Tag Archives: market lab report

Market Lab Report – Premarket Pulse 5/5/15

Major averages rose yesterday on lower volume, closing in the lower half of their respective trading ranges. The bounce so far has been on lower volume. Leading stocks are trying to find their floors but bounces have been anemic overall. While this normally would indicate lower lows ahead, the QE-laden environment spurred on by the perpetually sluggish global economy can push major averages higher in baby-step fashion into new highs as we have seen a number of times before. So while we have major averages that are narrowing their respective trading ranges which implies a potential break out to new highs, we also have a market that is struggling to find direction amidst the recessionary overhang despite all the QE being pumped into the system. With the Fed now focused on “data dependence,” the market is now likely to key on each new economic data release, with any movement centered around the strength or weakness of such data. Thus the Fed, by removing any reference to a target date for a future interest rate increase, has served to increase uncertainty, and markets, as we know, generally do not like uncertainty. As always, we remain fluid as markets can change on a dime. Keep stops tight and take profits when you have them. A 3:1 ratio of gains:losses adds up nicely over a number of months.

Market Lab Report – Premarket Pulse 5/4/15

The NASDAQ Composite and S&P 500 bounced off their respective 50-day moving averages on Friday on appreciably lower volume. The number of distribution days remains high. That said, the up-down oscillation in the price of the majors seems to be narrowing which potentially bodes well for an upside breakout to resolve this sideways market that has persisted since December 2014. On the other hand, leaders have had a tough time of things which may imply further down side in the short run. Of course, major averages can tip toe higher as they have done in the past even while leaders struggle to find their footing. Investors should maintain awareness of leading stocks that may be pulling into logical areas of support while keeping an eye out for areas that may benefit from any rotational type of correction in the general market. We have seen a number of standard-issue base breakouts fail, particularly in headline names like Apple (AAPL), Twitter (TWTR), and Facebook (FB), and this speaks to the value of utilizing alternative buy points as stocks come up the right sides of potential new bases. This is the primary long set-up that appears to work in this market, while orthodox buying of obvious base breakouts is far less effective. Thus as the market pulls back investors should be on the lookout for potential emerging leaders showing these types of unorthodox buy points such as roundabout pocket pivots.

Market Lab Report – Premarket Pulse 5/1/15

Major averages fell on higher volume yesterday, closing under their respective 50dmas. Leading stocks continue to sell off. Markets have been trading sideways since December 2014. If they continue their pattern, the market may have one or two more down days then bounce. Of course, sideways markets are the most difficult to time so a move to cash may come quick. Fortunately, the number of actionable names have proven out provided, as we have been advising for quite some time now, that one takes profits in context with the individual stock and overall market conditions and is quick to cut losses. Futures are currently up slightly at the time of this writing. The number of Americans who applied for unemployment benefits last week sank to a 15-year low which reflects the low level of layoffs occurring in the US economy. Of course, this report sparks fear that the Fed may move a step closer to hiking rates. Leading stocks continue to break down in force with LinkedIn (LNKD) getting smashed after-hours yesterday on poor earnings guidance. While one can hope for a bounce in the indexes, the action of individual stocks, including former leading areas like social-networking, bio-tech, and semiconductors, is severe and likely a clue of further weakness to come. Investors should exercise extreme caution.