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Thanks for the info, best thread on the board at the moment. IMO.

UPDATE:

I have added the London Stock Exchange and a Pivot calculator to the header, feel free to access the links. For those who are not familier with Pivots:

PIVOT POINTS: Are calculated from the High (H), low (L) and close (C) of the previous day.
Unless significant market news has been made available between yesterday's close and today's opening you can expect prices to test the near term support and resistance and the pivot price.

Should, for any reason, these near term support and resistance areas fail then the second such area will likely be tested. If these support or resistance areas fail, because of market influencing news or observations, the off floor or, more particularly, intermediate term positional players will likely enter the market and make the market trend.

FORMULA:

Pivot point = P = (H + L + C)/3

1st resistance = R1 = 2P - L

2nd resistance = R2 = (P -S1) + R1

1st support = S1 = 2P - H

2nd support = S2 = P - (R1- S1)

I always use the Pivot point, Supports 1/2 and Resistance 1/2 on the stocks I trade as a guide to where the stock will move in the day. You need to use other indicators as well for example Bollingers bands combined with RSI, for oversold/overbought levels, eg, if the top BBand is hit, but the RSI is low, chances are the stock will keep on rising, etc.
When you use the Pivot calculator, input the information what it wants, eg, the stocks High (of the day) low (of the day) and what it closed at, then press 'calculate', then you will have the R2, R1, P, S1, and S2 of the next trading day.

This table indicates how broker recommendations for key FTSE companies have changed in the last 24 hours. It details how great the rating change has been and reasons for this change. The consensus recommendation gives a numerical rating where 1=Buy, 2=Outperform, 3=Hold, 4=Underperform and 5=Sell.

	27th May	28th May	Change	Consensus Rating	Broker Change
BT Group	2.59	2.65	-2.3%	Hold	SG Securities downgrades to "hold" from buy given the lack of short-term catalysts for the stock. Until interims are released in November, the broker sees no spur for share price gains.
British Airways	2.67	2.73	-2.2%	Hold	Smith Barney believes a Virgin Atlantic/BA tie-in is unlikely given regulatory and ego issues. Broker still thinks BAY is the best long-term flag carrier in the sector and retains its 170p target price.
GUS	2.35	2.26	3.8%	Outperform	Teather & Greenwood is pleased at the price GUS fetched for its home shopping business and marginally ups forecasts, although, with results imminent, further alterations are likely.
Kingfisher	2.47	2.5	-1.2%	Outperform	Exane restated its "outperform" rating ahead of results, believing the group is on track to spin-off its electricals division and create a pure play company.
Prudential	2.68	2.76	-3.0%	Hold	DKW downgrade to "reduce" from Add following the departure of Mark Tucker, CEO of Prudential Asia. Asia contributes 31% of sales and 50% of new business profits and DKW doesn't like the uncertainty.
Royal & Sun Alliance	3.17	2.96	6.6%	Hold	HSBC dramatically raises its rating to "add" from reduce believing there to be a significant improvement in underwriting and capital adequacy
Tomkins	2.76	2.71	1.8%	Hold	Lehman Bros follows the trend set by others last week and upgrades to "Equal weight".
Vodafone	1.97	1.92	2.5%	Outperform	Positive results and fiery rhetoric from Sir Christopher Ghent do the trick for Deutsche. It upgrades to "buy"
Xstrata	2.05	2.17	-5.9%	Outperform	Morgan Stanley downgrades "equal weight" due to the recent rise in coal prices an the strong performance of the A$ and the Rand
MM02	2.59	2.48	4.2%	Outperform	SG Securities upgrades to "buy" from hold, believing the downside risk is now limited and there is speculative upside on the disposal of German operations. The target price is 77p.

Good stuff, IT. Keep it going!

Agreed, some quality information there.

This thread is a real asset to this BB, well done!

Andy.

Thanks guys, I hope it helps with your trading. I am helping to Beta test AM live charting at the moment, and what I see so far is very good! ========================================================================== This table indicates how broker recommendations for key FTSE companies have changed in the last 24 hours. It details how great the rating change has been and reasons for this change. The consensus recommendation gives a numerical rating where 1=Buy, 2=Outperform, 3=Hold, 4=Underperform and 5=Sell.

	28th May	29th May	Change	Consensus Rating	Broker Change
Barclays	2.42	2.52	-4.1%	Hold	HSBC restates its "sell" rating following its quarterly Q&A session with CFO John Varley. Outlook remains difficult, retail division is struggling to grow and there will be a further pressure on margins.
British Airways	2.73	2.82	-3.3%	Hold	Merrill upgraded its bonds to neutral encouraged by the impact cost cutting is having on the bottom line. This has yet to impact the valuation metrics as other brokers retain cautious stances.
EMAP	2.78	2.72	2.2%	Hold	Numis upgrades to add, encouraged by the full-year results.
GUS	2.35	2.26	3.8%	Outperform	Positive broker reaction to both the results and the divestment of the home shopping business prompts Seymour Pierce, among others, to restate its Buy rating.
ICI	2.47	2.53	-2.4%	Hold	CSFB downgrades to underperform and lowers target price to 100p from 110p. It is dismayed by new management's apparent commitment to the old strategy and believes the discount, relative to ICI's peer group, should be reinstated.
Kingfisher	2.47	2.5	-1.2%	Outperform	Exane restated its "outperform" rating ahead of results, believing the group is on track to spin-off its electricals division and create a pure play company.
Lloyds TSB	2.73	2.73	0.0%	Hold	ABN Amro ups the target price to 525p and Goldman restates its outperform rating following the recent share price slide and signs of a turnaround in the business
Pearson	2.8	2.76	1.4%	Hold	Investec upgrades Pearson to a "buy" believing that its share price has lagged a rising media sector leaving it looking relatively attractive
Rentokil Initial	2.53	2.58	-2.0%	Hold	UBS Warburg downgrades to neutral bearing in mind the group's lower underlying growth and its cautious stance on the medium term outlook.
Vodafone	1.97	1.92	2.5%	Outperform	Positive results and fiery rhetoric from Sir Christopher Ghent do the trick for Deutsche. It upgrades to "buy"

The consensus recommendation gives a numerical rating where 1=buy, 2=outperform, 3=hold, 4=Underperf. and 5=sell.

