Quick Note: Week Ending May 10th, 2014

For the first time since the end of 2012, the NASDAQ Composite seems to be “approaching” a correction. Note that the weekly charts are consolidating. This did not happen for almost a year and a half.

COMP-Weekly

The daily charts went into consolidation almost a full six weeks ago

COMP-Daily

Note that this is significant, since in the past it was the Composite that defied any hint of correction or serious consolidation, as the the S&P 500 and the Dow Jones Industrial Averages consolidated well, and repeatedly.

We will get confirmation soon. As we stand, the NASDAQ needs at least two more weeks of serious consolidation to reach a correction, per my naming convention. Yet, and despite the decent economic news all around, it seems heading that way.

Update: Week Ending April 5th, 2014

First things first. This, by all probability, is my last detailed weekly update. I am in the process of writing a series of books on trading, which are to capture all that I said in this and other posts and forums. I will definitely update this site when I start publishing these.

Back to the update.

We left the world as of my last weekly update in what I anticipated to be a “rolling consolidation.” If you were long the NASDAQ composite this last Friday, the word consolidation may not be your first choice of words. After all, a 2.6% drop is noticeable, regardless of what your portfolio sigma, beta and alpha are.

In the larger view of things, the action was not that significant. After all, yes the Composite did touch the slow moving weekly average, but that is something it does almost on monthly basis. Further, the weekly averages did not consolidate (yet), meaning it is still a consolidation and not yet a correction – per my naming schema.

For the DJIA and the S&P 500, the action was not more significant than the normal consolidation-of-the-month action. If anything, the weekly charts for both did not even register a blimp. Yet, as we noted in multiple recent updates, what is concerning here is that the interest rates and the gold are starting to act as if in a flight-to-safety mode. Noting that in addition that implied volatilities on the like of Altria (MO), Annaly (NLY), AT&T (T), Verizon (VZ), and many of the other high-yield aristocrats also climbed, I would think that the impression of a general flight-to-safety is the right impression to walk away with from the last few weeks. Considering the rolling consolidation has been going on for almost a month now. Never the less, the verdict of the jury is not there yet, since it was mainly a NASDAQ Composite plight.

Further, the Composite is sitting about 14% above its slow monthly moving averages (Monthly EMA-21),. On one hand, this is still high in historical measures. On the other hand, this is more or less what is at risk in the case of a decent market correction, and hence, those with profits may decide to take them, effectively making it a self-fulfilled prophecy.

The economic numbers were generally good. In particular, employment was excellent, even though some considered it to be below quality and/or expectations. I like to think adding a couple of hundred thousand jobs in a month is good. What makes it even better is the significant revision of last month’s numbers. And yes, the PMI numbers were somewhat disappointing, but  in reality the market celebrated that and hit new highs earlier in the week.

My original stance is still

  • Interest rates, in the coming couple of years, are on the way up
  • Gold prices are on the way down
  • In the lack of a true impending correction or a rolling consolidation, equity markets are heading into the overpriced zone

Relating to the first point, we note that the yield curve is now flattening, note that the 5-year treasury rates have climbed 37% from their year-ago levels, the 10-year about 16%, while the 30-year is about flat (only 3% higher).

As for the second point, it still holds, as the action this week did not dent the downward-pointing technical patterns for gold at all.

Now for the third point, my oscillator closed at 43%, after hitting 75% earlier in the week; the closing number is in the bought region, while the weekly peak was in the overbought region. The longer term signals are still strong. As such, it is not clear to me whether this is a continuation of the “rolling consolidation,” which currently it still seems, or this is the beginning of a full-fledged correction.

Most sectors had a good week, save Friday. As such, the longer term trends were still good, but the shorter term trends got impacted by the action on Friday. I cannot see an impetus for a crash, except for some unseen natural or geopolitical phenomenon. Further, the fact that the index overextended most (the composite) is the only one seriously suffering is actually a good sign, since that was truly needed.

All in all, the Fed, Gold and Treasuries should show us whether this Friday’s action is to be continued or it does have legs. If the reversal from my expected patterns continue, then this would be a full fledged flight to safety. This should mean that the index extended most – Composite, S&P 500, and DJIA in that order – will suffer most.

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Update: Week Ending March 22, 2014

It is a changed world! Russia annexed Crimea, and in a remarkable one-week span, and the reaction from the West was mooted, to use a politically correct term. As such, Dr. Yellen and the Fed had much more impact on financial events of the week than did the geopolitical developments in the Ukraine.

I am still bewildered here at the political novices on the West as the rhetoric was much heavier than the action. After all, one look at the map should have convinced even a political novice of the inevitability of the Russian action. As such, acting as if ratcheted-up talk or sanctions would deter such action only took from the credibility of the political leaders sounding off such empty threats.

In any case, it is clear that a new era of cold war is upon us, and it is as clear that it will take quite a different shape than the prior one.

Back to the Fed and Chair Yellen. Reading the statement, I was surprised by the simpler and more direct language. I believe this is telling of things to come. As far as the content, this is something I have been predicting for almost a year now, so there was no surprise, other than the extent of “forthcoming” that the statement conveyed.

In essence, we are back — now that the geopolitical action has turned from a yelling game back into a chess game — to my original stance of

  • Interest rates, in the coming couple of years, are on the way up
  • Gold prices are on the way down
  • In the lack of a true impending correction or a rolling consolidation, equity markets are heading into the overpriced zone

The interesting observation for the week, relating to interest rates, is the flattening of the curve, where the 5-year rates increased, the 10-year remained more or less neutral, while the 30-year headed lower.

As for indices, the DJIA is still going through a shallow consolidation, and so is the NASDAQ Composite. The S&P 500 is acting in an undetermined way. Pending end-game on Ukraine, which we may get a confirmation of within a week or two, Gold (GLD) is consolidating, and so are treasury rates. Note that the unusual (as of late) correlation between interest rates and gold reversed a bit but has not fully disappeared, and this is why we still need confirmation on the geopolitics. The message Gold and Treasuries are sending has weakened, but did not altogether disappear.

