After Market Report - Buyers Lack Conviction; Energy Looking Good

::: Today's Market Action :::

Merger activity was a major catalyst in propelling the market higher at the end of '06 and into '07 and that was the case today as well.  On the surface (looking at price performance alone) it appeared to be a big day for the bulls and may have even lured in a few unsuspecting traders, thinking that the correction might be over.  One look at the volume, however, indicated there was absolutely no conviction on the part of buyers today.  Most traders are clearly waiting for tomorrow's housing data, the Fed decision on Wednesday and are wary of current market conditions.  While technical conditions have improved some since the massive sell off on Feb 27th, it still remains a risky proposition to get aggressive on the long side.  A day or two more like we had today and I'll be tempted to add a few more shorts.

::: Major Indices Performance - The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST - End of Day March 19th 2007

Nasdaq: UP .92% today with volume 16% BELOW  average
Nasdaq ETF (QQQQ) UP 1.03%, volume 28% BELOW average
Dow: UP .90%, volume 15% BELOW the average
Dow ETF (DIA): UP 1.02%, volume 29% BELOW the average
S&P ETF (SPY): UP 1.21%, volume 6% ABOVE the average
Russell Small Cap ETF (IWM): UP  1.13%, volume 5% BELOW the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Leading stocks did well today, beating the performance of all major indices with volume a bit above average.  However, volume in stocks that were down today was significantly higher than up stocks.

Summary:

* Advancers led Decliners 353 to 80.
* Advancers were up an average of 1.93% today, with volume 8% BELOW average
* Decliners were down an average of 1.42% with volume 66% ABOVE average
* The total SI Leading Stocks Index was UP  1.31% today with volume 5% ABOVE  the average

::: Where's the Money Flowing :::

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF's.  A couple years ago this was not possible, but as more traders/investors use ETF's they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I'm able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://selfinvestors.com/industry_tracking/

* Current Leading Sectors/Industries (over last 30 trading days): 
Utilities, Bonds, Energy
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Biotech, Internet Infrastructure, Home Builders, Agriculture

* Today's Market Moving Industries/Sectors (UP):
Oil & Gas Services, Energy, Biotech, Software, Gold, Health Care

* Today's Market Moving Industries/Sectors (DOWN):
None

::: Stocks :::

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation. 

Sorry, no interesting candidates for Stock of the Day today.  Vimpel Communications (VIP) made a nice move today and looks interesting but it's a short base and needs to go sideways for a bit before I'll get interested.

Comments

[Anonymous]

It is amazing how much non-factual hype you have been writing about TIE and conveniently omitting the most important facts.

Consider 3.8% EPS growth from 2006 to 2007:

TIE 2006 EPS 1.57
TIE 2007 EPS 1.63

Why are you not including this fact?

TIE 2007 EPS estimates lowered from 1.67 to 1.63 (12/2007 EPS Mean % change -2.519%)

http://www.nasdaq.com/earnings/analyst_summary.asp?mode=&kind=&timeframe=&intraday=&charttype=&splits=&earnings=&movingaverage=&lowerstudy=&comparison=&index=&symbol=tie&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&FormType=&mkttype=&pathname=&page=analystinfo&selected=TIE

[Tate]

Hype? Where are you seeing it? You won't find any of that here and would realize it if you've spent any time here or as a member. The EPS numbers that nasdaq.com is using includes the one time gain from the sale of their minority interest in VALTIMET SAS. I don't include one time gains. It distorts the true earnings story of the company. As far as 2007 estimates I don't place much importance on analyst predictions but since you brough it up Yahoo is actually showing revisions higher for 2007 (1.67). The bottom line is that Titanium Metals (TIE) is an outstanding company that's well managed and it's one of the highest ranked stocks that I cover. Thanks for your comment.

[Anonymous]

You are full of hype, ignoring company fundamentals and valuation in your facts distorting analysis.
1. Yahoo site posts 2007 TIE EPS estimates as 1.63; 7 days ago it was 1.67 (so the earnings have been lowered) http://finance.yahoo.com/q/ae?s=TIE

2. Moreover Nasdaq site reports accounting standard GAAP 2006 EPS of 1.53
3. If you want to use pro-forma EPS to justify your fact distorting hype then TIE earning growth has been decelerating in 2006 (Q1 => Q2 => Q3 => Q4) 0.32 => 0.31 => 0.29 => 0.36; nevertheless, the company is trading with pro-forma P/E of 30 (as a growth company)
4. Your hype: “TIE has consistently been one of the highest rated stocks that I've tracked over the past couple years and it remains so with a slow down nowhere in sight...” No slow down in site? Earnings deceleration in 2006 is no slow down in site. Give me a break!
5. The conclusion: The stock is overvalued and the stock price is way ahead of TIE earnings. Moreover, either you an incompetent fool or simply you are full of crap when it comes to objectively evaluating stocks!

[Anonymous]

In short:

If you use GAAP numbers, TIE EPS growth from 2006 to 2007 is only 3.8%.

If you use pro-forma numbers for 2006 EPS (Q1 => Q2 => Q3 => Q4) 0.32 => 0.31 => 0.29 => 0.36; there are signs of significant earnings deceleration and stock overvaluation.

So, to say that "a slow down nowhere in sight" is a big time non-factual hype.

[Tate]

I'm starting to feel like I'm in a Yahoo forum here! You would have been better off using the short version of your comment. If you're going to use personal attacks in trying to make your point how about not hiding anonymously.. maybe even mention you're probably short this one. Just a thought. At any rate thanks for your difference of opinion... it brings up important points about how earnings reported by a company can be distorted by one time gains. Many times it's the GAAP number reported that is what you consider the hype and a distortion of the true growth of the company.

As I stated above, yes I will use a pro forma number and exclude the one time gain from the sale their interest in VALTIMET SAS. How this could be construed as me "hyping" the stock is beyond me. I stand by my statement that TIE is 'one' of the highest rated companies I have tracked and currrently track. There is a bit of slowing expected in earnings growth but it's not all that significant. The bottom line is that it remains an outstanding, well managed company.

[Anonymous]

Actually, you are attacking me instead of objectively answering the questions based on the facts that I have provided.

Moreover, I am not short TIE. In addition, I am sure you were long TIE when you posted the hype (even though you did not bother making the disclaimer).

There are facts about the company that you continue selectively ignoring:

1. If you use pro-forma numbers for 2006 EPS (Q1 => Q2 => Q3 => Q4) 0.32 => 0.31 => 0.29 => 0.36; there are clear signs of significant earnings deceleration and stock overvaluation. These are real numbers (not estimates)

2. Using GAAP numbers, estimated TIE EPS growth from 2006 to 2007 is only 3.8% (I know you do not like the analyst estimates. In addition, you selectively use pro-forma numbers when you calculate the growth but use GAAP numbers when you are talking about valuations. Selectively cherry picking the numbers)

3. 2007 earnings estimates for TIE have been lowered. Why are you still denying this fact?

4. TIE has filed with the SEC about possible revenue loss secondary to Airbus delays. Why there is no mention of this important information in your hype?

5. Selective cherry picking the data and making statements that "a slow down nowhere in site...” is simply not true and deceiving.

6. Please disclose your position in TIE (or any possible involvement with a hedge fund)

7. Please explain why you continue ignoring the facts and promoting your one-sided hype.

Thank you!

P.S. I will disclose my name after you answer the question truthfully.