Tag Archives: market lab report

MLR – PMP 1/21/15

Major averages rose again yesterday on lower volume after a double-reversal that saw the indexes first open up, then trade sharply lower before reversing to close back in the black. Oil moved to lower lows as it looks to continue its downtrend after a brief pause, while precious metals rallied again with gold clearing the $1300 price level overnight in anticipation of more QE across the globe. The markets continue to express indigestion as leadership remains scant and the indexes continue to flop around in a choppy range that extends back to early December. The volatility and whipsaw nature of the market’s intraday action makes it difficult for investors and traders on both sides of the market, which necessitates the idea that we expressed yesterday, namely that gains should be taken when one has them and stop-loss points should be kept tight. Wearable video systems maker Taser International (TASR) had a pocket pivot yesterday as it rallied off of its 20-day moving average and up through its 10-day moving average after receiving an order from the Cleveland Police Department for 1500 AXON law-enforcement video systems. TASR’s officer-worn camera products are increasingly in demand, which bodes well for the company which is expected to announce earnings in late February. Netflix (NFLX) is set to gap up sharply this morning, clearing the $400 price level and its 200-day moving average after announcing what was perceived as a strong earnings report yesterday in after-hours trade. We would not consider this a buyable gap-up since the stock remains well below its prior highs, but there is always the possibility that it can trade up to its October gap-down or “falling window” high at 430.18.

MLR – PMP 1/20/15

Major averages bounced on unimpressive volume despite triple witching options expiration which normally should significantly boost volume. This was the third time since December that the NASDAQ Composite and S&P 500 bounced off logical support areas. US Treasury yields continue to fall despite no quantitative easing in the US because US Treasury bonds are more attractive at present than foreign Treasurys which currently offer a negative rate of return. US Treasurys also represent a flight to quality fear trade. Thus all the buying of US Treasurys pushes the price higher and the yield lower. Chinese stocks had their worst day in over six years on Monday with the Shanghai falling more than 7% as Chinese regulators moved to crackdown on excessive margin trading. European markets resisted the Chinese slide and rallied. Futures are up sharply this morning as the promise of more stimulus from China and the European Central Banks pending announcement of expanding QE bond-buying later this week. With all the rip-tide action in the markets as of late, it is even more essential to keep your stops tight and take your gains when you have them, whether on the long or short side.

MLR – PMP 1/16/15

Major market averages fell once again but on lower volume as they test the January 6 lows. Central banks around the world indicate an acceleration of their respective QE programs and consequently lower interest rates as India’s central bank cut interest rates. Meanwhile, the Swiss National Bank ended a program to support the Euro vs. the Swiss Franc as the Swiss are losing confidence in the Euro. To wit, the Euro has been given a limited lifetime by various analysts of anywhere between 6 months to 6 years. A rip-tide market has emerged with expectations of additional quantitative easing pushing the market higher while the economic global troubles, plummeting oil prices, and lack of confidence in the Fed push the market lower. Where the selling ends is anyone’s guess, but the indexes appear set for a possible test of their 200-day moving averages as the Market Direction Model remains on its sell signal. Futures are currently trading lower.