The economic numbers for the week were fine, for yet another week. The Leading Economic Indicators was very good.+ The CPI was lower than expected, and this is a number I am watching closely because of my standing thesis about the inevitability of deflation. You see, if the Fed cannot get inflation into the 2% target zone within the next few months, then you can scrap my Gold/Treasury-rate thesis. As deflation will act as bullish for Gold in this new post-financial crisis world. In essence, central banks will resort to money printing again, and interest rates will stabilize or head south if deflation shows its head. And to repeat, the funny thing is that this is a losing battle anyways, as the Japanese demonstrated over the last 2 1/2 decades.

For specific sector action within my trading set, it is clear that the industrials were the best performers. This excludes Boeing (BA) and that I attribute to the Malaysian airline uncertainty, and Lockheed-Martin (LMT) and that I attribute to the (near) resolution in the Ukraine.

Retail was mixed, but with a positive hint. Banks were also mixed, and again with a positive hint. Annaly (NLY), which is my mREIT representative, did well overall, and I attribute that to the 30-year treasury behavior as well as the dividends announcement, in which the dividends was not cut for the first time in a while.

Energy issues were mainly on the negative, while transportation was mainly on the positive.

To conclude, the major threat of the geopolitical overhang is somewhat gone, but is still worth watching for. The Fed actions seem to have restarted the rate rise motion, which got interrupted for a while, which coincided with Gold had its first down week in almost 2-months.

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Positive Positive   Positive  
DJIA Dow Jones Industrial Average Positive Positive   Positive  
COMP NASDAQ Composite Index Positive Positive   Neutral  
GLD SPDR Gold Trust ETF Neutral Positive   Neutral  
VIX CBOE Volatility Index Positive Positive   Neutral  
FVX CBOE 5 Year Treasury Note Yield Index Positive Positive   Positive  
TNX CBOE 10 Year Treasury Note Yield Index Positive Neutral   Positive  
TYX CBOE 30 Year Treasury Bond Yield Index Negative Negative   Negative  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a “neutral” of 18%, which was also the low of the week. This compares to a “neutral” value of -25% on Friday. This is an improvement, but the undetermined status also is reflected from the longer term oscillator as indicated by the table below.

The full trading set table is as follows.

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Negative Neutral   Negative   Yes
JPM JPMorgan Chase & Co. Positive Positive   Positive    
GS The Goldman Sachs Group, Inc. Neutral Neutral   Negative    
WFC Wells Fargo & Co. Positive Positive   Positive    
NLY Annaly Capital Management, Inc. Positive Neutral   Positive    
MO Altria Group, Inc. Positive Negative   Positive    
T AT&T Inc. Positive Negative   Positive    
VZ Verizon Communications Inc. Negative Negative   Neutral    
GPS The Gap, Inc. Neutral Positive   Negative    
ANF Abercrombie and Fitch Co. Positive Neutral   Neutral    
JWN Nordstrom, Inc. Positive Positive   Positive    
TGT Target Corporation Neutral Negative   Negative    
DIS The Walt Disney Company Positive Positive   Neutral    
MCD McDonald’s Corp. Positive Positive   Negative    
MDLZ Mondelez International, Inc. Neutral Positive   Negative    
BA The Boeing Company Negative Neutral   Negative    
LMT Lockheed Martin Corporation Neutral Positive   Negative    
CAT Caterpillar Inc. Positive Positive   Positive    
DE Deere & Company Positive Positive   Positive    
EMR Emerson Electric Co. Negative Neutral   Positive    
DOW Dow Chemical Co. Positive Positive   Positive    
ADM Archer, Daniels, Midland, Co. Positive Positive   Positive    
MON Monsanto, Co. Positive Positive   Positive    
POT Potash Corp. of Saskatchewan Inc. Positive Neutral   Positive    
PFE Pfizer Inc. Neutral Positive   Positive    
BMY Bristol-Myers Squibb Company Neutral Positive   Negative    
ABC AmerisourceBergen Corporation Negative Neutral   Negative    
AAPL Apple, Inc. Positive Positive   Positive    
INTC Intel Corporation Positive Positive   Positive    
CSCO Cisco Systems, Inc. Negative Negative   Neutral    
HPQ Hewlett-Packard Company Positive Positive   Positive    
CVX Chevron Corporation Positive Negative   Positive    
BP BP plc Negative Positive   Negative    
NGG National Grid plc Neutral Positive   Negative    
NI NiSource, Inc. Positive Positive   Neutral    
WMB Williams Companies, Inc. Neutral Positive   Negative    
WM Waste Management, Inc. Negative Negative   Negative    
CNW Con-way Inc. Positive Negative   Positive    
CSX CSX Corp. Positive Positive   Positive    
NSC Norfolk Southern Corp. Positive Positive   Positive    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Update: Week Ending March 15, 2014

The confusion has cleared this week. It is clear that the geopolitical issues we have been discussing for at least a couple of weeks have finally sunk in this last week. Crimea, Arab Gulf states, China-Japan, China-Philippines, Venezuela, and North Africa should have been enough to spook the markets, but the flight to safety seems to have accelerated towards the middle of the week.

Clearly this was a down week for the three indices I track. Yet, what makes this episode different than the consolidation-of-the-month affair, the last of which ended about five weeks ago, is that Gold (GLD) is appreciating, even on days that treasury rates are increasing, and treasury rates are falling even on days that the economic release are very bullish. This “break of logic” suggests that something else is at play; i.e. geopolitics!

Just for the record, the last correction was in summer of 2011, and the last crash was actually the financial crisis whose end has just marked the fifth anniversary. Note also that the three indices notched high marks on the Friday of the week before.

