Tag Archives: market lab report

MLR – PMP 2/6/15

Major averages rose on lower volume yesterday as institutions seem unconvinced that this current rally has legs. Much of yesterday’s gain came on news that Greece may work out a deal with the other countries in the EU. Of course, Greece has been a highly volatile component thus today’s gain may be fleeting. Major averages, while having cleared their respective 50-day moving averages, are closing in on resistance as they retest the highs of their current volatile sideways range. Whether they can clear to higher highs remains an open question as this has previously represented stiff resistance to any further advances. Today’s jobs number came in stronger than expected, while the unemployment rate rose to 5.7%. This is likely seen as a non-event by the market, and it will be a matter of how the indexes act as they move up and encounter resistance at current levels. Some new leadership is emerging here as others lag: Generic drug maker Lannett Companies (LCI) had a buyable gap up on a strong earnings report. Pretax margin 40.2%, ROE 33%, earnings and sales are skyrocketing, institutional sponsorship grew last 7 quarters, group rank 8. Visualized data analytics software maker Tableau Software (DATA) had a buyable gap up also on strong earnings. Skyrocketing earnings and sales, institutional sponsorship grew last 5 quarters, group rank 57. Semiconductor Ambarella (AMBA) – strongly accelerating earnings and sales, pretax margin 23.1%, group rank 14. AMBA’s pocket pivot occurred in anticipation of a strong earnings report from GoPro (GPRO) after the close yesterday, and while GPRO did have a strong report, its forward guidance was lacking, causing AMBA to move lower as well in the after hours. LinkedIn (LNKD) is gapping up to all-time highs this morning as it emerges from a multi-month base after announcing strong earnings yesterday after the close. This will likely qualify as a buyable gap-up, and we will report on this later on the day as it develops. Twitter (TWTR) is also gapping up sharply after earnings, but is not in a constructive position within its overall chart pattern.

MLR – PMP 2/5/15

Major averages had an about face during the last half hour of trade yesterday as the Greek debt crisis escalated, sending most of the averages into the red. Volume was higher, though only slightly on the NASDAQ Composite, reflecting another distribution day. Oil fell 8% as it may not necessarily have yet found its floor. This morning futures are up as the market follows its typical riptide pattern with sudden moves in either direction. Meanwhile, leadership is a mixed bag at best, and big-cap companies like Disney (DIS) or Boeing (BA), while moving higher, do not strike us as the stuff of robust bull market environments. The Market Direction Model remains in cash, as a neutral stance appears to be the most prudent approach to the market at this time. Things could change, perhaps soon or later, but exercising patience as investors wait for the market to sort out its current choppy, sloppy sideways consolidation since mid-December is certainly warranted, in our view.

MLR – PMP 2/4/15

Major averages rose on higher volume as they all cleared their 50-day moving averages. Choppy riptide action has been the way of things since mid-December so with leading stocks continuing to lag the pace of the current bounce, there is cause for concern. Further, the major averages remain stuck in a trading range until they start making higher highs. At present, volatility continues to rule the day as does defective price/volume action. Meanwhile, oil continued its bounce helped by an oil refinery strike and signs of inventory buildups. Keep stops tight as always and remain nimble if you are trading stocks. MDM remains in cash as the sidelines are a good place to be when the market is as noisy as it is. As Jesse Livermore once said, more money is lost by investors trying to trade when the market is not right to trade, and as the market exhausts investors’ patience, that is often when the market gets traction and starts to trend.