FINANCIALS AND TELECOMM LEAD DAY'S DECLINE -- SOME OIL WINNERS
FANNIE MAE LEADS FINANCIALS DOWN... Sharp losses in Fannie Mae and Freddie Mac pulled the financial sector sharply lower today. FNM was one of the NYSE most active stocks as well. The mortage-related stock tumbed 4 points on extremely heavy volume -- and is threatening its October low. The odds of that previous low holding don't look too good. Freddie Mac, which usually trades in tandem, has already tumbled to a new 52-week low -- also on massive volume.
Chart 1
Chart 2
MONTHLY CHARTS... The monthly chart of Fannie Mae doesn't look promising either. The stock appears headed toward the low hit at the start of year 2000 in the high 40s. The monthly MACD lines have been negative for over a year -- and have already broken the lows of 2000. Freddie Mac doesn't look any better -- and is headed toward the highs 30s.
Chart 3
Chart 4
NEXTEL LEADS TELECOMM DECLINE... The telecomm group lost over 3% today and was one of the day's biggest losers. Nextel Communications was one of the biggest reasons. The stock tumbled to a three-month low today and is in danger of undercutting its December low. Heavy volume during the latest selloff isn't a good sign either.
Chart 5
ENERGY WINNERS... There were some winners in the oil patch today. EOG Resources moved up on good volume to challenge its recent high. Volume has been incresing during its recent advance, which is a good sign. Its weekly chart shows the energy leader heading up to challenge the high of last spring near 44. Another oil leader -- Sunoco -- is moving closer to a test of the highs of last August near 37.5. Its rising relative strength line also shows it to be a market leader.
Chart 6
Chart 7
Chart 8
MARKET SINKS SOME MORE... There wasn't much good to say about today's market action. All major averages fell hard. Breadth was terrible, The S&P 500 is threatening its February low. It looks like things are going to get worse, before than can start getting any better. It's not a good sign when energy stocks are the day's strongest group -- and financials are the weakest.
Chart 9
MONEY MANAGEMENT UPDATE... At the start of last week, we mentioned that the price and breadth indicators used at MurphyMorris Money Management were still negative, but were showing some slight improvement. At the start of this week, even that modest improvement has evaporated. Our review of the leading mutual funds list shows the the only funds with "positive" trends are short funds that move inversely to the market. That, in and of itself, would seem to confirm that the intermediate trend of the market remains DOWN. About the only nice thing we can say is that some of our sentiment indicators are now getting into extreme positions that have been associated with productive market bottoms. [Having said that, we need to point out that we do not actually use these sentiment readings in our disciplined model approach].