The combination of all the above is quite worrisome to say the least. Will it be a consolidation, correction or a crash? Technical analysis are market following, but clearly Gold and Treasuries are sending a stronger message than what we saw in quite a while.

We shall see what this Sunday brings, but this weekend should be pivotal. It is not clear what type of retaliation the West will attempt to inflict on Russia, but I am already seeing chatter relating to the certainty of both the secession and inevitable “consumption” of Crimea, as well as the sanctions to follow. This makes the first few days of next week pivotal in determining the depth of the financial market events that seem at this point certain to follow. 

The economic numbers for the week were quite fine, thank you! The only worrying number I saw was the PPI (Producer Price Index) which was unexpectedly deflationary.

For next week, we have a two-day Fed meeting which should include an economic update. It is not clear that this important event , the first to be conducted by Chairman Yellen, will amount for much considering the potential for paradigm-shifting geopolitical events transpiring earlier in the week.

In general, most sectors and issues in my trading set were punished, with the trend being more negative than the oscillator readings.

To conclude, the geopolitical overhang is something worth seriously watching, and possibly for more than just Crimea.

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Positive Positive   Negative  
DJIA Dow Jones Industrial Average Neutral Positive   Negative  
COMP NASDAQ Composite Index Neutral Positive   Negative  
GLD SPDR Gold Trust ETF Positive Positive   Positive  
VIX CBOE Volatility Index Positive Positive   Positive  
FVX CBOE 5 Year Treasury Note Yield Index Positive Positive   Neutral  
TNX CBOE 10 Year Treasury Note Yield Index Negative Neutral   Negative  
TYX CBOE 30 Year Treasury Bond Yield Index Negative Neutral   Negative  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a “neutral” of -25%, which was also the low of the week. This compares to a “bought” value of 40% on Friday. In essence, the geopolitical risk seems to have won over the improving economics.

The full trading set table is as follows.

 

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Negative Neutral   Negative   Yes
JPM JPMorgan Chase & Co. Positive Positive   Negative    
GS The Goldman Sachs Group, Inc. Positive Neutral   Negative    
WFC Wells Fargo & Co. Positive Positive   Positive    
NLY Annaly Capital Management, Inc. Positive Neutral   Positive    
MO Altria Group, Inc. Positive Negative   Neutral    
T AT&T Inc. Negative Negative   Neutral    
VZ Verizon Communications Inc. Negative Negative   Negative    
GPS The Gap, Inc. Neutral Positive   Negative    
ANF Abercrombie and Fitch Co. Positive Neutral   Neutral    
JWN Nordstrom, Inc. Positive Positive   Neutral    
TGT Target Corporation Positive Negative   Neutral    
DIS The Walt Disney Company Positive Positive   Neutral    
MCD McDonald’s Corp. Positive Neutral   Positive    
MDLZ Mondelez International, Inc. Positive Positive   Neutral    
BA The Boeing Company Negative Neutral   Negative    
LMT Lockheed Martin Corporation Positive Positive   Neutral    
CAT Caterpillar Inc. Neutral Positive   Negative    
DE Deere & Company Positive Positive   Neutral    
EMR Emerson Electric Co. Negative Neutral   Negative    
DOW Dow Chemical Co. Positive Positive   Neutral    
ADM Archer, Daniels, Midland, Co. Positive Positive   Positive    
MON Monsanto, Co. Positive Positive   Positive    
POT Potash Corp. of Saskatchewan Inc. Positive Neutral   Neutral    
PFE Pfizer Inc. Neutral Positive   Negative    
BMY Bristol-Myers Squibb Company Positive Positive   Neutral    
ABC AmerisourceBergen Corporation Neutral Positive   Negative    
AAPL Apple, Inc. Positive Neutral   Negative    
INTC Intel Corporation Negative Positive   Negative    
CSCO Cisco Systems, Inc. Negative Negative   Negative    
HPQ Hewlett-Packard Company Neutral Positive   Negative    
CVX Chevron Corporation Neutral Negative   Negative    
BP BP plc Negative Positive   Negative    
NGG National Grid plc Positive Positive   Neutral    
NI NiSource, Inc. Positive Positive   Positive    
WMB Williams Companies, Inc. Neutral Positive   Negative    
WM Waste Management, Inc. Negative Negative   Negative    
CNW Con-way Inc. Positive Negative   Positive    
CSX CSX Corp. Positive Positive   Neutral    
NSC Norfolk Southern Corp. Positive Positive   Positive    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Update: Week Ending March 8, 2014

A third week of confusing observations, in a row.

Again, it was a great week for the S&P 500, the NASDAQ Composite, and even the DJIA tagged along for a change. Yet, all of this happened with the backdrop of confusing currency action, bond rates and gold moving in the same direction, and of course, escalation of geopolitical rhetoric: worldwide!

Between Crimea, Arab Gulf states, China-Japan, Venezuela, and North Africa, it is not clear what is caused by flight to safety and what is caused by improving economic fortunes.

On the improved economic fortunes, the awaited labor numbers came. The weekly unemployment was better than expected, the ADP numbers lower, but the actual February jobs report was actually good -for both the month and the revision of the prior month.

Retail, as usual, is the beneficiary of jobs data, and hence, other than the Gap Stores (GPS) which suffered some beating late in the week, retailers in my trading-set fared very well for the week.

The bond action, showing hints of resuming the upward march in rates, hurt the mREITs; represented by Annaly (NLY) in my set. The gold (GLD) action though is still casting doubt on my thesis of a continually improving economy. We shall become much smarter this week, as the diplomacy in Ukraine – or lack of – can spook the markets or soothe them. Gold would be the barometer for this coming week.

The agro-industrial issues in my set fared very well and so did the cargo-related issues, while the energy and utility issues were generally on the negative side.

To conclude, this week action did nothing to suggest an economic reversal. Now that the jobs numbers are out and they dispelled the confusion created by weather and the January numbers, my notes from the last couple of weeks relating to economic caution are no longer warranted. Yet, this new geopolitical overhang is something worth seriously watching for.