UK, US and European results this week
Result Date	Company name	Country	Results	Consensus Rec		No. Anl	EPS	Revenue
27-May	Cewe Color	D	Q1	1.67	Outperform	3	2.69	450
27-May	D. Logistics	D	Q1	3.25	Hold	5	0.05	339
27-May	DEAG Deutsche Entertainment	D	Q1	1.00	Buy	1	0.13	122
27-May	Hannover Rkversicherung	D	AGM/Q1	2.35	Outperform	24	3.11
27-May	Indus	D	FY	2.00	Outperform	2	3.26
27-May	Microlog Logistics	D	Q1	2.33	Outperform	3	1.70	357
27-May	MLP	D	Q1	3.59	Underperform	18	0.39
27-May	RM	GB	H1	3.17	Hold	6	6.20	197
27-May	Sixt	D	FY	3.00	Hold	2	0.58	2,130
27-May	Telekom Austria	AU	Q1	2.42	Outperform	12	0.20	3,957
27-May	TUI	D	Q1	3.83	Underperform	19	0.66	20,383
27-May	Umweltkontor	D	Q1	3.50	Hold/Underperform	6	0.27	264
27-May	Vodafone Group	GB	FY	1.95	Outperform	37	6.39	30,321
Wednesday
28-May	Analytik Jena	D	Interims	3.00	Hold	2	0.05	80
28-May	British Land	GB	FY	2.17	Outperform	12	21.87
28-May	Costco Wholesale Corp	US	Q3	2.52	Hold	25	1.57	42,087
28-May	De La Rue	GB	FY	3.25	Hold	4	17.78	548
28-May	Emap	GB	FY	2.76	Hold	18	48.20	962
28-May	Euromicron	D	Q1	2.00	Outperform	1	1.07	138
28-May	Gauss Interprise	D	Q1	4.00	Underperform	1	-0.34	30
28-May	Girindus	D	Q1	3.00	Hold	2	-0.47	31
28-May	GUS	GB	FY	2.41	Outperform	23	46.35	7,069
28-May	ICAP	GB	FY	1.20	Buy	5	76.50
28-May	Krispy Kreme Donuts	US	Q1	2.14	Outperform	7
28-May	LPKF Laser & Electronics	D	Q1	2.80	Hold	5	0.19	26
28-May	Nexus	D	Q1	4.00	Underperform	1		36
28-May	Northern Foods	GB	FY	3.20	Hold	15	13.90	1,405
28-May	Peacock Group	GB	FY	2.18	Outperform	11	14.70	399
28-May	Premier Farnell	GB	Q1	2.33	Outperform	6	11.39	768
28-May	Shanks Group	GB	FY	2.56	Hold	9	10.60	544
28-May	Szucker	D	FY	1.80	Outperform	10	1.48	4,406
Thursday
29-May	Big Food Group	GB	FY	3.06	Hold	16	2.14	5,180
29-May	BTG	GB	FY	2.75	Hold	4	-32.53	33
29-May	Chloride Group	GB	FY	2.86	Hold	7	1.86	141
29-May	Daily Mail & General Trust	GB	H1	2.80	Hold	11	33.00	2,011
29-May	Electrocomponents	GB	FY	2.78	Hold	9	16.28	739
29-May	Invensys	GB	FY	3.28	Hold	21	2.52	4,835
29-May	Lonmin	GB	H1	2.82	Hold	18	53.94	466
29-May	Pennon Group	GB	FY	2.77	Hold	13	47.00	408
29-May	PETsMART Inc	US	Q1	1.8	Outperform	5
29-May	Pilkington	GB	FY	2.69	Hold	16	6.14	2,598
29-May	Plasmon	GB	FY	2.00	Outperform	1	9.36	61
29-May	Securicor	GB	H1	2.00	Outperform	12	8.89	1,382
29-May	Wagon	GB	FY	2.33	Outperform	6	14.30	445
Friday
30-May	Brain Force Software	D	Q1	1.00	Buy	1	0.05	61
30-May	Fuller, Smith & Turner	GB	FY	1.80	Outperform	5	45.25	139
30-May	Splendid Medien	D	FY	5.00	Sell	1	-3.44	36
30-May	Synstar	GB	H1	2.00	Outperform	4	3.84	233
30-May	W.E.T. Automotive Systems	D	Q3	1.20	Buy	5	5.50	178

The broker ratings are overall consensus figures derived from Multex Global Estimates reports. The EPS, EBIT and revenue estimates relate to the full-year and therefore do not necessarily correlate to the reporting period indicated. The consensus recommendation gives a numerical rating where 1=buy, 2=outperform, 3=hold, 4=Underperf. and 5=sell.

