Ticker Sense

There Is No Value Only Growth

We are not suggesting that there is no value in stocks, more that there are no "value stocks."  The chart below highlights the performance of several style indices provided by S&P and Birinyi Associates.  The "Birinyi Dividend Index" is constructed of S&P 500 stocks that yielded between 4 and 10% on 12/31/08 (112 issues and not all financial).  As shown, these dividend stocks and the S&P 500 Pure Value index have performed worst of the seven styles shown (-62.7% and -67.5% respectively; the S&P 500 Financial Sector is down 78.4% by comparison).

In short, the values have gotten better, the yields have gotten higher and the market does not care.  P/E ratios, price to book, and other valuations do not matter in this market.  At the end of the day any valuation based on trailing earnings has no bearing going forward, and estimates for these supposed "value" companies are so uncertain that they have become useless.  Google with a P/E of 20 is up 34% on the year, and GE with a P/E of 4.7 is down 44%.

S&P 500 Most Oversold List

At Birinyi Associates we continue to find the best opportunities in picking stocks.  Sectors and styles continue to be volatile and while ETFs increase exposure they also increase the potential for headline risk.  In this trader's market we believe market players should concentrate on names they know and understand.  The traditional timing models that we have presented on this blog are based on a 50-day moving average.  This approach has become less useful as many stocks have moved far enough that the 50-day average is not a meaningful measuring point.  

Below we highlight a list of the S&P 500 stocks that are the most oversold based on a 12-day moving average.  This list along with a list of the most overbought stocks are distributed to Birinyi's Mini-Institutional subscribers daily.  Being a somewhat contrarian indicator, these stocks are below the bottom end of their trading range, and given strength should rally at least to the average and often to the top of the range (Short-Term TE).  The "Extreme" column shows the most oversold and overbought levels for the stocks within the last year.

February 23rd Blogger Sentiment Poll

There are still more bulls than bears in this week's poll, but the margin continues to narrow.

Blogger Sentiment Poll Participants:

24/7 Wall St. (-) Ahead of the Ticker (+) Carl Futia (+) Crossing Wall Street  Daily Dose of Optimism (+) Dash of Insight (-) Elliot Wave Lives On (-) Fallond Stock Picks (-) Information Arbitrage (-) Learning Curve (+) MaoXian  Millionaire Now! (N) Navivest (+) Peridot Capitalist (+) Smart Money Tracker (N) StockAdvisors.com Traders Talk (N) Wall Street Folly  Wishing Wealth (-)

S&P vs Dow; Resistance vs Support

Until today 800 on the S&P 500 had been a key level of support; it came into play in December and on 1/20/09.  After declining below 800 this morning the index was unable to sustain a rally - support becomes resistance (we saw the same thing in March-09 crude contracts at $38). 

Interestingly; the Dow was supporting to today's market at 7,550, which seemed to prevent a further run down.  The DJIA closed at 7,552.60, just 0.31 points higher than November's closing low of 7,552.29.  In other words, the Dow was finding support at the November lows while the S&P 500 is still 48.15 points above its November low of 741.  

Tomorrow we will be watching both the Dow and the S&P 500 closely.  In a positive scenario look for the Dow to hold 7,550 and the S&P 500 to break out above 800.  If the Dow breaks down below 7,550 look for the S&P to find its first support at 750.

February 17th Blogger Sentiment Poll

There are more bulls than bears in this week's poll.

Blogger Sentiment Poll Participants:

24/7 Wall St. (N) Ahead of the Ticker (+) Carl Futia (+) Crossing Wall Street  Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (-) Information Arbitrage (-) Learning Curve (+) MaoXian  Millionaire Now! (N) Navivest (+) Peridot Capitalist (+) Random Roger's Big Picture (+) Shark Report (+) Smart Money Tracker (N) StockAdvisors.com  Traders Talk (+) Wall Street Folly  Wishing Wealth (-)

February 9th Blogger Sentiment Poll

There are more bulls than bears in this week's poll, many have moved to the neutral camp.

Blogger Sentiment Poll Participants:

24/7 Wall St. (N) Ahead of the Ticker (+) Carl Futia (+) Daily Dose of Optimism (+) Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (+) In the Money  Information Arbitrage (-) Learning Curve (+) MaoXian  Market Time (N) Millionaire Now! (N) Navivest (+) Peridot Capitalist (N) Random Roger's Big Picture (+) Shark Report (N) Smart Money Tracker (N) Traders Talk (+) Wall Street Folly

February 2nd Blogger Sentiment Poll

Blogger Sentiment Poll Participants:

24/7 Wall St. (-) Ahead of the Ticker (N) Carl Futia (+) Dash of Insight (-) Elliot Wave Lives On (-) Fallond Stock Picks (-) In the Money  Information Arbitrage (N) Learning Curve (+) MaoXian  Millionaire Now! (N) Navivest (+) Peridot Capitalist (+) Random Roger's Big Picture (+) Self Investors (N) Shark Report (N) Smart Money Tracker (N) Stock Advisors.com Traders Talk (N) Wind River Advisors  Wishing Wealth (-)