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Positive Positive   Positive  
DJIA Dow Jones Industrial Average Positive Positive   Positive  
COMP NASDAQ Composite Index Positive Positive   Positive  
GLD SPDR Gold Trust ETF Positive Positive   Positive  
VIX CBOE Volatility Index Negative Positive   Neutral  
FVX CBOE 5 Year Treasury Note Yield Index Neutral Positive   Positive  
TNX CBOE 10 Year Treasury Note Yield Index Neutral Neutral   Positive  
TYX CBOE 30 Year Treasury Bond Yield Index Neutral Neutral   Positive  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a “bought” value of 40% on Friday. This is almost identical the value of  38% on the Friday before. The longer term indicators moved also to a “bought” posture, and hence, other than the geopolitical risk, the markets seem to be resuming their upward trend with vigor.

Note that I am down to one issue, Geron (GERN), in my current holdings as per the table below. This has less to do with the caution I was preaching the last couple of weeks than with the fact that I am in the process of testing a new trading strategy. Hence, “cash,” other than my conviction holdings in GERN, is the way to be till I have finalized my new approach. The strategy, as with every strategy I had for almost a decade, also requires the trading set to be created and tracked. So I will continue to provide the weekly updates.

The full trading set table is as follows.

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Negative Positive   Negative   Yes
JPM JPMorgan Chase & Co. Positive Positive   Positive    
GS The Goldman Sachs Group, Inc. Positive Neutral   Positive    
WFC Wells Fargo & Co. Positive Positive   Positive    
NLY Annaly Capital Management, Inc. Positive Neutral   Neutral    
MO Altria Group, Inc. Positive Neutral   Positive    
T AT&T Inc. Negative Negative   Neutral    
VZ Verizon Communications Inc. Neutral Negative   Negative    
GPS The Gap, Inc. Positive Positive   Neutral    
ANF Abercrombie and Fitch Co. Positive Neutral   Positive    
JWN Nordstrom, Inc. Positive Positive   Positive    
TGT Target Corporation Positive Negative   Positive    
DIS The Walt Disney Company Positive Positive   Positive    
MCD McDonald’s Corp. Neutral Negative   Neutral    
MDLZ Mondelez International, Inc. Positive Positive   Positive    
BA The Boeing Company Negative Neutral   Negative    
LMT Lockheed Martin Corporation Positive Positive   Positive    
CAT Caterpillar Inc. Positive Positive   Positive    
DE Deere & Company Positive Positive   Positive    
EMR Emerson Electric Co. Neutral Neutral   Positive    
DOW Dow Chemical Co. Positive Positive   Positive    
ADM Archer, Daniels, Midland, Co. Positive Positive   Positive    
MON Monsanto, Co. Positive Positive   Positive    
POT Potash Corp. of Saskatchewan Inc. Positive Neutral   Positive    
PFE Pfizer Inc. Positive Positive   Positive    
BMY Bristol-Myers Squibb Company Positive Positive   Positive    
ABC AmerisourceBergen Corporation Neutral Positive   Positive    
AAPL Apple, Inc. Neutral Positive   Positive    
INTC Intel Corporation Neutral Positive   Neutral    
CSCO Cisco Systems, Inc. Negative Negative   Negative    
HPQ Hewlett-Packard Company Positive Positive   Positive    
CVX Chevron Corporation Neutral Negative   Positive    
BP BP plc Neutral Positive   Negative    
NGG National Grid plc Positive Positive   Neutral    
NI NiSource, Inc. Neutral Positive   Negative    
WMB Williams Companies, Inc. Positive Positive   Positive    
WM Waste Management, Inc. Negative Negative   Negative    
CNW Con-way Inc. Neutral Negative   Positive    
CSX CSX Corp. Positive Positive   Positive    
NSC Norfolk Southern Corp. Positive Positive   Positive    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Geron: Technical Analysis

I think I have written enough articles about Geron (GERN) to let the readers make an educated investment decision. I have discussed the history of the companyImetelstat, a valuation model, details of the secondary offering, and finally the fact that it was the institutions that almost doubled their positions since the November 2013 pop in the price.

There is nothing more to say. Yet, there has been a lot of “technical signal” talk around the stock recently. Now, despite my stated position that biotech investing is highly speculative and will only pay off with diversification and over a very long time horizon, I will go over how I “would have” viewed Geron if it were part of my technical trading schema (which it is not).

As a caveat and the reason Geron is in my conviction and not technical trading list, Geron fails that basic market cap/stock price test, and  as such, the rest of this discussion is academic. You see, technical analysis  in my view is all about probabilities. Hence, you will need a “cushion” for the inevitable “being wrong.” I view a stock price above $10 and a market cap above $2 B as enough of a hedge to “find the company still listed” the next day. Yes, that did not help some names we remember from days long gone, but the existence of the price cushion at least gives you a warm fuzzy feeling that there may still be something to salvage if the floor drops.

Back to technical analysis. The first thing to look at for me is the long term monthly charts. I view these as a proxy for the most fundamental fact (and possibly the only one) that we know about the market, and that is that market prices move according to a random walk around an average or a mean. We call this “log normal mean reversion.” The mean that the prices move around is, for me, the long term moving average. Hence, if the charts are pointing upwards on the monthly scale, then the expected yearly rate  of appreciation is the slope of the price curve. If it is pointing downwards, then there is no point of fighting the market game.

Looking at the chart below, you can clearly see that this recent alignment is a relatively rare, and usually short-lived incident in the life of this company. As such, what distinguishes this recent episode from the previous two in the last 10 years is that it is quite longer in duration (sixth month and counting).

