The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
We had another choppy day yesterday which, once again, left me unimpressed with this bounce attempt. The indices look like good shorts to me under yesterday's lows.
Currently holding:
Panera is a popular stock right now as it powers to new all-time highs. MaoXian chose PNRA for his chart of the day today. Garry sent me an email asking if I thought PNRA's run was over or if now is a good time to get in. You all know I'm going to give a nice political, non-committal answer like "I don't think the run is over but this isn't the best time to get in either." But seriously, that's my answer. It's tough to argue with the absolute strength , and especially the relative strength that Panera is showing. It's up about 22% this year versus a loss of 6% for the Nasdaq. I don't see any signs of weakness in the daily chart although the weekly chart has a couple. But while I like its strength, it is a little bit too extended for my comfort in buying right now. The $45 area looks like a good place to put a stop and it's just a little too far away for me. But it's not too far away from William O'Neil's suggest maximum stop of 8%. Ideally I'd like to wait for a dip to try buying PNRA but this looks like the kind of move that may not give such a nice dip right away. The intraday chart shows that there's minor support at 49, so that may be a good area to put a stop if you were jumping in right now.
Yesterday we got some follow-through on Monday's buying. The indices managed to close above Monday's highs thanks to a late day surge. This bounce doesn't seem very convincing to me right now. That's mainly due to the amount of churning that I see during the day. I want to see how the indices act once they hit the resistance that's just above.
Currently holding:
I know the west coasters aren't happy about this and count me as one east coaster who doesn't like it either. I vote for shortening the trading day.
NYSE Considers Plan to Open Earlier, Thain SaysJan. 26 (Bloomberg) -- The New York Stock Exchange is considering a plan to open trading by as much as two hours earlier to attract more business from international investors, NYSE Chief Executive Officer John Thain said.
The exchange wants to make a decision within the year, Thain told reporters at the World Economic Forum in Davos, Switzerland. Trading now begins at 9:30 a.m. and ends at 4 p.m. in New York.
``We are considering the expansion of the hours,'' said Thain, 49. ``It would probably be just an hour or two at the beginning or the end, more likely at the beginning.''
Seat prices have fallen by more than half since their August 1999 peak of $2.65 million, as the U.S. Securities and Exchange Commission rewrites rules governing trading. Thain is developing a hybrid plan to mesh electronic and manual trading to fend off competition from all-automated competitors, such as the Archipelago Exchange.
Archipelago plans to open for trading by 4 a.m. New York time as soon as March to lure business from Europe, the Financial Times reported Jan. 18. [read the entire story...]
The market's gapping up again today. Yesterday's gap held but it got a little dicey late in the day. I'll be interested to see if the bulls can push the indices above yesterday's highs.
Currently holding:
Loren sent me a message last night asking if I thought NSC was a short after the plunge it took yesterday. Before today's session my answer would have been "yes, as long as I can find a good entry point that gives a good risk/reward". Had I jumped in yesterday I probably would have put a stop at 34, which had been support and should have turned into resistance. If I had done that I would have been stopped out at today's open. This is a good example of why I don't like to chase shorts. Stochastic was already in/near oversold and the stock had already fallen a good distance in just a few days. I'm much more comfortable shorting rallies in an established downtrend.
Now that it's bounced back from yesterday's losses I think that a break of 34 would be a good trigger for a short. It looks like there's good support around 34 and maybe yesterday's slide was exaggerated by the general market's weakness. If it does break 34 the 200 DMA might be a good target to take profits.
I got a response from StockCharts.com about the discrepancy on their QQQQ chart. Here's what they said:
The data for QQQQ was adjusted downwards on December 17, 2004 to account for the dividend as described here: http://www.cboe.com/publish/TTStockSM/04-685.pdfFor more information on data adjustments, please see the following article: http://stockcharts.com/commentary/mailbag/mailbag20000804.html
Thank You,
StockCharts Support
http://stockcharts.com
Here are some points from the second link above (emphasis is mine):
The charts on StockCharts.com are adjusted downwards to account for dividends and fund distributions. Other sites may or may not make similar adjustments. By adjusting our historic data downwards whenever a dividend or distribution occurs, we feel we are giving you a truer picture of how the security actually performed over time.An very similar situation occurs when a stock splits. You buy a stock in July at $50 and it rises to $100 by December and splits. If the chart showed a huge drop in price you would know something was wrong. What happens is the chart data gets adjusted for the split, and now it looks like you bought twice as many shares in July for $25 each and they are now worth $50.
The same has to happen with mutual fund distributions, dividends and other payouts. Let's say you buy a fund at $10 a share, and it rises to $11, then pays a distribution of $1. If the chart shows a sharp 10% drop at year end and lists the NAV at $10, you are looking at raw data. You either received a check for $1 or you now have more shares than you did before. But the chart should adjust the share prices back in time to reflect the fact that the fund rose 10%. An adjusted data chart would show the correct price after the distribution of $10, and the earlier price would be an equivalent $9, with no sharp drop in the chart.
Adjusted data charts reflect the equivalent value of the stock or fund with respect to the present pricing. Just as you could not have bought the stock at $25 in July, your fund chart should show what the equivalent value of the fund share was in the past, to account for distributions.
Charts that do not reflect distributions should not be used to perform any technical analysis. The reason is simple -- if you had bought VFIIX six months ago, you would have paid about $9.70 a share. If you sold it all today at $9.90, you would still need to add in the $0.30 dividend or distribution received during that period to calculate your gain. StockCharts.com's adjusted data charts do that for you, and show the equivalent NAV of $9.40 six months ago.
Adjusted data for stocks is a different beast. When Ford spun off Visteon, holders of Ford stock received shares in Visteon -- and the value of each Visteon share was equal to the drop in Ford share price on the day of the spinoff. If you invested in Ford, you still would have the same amount of capital. If you were going to buy shares that day - you would pay the listed price. The chart should reflect that new lower price for stocks, but it should not for mutual funds.
I really don't like the fact that I'm seeing different data in different places for the same equity. I really don't care which method is correct, I just want them to all be consistent. Maybe I'll contact those other data providers to get their point of view.
The market was able to hang on to the gains from the gap up opening this morning and even closed above the open. The Nasdaq closed clearly above its January downtrend line while the S&P 500 is just a hair over its downtrend line. I'm not seeing much that sways me into either the bull or bear camp though, so I'm content to stay in cash for now.
The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
Currently holding:
IBD has been running a series of articles about when to sell stocks. For those that have read "How to Make Money in Stocks" this is nothing new but the articles may be a good refresher course:
