– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

It’s kind of interesting that Brinker International (NYSE: EAT) announced that it was selling its “On the Border” chain of Mexican restaurants a few days before “Cinco de Mayo,” as Texas Roadhouse (NASDAQ: TXRH) joined Buffalo Wildwings (NASDAQ:  BWLD) and Panera Bread (NASDAQ: PNRA), in surprising analysts with less than rosy outlooks for the near future.

The stock market rallied on 5-3 behind a robust ISM manufacturing index and the heralded return of the consumer to the economic recovery. Yet, the data is backward looking, and more current information does suggest that a slightly different take is worth considering. And as the action on 5-4 showed, this is a fickle market.

We’ve been bullish for a while, but as we look around  we’re becoming skeptical about the ability of the economy to sustain its recovery without something more tangible to drive it, such as jobs, and less of a threat of higher taxes. Call us old fashioned, but there you have it. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/05/03/empty-tables-at-casual-diners-are-worrisome-according-to-duarte/).

The precipitous fall in the Financial Select Sector SPDR (NYSE: XLF) and the Healthcare Select Sector SPDR (NYSE: XLV) ETFs on April 27, suggest that something significant may have changed in the dynamics of what was, up until Tuesday, a significant momentum run.

The momentum run is starting to show signs of some fraying at the edges as two key sectors, health care and banking are starting to lag.   First, let’s look at what’s happened to health care, more specifically, the medical equipment (RXP) and the HMO stocks (HMO). Both sectors have been lagging the market lately, and the losses seem set to accelerate. The acceleration to the down side seemed to get worse after the release of a study from the U.S. Department of Health and Human Services which concluded that the health care reform bill, touted as a cost cutting plan, would actually raise costs by $511 billion over the next ten years. What made the news worse is that this was considered a best-case scenario and that it would be dependent on a half-trillion dollar cut to Medicare services. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/04/26/momentum-run-resumes-according-to-duarte/).

The S & P 500 SPDR ETF (NYSE: SPY) and the Russell 2000 Trust (NYSE: IWM) are within one good day of erasing the losses caused by the SEC’s accusation of Goldman Sachs (NYSE: GS) committing “fraud.”

The hallmark of a bull market is that it climbs a wall of worry. And the potential threat against Wall Street’s largest player, at the hands of the Securities and Exchange Commission should have been a bigger blow to this rally. Yet, at least as measured by the major indexes, last Friday’s selloff may turn out to be a blip, and yet another opportunity to buy on a dip in a long running bull market.

To be sure, it’s our job as market analysts and investors not to be fooled by the market’s volatility.  So here are a few things to consider. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/04/17/duarte-fol-up/).

Alcoa (NYSE: AA) met our expectations with its lackluster report. But that’s usually what it does which makes us wonder why anyone bothers with the report.

What’s more important is how the rest of the market fares in response to earnings reports as they come off the presses.  So far it’s pretty standard. What’s more important is how the growth stocks do. That’s because the small stocks have been very hot lately, and if they disappoint as earnings season progresses, we could have a fairly good correction on our hands. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/04/12/close-attention-to-portfolios-produces-long-term-gains-says-duarte/).

Alcoa (NYSE: AA) and Goldman Sachs (NYSE: GS) are tracing similar patterns to what they did before their last earnings reports.

The stock market is clearly on a momentum run. But that momentum run is starting to favor the small stocks. That’s why the Russell 2000 Index of small stocks (RUT) was up 2.5% on April 5th and 6th, compared to the 0.9% gained by the S & P 500 (SPX) over the same period. That means that it’s important to see if we can glean any clues from the market’s behavior during past earnings seasons, and to put it into context for the current market.

Alcoa is always the first stock to officially report earnings. That start, traditionally sets the tone for the rest of earnings season. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/04/06/trend-in-stock-market-remains-to-the-up-side-according-to-duarte/).

If you’ve been scratching your head about the steady, and somewhat predictable performance of exchange traded mutual funds (ETFs) such as the S & P 500 SPDR (NYSE: SPY), maybe you should be looking at what’s inside your good old-fashioned mutual fund, such as the ones used in many 401-k plans.

A steady advance in the stock market is due to one thing, and one thing only: steady buying, such as the steady buying that is the hallmark of mutual fund managers. These deeply pocketed guys often made decisions based on orders from a committee or a group of managers.  And in the old days, they used to look at good old-fashioned investment criteria, such as valuations, company managements, and earnings and sales performance of each individual company that they put their money into. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/03/26/rally-shows-signs-of-tiring-to-duarte/).

The Dow Jones Diamonds (NYSE: DIA), the S & P SPDR (NYSE: SPY) and the Russell 2000 Trust Small Cap ETF (NYSE: IWM) all made new highs from the March 2009 bottom, setting up the bears for some potential disappointment barring a sudden reversal of fortune.

The stock market is clearly on a significant momentum run, as the market shrugged off two less than rosy days to end last week. Both days delivered what technical analysts call divergences.  A divergence is what happens when one part of the market doesn’t keep up with those parts of the market that are leading a rally. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/03/19/duarte/).

The Dow Jones Industrial Average and the Dow Jones Diamonds (NYSE: DIA), an exchange traded mutual fund (ETF) that mirrors the action in the index moved nicely higher on Tuesday. The flip side, is that last week’s leaders, the small stocks, in the Russell 2000 Trust ETF (NYSE: IWM) lagged the big stocks.

It’s too early to know if this is an important day or not. After all, the market delivered more gains, including a new recovery high for the Dow Industrials and the S & P 500. Those are good things.  But you still want to see the small stocks keep up. And on Tuesday, they really didn’t, which means that we have to start watching what happens in this important market relationship. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

The S & P 500 SPDR ETF (NYSE: SPY) celebrated the one-year anniversary of the current bull market by making new highs on March 9.

To be sure, the gains weren’t all that magnificent. But gains they were. And no one was complaining much, given the fact that the bears have been out beating the negativity drums for some time and calling for some kind of an anniversary decline.

Still, it’s good to put things in perspective. This bull market is now a year old, which means that it’s starting to grow old, in terms of cyclical bull markets, or bull markets that don’t last several years.  The jury is still out on whether this is a secular bull market, the kind that lasts several years, even decades, such as the ones in the 1980s and 1990s. [entire post]

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– From “Dr. Joe’s Market Diagnosis” , by Dr. Joe Duarte –

Note: A follow-up interview to this post was published by FinancialWire(tm) (at http://www.financialwire.net/2010/03/08/wall-street-for-main-street-duarte-on-growth-stock-etf-momentum/).

The iShares Trust Russell 2000 Index Fund (NYSE: IWM) and the S&P Midcap 400 Depository Receipts (NYSE: MDY) are proof positive that the underpinnings of this stock market may be stronger than the conventional wisdom believes.

The Russell 2000 index is home to a large group of small capitalization stocks, while the S &P 400 Index is where the mid cap stocks are gauged. These are the stocks of the future, as they represent smaller companies than those, for example, in the Dow Jones Industrial Average, both in terms of the amount of money that they market has put into them, market capitalization, and in the size of the companies themselves. [entire post]

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