GERN-10year

Here it is definitely worth mentioning that technical analysis is about the past and as such is always “lagging.” Hence none of us would have anticipated in September (based on the above chart pattern) that this is a dominating and non-temporary phenomenon. Especially given the history of this particular equity, as demonstrated in the chart. I can now look at it and say with certainty that the market judged GERN as an appreciating asset starting around Fall 2013. I can further assert that this judgement had a unique commitment we did not see in a whole decade, despite (temporary) higher percentage appreciations in the past.

In October a persistent technical analyst should have noted something special and unique when the short-, mid-, and long-term monthly patterns aligned, while the price chart was still exhibiting appreciation. Prior to that, most – myself included – would not have deemed GERN as an investment grade company.

The reason the conviction would have been sealed this time around is that, as you see from the chart below, for the first time in years, the weekly pattern was sustained long enough and strongly enough to reflect itself on the monthly charts.

GERN-5year

This event itself is rare for the weekly in the past few years as the chart above indicates, but what makes it more unique is that it is the first time that the monthly charts were exhibiting my favorite alignment with the monthly charts showing this strong similar pattern.

In effect, the new found market conviction was there for all of us to see around October and well before the spike of November 7.

If you are a long term investor then these are the patterns you need to keep an eye on. Much more so than the daily pattern that we have seen articles written about recently. In particular, the Flag pattern that was discussed (as shown below) is a reflection of the new found long-term conviction described in the charts above. Actually, comparing the chart below with the one above clearly indicates the slow moving weekly average as  acting as the bottom of the “flag.”

GERN-Flag

After all, range-bound trading — be it the flag or the properly-aligned long weekly and monthly averages — suggests that enough people believe in the quality of the investment in the equity to actually rise to the plate and commit money if it drops below a reasonable amount. That reasonable amount is their view of the proper price appreciation (the mean in the mean-reversion discussion above).

In conclusion, I believe that the market conviction at this point is that 100% yearly appreciation (from $3 as the base today) is the expected return for the stock in the coming months, barring any significant event. It seems this is what the market is willing to commit to in the absence of new events or news.

Incidentally, this jives well with the low end estimate in my valuation model, considering that the MF trial – and nothing else – is currently the headline news. Now if, as Dr. Tefferi’s latest presentation suggested, other MPN diseases are thrown in the mix, then my higher end valuation is what would be the (possibly conservative) base.

This is my “technical” take on Geron. I know that many of the concepts discussed are not what people advocate in technical analysis, but this is the approach that served me well over the last few years, and as mentioned in the previous paragraph, it seems to coincide – at least for this particular equity – very well with my fundamental analysis and valuation models.

DISCLAIMER: I am Long GERN.

Performance of my F&F Fund as of End of February 2014

Well, I started dismantling the positions around Valentine’s day!

You see, I am trying to switch to an options-focused strategy, as the earlier long-only strategy has been validated already. After all, I was able to go back and calculate the implied rate of return on the main portfolio since July 1, 2011, and it stood at 23% annualized! the DJIA yielded around 10% on price during that same period.

Further, the performance of the “isolated” F&F fund stood on 2/14/2014 at 17.25%, while the DJIA yielded 8.22% for the same period since 9/1/2013.

Both numbers jive with the 130% beta and the 11% Alpha calculated last month.

I will keep you posted once enough history on the new strategy is accumulated.

 

Update: Week Ending March 1, 2014

As the old edict goes, “if there is doubt, there is no doubt!” Caution is the certainty of the coming week.

You see, this was another hard to read week. Mind you, the indices had a great time.  The S&P 500 had a new all-time high. The NASDAQ Composite had a new multi-year high. And the DJIA decided to play along this time around and is standing less than 2% away from its all-time high.

The above was a solid performance, but what brings the doubt is that many of the interest-related issues, be it the treasury bond prices or the high-dividend issues, also recovered well. In an ancient life, this is exactly what you would have expected, but this “correct correlation” has not been seen in many years. Further, gold seems to have had a decent week, albeit not a great one.

Retail, which we have been long proclaiming it should recover, did actually recover in a magnificent way this ending week. Yet, industrials and energy were showing some split-personality, with some issues doing quite well and others not participating in the move upwards and technology was in the “suffering” column.

I will have to tag this schizophrenic behavior to the geopolitical developments worldwide this last week. Between the Ukraine, Venezuela, the Middle East and the Far East, I think there was plenty this past week to keep the “cowardly” capital markets guessing.

Yet, the doubt comes from whether the recovery has hit a road-bump altogether. This will have to wait for the employment numbers this coming Friday! It should be a cleaner number than what we saw in January, and hence we should be able to discern whether a weather-related temporary slowdown was to blame, or whether actually a softening is the real culprit.

In particular, it is the treasuries that are challenging my standing long-term view of interest rates and gold. You see, the occasional pullback in interest rates is expected, and it usually manifests itself on the weekly charts. Yet, what I saw, since this last week marked an end-of-month, is that we had two down months on 5-, 10-, and 30-year treasury rates. That is a serious exclamation mark for me! The first down month (January) was expected and coincided with the pullback in equities — another one of these unusual new-age correlations that we have accepted despite contradicting financial logic — but the second month (February) pullback looked real. Gold lagged both moves in the sense that it had a small-up month in January, when the rates actually dropped significantly, but a larger move in February when the move in the rates was smaller.

What makes this talk about interest rates more significant is that February is the first month I have noted that there is actually a slowdown in Fed balance sheet appreciation. It stood at $4.098 T on 1/22/2014 and at $4.160 T on 2/26/2014. That is only a $62 billion rise over the 5-week period. As such, the improved treasury and mREIT prices have been playing against the reduced Fed demand for such securities.

All in all, I will trade cautiously this coming week and look for guidance from Friday’s numbers to extrapolate for the month of March.

