The Market Today

A late afternoon rally pushed us in the black for the day. Well…barely, but I’ll take it. This was a nice end to a good week. The S&P 500 rose 0.20 points (yes points, not percent) for a total gain of 0.02%. On an annualized rate, that’s less than 5% a year. I’ll still take it. The Buy List pulled back slightly; we lost 0.13% today, but November is treating well so far. This month, the Buy List is up 2.39% and the S&P 500 is up 1.09%.
Our problem child today was Quality Systems (QSII). This I just don’t get. The company reported very good earnings yesterday. The stock rose at the open, and promptly fell to a 3.34% loss. I have no idea what caused the sell-off. The important news is that QSII had a great quarter. I’ll take that too.
Frontier Airlines (FRNT) had a hectic day. When I saw the stock open, and nearly run to $10, I felt like a baseball player on a team whose pitchers had a no-hitter going through six or seven innings. Everyone is thinking the same thing, but no one wants to mention it. You don’t even want to sit near the guy. But I had to go and blog it around noon today. What was I thinking? I’m sorry, it’s all my fault. Our no-hitter got broken up by back-to-back home runs. Frontier plunged to $9.44, then closed at $9.63. For the day, we lost 9 cents. Once again, I’m sorry.
Did anyone notice that AFLAC (AFL) is almost at a new high? Good, me too.
The major action lately is definitely going on in the energy sector. We’re at one of those important “tipping points” in a bull market. This can happen for any sector, or even the entire market. So far, energy stocks have mauled every bear’s growl. They’ve flattened all non-believers. No prisoners. No mercy. Every sell-off has been fought back with another rally.
Then in October, the sector started to break down again. But the selling was much harder than anything we’ve seen before. Was this the end? The Dow Jones Energy Index (^DJUSEN) finally found a bottom on October 20. That was a 15.8% “correction” in just 11 days.
So now the question is: Was this just another pullback in the long-term trend, or was this a signal that the long-term trend had trended out? Normally, the bulls love to buy on any pullback. And predictably, we’ve now had the reversal. The index rallied about 10% off its low through yesterday. But then today came. The index got nailed for a 2.51% loss. That’s a tough loss on a day like this. The signs are all around us. Add in the productivity report. Add in the inflation report. Add in oil prices. The message is clear: Energy is out of power.
Here’s a chart YTD:

Posted by Eddy Elfenbein on November 4th, 2005 at 7:01 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.