Monthly Archives: June 2008

Frustrating Bulls and Bears Alike

26
Jun 08
Hmm, first quarter GDP revised up again to +1.0%, existing home sales up 2% and the Dow Jones Industrial Average plunges 358 points to a new 2008 low. The S&P 500 closed below 1300, heading for a retest of its March low at 1270. This just shows you what $140 oil and the realization that GM and Citigroup are not going to make it this time can do. The market continues to do what it does best, frustrating bulls and bears alike until it shakes everyone out of their positions, and then can make a major move up or down...

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Oil Peak Predictions

19
Jun 08
Like so many summer markets, this one is a tough one. But it isn’t the usual “sell in May and go away” problem–actually, the 10-year cycle and the Presidential cycle show the 2008 market normally would be higher by Labor Day than the end of May. The problem this time is shaking off the known bad news and breaking out of the 1270 to 1440 trading range on the S&P 500 that reflects the fear around the housing mess, the credit crunch, inflation and high oil prices. Oil prices are in a parabolic increase, which is a main factor keeping...

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Sell ENER for an Outstanding Gain

19
Jun 08
Energy Conversion Devices (ENER) priced a secondary stock and convertible offering this morning, and had to increase the size to meet demand. The stock hit a new 52-week high today, so we were right to hold onto our whole position even after the stock soared past our $55 target price. But now ENER is selling for over 50x my earnings estimate and about 10x my revenue estimate. While the crowd at Investor’s Business Daily could keep it running, it is time for us to get off this train. Sell ENER for a 178.5% gain in 16 months. When breaking news...

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A Fast and Furious Rally to Come

12
Jun 08
The S&P 500 dropped 105 points off its touch of 1440 on May 19, including a nearly 70 point drop since our last issue on June 5 through yesterday’s close. I was ready to send you a Flash Alert any day this week, but the S&P 500 obliged by making its second major bottom late today, just a few points above the 1326 level I’ve been talking about. It’s still possible there will be an intraday spike down to touch 1326–it is amazing how magnetic these support and resistance levels can be–but today’s action suggests that would be a great...

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MegaShift Stocks Make a Run

05
Jun 08
Today’s breakout over 1395 (finally!) should mark the beginning of the big move to 1440, and then on to new highs over 1555. For most of this week, it looked like the S&P 500 was determined to go back down to 1326 for one last test of that major support level. It is still possible that this could happen, because in order to be sure we are off on another upleg the index now has to survive a test tomorrow or early next week back down to 1395 from above, and then rebound from that area to close above today’s...

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