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Positive Positive   Positive  
DJIA Dow Jones Industrial Average Positive Positive   Positive  
COMP NASDAQ Composite Index Positive Positive   Positive  
GLD SPDR Gold Trust ETF Positive Neutral   Positive  
VIX CBOE Volatility Index Negative Positive   Negative  
FVX CBOE 5 Year Treasury Note Yield Index Negative Neutral   Negative  
TNX CBOE 10 Year Treasury Note Yield Index Negative Neutral   Negative  
TYX CBOE 30 Year Treasury Bond Yield Index Negative Negative   Negative  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a borderline “bought” value of 38% on Friday. This is opposed to a “neutral” value of  10% on the Friday before. The longer term indicators stayed neutral. Hence, we will need another reading to see if the “bought” improvement is to be confirmed.

All in all, this adds to the need for caution this coming week.

The full trading set table is as follows.

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Neutral Positive   Negative   Yes
JPM JPMorgan Chase & Co. Negative Positive   Negative    
GS The Goldman Sachs Group, Inc. Negative Neutral   Positive    
WFC Wells Fargo & Co. Positive Positive   Positive    
NLY Annaly Capital Management, Inc. Positive Neutral   Positive    
MO Altria Group, Inc. Neutral Neutral   Positive    
T AT&T Inc. Negative Negative   Negative    
VZ Verizon Communications Inc. Neutral Negative   Positive    
GPS The Gap, Inc. Positive Neutral   Positive    
ANF Abercrombie and Fitch Co. Positive Positive   Positive    
JWN Nordstrom, Inc. Positive Positive   Positive   Yes
TGT Target Corporation Positive Negative   Positive    
DIS The Walt Disney Company Positive Positive   Positive    
MCD McDonald’s Corp. Positive Negative   Negative   Yes
MDLZ Mondelez International, Inc. Positive Positive   Neutral   Yes
BA The Boeing Company Negative Neutral   Neutral    
LMT Lockheed Martin Corporation Positive Positive   Neutral    
CAT Caterpillar Inc. Positive Positive   Positive    
DE Deere & Company Negative Neutral   Neutral    
EMR Emerson Electric Co. Neutral Neutral   Positive    
DOW Dow Chemical Co. Positive Positive   Positive    
ADM Archer, Daniels, Midland, Co. Neutral Positive   Positive   Yes
MON Monsanto, Co. Negative Positive   Neutral    
POT Potash Corp. of Saskatchewan Inc. Positive Positive   Neutral    
PFE Pfizer Inc. Positive Positive   Positive   Yes
BMY Bristol-Myers Squibb Company Positive Positive   Positive    
ABC AmerisourceBergen Corporation Positive Positive   Neutral   Yes
AAPL Apple, Inc. Negative Positive   Negative    
INTC Intel Corporation Neutral Positive   Positive    
CSCO Cisco Systems, Inc. Negative Negative   Negative    
HPQ Hewlett-Packard Company Positive Positive   Positive    
CVX Chevron Corporation Neutral Negative   Positive    
BP BP plc Positive Positive   Positive    
NGG National Grid plc Positive Positive   Positive    
NI NiSource, Inc. Positive Positive   Neutral    
WMB Williams Companies, Inc. Positive Positive   Neutral    
WM Waste Management, Inc. Negative Negative   Negative    
CNW Con-way Inc. Negative Negative   Neutral    
CSX CSX Corp. Neutral Positive   Positive    
NSC Norfolk Southern Corp. Negative Positive   Neutral    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Update: Week Ending February 22, 2014

A hard to read week. That is the summary.

The NASDAQ Composite and S&P 500 indices have recovered, while the DJIA lagged. There was a noticeable topping off on the daily charts for the DJIA that also appeared for the SPX. The SPX though did (briefly) turn positive for the year. The Composite seemed to be immune to the trials of the financial world, and that is scarier, in my book, than aligning with the other indices.

My long awaited event of the release of the minutes of the last Fed meeting came, and the headline news has nothing with the content, but with the fractured opinions. Yet, the message is not if interest rates will rise, but when.  It seems some members favored earlier rather than later. With that, the Bernanke era is folded and the new Yellen era unfolds.

I do not see any of my favorite measures on the economic calendar for next week. Yet the week after will have the February payroll, which should be a cleaner reading than that of January. You see, for the first time that I remember, weather was blamed in multiple sectors and regions. Whether it was some of the retail earnings reports or the housing starts, the talk about weather was prominent. If that is true, then one should expect explosive growth to come. After all, unlike a hurricane or an earthquake, this is a temporary situation — save the possibility of flooding. As such, one would think that a portion of the activity that was affected by weather would find a future point to take place. Especially that there was no particular timely event that got clobbered. We did not miss a major holiday or the like due to the Polar Vortex. Had it come a couple of weeks earlier, then it would have affected the holiday season, but that was not the case. After all, we all watched the 49ers and the Packers fight it out in a fully packed stadium.

The more concern is due to the water shortage in the West, where it had already gotten to the point of Farming vs. Others.  Will it get to the point of Industry vs. Others? I do not think so, as some relief did take place, but that is an interesting situation as the rainy season in California has only a few weeks left. You see, unlike the unseasonal cold, which is a temporary event, lack of water will hurt for the rest of the year.

Overall, retail did well for the week. Even Nordstrom (JWN), which got a few downgrades, recovered well; Walmart (WMT) — which is not in my trading set — did not though. The Gap (GPS) and Abercrombie & Fitch (ANF) held a very interesting technical pattern for the week, before showing some signs of price appreciation on Friday. In particular, this was another week for ANF where management news was major news.

Technology issues in my trading set got somewhat of a beating, including HP’s whipsaw after earnings release. Energy and Utilities fared quite well during the week, and less so did Verizon (VZ).

Geron (GERN) had some interesting news both in the form of the release of the institutional ownership, which seems to have grown significantly, and in the Scripps 34th conference, where GERN’s medicine Imetelstat was favorably mentioned in Dr. Tefferi’s presentation about diagnosis and treatment of myeloproliferative diseases.

