Tag Archives: market lab report

Market Lab Report – Premarket Pulse 11/3/15

Major averages were up yesterday on lower volume. Once again, they are for the most part approaching all time highs, while the NASDAQ 100 hit a new 15-year high, underscoring the narrow, big-stock leadership in this current environment. The question is whether the indexes will once again resume their trendless ways as they have for most of this year each time they were at or near new highs. Easy money has pushed markets higher since 2009 but it seems a QE-related exhaustion took effect this year as the sloppy uptrend in US markets stalled out. Nevertheless, stock opportunities continue to present themselves but one must be nimble in taking profits in context with the stock’s chart and general market, and of course, quickly cutting any losses. Telecom infrastructure company Dycom (DY) had a pocket pivot. Earnings are skyrocketing, sales are accelerating, group rank 11. Despite several pocket pivots in the stock over recent weeks, it has remained in a flat base as earnings approach later this month. Cosmetic retailer Helen of Troy (HELE) had a pocket pivot. HELE gapped higher on its prior earnings report. It has since traded sideways and is just breaking out of its consolidation. Group rank 32. Cruise line company Norwegian Cruise Lines (NCLH) had a pocket pivot. Earnings and sales are accelerating, group rank 55. Financial software solutions company SS&C Technologies Holdings (SSNC) had a pocket pivot. Sales are strongly accelerating, pretax margin 37.2%, group rank 31. Tesla Motors (TSLA), which we have initiated as a short-sale twice since August, leading to substantial downside each time it failed at its 50-day moving average, is set to announce earnings after the close. Those holding short positions in the stock should consider whether they wish to play “earnings roulette” or bank their profits and wait to see where the stock goes following the report. Otherwise, we maintain our downside target of $180, notwithstanding any rallies that may occur between now and then.

Market Lab Report – Premarket Pulse 11/2/15

Major averages fell Friday on higher volume, further consolidating prior gains, but the action among individual stocks remains mixed. For every stock gapping up on earnings others are blowing apart, such as Chipotle Mexican Grill (CME), which will gap down again this morning after announcing over 40 stores being close due to e. coli infections. European stock markets are trading higher after positive economic news on factory activity. Meanwhile, China’s manufacturing activity contracted once again for the eighth straight month in October sending markets in Asia lower. With central banks continuing to ease monetary policy, markets remain on their QE morphine drip. As we explained on Thursday of last week, economies have never been more connected thus central banks must generally move together when it comes to easy monetary policy. So while US and UK central bank officials may warn of impending rate hikes, this is most likely political jawboning. Expect rates to stay near zero well beyond what central bank officials say, though a token 25 basis point hike would not be surprising which would allow the Federal Reserve to stay closer to script of their claim that a rate hike would occur before the end of this year. While a number of actionable buy signals in the form of pocket pivots and buyable gap-ups have been seen during earnings season, progress has remained tepid for the most part. Thus this does not come across as a market where big money is being made, despite, the sustained rally throughout October. Either it is slow in developing, or it will remain slow as uncertainty over the Fed’s next move dominates, putting the market in a position of reacting to economic news as the December Fed meeting approaches. Meanwhile, investors who elect to test the waters on the long side should simply understand where their stops are, and act on that basis for now.

Market Lab Report – Premarket Pulse 10/30/15

Major averages nudged lower yesterday on lower volume after the prior day’s strong move. The number of actionable stocks has been sound over the past several days which bodes well for the market’s internals. Automotive parts retailer O’Reilly (ORLY) had a buyable gap up on a strong earnings report. ROE 39.1%, earnings and sales are accelerating, group rank 8.