One Potential Positive Going Into Monday…
The early morning bias in the futures market
was negative prior to the markets’ opening. This was due to the announcement
by semiconductor giant Intel
(
INTC |
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PowerRating) that it anticipates revenue of
$6.2 billion to $6.5 billion, compared with $6.4 billion to $7 billion that it
projected in mid-April. It blamed weaker-than-expected demand for personal
computers. The company also said it expects a gross profit margin of around 49%,
well below the 53% it had predicted.
One potential
positive going into Monday is that the VIX hit highs not seen since early
January of this year. That spike coincided roughly with a significant low in
the stock market. The current spike in itself does not constitute a low
in the market, however. The best thing to do is to watch the Market Bias
page this weekend to find out what the directional bias of the market is
likely to be on Monday.
When the Dow Jones Industrial Average
(
$INDU |
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PowerRating) opened, Intel shares
tumbled 18%, contributing a 33-point let down for the Dow industrials. The news
upset investors who have been watching for signs that demand for technology
equipment is increasing.
The news also rattled the Philadelphia Semiconductor Sector Index
(
$SOX.X |
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PowerRating). The
semiconductors are breaking below the 70.7% Fib retracement at 430.54. This Fib was
measured from the Sept 2001 lows to the March 2002 highs. The SOX dropped as low
as 421, but has now pulled up higher.
In addition, the Biotechs dumped at the bell. The
AMEX Biotech Sector
(
$BTK.X |
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PowerRating) dropped to an intraday low at 382.82.
This was due to drug company Biogen
(
BGEN |
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PowerRating), which sank 11% after
the company held a conference call in which it lowered second quarter and 2002
earnings guidance based on slower-than-expected sales growth for Avonex, its
treatment for multiple sclerosis.
The Nasdaq
(
$COMPQ |
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PowerRating), hurt by the
Semis and Biotech, fell to 1500, just 100 points from the September lows.
New Century
Financial
(
NCEN |
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PowerRating) is trading in an
Ascending Triangle on the daily chart. Volume is very strong today. One of
the signs of a breakout would be strong volume. NCEN has a
TradingMarkets.com RS3 rating of 95.
NCEN is trading at 28.14 up 2.55.
Dean Foods
(
DF |
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PowerRating) is trading in an Ascending
Triangle on the daily chart. Volume is very strong today, which would be one of the signs
of a breakout. Dean Foods is trading at 37.80 up 1.08.
Federal Express
(
FDX |
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PowerRating) retouched its 50-day
MA. Federal Express has been bouncing off the 150-day MA over the
last month. This is a moving average that some hedge fund managers use, and it
would appear that someone is buying as it approaches this level. Currently,
FDX appears to be forming a symmetrical triangle on the daily and is boxed
in between the 50- and 150-day MAs. A break out of this consolidation zone
could offer a nice move. Swingers may want to put this on your watch list
for a break in either direction.
This morning
August gold
(
GCQ2 |
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PowerRating) opened higher on follow through after yesterday’s move
to the upside. August gold has influence on the movement of gold stocks. The
Phlx Gold
& Silver Index
(
$XAU.X |
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PowerRating) and some of the gold mining stocks
are positive in early trading. Some of those stocks are Anglogold
(
AU |
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PowerRating),
Barrick Gold
(
ABX |
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PowerRating), Newmont Mining
(
NEM |
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PowerRating) and Placer Dome
(
PDG |
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News |
PowerRating).
Nasdaq Breadth: 2002-06-07 13:20:00
Adv: 1239 UpVol: 4186075
Dec: 2034 DnVol: 7065039
Net: -795 Net: -2878964
NYSE Breadth:
2002-06-07 13:20:00
Adv:
1396
UpVol:
52613480
Dec:
1674
DnVol:
57566736
Net:
-278
Net:
-4953256