The bottoming in Treasury rates was more apparent this week.  Yet, Gold (GLD) was unphased due to that. On the other hand Annaly (NLY) was showing some topping off. It is not clear whether this is due to the rates or the recent news about exiting senior managers.  I still maintain that, long term, rates are going up and gold is going down. The only wrinkle I see here is that the inflation numbers released during the week (CPI and PPI) were tamer than expected.

You see, my expectations, as stated multiple times, is that the Fed will be able to achieve its target inflation rate of 2%, implying a 10-year treasury rate in the neighborhood of 4%, before inflation heading back south, as it should. If the Fed fails at raising inflation, then Japan here we come! After all, deflation, should be the norm for humans due to all the technological advances that have reduced overall cost and increased overall productivity. That is something that the Fed can delay but, as the Japanese found out the hard way, nobody can escape!

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Positive Positive   Positive  
DJIA Dow Jones Industrial Average Positive Positive   Positive  
COMP NASDAQ Composite Index Positive Positive   Positive  
GLD SPDR Gold Trust ETF Positive Neutral   Positive  
VIX CBOE Volatility Index Negative Positive   Neutral  
FVX CBOE 5 Year Treasury Note Yield Index Negative Positive   Positive  
TNX CBOE 10 Year Treasury Note Yield Index Neutral Neutral   Positive  
TYX CBOE 30 Year Treasury Bond Yield Index Neutral Neutral   Positive  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a “neutral” value of 10% on Friday. The longer term indicators were also neutral. This coincides with what we discussed in the opening paragraphs about the signs of topping on the indices. We shall see who wins next week, even though it is the week after that will have the payroll number.

It is worth noting here that I am using a different source of data starting from this week. I did compare prior weeks results and they seem to conform well. As such, I am not expecting any discrepancies going forward.

The full trading set table is as follows.

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Positive Positive   Negative   Yes
JPM JPMorgan Chase & Co. Positive Positive   Positive   Yes
GS The Goldman Sachs Group, Inc. Negative Neutral   Neutral    
WFC Wells Fargo & Co. Positive Positive   Neutral    
NLY Annaly Capital Management, Inc. Positive Negative   Positive    
MO Altria Group, Inc. Negative Negative   Negative   Yes
T AT&T Inc. Negative Negative   Negative   Yes
VZ Verizon Communications Inc. Neutral Negative   Positive   Yes
GPS The Gap, Inc. Positive Neutral   Positive    
ANF Abercrombie and Fitch Co. Positive Negative   Neutral    
JWN Nordstrom, Inc. Neutral Negative   Positive   Yes
TGT Target Corporation Negative Negative   Negative   Yes
DIS The Walt Disney Company Positive Positive   Positive    
MCD McDonald’s Corp. Positive Negative   Positive   Yes
MDLZ Mondelez International, Inc. Positive Positive   Positive   Yes
BA The Boeing Company Negative Neutral   Negative    
LMT Lockheed Martin Corporation Positive Positive   Positive    
CAT Caterpillar Inc. Positive Positive   Positive    
DE Deere & Company Negative Neutral   Negative   Yes
EMR Emerson Electric Co. Negative Neutral   Negative   Yes
DOW Dow Chemical Co. Positive Positive   Positive    
ADM Archer, Daniels, Midland, Co. Neutral Neutral   Negative   Yes
MON Monsanto, Co. Neutral Positive   Positive    
POT Potash Corp. of Saskatchewan Inc. Positive Neutral   Neutral    
PFE Pfizer Inc. Positive Positive   Neutral    
BMY Bristol-Myers Squibb Company Positive Positive   Positive    
ABC AmerisourceBergen Corporation Neutral Positive   Positive   Yes
AAPL Apple, Inc. Neutral Positive   Negative   Yes
INTC Intel Corporation Negative Positive   Negative   Yes
CSCO Cisco Systems, Inc. Positive Neutral   Negative   Yes
HPQ Hewlett-Packard Company Positive Positive   Positive    
CVX Chevron Corporation Negative Negative   Negative    
BP BP plc Positive Positive   Positive    
NGG National Grid plc Positive Positive   Positive   Yes
NI NiSource, Inc. Positive Positive   Positive    
WMB Williams Companies, Inc. Positive Positive   Positive    
WM Waste Management, Inc. Negative Neutral   Negative   Yes
CNW Con-way Inc. Negative Negative   Negative   Yes
CSX CSX Corp. Neutral Positive   Neutral    
NSC Norfolk Southern Corp. Neutral Positive   Negative    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Update: Week Ending February 15, 2014

Tea-leaf reading from last week proved accurate, with thanks, in no small part,  going to my market oscillators. Yes, this round of consolidation is proven over.  Even if next week is unexpectedly a down week, it would actually be a different round (a la September-October of last year)! In particular, the NASDAQ Composite has broken through the YTD high.

I still think worry should persist. Effectively, it was the DJIA that truly had a decent consolidation and less so for the S&P 500. The NASDAQ Composite hardly registered anything, despite the intra-week action the week before. In essence, the Buffet indicator of total market capitalization as a ratio of the GDP, and the Soros indicator of the separation between the slow moving averages and the current pricing are still suggesting that a correction is still in the books. Remember that the Composite and the SP500 are much broader indices than the DJIA.

There is no point in repeating the logic, as it was discussed in detail in my January 11 update. I found it humorous though that certain writers started referring to last couple of weeks as a “mini-correction.” As I mentioned before, my classification of a consolidation, correction or crash relates to charts and not to a specific high-to-low arbitrary level.

As this language is one that I will continue to repeat in future posts, let me again clarify what I mean by consolidation, correction and crash. As far as I am concerned, if I see the reversal only in the daily charts, then it is a shallow, short-lived “consolidation.” If the reversal shows in the weekly charts, then it is a medium depth and duration “correction.” A “crash” will show up as a reversal on the monthly charts. .

