Tag Archives: market lab report

Market Lab Report – Premarket Pulse 10/21/15

Major averages fell yesterday on higher volume as the NASDAQ Composite met resistance at its 200dma. Futures are currently higher by about 0.5% which would give the NASDAQ Composite a second try at breaking above its 200-day moving average. Expect more backing and filling as the market digests its gains. The S&P 500 is about 4% off its highs and 1.48% from its 200dma, so while it could continue to trend higher as it approaches new highs, any uptrend beyond a broach into new high ground may be short-lived. This year, rallies into new high ground have fizzled out as the major markets have expressed deep reluctance to continue any meaningful move. Indeed, if you look at a weekly chart of the S&P 500 since QE began in late 2008, you will see a slowing ascent, especially when comparing uptrends between 2013-2014 to uptrends in 2009-2012. And in 2015, this slowing ascent has slowed to, more or less, a flatlining, trendless market. That still makes the US the tallest standing midget as world markets have been in bearish downtrends since mid-2015. Nevertheless, the weight of the slowing global economy as reflected by the bearish stock market charts in China, Europe, UK, and so on will most likely keep a lid on the US stock market achieving any meaningful uptrend beyond old highs.  Profit opportunities in individual stocks should continue to present as they did so at various times this year.   Short-sale target Tesla Motors (TSLA), which we reactivated as a short-sale in our Pre-Market Pulse report of October 1st. has continued to move lower as negative news begins to pile up for the stock. Our current downside target for the stock remains 180.

Market Lab Report – Premarket Pulse 10/20/15

Major averages rose yesterday on lower volume with the NASDAQ Composite a kiss away from its 200-day moving average. Expect a continuation of the tug-o-war between signs of economic strength which determine the future of quantitative easing (QE) and rate hikes: Key variables that can push the market higher: 1) QE 2) Global economic strength – if it is believed this is a sign of a sustainable recovery, the onset of higher rates will be considered a bullish event 3) U.S. economic strength – if it is believed this is a sign of a sustainable recovery, the onset of higher rates will be considered a bullish event Key variables that can push the market lower: 1) Global economic strength – if it is believed this is not sustainable, the onset of higher rates will be considered a bearish event 2) US economic strength – if it is believed this is not sustainable, the onset of higher rates will be considered a bearish event We have been at inflection points on a number of variables this year which accounts for much of the market’s trendless, sideways action. The global economic slowdown, especially in China, created the first correction exceeding -10% that the U.S. market has seen on the S&P 500, since 2011. But such economic slowdowns have central banks fueling markets with additional QE, further kicking the can down the road, and the road is a long one having started in late 2008. But this year’s trendless market action in the U.S. and downtrends in global markets shows QE has a limited lifespan. As always, keep a close eye on your stocks and watch lists. Despite this year’s trendlessness, profit opportunities in stocks have been present as can be seen in this year’s Pocket Pivot and Buyable Gap-Up reports. Of course, a deft hand of taking profits when you have them in context with the stock’s chart relative to itself and to the general market have also been key. Telecom infrastructure company Dycom (DY) had a pocket pivot. Earnings are skyrocketing, sales are accelerating, group rank 7. Supply chain management software company Manhattan Associates (MANH) had a pocket pivot at near breakout point. Pretax margin 28%, ROE 48.5%, consistent and robust earnings and sales, group rank 23.

Market Lab Report – Premarket Pulse 10/19/15

Major averages rose Friday on lower volume, surprising for an options expiration day when volumes tend to trade large. The NASDAQ Composite has broken out above its 50-day moving average but is nearing its 200-day moving average which may serve as resistance. The S&P 500 is further below its own 200-day line, but successfully retested its 50-day moving average last Thursday, bouncing up and off the line on higher volume. China announced GDP growth of 6.9%, the slowest since 2009, despite numerous measures of stimulus by the Chinese government. Growth came in at 7% in both of the first two quarters of this year, matching the country’s target. Weakness in the Chinese economy took down global markets in August, but markets are contextual so today’s number, although under 7%, was above median expectations of 6.8%. The question is when China’s economy will recover. If recovery is further off than expected, today’s disappointing number could pull down markets once again. Futures are currently off about 0.4%.