UK, US and European results this week
Result Date	Company name	Country	Results	Consensus Rec		No. Anl	EPS	Revenue
Monday
16.Jun	Majestic Wine	GB	Prel. FY	1.20	Buy	5	34.00	125
Tuesay
17.Jun	Amadeus AG	D	FY	1.00	Buy	1	0.25	59
17.Jun	Chattem Inc	US	H1	2.25	Outperform	4	1.15	244
17.Jun	Danisco	DK	FY	2.47	Outperform	16	25.70	16,885
17.Jun	Norstan Inc	US	FY	2.00	Outperform	1	0.05	225
17.Jun	Progress software	US	H1	2.33	Outperform	3	0.68	306
17.Jun	Vermont Pure Holdings	US	H1	1.50	Buy/Outperform	2	0.17	75
Wednesday
18.Jun	Babcock International	GB	AGM	2.60	Hold	5	8.62	397
18.Jun	Bear Stearns Companies Inc	US	H1	2.55	Hold	11	6.55	5,351
18.Jun	Bouygues	F	Q1	2.56	Hold	18	1.37	21,502
18.Jun	Halma	GB	Prel. FY	3.00	Hold	5	8.60	271
18.Jun	Hennes & Mauritz	S	H1	2.13	Outperform	26	8.08	52,101
18.Jun	iSoft Group	GB	FY	2.33	Outperform	9	13.45	90
18.Jun	Worthington Industries	US	FY	2.43	Outperform	7	0.94	2,205
Thursday
19.Jun	AEA Technology	GB	FY	1.00	Buy	2	-12.10	260
19.Jun	Carlo Gavazzi	CH	FY	6.00	N/A	1	-4.85	204
19.Jun	KB Home	US	H1	2.80	Hold	10	8.05	5,608
19.Jun	Lehman Brothers	US	H1	2.50	Outperform/Hold	16	4.39	6,715
19.Jun	McCormick & Co	US	H1	2.46	Outperform	13	1.45	2,479
19.Jun	Morgan Stanley	US	H1	2.83	Hold	18	3.13	20,363
19.Jun	Saba Software	US	FY	2.67	Hold	3	-0.88	44
19.Jun	Tibco Software	US	H1	2.64	Hold	11	0.06	260
Friday
20.Jun	Cardiodynamics Intl Corp	US	H1	2.50	Outperform/Hold	2	0.06	31
20.Jun	Tektronix Inc	US	FY	2.77	Hold	13	0.50	793

Thanks Insider trader

The broker ratings are overall consensus figures derived from Multex Global Estimates reports. The EPS, EBIT and revenue estimates relate to the full-year and therefore do not necessarily correlate to the reporting period indicated. The consensus recommendation gives a numerical rating where 1=buy, 2=outperform, 3=hold, 4=Underperf. and 5=sell.

UK, US and European results this week
Result Date	Company name	Country	Results	Consensus Rec		No. Anl	EPS	Revenue
Tuesday
24.Jun	FedEx Corporation	US	FY	2.33	Outperform	18	2.71	22,409
24.Jun	Goldshield	GB	Prel. FY	3.00	Hold	2	37.79	108
24.Jun	Omnova Solutins	US	H1	2.00	Outperform	2	-0.09	694
24.Jun	Palm Inc	US	FY	2.90	Hold	10	-2.92	834
24.Jun	Paychex Inc	US	FY	2.83	Hold	24	0.78	1,101
24.Jun	Verity Inc	US	FY	2.50	Outperform	6	0.38	104
24.Jun	Workspace	GB	FY	1.86	Outperform	7	55.45
Wednesday
25.Jun	3Com Corporation	US	FY	3.11	Hold	9	-0.18	1,012
25.Jun	General Mills	US	FY	2.06	Outperform	17	2.63	10,423
25.Jun	Goldman Sachs Group	US	H1	2.47	Outperform	15	4.74	15,120
25.Jun	Hornbach Holding	DE	FY	3.00	Hold	3	2.12	1,705
25.Jun	Stagecoach	GB	Prel. FY	2.85	Hold	13	6.00	2,080
25.Jun	Stratos Lightwave	US	FY	4.00	Underperform	2	-2.92	42
25.Jun	The WD-40 Company	US	Q3	2.00	Outperform	3	1.61	235
25.Jun	Tribal	GB	Prel. FY	2.00	Outperform	6	17.72	101
25.Jun	Xansa	GB	FY	3.71	Underperform	14	4.55	464
Thursday
26.Jun	Berkeley Group	GB	Prel. FY	2.63	Hold	16	114.53	1,126
26.Jun	Clruyt	BE	FY	2.50	Outperform/Hold	15	3.50	3,168
26.Jun	Del-Monte Foods	US	FY	2.40	Outperform	5	0.84	3,168
26.Jun	Dixons	GB	FY	2.72	Hold	29	11.40	5,666
26.Jun	DS Smith	GB	Prel. FY	2.00	Outperform	6	17.41	1,483
26.Jun	Gerry Weber	DE	FY	3.60	Underperform	5	0.62	360
26.Jun	Gesco AG	DE	APC	1.00	Buy	1	-1.30	153
26.Jun	Lawson Software	US	FY	2.67	Hold	3	0.01	333
26.Jun	Nike Inc	US	FY	1.86	Outperform	14	2.78	10,573
26.Jun	Reliance Security	GB	FY	1.50	Buy/Outperform	5	40.00	267
Friday
27.Jun	Chemring	GB	H1	2.22	Outperform	10	29.49	122
27.Jun	First Technology	GB	Prel. FY	2.42	Outperform	12	26.20	128
27.Jun	Lone Star Steakhouse	US	H1	1.00	Buy	3	1.42	605
27.Jun	McCormick & Co	US	H1	2.46	Outperform	13	1.45	2,479
27.Jun	Sibir Energy	GB	FY	2.00	Outperform	1	-0.80	17
27.Jun	Tops Estate	GB	Prel. FY	3.00	Hold	2	10.86

The consensus recommendation gives a numerical rating where 1=buy, 2=outperform, 3=hold, 4=Underperf. and 5=sell.

