Monday
Jun092008

Bespoke's Torture Index

A few months ago, we created the Bespoke Torture Index for our Premium members.  This index combines the recent performance of a number of assets and combines them to show how much pain US individuals are going through.  The index takes into account the one-year performance of stocks, the dollar, oil, gold and commodity prices.  For oil, gold and commodities, we use the inverse of the one-year performance, so when they are going up in price, they are going down in our Torture Index.  We then average all of these one-year performances to get the final Torture Index number.  The lower the number, the more pain we're in.

All five inputs going down is the worst possible scenario, and this has indeed happened over the last year or so.  As of Friday's close, the Torture Index was at -41.37, which is the most extreme it has been since early 1980.  But how low can we go?  The worst the Torture Index has ever been was -64.75 back in early 1974. 

To view the Torture Index on a regular basis, become a Bespoke Premium member today.

Tortureindex

Monday
Jun092008

Oil vs Stocks

First it was $50. Then it was $75. Then it was $100.  Over the last several years, economists have speculated where the economy's breaking point would be with regards to the price of oil.  A look at last week's trading of the S&P 500 versus oil shows that at $130 per barrel things are at least bending.

Oil_vs_sp_500_06020606

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Monday
Jun092008

Biggest Winners and Losers Since the 5/19 Top

The S&P 500 is now down 4.62% since it recently peaked on May 19th.  Below we highlight the best and worst performers in the index since then.  The list of worst performers is dominated by Financials and Consumer Discretionary stocks.  MBIA and AMBAC have been the worst performers, down 43% and 37% respectively.  Year to date, MBI is down 71% and ABK is down 91%.  Homebuilder CTX is down the third most at -30.39%.  Other notables on the losers list include Ford (F), Lehman (LEH), General Motors (GM), and Merrill Lynch (MER).

The list of best performing stocks is topped by two tech companies - Jabil Circuit (JBL) and Compuware (CPWR).  Anheuser-Busch (BUD) ranks third with a gain of 13.31%, and DELL, which reacted positively to its most recent earnings report, ranks fourth at +11.98%.  Other notables on the winners list include Monsanto (MON), SLM, NSM, AET and BIG (which continues to be the best performer in the S&P year to date).

Biggestlosers

Biggestwinners

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Monday
Jun092008

Bespoke's Sector Snapshot

After a downright depressing Friday, the technicals of the S&P 500 and some of its sectors have taken a big hit.  The S&P 500 broke below its 50-day moving average as well as the short-term uptrend it had formed off the March lows.  While the index is close to oversold levels (one standard deviation below its 50-day), it has been no stranger to extreme oversold levels (below the green shading) over the past year.  Friday also saw Financials, both Consumer sectors, Industrials and Health Care all move to oversold levels.  The struggling Financial sector even moved below its March lows.  On the flip side, Technology, Telecom, Energy, Materials and Utilities are all closer to the top of their trading ranges than the bottom.  We'll see if this sector divergence continues this week.

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Finlindu

Inftenrs

Condcons

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Friday
Jun062008

Learn More About Bespoke Products

For Think B.I.G. readers that are unfamiliar with the many unique reports we issue to Bespoke Premium subscribers, below we provide examples of a number of them.  From in-depth economic indicator analysis, to bi-monthly short interest readings, to earnings estimate revisions, ETF analysis, daily upgrades/downgrades, and concise sector analysis, Bespoke Premium keeps subscribers on top of today's difficult markets.  And don't forget our Daily Morning Lineup that traders and investors use to get their day going each morning.  Click the thumbnails below to view sample reports of the different types of analysis we issue daily at Bespoke Premium - all for just $1 a day.  Click here to subscribe and receive this unparalleled stock market research at a great price.

Economic Indicator Charts and Summary; Short Interest Report

Earnings Estimate Revisions; Market Indicator Charts

Weekly Sector Snapshot; Sector Weight Analysis

Dynamic Upgrades/Downgrades Report; ETF Trends Analysis

Daily Morning Lineup

Please click here to learn more or subscribe now.

Friday
Jun062008

Dow -3% Days

Today's decline of 3.24% for the Dow was the first -3% day since February 27th, 2007, and just the third of the bull market (if it still is one) that started in October of 2002.  Below we highlight all -3% days for the Dow Jones Industrial Average post WWII.  The average change on the day following the 60 prior occurrences has been 0.11%, while the average change over the next week has been 0.28%.  Going back 10 years, the average performance on the next day has been 0.63%.

Dow3

Friday
Jun062008

Looking Forward to Monday?

It's not often that people look forward to Mondays, but based on one piece of market analysis, it could be a lot better than today.  With the S&P 500 currently down 1.88%, the index is set to have been up more than 1.5% yesterday and down more than 1.5% today.  Over the last 50 years, this has happened just 30 other times.  The average change following these 2-day whirlwinds has been 0.14% on the following day and 0.56% over the following week.  During the current bull market (since 10/9/02), the occurrence has happened 5 times, and the index has been up more than 1.2% the next day every time for an average change of 2.17%.  Looking at today's declines, Monday can't get here quick enough.

Spx606

Friday
Jun062008

Triple Crown and Stocks: The Big Brown Sell Off?

