Friday, July 2, 2010

Southridge Capital Comments on Payroll Report:

June Employment Report: 100K Jobs ex-Census, 9.5% Unemployment Rate 9.5%
The weak reports will add to growing concerns that the economic recovery is slowing.

The jobless rate was 9.5 percent last month, down from 9.7 percent in May, a surprising decrease that came as hundreds of thousands of workers dropped out of the labor force. Private employers added just83,000 jobs in June

The Birth/Death adjustment added 147,000 jobs to the number. The B/D model has now added over 550,000 jobs that this 'adjustment' has added this quarter .

Employers cut hours, average pay dropped, and more people gave up looking for work

Total nonfarm employment actually dropped 125,000 -- the largest decline since October -- as the government laid off 225,000 temporary census workers.

Thursday, July 1, 2010

Southridge Capital - Robert Colby - Chief Market Technician - Comments on Close of Second Quarter

Summary: oversold with some positive divergences…there is still hope for an oversold bounce.

S&P 500 Composite (SPX) broke below 8-month lows on 6/30/10, thereby clearing out some protective sell stops below the lows.

Sentiment is more bearish.

Advisory Service Sentiment shows an decrease in the Bull/Bear ratio, which fell to1.23, down from 1.32 the previous week. The ratio has fallen substantially from its peak at 3.36 set on 1/13/10, which was the highest bullish sentiment in 6 years.

SPX price momentum oscillators, such as RSI (14), MACD, Directional Movement, and Stochastics, are more deeply oversold but not quite as oversold as they were a few weeks ago, thereby showing bullish divergence.

The Dow-Jones Industrial Average closed below 7-month lows. The Dow-Jones Transportation Average closed below 4-month lows. Some will interpret this as a Dow Theory Bear signal, but I interpret it as a non-confirmation.

The Dow-Jones Utility Average held above June lows.

The Cumulative Daily Advance-Decline Line is still holding above its early June low.

Both NYSE and NASDAQ Bullish Percent Indexes are holding above early June lows.

Consumer Discretionary Stock Sector absolute price fell below 4-month lows on 6/30/10.

Consumer Staples Stock Sector absolute price fell below 8-month lows on 6/30/10.

Industrial (XLI) Stock Sector absolute price fell below 4-month lows on 6/29/10.

Technology Stock Sector Relative Strength Ratio (XLK/SPY) crossed below both 50- and 200-day SMAs on 6/30/10 and is now neutral. Absolute price fell below 8-month lows on 6/30/10.

Utilities Stock Sector Relative Strength Ratio (XLU/SPY) rose above 5-month highs on 6/30/10. The XLU/SPY Ratio’s 50-day SMA is still below the 200-day SMA, however, so the XLU/SPY remains neutral. Absolute price of XLU fell below 3-week lows on 6/30/10.

Health Care Stock Sector Relative Strength Ratio (XLV/SPY) rose above the highs of the previous 3 months on 6/30/10. The XLV/SPY Ratio’s 50-day SMA is still below the 200-day SMA, however, so the XLV/SPY remains neutral. Absolute price of XLV fell below 4-week lows on 6/30/10 and remains bearish because price is below both SMAs and the 50 is below the 200 SMA.

Financial Stock Sector absolute price fell below 3-week lows on 6/30/10.

Energy Stock Sector absolute price fell below 10-month lows on 6/30/10 and remains bearishly below 50- and 200-day SMAs.

NASDAQ Composite absolute price fell below 7-month lows on 6/30/10.

The Small Cap Russell 2000 Index absolute price tested its May-June lows and remains neutral.

Crude Oil broke down below support at 75.17 on 6/30/10, turning the short-term trend bearish.

U.S. Treasury Bond price rose further above 14-month highs on 6/30/10, again confirming a major uptrend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell further below 8-month lows on 6/30/10 and is RELATIVELY bearish. This implies that investors are choosing less inflation protection.