UK, US and European results this week
Result Date	Company name	Country	Results	Consensus Rec		No. Anl	EPS	Revenue
Monday
30.Jun	Aetna Inc	US	H1	2.41	Outperform	17	4.52	17,988
30.Jun	Artesian Resources	US	H1	1.67	Outperform	3	1.84
30.Jun	Berkeley Berry	GB	Prel. FY	3.50	Hold/Underperform	2	-5.40
30.Jun	Captaris	US	H1	3.00	Hold	2	0.05	94
30.Jun	Hartest	GB	Prel. FY	3.00	Hold	1	0.49
30.Jun	Intertainment AG	D	FY	2.00	Outperform	1	-0.49	19
30.Jun	Mediware Information Systems	US	FY	2.00	Outperform	2	0.52	33
30.Jun	PC-Ware	D	FY	1.00	Buy	1	0.72	451
Tuesday
01.Jul	Beale	GB	Int.	3.50	Hold/Underperform	2	8.70	101
01.Jul	Carpetright	GB	Prel. FY	3.14	Hold	7	50.50	441
01.Jul	HMV Group	GB	Prel. FY	2.00	Outperform	14	15.89	1,712
01.Jul	Honeycombe	GB	Prel. FY	2.00	Outperform	2	6.14	34
01.Jul	Merix Corp	US	FY	2.83	Hold	6	-0.86	94
01.Jul	Scottish & Newcastle	GB	Prel. FY	2.80	Hold	27	41.20	4,616
01.Jul	Stonemartin	GB	FY	3.00	Hold	1	-2.69	5
Wednesday
02.Jul	Audiovox Corporation	US	H1	1.00	Buy	1	0.38	1,246
02.Jul	Biomet	US	FY	2.35	Outperform	20	1.09	1,387
02.Jul	Greene King	GB	Prel. FY	2.07	Outperform	14	70.00	538
02.Jul	Heidelberger Druckmaschinen	D	FY	3.27	Hold	23	0.64	3,991
02.Jul	Northgate	GB	FY	1.56	Outperform	9	40.93	320
02.Jul	Somerfield	GB	FY	2.64	Hold	14	4.95	4,683
02.Jul	Stolt Offshore	US	H1	3.00	Hold	6	-0.97	1,625
02.Jul	Vega Group	GB	FY	2.00	Outperform	1	5.90	34
Thursday
03.Jul	Heiton Group	IL	Prel. FY	2.33	Outperform	4	0.43	463
03.Jul	Online Travel	GB	Prel. FY	1.00	Buy	1	1.20

The Dow has formed a nice range, with clear boundaries to trade tomorrow. We will watch 9,260 up and 9,160 down.

Short Term Dow

Short term, the Dow is sitting at the lower trend line of the channel formed in the 60 Minute Chart at 9,200. Watch for a downside break at that trend line to indicate direction at the Open.

Medium Term Dow

In the medium term, we entered the market Short today at 9,180, but were stopped out with a 10 point loss. We are now out of the market, and will watch 9,160 down and 9,260 up, with 10 point stops.

NASDAQ & S&P

The NASDAQ continued to trend higher today within its sloping channel, and the S&P formed a range within its channel. We will be watching the boundaries tomorrow. *

Summary

The Dow traded sideways today, forming a range at the highs, which has given us clear levels to trade tomorrow. We are out of the market and will be watching 9,160 down and 9,260 up for tomorrow.

Insider Trader - You're up early!

Yep! Hope your trading is going well.

The broker ratings are overall consensus figures derived from Multex Global Estimates reports. The EPS, EBIT and revenue estimates relate to the full-year and therefore do not necessarily correlate to the reporting period indicated. The consensus recommendation gives a numerical rating where 1=buy, 2=outperform, 3=hold, 4=Underperf. and 5=sell.

