This Indicator Has An 81% Accuracy Rate!
Stocks
fell Friday after lower-than-expected GDP raised concerns about the strength of the economic recovery.
The S&P snapped a 9-week winning streak, and stocks rotated out
of tech.
For the month, the Dow rose 0.3%, the S&P, 1.7% and
the Nasdaq, 3.1%.
Yellow Roadway
(
YELL |
Quote |
Chart |
News |
PowerRating)
fell on weaker 4Q results, dragging the truckers down. In uncharacteristic
divergence, the Transports were off 6% for the week with the Dow off only 1%.
Chicago’s
PMI number rose to 65.9, the highest since July of 1995. The S&P is on track for
its first weekly loss since November. Pixar
(
PIXR |
Quote |
Chart |
News |
PowerRating) announced
that negotiations to renew lucrative film deals with Disney
(
DIS |
Quote |
Chart |
News |
PowerRating)
have been terminated. Disney would still retain rights to sequels to previous
hits such as Toy Story and Finding Nemo. Pixar was seeking a deal
that would give Disney a distribution fee of about 15% while retaining all
rights to the films, a point Disney wouldn’t budge on. Disney shares are trading
lower while Pixar shares are trading higher for the day. Telecommunications
maker Nortel Networks
(
NT |
Quote |
Chart |
News |
PowerRating) reported a fourth-quarter profit of $499
million on revenues of $2.83 billion. NT traded as high as 20% before investors
digested the gains. Nortel gained 86% January in the strong telecom sector, with
Lucent +58%, GLW +23% and NOK +21%.
The S&P gained 1.7% up for the
month, and according to the January Barometer — which says that the
direction of the S&P 500 during the month of January sets direction for the
remainder of the year — 2004 should be an up year. This indicator is quite
accurate, having been wrong only five times since 1950 for an amazing 81%
accuracy rate. Seriously, those are the statistics but please don’t base your investment decisions on this one indicator. Another important indicator which comes into play this weekend is
the Super Bowl Stock Market Indicator, which
says that when a
team from the original National Football League wins the championship, stocks
rise. When a team from the now-defunct American Football League wins, it’s
bearish. According to this theory, the market should rise if the underdog
Panthers upset the Patriots. Stay tuned.
| Dow | -22.22 |
10488.07 |
| S&P 500 |
-2.98 | 1131.13 |
| Nasdaq | -2.08 | 2066.15 |
The day’s leading sectors were
Internet
(
ECM.X |
Quote |
Chart |
News |
PowerRating) +2.24%,
Networking
(
NWX.X |
Quote |
Chart |
News |
PowerRating) +1.59%, Gold and Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating)
+1.53%, and Hardware
(
HWI.X |
Quote |
Chart |
News |
PowerRating) +1.32%.
Weak today were Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) -3.12%, Biotechs
(
BTK.X |
Quote |
Chart |
News |
PowerRating) -1.56%.
Economic news releases included
a lower than expected GDP that rose only 4.0%, Chain Deflator was also lower,
showing a 1.0% increase. Michigan’s consumer confidence number came in at
103.8, slighter higher than expectations, and Chicago’s PMI at 65.9.
Dollar was -0.33 at
87.17.
Gold was +0.28 at 402.40.
Crude Oil was +0.34 at
33.05.
Volume was
1,638,716,000 on
the NYSE, and 1,932,898,000 on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 1701 | Up Vol 866 |
| Declining | 1546 | Down Vol 744 |
| Ratio | 1.10 | 1.16 |
| Nasdaq | ||
| Advancing | 1698 | Up Vol 951 |
| Declining | 1448 | Down Vol 945 |
| Ratio | 1.17 | 1.00 |
Stocks in the news:
Adobe Systems
(
ADBE |
Quote |
Chart |
News |
PowerRating) rose 6% after giving
investors higher numbers for the first-quarter. Sales of its Creative Suite and
Acrobat products were strong as it upped revenue forecasts to $385 million and
earnings to 38 cents a share.
Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating) announced a deal to purchase
eMachines for $325 million and also reported an $111 million loss on a 17%
drop in revenue that came in at $875 million. Sales of plasma TVs were strong
with low-end PCs dragging down earnings.
PeopleSoft
(
PSFT |
Quote |
Chart |
News |
PowerRating) reported fourth quarter earnings
of $17.4 million, in-line with analyst consensus. Sales dipped 10% lower to
$685 million
ChevronTexaco
(
CVX |
Quote |
Chart |
News |
PowerRating) reported higher sales with
profit almost doubling. Soaring crude oil and natural gas prices allowed the
company to earn $1.74 billion on revenue of $30 billion.
bricew@tradingmarkets.com