The Growth Stock Report - Weekly Market Report

October 19th, 2007

Market Bias:

SELLERS' EDGE

In this week's edition you will find:

 

Where We Are:

What the market is saying:

Earnings season blows an undeniable stench as broad market selling puntuates the week

The Sellers' Edge is intact as multiple distribution days gather on the major indexes.

As mentioned in previous reports, technical weakness in Financials, Retail and Transportation threaten to become downside leaders for the broader market.

Not to mention the Home Builders and REIT's that have already nose-dived this year.

But the broader market's tendency to rise through bad times can't be denied. Pullbacks and corrections are healthy, there's no reason to believe this rough patch won't be short-lived.

Technology and Biotechnology have provided strong leadership for the past month. Should the Bull regain its footing, we're looking for these sectors to blaze the way.

But until we see selling volume dry up and buyers retake control, the best we can do is protect our accounts by not letting profits turn to losses and laying low on new buys.

Technically speaking:

Charts courtesy of Stockcharts.com

Index
Change
%
YTD
Action
DJIA
-571.06
-4.1 %
8.5 %
gets slammed back to its 50-day MA.
Nasdaq
-80.52
-2.9 %
12.8 %
pulls back sharply, though comfortably above its 50-day MA.
S&P 500
-61.17
-3.9 %
5.8 %
sells off to just above its 50-day MA.
Russell 2000
-42.38
-5.0 %
1.4 %
crumbles to close below both of its major MA's.

Volume indications turn bearish with the Dow racking up four distribution days, the S&P 500 and Nasdaq making three distribution days and the Russell 2K posting two distribution days.

U.S. Dollar Index ($DXC ) finds another new low.
Gold & Silver Miners Index consolidates at its highs for the year.
Consumer Index ($CMR ) falls to just above its major MA's.
Cyclical Index ($CYC ) also falls to just above its major MA's.
Technology Index ($DJUSTC ) pulls back as it holds well above its 50-day MA.
Semiconductor ($SOX ) falls further below its major MA's.
Software Index ($GSO ) puls back after a new high, holding well above major MA's
Telecom Index ($XTC ) consolidates above its major MA's, though under summer's highs.
Banking Index ($BKX ) fall to just shy of August's lows, under its major MA's.
Broker Dealer Index ($XBD ) falls further under its major MA's.
Retail Index ($RLX ) also falls further under its major MA's.
Healthcare Index ($HCX ) puls back above its major MA's.
Biotechnology Index ($BKX ) pulls back after hitting a new high for the year.
Pharmaceutical Index ($DRG ) closes below its 200-day MA, well off the spring's highs.
REIT Index ($DJR ) sells off below its major MA's.
Transportation Index ($TRAN) sells off under its major MA's.
Airline Index ($XAL ) also sells off under its major MA's.
Defense Index ($DFX ) pulls back, though trending above major MA's.
Energy Index ($IXE ) pulls back after hitting a new high for the year.
*Arrows denote sector's position above or below its 40-week exponential moving average.

 

What Was Important About Last Week

STOCKS:

ECONOMY:

 

What We’re Looking For This Week

Key earnings releases:

On the economic front we have potential market movers with:

The Following Sections Are On Our Home Site:

This Week's Word On Discipline:

" Something in human nature causes us to start slacking off at our moment of greatest accomplishment. As you become successful, you will need a great deal of self-discipline not to lose your sense of balance, humility and commitment." -- H. Ross Perot

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