UK, US and European results this week
Result Date	Company name	Country	Results	Consensus Rec		No. Anl	EPS	Revenue
Monday
14.Jul	Pace Mirco Tech	GB	Prel. FY	3.00	Hold	5	-7.14	183
14.Jul	Bank of America Corp	US	H1	2.04	Outperform	23	6.29	36,605
14.Jul	BB&T Corporation	US	H1	3.15	Hold	20	2.85	4,854
14.Jul	Citigroup	US	H1	2.00	Outperform	16	3.24	77,418
14.Jul	SKF AB	S	H1	2.17	Outperform	23	20.96	41,573
Tuesday
15.Jul	Agie Charmilles	CH	H1	3.20	Hold	6	3.70	1,021
15.Jul	Dow Jones & Co	US	H1	3.36	Hold	11	0.87	1,526
15.Jul	FleetBoston Financial Corporation	US	H1	2.52	Hold	21	2.38	11,427
15.Jul	Gannett	US	H1	2.42	Outperform	19	4.53	6,665
15.Jul	Intel Corporation	US	H1	2.35	Outperform	34	0.62	28,297
15.Jul	Mellon Financial Corporation	US	H1	2.67	Hold	15	1.62	4,196
15.Jul	New York Times	US	H1	2.53	Hold	15	2.03	3,263
15.Jul	Seagate Technology	US	Q4	2.00	Outperform	10	1.36	6,473
15.Jul	Sinnerschrader	D	Q2	4.00	Underperform	1
15.Jul	Stryker Corp	US	H1	2.50	Outperform	22	2.16	3,500
15.Jul	Suedzucker	D	Q1	2.60	Hold	10	1.55	4,564
15.Jul	Teles	D	Q2	1.50	Buy	2	0.47	79
15.Jul	USBancorp	US	H1	2.15	Outperform	26	1.98	13,053
Wednesday
16.Jul	Advanced Micro Devices	US	H1	3.32	Hold	25	-1.50	2,786
16.Jul	Bank One Corporation	US	H1	3.05	Hold	21	2.96	16,544
16.Jul	Capital One Financial Corporation	US	H1	2.17	Outperform	23	4.68	10,462
16.Jul	General Dynamics Corporation	US	H1	2.68	Hold	19	4.88	14,943
16.Jul	Harley-Davidson Inc	US	H1	2.33	Outperform	15	2.32	4,648
16.Jul	Knight-Ridder	US	H1	2.60	Hold	15	3.69	2,902
16.Jul	Microgen	GB	H1	2.00	Outperform	2	3.00	25
16.Jul	Micronas	CH	H1	2.06	Outperform	17	2.44	742
16.Jul	Rhoen Klinikum	D	H1	2.25	Outperform	4	2.82	972
Thursday
17.Jul	Altria Group	US	H1	1.82	Outperform	11	4.64	78,811
17.Jul	Avocet Mining	GB	FY	2.00	Outperform	2	3.50
17.Jul	Bankinter	S	Q2	2.76	Hold	25	1.62
17.Jul	Bespak	Gb	Prel. FY	2.33	Outperform	5	16.10
17.Jul	Coca-Cola	US	H1	2.11	Outperform	18	1.83	20,917
17.Jul	Electrolux	S	H1	2.67	Hold	18	16.72	126,567
17.Jul	Eniro AB	S	Q2	2.27	Outperform	15	3.61	5,150
17.Jul	First Data Corporation	US	H1	1.89	Outperform	28	1.92	8,746
17.Jul	Georg Fischer	CH	H1	2.86	Hold	7	19.18	3,285
17.Jul	Microsoft	US	Q4	1.65	Outperform	31	1.04	31,991
17.Jul	Misys	GB	Prel. FY	2.54	Hold	28	17.32	1,030
17.Jul	Nokia	FI	Q2	2.40	Outperform	56	0.79	30,685
17.Jul	Northern Rock	GB	H1	2.33	Outperform	24	63.32
17.Jul	SAP	D	Q2	2.66	Hold	45	3.51	7,237
17.Jul	Silk Industries	GB	Prel. FY	1.00	Buy	1	6.40
17.Jul	Wachovia Corporation	US	H1	2.35	Outperform	20	3.10	19,030
Friday
18.Jul	Abbey	IR	Prel. FY	1.50	Buy	3	0.88
18.Jul	Keycorp	US	H1	3.26	Hold	19	2.14	4,567
18.Jul	Mattel	US	H1	2.29	Outperform	14	1.28	5,005
18.Jul	Tietoenator	FI	Q2	2.48	Outperform	27	1.17	1,399

*Currencies are shown for the country represented. eg. DE=Euro, UK=GBP, US=Dollar

IT

- it's been a while - are you going to post more often?

I will do my best too. Good luck with the meeting tonight.

- Strong jobs report tries to rally stocks but fear of rate hikes still controls for now.
- Sizzling jobs report continues string of strong economic data as expansion beats expectations
- Market still discounting interest rate hikes as large cap indexes head toward 200 day SMA.

Stocks still selling on good news in fear of rate hikes.

Friday was another example of investors betting against the economy in fear of the Fed embarking upon a rate hiking campaign. As previously discussed, that fear is not without merit given the Feds track record on the economy once it decides it needs to clamp down on money supply. Despite strong economic data, investors fear the Fed will smother the recovery and thus limit earnings growth. When that happens, stocks are suddenly overvalued as earnings drives stock prices.

Stocks tried to put on a fairly brave face. Futures were down but once again rallied on the release of strong economic data with non-farm payrolls climbing another 288K, well ahead of expectations. They fought off a low open and turned positive. They held that gain most of the session before sellers took over ahead of the weekend and once again sold off. No relief bounce on the strong number, no short covering rally in bonds as the jobs report was rock solid.

Semiconductors showed relative strength with SOX gaining 1% though it was up over 2% on its high. Massive weakness in small and mid-cap stocks, however, seriously undercut that strength as the large cap and smaller cap indexes drove toward the March lows and the 200 day SMA. There are indications the selling is starting to get overdone, and another quick blowdown toward those levels will most likely do the trick. A look at the index chart patterns shows major weakness, but if they continue to fall hard and fear notches up further on breaches of the May low and the 200 day SMA, then there is enough to turn the market. Remember, this is a correction, not a major bottom. Sentiment indicators dont have to be at all time highs to do the trick, and they are getting there.

THE ECONOMY

Honey, now thats good job creation.

No way the economy could do better than March in creating jobs, but it did. Sure the overall number was lower (288K versus 337K revised), but it was still very strong, and when you factor out the 75K jobs in March that resulted from the end of the grocery strike, April was even stronger. 288K new jobs, the unemployment rate falling to 5.6%.

Strong in the overall number and stronger across the board. Business and professional services led the way with 123K, manufacturing up 21K (March revised up to 9K), construction +18K, retail +23K. All areas gained, and as the breakdown shows, it was not all gardening and burgers. For the past two months 625K jobs were created, the highest 2 month surge since April 2000 at the peak of the prior economic run. For the year job gains average 215K per month.

