Wednesday, November 23, 2005

Stocks Higher Mid-day on Rising Optimism, Lower Energy Prices and Short-Covering

Indices
S&P 500 1,267.99 +.54%
DJIA 10,928.18 +.52%
NASDAQ 2,264.74 +.50%
Russell 2000 684.47 +.28%
DJ Wilshire 5000 12,672.98 +.51%
S&P Barra Growth 606.25 +.39%
S&P Barra Value 657.42 +.68%
Morgan Stanley Consumer 595.55 +.30%
Morgan Stanley Cyclical 777.36 +.55%
Morgan Stanley Technology 536.23 +.87%
Transports 4,182.99 +.07%
Utilities 401.30 +.70%
Put/Call .68 -29.90%
NYSE Arms .72 -1.97%
Volatility(VIX) 10.81 +1.89%
ISE Sentiment 174.00 -1.14%
US Dollar 91.48 -.02%
CRB 314.08 -.45%

Futures Spot Prices
Crude Oil 58.25 -1.0%
Unleaded Gasoline 146.10 -1.78%
Natural Gas 11.66 +.40%
Heating Oil 169.25 -2.51%
Gold 491.10 -.37%
Base Metals 139.70 -.32%
Copper 185.00 +.14%
10-year US Treasury Yield 4.46% +.97%

Leading Sectors
Steel +3.06%
Gaming +1.52%
Networking +1.47%

Lagging Sectors
Biotech -.71%
Oil Tankers -.72%
Gold & Silver -1.42%
BOTTOM LINE: The Portfolio is higher mid-day as gains in my Internet longs, Medical Information Systems longs, Semi longs, Computer longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is modestly higher, most sectors are rising and volume is about average. Measures of investor anxiety are mostly higher. Overall, today’s market action is slightly positive considering recent gains and the bounce in long-term rates. Here are some thoughts on the Xbox 360:
1. The improvement over prior gaming systems is significant.
2. Microsoft (MSFT) over-promised to retailers.
3. There is going to be a severe shortage for the holidays.
4. Stories of ridiculous auctions on eBay (EBAY) will be common, generating more buzz.
5. The Xbox will take more market share from Sony (SNE) than most expect.
6. High definition television and surround sound equipment sales will accelerate as a result.
7. Rumors of excessive crashing are likely over-hyped.

I expect US stocks to trade modestly higher from current levels into the close on short-covering, lower energy prices and more optimism.

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