Rusty Market Musings » GE

Resilience is the word deux

LtPinback — Fri, 17 Apr 2009 23:46:38 +0000

Bizarrely, today traded exactly as yesterday including the Pivot Point bounce. The new high was at 875. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

GE and C results plus the Reuters/University of Michigan’s consumer sentiment index rising to 61.9 vs. 57.3 two weeks ago continues to feed the market with optimism.

S&P 500 Index Daily Chart

More broad-based consolidation

LtPinback — Fri, 20 Mar 2009 22:07:39 +0000

Again broad-based selling from the start but this time once the 780 support was taken down the selling accelerated but at no time there was a sense of panic. Last 2 hours of trading show price recovering from oversold intra-day levels but ultimately failing again to close near the lows. Volume was high and it is trending down.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The consolidation continues and Fibonacci and support levels suggest it will extent to 750 or even 741. Volume overall for the rally has been high and now it is trending down which again suggest the rally is somewhat solid and that this down leg is a normal retracement. Overall fear is still high and economic fundamentals continue to be terrible so if 741 doesn’t hold we may test the lows. Analysts digested the GE’s PR info and concluded that GE is too optimistic and thus downgrade the earning estimates for this year and 2010. News of slow TARP start by only getting applications for 2.5% of the $200 billion available also spook the market.

S&P 500 Index Daily Chart

Mixed day with Financial Sector profit taking

LtPinback — Thu, 19 Mar 2009 22:21:21 +0000

The day started with a quick sell off of yesterday’s FOMC rally followed by surprisingly strong consolidation action in the 780-790 range and ending in a strongly fought battle to take down the 780 support level that ultimately was unsuccessful. The CBOE Volatility Index (VIX) surged 9.0% ahead of the triple witching Friday. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

A mixed day with substantial strength in the Energy and Materials Sectors due to commodity prices increasing as US Dollar declines and profit taking in the Financial Sector. Prices held quite well and volume indicates that a lot of consolidation took place. S&P 500 50 Day SMA is still resistance. GE did a 5 hours PR exercise without any noticeable result thus speaking volumes on the general level of companies’ trustworthiness perceived by the market at this time.

S&P 500 Index Daily Chart

Ken Lewis’ “Me too” rally

LtPinback — Thu, 12 Mar 2009 22:01:32 +0000

The trading day was characterized by an unstoppable follow-through rally to the November lows. Volume was high and very little profit taking took place.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Bank of America (BAC) CEO Kenneth Lewis said his bank was also profitable in January and February thus joining his C and JPM buddies in what can only be described as a shameful coordinated push for a rally. GE credit rating was cut to AA+ with a “stable” outlook by Standard & Poor’s. Market was expecting much worst so GE joined in the relief rally. The joke of the day was provided by General Motors’ (GM) statement that it will not immediately need $2 billion in emergency funding for March. Possible scenarios are either a bit of consolidation at these levels or going directly to next resistance at 800.00 in the S&P 500 index.

S&P 500 Index Daily Chart

Doji Goodness

LtPinback — Fri, 06 Mar 2009 22:55:36 +0000

Same old story with a twist. Relentless selling. Check. New lows. Check. Ugly economic news. Check. General Motors falling 22 percent and almost certain to go belly up. check. Volume was high. Check. Last 30 minutes reversal printing a bullish Doji on the S&P 500. Chec… WHAT!!

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The week ended so oversold that shorts were actually scared to hold into the weekend in case that for example GM announces filing for Chapter 11 or GE loses its AAA rating. Go figure market rationality. Technology Sector took a beating on news of Apple having its second-quarter and fiscal 2009 earnings and revenue estimates lowered by J. P. Morgan Securities. Apple “of course” been the poster child of the industry. Market rationality indeed.

S&P 500 Index Daily Chart

Trivia:

U.S. stocks have shed around $11 trillion in value since October 2007.
U.S. jobless rate hits 25-year high.

Naughty China or more likely stupid Wall Street

LtPinback — Thu, 05 Mar 2009 22:47:03 +0000

Relentless selling from start to finish. New lows and no profit taking by the shorts at the end of the trading day. The culprids were news of Premier Wen Jiabao not announcing any expansion of China’s stimulus package. GM been effectively bankrupt unless the government steps in and says it isn’t. Citigroup under a $1 stock but honest to god well capitalized and making money and GE’s officers combine credibility adding up to a grand total of zero and showing. Volume was high and fear again was felt across the market.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Back to crash mode. Nothing more to add.

S&P 500 Index Daily Chart

Oversold rally

LtPinback — Wed, 04 Mar 2009 22:30:00 +0000

Overnight news of a Chinese stimulus package lifted sentiments as well as energy and natural resource stocks and commodities. Once the gap to Pivot Point was closed, the market took off on decreasing volume on the upside. This coupled with GE record lows and the relative weakness of the Financial Sector made the rally uncertain. Nevertheless around 2:00pm the rally continued in earnest this time with much better upside volume and improvement in GE and particularly the Financial Sector. Fear was absent during the trading day and the CBOE Volatility Index (VIX) fell 6.6 percent. Volume was high but no significantly higher than previous days. At the end of the trading day profit taking was significant taking almost a half of the daily gains.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The oversold rally was expected and somewhat overdue. The oversold rally wasn’t spectacular or broad-based for that matter. GE and the Financial Sector were left behind. GE printed a Doji Candlestick (or more likely a failed Doji Candlestick). This rally however does give much needed oxygen to the market but a significant follow-through is needed in order to consolidate sentiments. Economic news are still very negative.

S&P 500 Index Daily Chart

Choppy market

LtPinback — Fri, 27 Feb 2009 22:22:22 +0000

The market started making new lows (S&P 500 734.52) from those of November (S&P 500 741.02). The rest of the day was choppy and ended with the S&P 500 closing at a 12 year low. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Surprisingly the S&P 500 printed a 12 year low but no crash occurred. Also fear indicators while high remained pretty much stable. Three news dominated the market day.

The government converted up to $25 billion of Citigroup’s preferred shares to common stock.
U.S. GDP shrank 6.2 % in the fourth quarter (vs 5.4% exp).
GE slashed its dividend by 68 % to 10 cents.

The Financial Sector fell on the Citigroup news. The Health Sector continued to print a substantial decline on budget plans.

S&P 500 Index Daily Chart

Trivia:

The S&P 500 marked its fifth down month out of six and the biggest drop since October.
U.S. stocks have lost $10 trillion since peaking in October 2007.