Hourly wages rose 0.3% the largest gain since last July. Interestingly, average hours worked held flat, but with jobs and wages increasing that means employers are adding workers, not more hours per worker. The productivity gains during the recession had allowed employers to run leaner and squeeze more out of existing (remaining) workers. To ramp up production further to meet demand they finally had to start adding workers. It came as we anticipated, a breakout, a bursting dam, a light switch turning on. Once businesses became confident enough, they started hiring fast.

Of course the spin doctors were out in force Friday saying it was just two good months out of thirty, the economy is still in trouble, deficits are still high, and it is just a matter of time before pigs start flying, dogs started sleeping with cats, etc. The argument that jobs took too long to recover is just wrong. Economists know that a recovery does not start until the stock market bottoms. That is the point where you start the job watch clock because the market is the best leading economic indicator. When it turns, then the economy turns. We said all along that job recovery would not start until late 2003 based on this indicator. It started a bit earlier than that, and now is really running. It also still amazes (amuses?) me how a question about job creation can be answered by a discussion about how we should not be in Iraq. Or there is the half-hearted acknowledgment of the gain but complaints that there is still a long way to go. That is like saying you are not back in a bull market until the old high has been hit. Love being in an election year with only 6 short, short months left.

Wholesale inventories rise but still low.

March stock on hand rose 0.6% (0.5% expected), but sales jumped 2.7%, the largest gain since August 1994. February inventories remained at a 1.2% gain but sales were revised higher to 2.1%. That took the stock to sales ratio to another record low at 1.13 months from 1.16 in February. This is one reason the Q1 GDP number did not jump as much as anticipated, but it does mean that manufacturing activity will have to increase.

It needs to increase for a number of reasons. One is the old supply and demand. This recovery got off on the wrong foot because the first tax cut package relied too heavily on so-called rebates to US citizens. Rebates are historically proved ineffective, but Bush was not going to get his first tax cut passed without including this giveaway in the package. Thus a billions of dollars in potential stimulus was squandered, pumping up demand a bit but doing nothing to help supply. That is lingering even today as we see in the inventories data. That is THE critical inflation problem, i.e., where supply is not increased to meet demand. In any recovery you need to make sure the supply side is given a lot of incentive to invest and produce even before demand is stimulated. That means credits, higher expensing, accelerated depreciation, and capital gains cuts. Those did not emerge until the last round of tax cuts, and while they really helped jumpstart the supply side, we see that side of the economy is still running behind as business have yet to make big commitments to plants and inventory building. Thus it is imperative that we dont eliminate incentives for business to keep investing; business still needs to increase production and output to meet demand or we really do face inflation problems.

We avoided inflation in the 1980s and 1990s because of the massive investment in technology that started with tax credits shot supply higher, and it was able to meet any demand that came along. We get into trouble when supply is handicapped or ignored while demand is pushed. The Fed can raise interest rates and get them up to nominal rate levels, but it also needs to keep close eye on the money supply and not let it dry up. Too little money and it does not matter where rates are.

Another major reason inventories need to rise more is supply interruption. Lean inventories work great when everything is perfect. They allow more cash flow, better profits, and the ability to expand because everything is not tied up in inventories. Perfection is hard to maintain. We live in a world of terror strikes. A supply interruption of any extent causes delays and price spikes. Another inflationary problem. We are seeing it in the price of oil and gasoline already. Jus the fear of the problem has helped drive prices higher.

Economic future.

The market continues to struggle with economic growth versus the Fed clamping down on that growth. The future still looks good for job creation, but that is not the real key. Employment is a lagging indicator, so the fact that it is rising is good, but it does not provide insight into the markets future. That comes from the probabilities of rising earnings, and those come from expanding sales.

Looking at the other economic indicators such as leading indicators, business investment, consumption, ECRI, and many more future looking economic indicators, the economic future looks solid. Growth projections have underestimated actual growth all along just as they underestimated the slowdown all the way down. Economists are just as bad as any other profession in clinging to the most recent trends and failing to see new trends.

We see this as a broad-based expansion that is continuing to build strength. There is talk of fading earnings in Q3 and Q4 based on difficult comparisons. Yes comparisons will be harder, but if the economic expansion continues they will beat them an continue to grow at a healthy pace. The fear remains the Fed getting in the way of that growth. The market still has to shed the last worries about valuation vis-vis any Fed rate hike impact. Another blow lower toward the 200 day SMA on SP500 and DJ30 more and more looks as if that will be all it takes.

THE MARKET

Stocks could not hold the attempted rally yet again, closing miserably near session lows. NASDAQ gave up 40 points, SP500 broke 1100 on stronger volume, small and mid-caps plunged, leading the charge lower. NYSE decliners outpaced advancers better than 12:1.

It was not all gloomy, and some of the bad data is actually good data in the world of the market reading. NASDAQ showed relative strength all day until it the afternoon. SOX was up over 2% though it closed out the day 1% higher. Tech and chips, the leaders to the downside, performed relatively better. NYSE breadth was unmercifully bad. You have to go way back to October 1997 during the height of the Asian crisis to find such a horrid breadth reading. These readings often come with important market turns.

In 2002 the long downtrend came to an end when there were two sets of strong negative breadth on NYSE. The first was on July 22 during the first leg down at -4:1. The second was a series of high negative readings in October, the worst at -5.96:1 on October 9 just as the market bottomed. This year there was a massive negative breadth reading on April 13. Now we are seeing the second high readings as SP500 cuts toward the March low and 200 day SMA. This pair of readings coming as DJ30 and SP500 finally sell off, joining NASDAQ and SOX at these levels, suggests the bottom of the base is forming.

