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Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
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Market Synopsis
Mixed signals over the economy continue to
stymie analysts trying to decipher the true health of the
On the one hand, exports rose by a robust 1.5% but it was the other side of the equation that has some analysts concerned. Imports declined 2.5% in the month of March, the largest decline in imports since that same December 2001. And this despite the fact that the drop was softened somewhat by higher crude oil imports. In March, the volume of oil imported increased 10% and the average price per barrel increased 12% leading to an overall increase in the petroleum deficit of $17 billion. Had the volume imported and prices paid remained virtually the same, the overall imports would have declined at a level approaching that of the import of goods, a much deeper 3.1%.
Many believe that a drop in the deficit should be considered as a sign of a healthy American economy, however that might not be the case. A slowdown in imports has in the past indicated a more general slowdown in all parts of the economy though naturally one month’s data does not make a trend.
The lower trade deficit and the significant
drop in imports led to some puzzlement associated to the jump in retail sales
in April. While part of the increase could be attributed to misplaced sales
from the previous month, the increase of 1.4% was far greater than expectations
of 0.8% and led some to conclude that the
Technically Speaking
Since the bear market began in 2000, there have been few times when the tech-laden Nasdaq has been the leader but once again we find ourselves in the situation where, if only briefly, the Nasdaq has become the definitive leader. While the Nasdaq gained on Friday ending the week with a gain and sustained a continuation of a modest bounce from the 1900 level, the Dow and S&P are mired in a slump in which both finished Friday at low notes completing Lindahl sell signals on both the weekly as well as the daily charts. For the Dow Jones, resistance now lies at 10400 and for S&P, resistance will be firm at the 1180 level. Volume increased on Friday, which only served to emphasize these moves and enforce their interpretation.
Oil has had much to do with this index movement. In early 2005, the oil and oil service sectors were reaching their peaks on views of $100 per barrel prices (the comments from the Goldman Sachs analyst suggesting $100 per barrel in the near future probably marked the peak of oil prices for now). This price action heavily influenced the Dow and S&P whose peaks were reached only days later in early March.
Meanwhile at the same time, Nasdaq was in the process of falling having peaked on January 3 in its rally from the lows of 2002. As oil has no part of the Nasdaq, there was indeed no influence of the rising price of oil on Nasdaq stocks aside from the depressing effect of higher fuel prices on certain businesses.
Now the tables have turned and the
depressing effect of oil and oil service stocks’ prices are seen deflating the
larger, broader indexes
Nasdaq is also being
New Buy Recommendations:
None.
New Short Sales
None.
Stock Positions to Sell/Exit:
None.
Portfolio Comments:
New stops have been added to the list while others have been modified. Those that have blanks, are being carried unstopped for now. Please see our complete list of stops in the table below.
List of Current Stock Recommendations:
Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S
where positions should be retained. S+ and S++ indicate stocks for which there
is a technical case to add to the positions with plusses adding weight similar
to long positions. The maximum number of plus signs is 2.
Please take note that the following clause
is being removed under the assumption that the aforementioned federal budget in
[Stocks marked # are eligible as Canadian content in Canadian RSP funds.
Otherwise there is a 30 percent restriction on foreign stocks held in these
accounts.]
|
Date of Entry |
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
|
|
Air T Inc |
AIRT |
17.63 |
15.25 |
13.64 |
H |
|
|
Canadian Nat Res. |
CNQ |
56.94 |
52.63 |
|
H |
|
|
|
GILD |
39.58 |
38.80 |
34.50 |
H |
|
|
Humana |
HUM |
36.30 |
34.69 |
|
H |
|
|
|
HTCH |
37.00 |
38.75 |
32.00 |
H |
|
|
Pacificare Health |
PHS |
62.60 |
60.02 |
|
H |
|
|
Transcanada Corp |
TRP |
21.34 |
23.84 |
23.25 |
H |
|
|
Verisign Inc |
VRSN |
29.24 |
28.06 |
24.60 |
H |
|
Date of Entry |
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
|
|
Cisco |
CSCO |
17.66 |
18.70 |
18.70 |
Covered |
|
|
3M |
MMM |
77.67 |
75.61 |
78.40 |
S
|
|
|
Wal-Mart |
WMT |
47.05 |
47.13 |
50.00 |
S
|
|
|
Yellow Roadway |
YELL |
50.62 |
48.20 |
55.00 |
S
|
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price