The market seemed to like the Fed Chairman’s testimony on Tuesday. This was the first look at Yellen in the driver’s seat. We shall hear more when the Fed meeting minutes are released this coming Tuesday — even though it was not “her” meeting. In addition to the FOMC minutes, the CPI and PPI for January are due next week. This combination should be enough to assert one direction or another for the Fed.

As for my trading set, as expected, the retail sector showed mixed action, with GPS and DIS showing strong recovery signs. Department stores (JWN and TGT) are interestingly in the dumps. I cannot explain that. It may be related to employment numbers, but that does not make much sense given what we know about retail numbers to date. You see, even though the retail numbers released the past week were not strong, yet the Michigan Sentiment survey was better than expected.

Verizon (VZ) shot back at AT&T (T) making the price war official. As such, a budding recovery in the stock price, in attempting to recover from the damage of AT&T’s earlier action, was brutally squashed! Cisco (CSCO) showed impressive resilience in face of the latest earnings fiasco. I am becoming more of the opinion that the company needs new blood. The Apple (AAPL) melodrama closed an act with Icahn grudgingly accepting a “draw.” It still boggles my mind that AAPL caved in. I truly thought that they had something better to do with their money other than playing the “proven log-normal random game” of following stock prices.

The recovery in industrials and railroad continued. As I consider Waste Management (WM) a transportation company, it really starting showing life too. CNW did not participate in this sector’s attempted recovery though.

Interestingly, utilities are showing some strength. Williams (WMB) did not participate, though. Yet, given what we discussed above in retail and indsutrials, this move by utilities seems to indicate that the overall market move should be upwards for the coming weeks, regardless of any “consolidation of the month” behavior — that I hope will continue.

Treasury rates are starting to show bottoming behavior.  Gold (GLD) on the other hand is showing interesting strength given all we discussed to date. Despite my stated and repeated position on gold, traders should watch out for FOMC, CPI, and PPI for signs to prove me wrong. Otherwise, long term rates are going up, and gold is going down for the foreseeable future.

My regular table for the indices follows.

Index/ETF Symbol and Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend  
SPX S&P 500 Index Neutral Positive   Positive  
DJIA Dow Jones Industrial Average Neutral Positive   Positive  
COMP NASDAQ Composite Index Positive Positive   Positive  
GLD SPDR Gold Trust ETF Positive Neutral   Positive  
VIX CBOE Volatility Index Neutral Positive   Negative  
FVX CBOE 5 Year Treasury Note Yield Index Negative Positive   Neutral  
TNX CBOE 10 Year Treasury Note Yield Index Negative Neutral   Neutral  
TYX CBOE 30 Year Treasury Bond Yield Index Neutral Neutral   Neutral  
             

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term “Perceived Trend Oscillator” stood at a “bought” value of 38% on Friday. The lowest value for the week was a “neutral” 13%, a far out-cry from the clear “oversold” of -78% on Monday the previous week. This improvement was shared by the mid-term indication of the “Daily 3-EMA-7″ column in the table below.

As such, as we assumed in the last update, this round of consolidation was over!

The full trading set table is as follows.

Symbol and Company Name Daily 3-EMA-7 Weekly 3-EMA-7   Perceived Trend   Is a Current Holding?
GERN Geron Corporation Positive Positive   Neutral   Yes
JPM JPMorgan Chase & Co. Positive Positive   Positive   Yes
GS The Goldman Sachs Group, Inc. Negative Neutral   Neutral    
WFC Wells Fargo & Co. Positive Positive   Positive    
NLY Annaly Capital Management, Inc. Positive Negative   Neutral    
MO Altria Group, Inc. Negative Neutral   Neutral   Yes
T AT&T Inc. Negative Negative   Neutral   Yes
VZ Verizon Communications Inc. Negative Negative   Negative   Yes
GPS The Gap, Inc. Positive Neutral   Positive    
ANF Abercrombie and Fitch Co. Neutral Negative   Negative    
JWN Nordstrom, Inc. Neutral Neutral   Neutral   Yes
TGT Target Corporation Negative Negative   Negative   Yes
DIS The Walt Disney Company Positive Positive   Positive    
MCD McDonald’s Corp. Neutral Negative   Positive   Yes
MDLZ Mondelez International, Inc. Neutral Positive   Positive    
BA The Boeing Company Negative Positive   Neutral    
LMT Lockheed Martin Corporation Positive Positive   Positive    
CAT Caterpillar Inc. Positive Positive   Positive    
DE Deere & Company Negative Positive   Negative   Yes
EMR Emerson Electric Co. Negative Neutral   Negative   Yes
DOW Dow Chemical Co. Positive Positive   Positive    
ADM Archer, Daniels, Midland, Co. Neutral Neutral   Positive   Yes
MON Monsanto, Co. Neutral Neutral   Neutral    
POT Potash Corp. of Saskatchewan Inc. Positive Neutral   Positive    
PFE Pfizer Inc. Positive Positive   Positive    
BMY Bristol-Myers Squibb Company Neutral Positive   Positive   Yes
ABC AmerisourceBergen Corporation Neutral Positive   Neutral   Yes
AAPL Apple, Inc. Neutral Positive   Positive   Yes
INTC Intel Corporation Negative Positive   Neutral   Yes
CSCO Cisco Systems, Inc. Positive Neutral   Positive   Yes
HPQ Hewlett-Packard Company Positive Positive   Positive   Yes
CVX Chevron Corporation Negative Negative   Neutral    
BP BP plc Positive Positive   Positive    
NGG National Grid plc Positive Positive   Positive   Yes
NI NiSource, Inc. Positive Positive   Positive    
WMB Williams Companies, Inc. Positive Positive   Neutral    
WM Waste Management, Inc. Neutral Neutral   Positive   Yes
CNW Con-way Inc. Negative Negative   Negative   Yes
CSX CSX Corp. Neutral Positive   Positive    
NSC Norfolk Southern Corp. Positive Positive   Neutral    
               

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.