In addition, volume is playing into this scenario as well. We discussed NYSE versus NASDAQ last week, noting that NYSE volume was catching up to NASDAQ. That is an indication the more speculative tech sector is getting sold out. Friday NYSE volume actually eclipsed NASDAQ as DJ30 and SP500 exploded lower on rising volume, heading toward the March low and the 200 day SMA as those two indexes started to catch up with the tech selling. The CBOE put/call ratio again closed over 1.0, the fourth time in the past week. The overall put/call ratio (all regional exchanges included in the calculation) closed at 0.98; another downburst toward the 200 day SMA on SP500 and DJ30 would push that over 1.0 on the close as well.

All of these point toward a potential near bottom. They are secondary indicators and thus take a back seat to price/volume action, and there have been 6 NASDAQ and 5 SP500 distribution sessions in the last 6 weeks. In other words, the distribution has occurred as has the selling. Further, no market analysis is complete without a look at leaders. Many areas of strength were hit Friday including gaming, oil & gas, medical instruments and drugs. In short, even the defensive areas were not a safe haven. The momentum is still downside, and another hard drop looks likely but could also set the bottom. The weak rebound to start the week and the sharp rollover put a lot of pessimism back into investors as hope was squashed out again. That plays into a firmer bottom setting up, but for now it has just hinted at one with secondary indicators.

Market Sentiment

Above we noted sentiment indicators that suggest the market is hitting some extremes that are part of bottom formation. We will no doubt receive emails citing the bulls versus bears surveys that are not hitting extreme levels. It is true that some of these indicators are not hitting extremes. The VIX, for example, is nowhere near an extreme level. That does not, however, mean that the other indicators are without merit. Rarely do you get all sentiment indicators lined up together. Moreover, this is not a major market bottom trying to be put into place, but a correction after a big run in 2003. In other words, it is c consolidation in a continuing run higher. Thus the indicators such as bulls versus bears or VIX dont have to all hit extreme levels.

VIX: 18.13; +1.08
VXN: 25.5; +0.32
VXO: 19.07; +1.42

Put/Call Ratio (CBOE): 1.01; -0.25. Fourth close at 1.0 or above in the past two weeks. A series of closes over 1.0 such as this accompanied the late October 2002 bottom as well as other bottoms.

NASDAQ

Spent most of the day in positive territory, but could not make it through the 10 day EMA, tapping that point on the high. It sold off and gave up 40 points to close at the low.

Stats: -19.78 points (-1.02%) to close at 1917.96
Volume: 1.648B (-7.07%). Volume backed off on the reversal and selling. There was no heavy dumping of stock just as there was no dumping Thursday when NASDAQ sold off and rallied back over the 200 day SMA on rising volume. NASDAQ really appears to be sold out here at it nears the March lows once more. Accumulation in the NASDAQ consolidation is still solid at 4 to 2.

Up Volume: 599M (+133M)
Down Volume: 1.037B (-245M)

A/D and Hi/Lo: Decliners led 2.83 to 1. Strong downside breadth once more, but nowhere near the league of NYSE.
Previous Session: Decliners led 2.46 to 1

New Highs: 30 (+1)
New Lows: 98 (+22)

Rallied most of the session until reality set in and it broke lower, closing below the Thursday intraday low when NASDAQ bottomed and rebounded on some stronger volume. The 10 day EMA (1957) on the high but that did not last. It put up a fight and only got sloppy late. It slid below the April low (1919) and is heading toward the March low (1896). A slip below that would provide a good scare, and with the other indicators in the market, a potential point to bottom.

SOX continued its relative outperformance, but it too gave back much of its gain. It hit the 18 day EMA on the high (465) and gave up 7 points on the close. It is the first index to undercut the 200 day SMA and the March low, and it is trying to be the first index to recover. Classic double bottom with the slight undercut of the March leg down. Of course, it now has to make that strong volume move higher. There is nibbling ongoing in the chip stocks; that will have to turn into serious buying.

S&P 500/NYSE

Undercut near support on volume, moving toward the March low and the rising 200 day SMA. It is finally breaking down in this consolidation, something it needed to do.

Stats: -15.29 points (-1.37%) to close at 1098.7
NYSE Volume: 1.649B (+9.55%). Strong, rising volume as SP500 undercut near support. The distribution of late has taken its toll.

Up Volume: 182M (-115M)
Down Volume: 1.454B (+252M)

A/D and Hi/Lo: Decliners led 12.29 to 1. Massive downside breadth rarely seen in the market. This pairs with the April -6.7:1 reading in April and this extreme suggests the selling is getting extreme. Even the Thursday breadth was excessively negative.
Previous Session: Decliners led 4.28 to 1

New Highs: 27 (-1)
New Lows: 713 (+402). An explosion in new lows as SP600 and SP400 broke below the March lows. This is another signal of some extremes popping up.


Broke through the weekly up trendline from the early 2003 lows and broke 1106 as well. Still holding in a support range at 1096, but looks ready to try the March low (1087 intraday, 1091 closing) and possibly the 200 day SMA (1076). Heavy negative breadth, breaking near support, surging new lows. It is finally making the break lower it needed, and it looks to be doing it on the right kind of negative numbers.

DJ30

Sliced through 10,250 with ease, selling on rising, above average volume. As with SP500, DJ30 is starting to make a drop toward the March low (10,007 intraday, 10,048 closing) and the 200 day SMA (10,001) for the second leg of this drop. Given the relative strength in SOX and NASDAQ, the breadth readings, the new low readings, and the put/call ratio, we believe a test and slight undercut of the 200 day may be all DJ30 and SP500 need to be ready for a reversal.

