Tag Archives: market lab report

MLR – PMP 3/31/15

Major averages rallied yesterday on mixed volume as central banks indicated a dovish stance on interest rates. On Friday, Federal Reserve Chairwoman Janet Yellen said that while gradual hikes are likely this year, the central bank will move cautiously, meaning if the economy does not pick up sufficiently, it could mean another year of no tightening. Meanwhile, China’s central bank acknowledged their flagging economy so the PBOC governor said he saw âmore roomâ for China to ease policy if the economy stays soft and inflation continues to weaken. This sent Chinese stocks to a seven-year high. In US markets, both the S&P 500 and DJIA closed above their respective 50-day moving averages. That said, the S&P 500 was up on lower volume and there remains an overhang of distribution days, so we are not out of the woods just yet, and a resumption of the downside still remains a possibility as the bounce remains suspect. Futures are down sharply this morning as the market takes on a game show-like character of “Guess the Gap.” Construction products company Trex Company (TREX) – Earnings accelerating, ROE 37.8%, institutional sponsorship rose last 5 quarters, group rank 15.

MLR – PMP 3/30/15

âMajor averages rose on lower volume. The bounce so far has been anemic showing institutions remain reluctant to invest more fully in the current environment. The S&P 500 and DJIA both remain under their respective 50-day moving averages. The NASDAQ Composite bounced at a logical support point but the higher number of distribution days compared to accumulation days is a red flag. Adding to the market’s troubles, fourth-quarter GDP came in weaker than expected at 2.2%. The report also showed that quarterly corporate profits over the same period fell for the first time since 2008. Markets reacted negatively then stabilized. The zig-zag go-nowhere action of the major averages over the last 4 months is troubling as the markets are expressing a form of exhaustion. Should markets start to undergo a real correction, and not one of the 5% variety, this could force the Fed’s hand into launching QE4. We remain patient and vigilant as opportunities in individual stock rather than ETFs continue to present themselves. This morning futures are up sharply after dovish comments from Fed Chief Janet Yellen on Friday afternoon and People’s Bank of China Governor Zhou Xiaochuan Sunday. After last week’s bounce off the 50-day line by the NASDAQ, the market was set up in a logical position for a rally attempt, and with the last two days of the first quarter upon us a continued bounce is not surprising.

MLR – PMP 3/27/15

Major averages gapped down hard at the open yesterday but recovered part of their losses to close well off their lows. Volume was mixed. The NASDAQ Composite bounced at its 50-day moving average after undercutting the early February low, and this coincided with prior support at the top of its prior two month-range extending from late December to early February of this year. The S&P 500 and DJIA, however, remain under their respective 50-day moving averages. With the number of distribution days at high levels, the market should normally undergo further correction, but this is not a normal market. Each time since December, the market finds a shallow floor after selling off roughly 4-5%. Market averages are currently off 2-3%. Of course, the correction this time could be worse. Stay tuned.