With tomorrow's racing of the Belmont Stakes, all eyes will be on Big Brown as the horse attempts to win the Triple Crown for the first time since 1978.  To horse around a little, we looked to see how stocks have performed during Triple Crown years, and the trend is disconcerting.  Of the eleven prior winners, three occurred during the Great Depression and three occurred during the 1970s - not exactly good years for the stock market.  In total, the average performance of the S&P 500 during years when there was a Triple Crown winner was a decline of 4.2% with positive returns in only three out of eleven years (27.3%).

Triple_crown_3

While there have been eleven Triple Crown winners, there have also been 20 Triple Crown misses, where a horse won the first two legs, but failed to win the Belmont.  In these years, the performance of the Dow was considerably better with an average return of 7.8% and positive returns in fifteen out of twenty years (75%).  For reference, the overall average return of the S&P 500 over the same period has been a gain of 7.6% with gains in 63 out of 96 years (65.6%).  For the bulls, this gives them even more reason to root for Casino Drive.

Triple_crown_misses

Friday
Jun062008

Unemployment Rate Jumps By Fastest Rate Since 1975

Today's 10% rise in the Unemployment Rate from 5.0% to 5.5% marks the largest monthly increase since January 1975, and the twelfth largest increase since 1950.

Unemployment_rate_largest_increas_2   

The individual components of the report show that the largest area of weakness was among 16 to 19 year olds (it looks like a lot of kids will be playing video games this Summer).  On a positive note, the rate for married men and married women only rose by slightly more than 3%.

Unemployment_rate_5

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Friday
Jun062008

Percentage of Stocks Above 50-Day Moving Averages

Below we hightlight the percentage of stocks in the S&P 500 and its ten sectors that are trading above their 50-day moving averages.  This is a good measure of breadth to see how healthy various areas of the market are.  It's a good sign when more than 50% of stocks are above their 50-days, and as shown, the level for the S&P 500 is currently at 63%. 

The only two sectors with less than 50% of stocks above their 50-days are Financials (42%) and Consumer Discretionary (48%).  Utilities, Telecom, Energy and Technology currently have the highest percentage of stocks above their 50-days.  After hitting 0% in early January, 76% of stocks in the Tech sector are now back above their 50-days.

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Thursday
Jun052008

NYSE Short Interest Hits Another Record High

NYSE short interest data for the end of May was released after the close today, and from the looks of the report, the market's weakness in the second half of the month emboldened the short sellers.  Total short interest on the Big Board rose by 2.7% to another record high.  At current levels, short interest represents 4.3% of all shares outstanding and has now risen by more than 40% from its levels in October when the S&P 500 peaked.

Short_interest_end_of_may

On an individual stock basis, it's easy to see where the shorts are focusing their bets.  Of the ten stocks with the highest short interest as a percentage of float, all of them come from either the Consumer Discretionary or Financial sectors.

Short0530_2

Thursday
Jun052008

Today's Market Performance

Below we highlight the 1-day, 5-day and 1-month performance of key ETFs across all asset classes.  The S&P 500 tracking SPY ETF was up 2% today, but it's only up 0.56% over the last 5 days and down 4 bps over the last month.  SPY outperformed the Dow 30 and the Nasdaq 100 today, but underperformed the Midcap 400 (IJH) and Smallcap 600 (IJR).  On a sector basis, Energy was up the most at 5.22%, followed by Materials and Telecom.  The worst performing sectors today were Industrials and Health Care -- both up less than 1%.

Looking at country ETFs, Brazil (EWZ) was up the most today at 4.53%, followed by China (FXI), Russia (RSX) and India (INP).  Nice going, BRIC.  Japan's EWJ was the only country ETF that was up less than 1% on the day.  Of the commodity ETFs, USO was up a whopping 5% as oil soared.  And even though oil was up and the dollar was down, gold (GLD) was down 23 bps, causing gold bugs around the world to scratch their heads.  Finally, fixed income ETFs were down once again across the board.

To get performance and other technical measures for more than 200 ETFs on a daily basis, subscribe to Bespoke Premium today.

Recentetfperf

Thursday
Jun052008

Obama The Next President?

We use Intrade to track election sentiment, and as shown in the chart below, Obama has quite a big lead on John McCain in the Presidential election winner contract.  Currently, actual money is giving Obama a 60% chance of winning the election, while McCain is at 36%.  Interestingly, Hillary Clinton's chances of winning are still at 6.1%, and since this adds up to more than 102%, a premium is being placed on one of them. 

Thursday
Jun052008

Oil Support Levels Update

Earlier today, we posted that oil was at a key level right above its uptrend line.  Now that the commodity is up $5.63 on the day, it definitely seems to have held its uptrend!

Oilup605

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Thursday
Jun052008

Natural Gas Inventories

Today's release of Natural Gas in storage showed that inventories increased during the weak by 105 bcf, which was just slightly more than expected.  As the chart below indicates, natural gas in storage remains at above average levels and has not only been rising, but it has also been rising at a greater than average rate.  In early April inventories were 68 bcf above their long-term average.  Following today's report, inventories have increased to 138 bcf above average.

Nat_gas_inventories

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