 that ended Dec. 31. Earlier coverage on the company is available here and here. My in-depth interview with CEO Bob Hagerty is here. For Q4, net revenues were $263.3 million, up 41% y-o-y and 9.7% q-o-q. GAAP net income was $22.8 million, or 25 [...]
• What is John Donahoe’s Gameplan with eBay?- The big news this week is eBay’s CEO change. Meg Whitman retires, John Donahoe will be taking her place. There is wide-spread skepticism about John Donahoe’s choice as the successor to Meg Whitman. We just completed a comprehensive analysis of eBay’s business and a comparative analysis of eBay vs. Amazon. After yesterday’s closing bell, eBay came [...]
• Viacom - Discovering its Mojo- We did a lengthy review of Viacom’s (NYSE: VIA-B) vertical strategy in the Fall. Meanwhile, revenues were up 24% in 3Q07 to $3.27 billion. Adjusted net earnings grew 20% to $437 million and diluted EPS were $0.65, a 27% increase over 3Q06. The solid performance was due to the DreamWorks-Paramount blockbuster Transformers. Earlier this month, BET [...]
• IBM Also Looks Safe- Yesterday, International Business Machines Corporation (NYSE: IBM) officially released its financial results for Q4 and the fiscal year following preannouncement on Monday. Fourth quarter revenue was $28.9 billion, up 10% y-o-y and diluted earnings were $2.80 per share, up 24%y-o-y. For the full fiscal year 2007, total revenues were $98.8 billion, up 8% and diluted [...]
• Trend Radar 2008: Turnarounds- 2008 seems like a year in which several major companies are positioned for turnarounds. Whether or not they would be successful is another matter, but there is enough discontinuity in each of their markets, that turnarounds could happen. Here are some to watch: Yahoo: 4C:Yahoo’s Turnaround Formula and Web 3.0 and Yahoo. The formula exists. Leadership [...]
• Can Sprint Turn Things Around?- While the markets were closed on Monday for the holiday, speculation began to mount that Sprint Nextel Corp (NYSE: S) was on the verge of launching a price war against its competitors in an effort to win back its customers (see TheStreet.com’s article by Scott Moritz). The depth of Sprint’s troubles became apparent on Friday when the company issued a statement that announced major layoffs of 4,000 positions and approximately 125 store closings in order to cut cost by $700-$800 million per year.
• Trade Update: Apple (AAPL) Short Term August Spread Produces 109% Gain.- Sometimes we can make extreme market volatility work in our favor. Back on August 02, I highlighted a short term Bull Put Spread on Apple going into August expiry. At the time, the spread had a max. profit potential of $560 or around a 16% return. (See original article). Because I continued to like the fundamental story of Apple, one of my risk management scenarios for the spread was to possibly be assigned the shares and then create new spreads based on the technical outlook at the time with share ownership.