|
----- Original Message -----
Sent: Monday, November 01, 2004 7:26 PM
Subject: Gordon Harms report
10/29/04 MARKET CLOSE
TIMING IS EVERYTHING
MARKET CLIMATE/OUTLOOK-
Liquidity is marginally favorable.
Market valuation is unfavorable on balance.
Market psychology is neutral.
Market price trend is down from Jan 2004.
Bonds favorable from 5/13/04.
ECONOMIC OUTLOOK: Favorable.
Personal income is up.
Unemployment rate is low at 5.4%.
Gross Domestic Product is favorable(3.7 up from 3.3).
Cost of oil is unfavorable.
INFLATION: 3 month moving average; 3 down, Favorable
CPI, Sept 2.73% (Inflation), down from 2.97% in Aug.
PPI, Sept 3.58% (Inflation), down from 3.85% in Aug.
ECRI, Oct is 0.99%, down from 1.03% in Sept.
MARKET PRICE TREND Indicators: Favorable
Long Term Index Cycles
-Bullish, 5 of 8 moving Up, 4 of 8 are OS.
Short Term Index Cycles
-Bullish, 8 of 8 are moving up.
Oct through May is seasonally favorable on average.
MACD’s turned up 10/27/04.
NYSE Volume Sum Index –Bullish, turned up
10/27/04.
NASDAQ Volume Sum Index
–Bullish, turned up 10/26/04.
SP-CP is 0.96% ABOVE 1119 the 200sma which is rising. Was
-2.14%.
SP-CP is 1.38% ABOVE 1115 the 50sma which is rising. Was
-1.35%.
MARKET PRICE TREND Indicators: Unfavorable
All six trading systems are holding money funds from 10/25/04.
MARKET LONG TERM VALUATION: Unfavorable
S&P500 is 34.76% undervalued below an estimated 1732 fair
value,
based on
historical S&P 500 earnings, P/E and US30 bond yield.
Trailing S&P earnings -Bearish $56.15 up
from $52.00.
S&P500 annual earnings growth is 62.52%/year. Low -51.41% on
4/19/02.
Long term
S&P earnings growth rate average is near 6%.
Estimated S&P500 P/E for the coming year is 16.28;
long term P/E
average is near 14(corrected was 11).
The S&P500 P/E ratio is 20.13(4 to 20 is range: 1870 to
1997)
based on
trailing earnings. Trailing P/E was 45 in April 2002.
S&P500 Inflation adjusted real dividend yield is -0.92%.
Prior week was
-1.12%. BUY at greater than approx.-1.50%.
S&P 500 market value is 3.49 times book value. Was 3.38 last
week.
Dollar index is down 7.50% from 5/13/04. Was down 4.80%.
MONETARY LIQUIDITY: Favorable
Three month ROC of M3 money is +0.02%, last week was -0.07%.
Money Market yield is 1.10%. Was 1.05%.
Money Market funds are 1.918 trillion, was 1.918 trillion.
PSYCHOLOGY: 4 are Neutral
CBOE Equity Total Vol. Put/Call Ratio: .59, last week was .77.
Market: Bullish
> 0.60 and Bearish < 0.30
Market Vane(Commodity/Futures): 62% Bullish, last week was 60%
Bullish.
Market: Bullish
< 25% and Bearish > 65%
AAII 42.3 bull and 31.7% bear. 3 wk SMA Ratio = 0.69.
3 wk SMA Ratio > 1.10 = Bullish, >> Bullish = > 1.50, <
0.35 = Bearish
USB Index of Consumer Optimism 62 Oct. was 74 Sept. Estimated
neutral.
Estimated bullish < 41, bearish > 142.
RELATIVE VALUATION(Stocks to Bonds): Mixed
Stock Value Index is 2.30, was 2.47. Buy greater than 1.03.
S&P 500 dividend yield is 0.97 times 13 week T-Bill yield.
Five year note yield is 1.85 times S&P 500 yield.
10 Yr Note divided by 13 wk T-Bill is 2.14(4sma).
20 Yr Note yield minus 5 Yr Note Yield is 1.50%.
BOND PRICE TRENDS: Favorable from 5/13/04
STBI Bonds are up 11.01% from 5/13/04. Was up 11.88%.
Bd-Junk bonds up 9.73% from 5/17/04. Was up 8.87%.
Zero bonds are up 9.93% from 5/13/04. Was up 10.26%.
BONDS YIELDS: Unfavorable
The 30 year U.S. Govt. bond real yield is 2.06%, last wk was 2.03%.
The historical
average, real yield is near 3.00%.
The average 30 year U. S. Govt. historical bond yield expected
is 5.73%,
current yield is 4.79%. Was 4.85%.
5 Yr Note yield is 3.29% down from 3.31%.
10 Yr Note yield is 4.03% down from 4.08%
20 Yr Note yield is 4.79% down from 4.85%.
DOMINANT MARKET INDICATOR(Beasley): Favorable
OTC-C DOMINANT Pos Env, Score 13/15(IN > 4/15), IN
8/20/04.
NYC-I Pos
Env, Score 9/13(IN > 3/13), IN 6/9/04.
Total score is 22 of 28,
last weeks score was 22.
CYCLES 5 WEEK
10 WEEK
20 WEEK
9 Month
WIL-5 N-Up,10/26/04 OS-Up,10/29/04 OB-Dn,10/20/04 OS-Up,09/02/04
DJ-30 N-Up,10/26/04 OS-Up,10/27/04 N-Dn,10/14/04 OS-Dn,09/29/04
RUT-I N-Up,10/27/04 N-Up,10/28/04 OB-Up,08/25/04 OS-Up,09/10/04
NDX-X N-Up,10/27/04 OB-Up,10/28/04 OB-Up,08/31/04 OS-Up,09/10/04
N = Stoch >20 <80, OS = Stoch <20 OUT/Buy, OB = Stoch >80 Hold/Sell
SECTOR Averages ranked by percent gain from 8/12/04:(Last intermed.
low)
Precious 21.2 Japan 3.7
Hi-Tech 17.0 Zero Bd 3.2
DJ-20
16.8 DJ-30
2.2
Telecom 14.5 USBD 1.9
Latin 14.0 Vmfxx 0.2
SYSTEM(NCALPHA)...TRADE....C/MDY..HOLD.....G/L.......ANN/MDD....ONE
YEAR
SHARP(Microc2x)...10/25/04....4...VMFXX....0.01......47.8/12.1......14.2
LOSDF(Microc2x)...10/25/04....4...VMFXX....0.01......40.0/10.4......19.0
MDSDF(Microc2x)...10/25/04....4...VMFXX....0.01......42.6/10.4......15.8
NCALP(Microc2x)...10/25/04....4...VMFXX....0.01......54.2/12.1.......7.6
S&P500(Microc2x.).10/25/04....4...VMFXX....0.01......15.1/9.3........5.0
OTC-C(Microc2x)...10/25/04....4...OTC-C....0.01......32.2/16.7.......3.4
S&P500
Buy/Hold...10/29/03..252...SP500..............10.0/49.2.......7.8
OTC-C
Buy/Hold....10/29/03..252...OTC-C..............11.5/77.9.......2.0
REF: Data from Barron’s weekly magazine.
---
Outgoing mail is certified Virus Free.
Checked by AVG
anti-virus system (http://www.grisoft.com).
Version: 6.0.786 /
Virus Database: 532 - Release Date: 10/29/2004
Yahoo! Groups Links
|