Tag Archives: market lab report

MLR – PMP 1/26/15

âMajor averages finished Friday mixed on lower volume with the S&P 500 and Dow Jones Industrials indexes reversing into the red after starting up early in the day. The NASDAQ also gave up a good chunk of its early gains, but still managed to close up slightly. Oil continued its slide as well as commodities in general as global demand remains weak in addition to the glut of oil’s oversupply contributing to the selling pressure. The rip-tide markets struggle to find direction as QE remains in force with ECB, Bank of Japan, and so on which push markets higher, but the recessionary nature of the planet together with growing consternation push markets lower. The bottom line, which is easily discernible by anyone who can read a simple price/volume chart, is that the market indexes are in neither an uptrend nor a downtrend but instead are simply chopping back and forth within a big sideways consolidation extending back to early December. Thus progress on either side of the market can be fleeting, at best, necessitating a more short-term view for nimble traders, while those seeking to ride a longer-term trend are likely best served by exercising patience and waiting for the right conditions to present themselves. One way or another, the market will eventually resolve this current sideways consolidation, at which point a more playable trend may emerge. As the market has rallied, short-sale target stocks have rallied with it. Workday (WDAY) has found resistance at the confluence of its 200-day simple and 65-day exponential moving averages, which could serve as a short-sale point if the general market gets into further trouble after Friday’s reversal, using the high of Friday as a very quick upside stop. Tesla Motors (TSLA) has come within 1% of its 20-day moving average, which could serve as a short-sale point using the 20-day line as a guide for a quick upside stop. Both companies announce earnings in the latter half of February, so there is still plenty of time for these recent reaction rallies in each to fizzle and send the stock back to the downside, but this will likely be a function of just where the general market goes from here. Nevertheless, for those who are willing to short stocks, maintaining awareness of potential short-sale targets as they bounce with the market is useful with respect to being prepared to act should the market begin to roll over again.

MLR – PMP 1/23/15

Major averages pushed through their respective 50-day moving averages on higher volume on news the European Central Bank would increasing its flow of QE to $70 billion a month for at least the next 19 months, up from about $12 billion a month. This is a significant amount, yet the overall action of leading stocks remains poor. Much of the QE-money will get used to to prop up debt of irresponsible EU members like Spain, Greece, etc. Indeed, European markets have been in a downtrend since June 2014 despite QE but perhaps this sizeable increase will help European markets find their floor, and this, in turn could be beneficial for US markets. The Market Direction Model remains on close watch. U.S. oil supplies hit their highest level in 80 years putting further selling pressure on the price of oil was its well-entrenched owntrend continues. Lack of global demand adds to the selling pressure not just in oil but across a basket of commodities as the Commodity Research Bureau index plumbs lows it has not seen since 2009. Airline Virgin America (VA) had a pocket pivot yesterday. Airlines have been doing well with industry group rank 2 due to the falling price of oil. Earnings have been shooting higher. Veterinary services company VCA, Inc. (WOOF) had a pocket pivot. Earnings are accelerating, group rank 41. WOOF has a tendency to violate its 50dma at times. For general VoSI members, Gil Morales will be in the VoSI Member’s Lounge chat room today at 7:30 a.m. Pacific, 10:30 a.m. Eastern. Also Gil is planning to host a Stock-Hunting Webinar this weekend for VoSI Webinar Members, time to be determined. A formal invite with the actual time and day of the webinar will be sent out to webinar members later today.

MLR – PMP 1/22/15

Major averages except for the small cap risk-on Russell 2000 moved higher but on lower volume implying doubt from big monied institutions about this rally having legs. This morning the European Central Bank announced a 60 billion Euro per month expansion of its current QE program, which could help push major averages up into their respective 50-day moving averages which could serve as resistance. But so far, Euro-QE has done little to help push European markets higher as most of these markets topped in June 2014 and have since been heading lower into bear market territory with the UK market off more than 20% and the European markets off roughly about 15%. Meanwhile, China announced an $8 billion stimulus injection into its financial system after the country showed the slowest economic growth in two decades last week. Futures are up sharply on the ECB announcement.