Stats: -123.92 points (-1.21%) to close at 10117.34
Volume: 228 million Friday versus 202 million Thursday.


THIS WEEK

The speculation about rate hikes will continue this week as some important economic reports hit the wire. The PPI (Producers Price Index) and CPI (Consumer Price Index) give some insight, albeit from the governments rather tortured perspective, as to prices facing businesses and consumers. The trend shows gradual re-inflation in the governments basket of goods though as we have noted before, healthcare and education costs are inflating at a much faster pace. It will be interesting to see how much of a bite higher oil prices are taking.

Two things appear to be hampering the markets ability to find a bottom in this correction. First, speculation about how much damage the Fed will do when it starts hiking rates. Stocks have been discounting this ever since the March jobs and retail sales reports hit the street. As of yet they have not found the level that fully discounts the first rates hikes and their impact on the economy. It is more than that, however. As we have noted, nominal interest rates are much higher than 1%, and the Fed could raise rates 100 basis points and be basically neutral with short term rates. Thus a 50 basis point hike that is currently factored in by the August FOMC meeting (that means two 25 basis point hikes, one in June and one in August) will not stall out growth. Again, the market is concerned the Fed is going to go overboard in hiking rates as the Fed often does, and it is getting to a comfort level between stock prices and any negative economic results due to the Fed raising rates too high too fast.

The second issue involves Iraq and the struggle to reach the point of turnover to the Iraqis. The continued violence from outside fighters and more recently native Iraqis makes the goal of achieving a democratic Iraq even more difficult and open ended, and that is weighing on the market. Japan and Germany were occupied for years after WWII before their totalitarian roots were gone, and to hand over control in just over 1 year after 40 years of dictatorship is ambitious. The turnover issue has to be resolved with some certainty.

Right now the sentiment indicators are getting to some extremes and the patterns are setting up similar to early 2003. There is the added concern of the Feds interest rate campaign, something not present in 2003, but the market is selling and discounting that part of the equation. We believe that once the market is convinced the Iraq handover will occur as planned the market can start to move higher. As with the last Gulf war, it is not the actual date of the move but when the market is convinced it will happen.

The question then remains as to how much the market will move on a break higher. Summer is coming and that typically means lethargic stock moves on light volume. Summer rallies occur, but sustained moves are hard to hold during this period. 2003 was more of an aberration because the market was coming off a nasty 3 year decline. Thus if stocks to reverse and break higher, the upside may be limited after an early summer rally in the move.

We were very interested in the action on NASDAQ and SOX Friday as they were showing some relative strength after being the first indexes to sell off. They were unable to break through resistance, but they were showing some life along with the sentiment extremes. It may take SP500 and DJ30 selling closer to their 200 day SMA to get a turn, but the high sentiment readings along with the sold out performance of NASDAQ and SOX make the chance of a turn much more likely. Again, however, the price/volume action, the nuts and bolts of the market, have not shown indications of a turn and until we see a strong upside session and a solid follow through we are going to take it easy with new positions, requiring very solid moves through solid entry points.

Support and Resistance

NASDAQ: Closed at 1917.96
- Resistance: The 200 day MA (1939). The 10 day EMA (1958). The April closing low at 1978. 1990 to 2000, the top of the late 2003 base. The simple 50 day MA (1994) and 50 day EMA (1995). 2050 represents some prior price points and has stopped NASDAQ the last time it tried that level. Breakout from the pattern is 2080. 2089 is the February closing high. 2112 is the early January high.
- Support: Mixed tops and bottoms at 1900. The March low (1896). 1850 below that.

S&P 500: Closed at 1098.70
- Resistance: 1106 is a May 2002 top and represents some early 2001 lows. 1110, the weekly up trendline from the early 2003 lows. 1118 is the April closing low and the 10 day EMA (1117). 1125 stalled the last bounce attempt. The exponential 50 day MA (1125) and the simple 50 day MA (1127). The April and January highs (1150 to 1155). Next is 1159 (February highs) and 1160 to 1175 the highs in that double top that spanned late 2001, early 2002.
- Support: 1096 to 1100, then the March low (1087). 1075 to 1070 from the December consolidation. The 200 day SMA (1076).

Dow: Closed at 10,117.34
- Resistance: 10,250. The 10 day EMA (10,284). The exponential 50 day MA (10,362) and simple 50 day MA (10,362). 10,570 is the April high. Price consolidation at 10,600 level. 10,747 is the February high.
- Support: 10,000. The 200 day SMA (10,001). 9900-9850.

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the Economy section.

5-12-04
- Trade balance, March (8:30): -42.6B expected, -$42.1B February.
- Treasury budget, April (2:00): $46.8B expected, $51.1B March.

5-13-04
- PPI, April (8:30): 0.3% expected, 0.5% March.
- Core PPI: 0.2% expected, 0.2% March
- Initial jobless claims (8:30): 325K expected, 315K prior.
- Retail sales, April (8:30): 0.1% expected, 1.8% March.
- Retail sales ex-auto (8:30): -0.2% expected, 1.7% March.

5-14-04
- Business inventories, March (8:30): 0.4% expected, 0.7% February.
- CPI, April (8:30): 0.3% expected, 0.5% March.
- Core CPI (8:30): 0.2% expected, 0.4% March.
- Industrial production, April (9:15): 0.5% expected, -0.2% March.
- Capacity utilization, April (9:15): 76.7% expected, 76.5% March.
- Michigan sentiment, preliminary (9:45): 96.5 expected, 94.2 prior.