Stockscom Report for Sunday June 3 2007
Publisher: Colin Alexander
Editor: Ken Wilson (450-691-4617)
Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)
- ·
Job growth of 157K new jobs in May seen as
supportive
Market Synopsis
The release of the employment report on Friday morning was viewed as a
salve for the markets as job growth amounted to a better than expected 157K new
jobs. Inasmuch as the key number was neither negative nor below expectations,
this employment survey was very supportive encouraging continued long
speculation in shares. Clearly, this report ensures that bulls remain in the
driver’s seat for the moment and adds further upward pressure as stocks probe
higher and higher technical targets.
In spite of the job growth however, there is a new issue that has aroused our
curiosity. Friday’s report was the second consecutive report that lower
revisions have been made in stark contrast to the long string of higher
revisions that we’ve witnessed in the past. The April jobs report revised Feb
and Mar job gains lower by a not insignificant 49K and this latest report lowers
the Mar and Apr job growth lower by 12K. While these numbers are arguably small,
their mere existence suggests that job growth is weaker than advertised and
could signal a larger negative change once the annual revision to historical
data is performed.
Undoubtedly, the construction employment numbers would appear to be the most
susceptible to a large revision downward. With new housing activity 20% lower
for the first four months of the year, it seems terribly improbable that
construction employment remained unchanged for the second consecutive month and
has been steady since 2007 began.
Technically Speaking
The S&P 500 succeeded in marking a new all-time high closing price this week
when it surpassed the previous mark set in Mar 2000 at 1527.46 and closed for
the week at 1536.34, which is nonetheless lower than the intraday high set the
same day near 1553. Naturally, the magnet that we’ve mentioned for the past
several weeks remains functioning and it is quite likely that many more new
highs will follow including a new all-time intraday price for the index.
Thus, the current bullish sentiment remains strong and this is equally true for
the other large cap indexes: the Dow Jones and the Nasdaq twins. All indexes
finished the week higher rebounding strongly from the previous losing week.
Trading volumes were generally lower on the rise in prices this week but not to
any significant degree.
New Buy Recommendations (in order of preference):
None.
New Short Sales
None.
Stock Positions to Sell/Exit:
We were exited from N American Galvanizing and Coatings on our stop.
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.
N.B. There are no longer restrictions on foreign stocks held in Canadian
retirement savings accounts.
| Date of Entry
|
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
| 04/30/07
|
Allied Waste Ind. |
AW |
13.37 |
13.57 |
12.00 |
B |
| 04/09/07
|
Cameco Corp. |
CCJ |
46.22 |
53.19 |
42.00 |
B |
| 12/26/06
|
Cheniere Energy |
LNG |
29.15 |
39.30 |
33.00 |
B |
| 05/29/07
|
Dycom Industries |
DY |
29.32 |
30.41 |
26.00 |
B |
| 01/16/07
|
Echostar Comm |
DISH |
40.36 |
46.65 |
44.00 |
B |
| 03/26/07
|
Fronteer Dev’t Grp |
FRG |
12.40 |
12.18 |
11.00 |
B |
| 05/21/07
|
Gerdau Ameristeel |
GNA |
15.25 |
16.01 |
13.00 |
B |
| 11/13/06
|
Goodyear Tire |
GT |
18.00 |
36.13 |
30.00 |
B |
| 03/12/07
|
Grant Prideco |
GRP |
46.75 |
57.00 |
50.00 |
B |
| 05/07/07
|
Intercont Exch Inc. |
ICE |
138.48 |
142.97 |
140.00 |
B |
| 04/09/07
|
Matrix Service Co. |
MTRX |
24.28 |
26.47 |
23.00 |
B+ |
| 04/16/07
|
Merck & Co. |
MRK |
50.01 |
52.14 |
51.00 |
B |
| 14/05/07
|
NA Galv. And Cts |
NGA |
14.70 |
13.00 |
13.00 |
SOLD |
| 04/30/07
|
Portfolio Rec. Ass. |
PRAA |
56.17 |
59.47 |
49.00 |
B |
| 04/23/07
|
Synalloy Corp. |
SYNL |
36.39 |
36.56 |
30.00 |
B |
| 03/19/07
|
Tsakos Energy Nav |
TNP |
49.50 |
64.23 |
58.00 |
B |
| 03/26/07
|
Vasco Data Sec’y |
VDSI |
17.92 |
23.17 |
18.00 |
B+ |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price