Tag Archives: market lab report

MLR – PMP 11/12/14

Major averages closed unsurprisingly near flat yesterday on lower volume in a quiet Veterans Day holiday session. The slowdown in the market’s rise since its hard bounce off lows a few weeks ago allows it to consolidate its sharp gains. Nevertheless, there is currently no QE safety net though markets anticipate a resumption of QE in some form by the Federal Reserve given the pro-QE stance of other major central banks. As the indexes continue to move higher on lighter volume, breadth continues to decline. Despite making new highs yesterday, declining stocks led advancing stocks on the NASDAQ Composite while NYSE advancers slightly led decliners. This sets the stage for a pullback as futures sell off this morning in pre-open trade.

MLR – PMP 11/11/14

Major averages rose yesterday on lower volume ahead of today’s Veterans Day. The bond market is closed. The major averages have come straight off lows and show almost no signs of distribution, but the question remains whether they will continue higher or roll over in this environment that lacks a QE safety net. Price/volume action is key and so far, the trend is our friend. Further, the global QE environment is favorable thus central banks that tend to act in rough coherence should have an impact on the Fed’s decision to keep the status quo of unusually low interest rates for the foreseeable future since global economies remain weak which in turn has a dragging impact on the US economy. Chinese online social platform YY, In. (YY) had a pocket pivot off its 50dma. Earnings and sales are skyrocketing, pretax margin 37.5%, ROE 37.1%, group rank 28.

MLR – PMP 11/10/14

Major averages closed near breakeven near the top of their respective trading ranges on mixed volume, The unemployment report was the strongest ever for the month of October with just over a million jobs created and unemployment dropping to 5.8%. But most of extra job growth was due to seasonal factors than underlying economic growth, and the 5.8% number remains highly suspect while wage growth remains subpar. Thus, the report was insufficient to move the Fed off its current stance of low interest rates. Bond prices consequently rallied. That said, while the Market Direction Model managed to jump back on board the market’s uptrend very early in the bounce on Oct 20, the current uptrend remains suspect as the bounce has been relatively anemic in terms of price/volume action in leaders and major indices as well as up/down trading volume which has not seen trading volume of advancing stocks at least 9 times greater than that of declining stocks. Bounces off important lows share this 9:1 characteristic. But then, we are in a QE environment so many tried-and-true indicators have failed to measure up. MDM will continue to carefully monitor the situation as always. Several brokerage firms are raising their price targets on Alibaba (BABA) this morning. We first identified BABA’s pocket pivot in the 91-92 price area on October 21st. The stock is now up about 25% from that point. Biotech Medivation (MDVN) had a pocket pivot Friday after a strong earnings report. Earnings and sales are soaring, group rank 2. It is now somewhat extended.