Wednesday, November 3, 2010

Ford (F) Breaks Out on Good October Sales

I am waiting for the S&P 500 to break over the 200 weekly moving average before committing new money to the market.  That said, in a normal functioning market it would be classic to move over that level and then reverse down, both sucking in the last remaining holdouts (if there are any) on the bearish side and finally causing pain to bulls.... but we don't have a normal market, so all rules are off.

Right now we are being supported by the 13 day moving average (as we have for 2 months in a row) on the downside... that is currently S&P 1183, and the ceiling is S&P 1196 or the 200 week simple moving average.  We should break out big one way or the other, now we have to see if it's up or down.


Anyhow, I only have a modest position in Ford (F) as I was hoping to get a chance to buy on a pullback but those are now a rare occurrence.  The stock is breaking out on good October sales data.

Via WSJ:
  • Ford said it sold 157,650 cars and light trucks in October. That’s an increase of 15.4% from a year ago, when it sold 136,583 and still owned Volvo, the Swedish auto maker. When adjusted for the sale of Volvo to a Chinese car company, Ford’s sales increase was 19%.
  • Ford’s performance was driven by a 24% rise in sales of its high-margin F-Series pickup trucks. Sales of its Fusion midsized car also rose 24%.

Pickup sales are shooting up - traditionally these do well with construction.  But we have a new bull market in case you have not noticed - farming.  This is one area we cannot outsource (instead we import cheap labor but that's another story)  - and it is our version of Australia.  Asians want their commodities and agriculture is one area the U.S. still dominates.  So while Jim Rogers believes in the long run farmers will be the ones driving Ferraris - for now they are content with Ford pickups.
  • J.P. Morgan analysts following Ford point out that the company’s Ford F-Series pickup sales were up 29% year-over-year in October versus 40% in September and 9% in August.  Perhaps demand is emanating out of the farm states, where other see surging prices of crops as a source of strength for other business.
Long Ford in fund; no personal position

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