[su_spoiler title=”Monday-Wednesday’s Action: Bulls Defend Support” style=”fancy”]
Stocks rallied nicely on Monday which was the first day the market was open since March’s weaker-than-expected jobs report was announced on Good Friday. As a quick review, U.S. employers added 126k new jobs in March, missing estimates for a gain of 250k. On Monday, the ISM Non-Manufacturing Index slid to 56.5 in March, missing estimates for unchanged. This was the latest in a series of weaker-than-expected economic data points which suggests the Fed may not raise rates anytime soon. Remember the Fed has a dual mandate: help the economy and keep inflation near +2%. Right now, the economy remains lackluster at best and deflation is more of a threat than inflation. The Fed has told us (several times) that they remain data-dependent which means that the Fed is likely not in a rush to raise rates anytime soon – considering the data remains tepid at best.
On Tuesday, stocks were up for most of the day but sold off hard before the close to end mixed. M&A news helped transportation giant FedEx (FDX) to buy TNT, the Dutch Delivery company, for $4.8 billion. The acquisition was fueled by a very strong US dollar in recent months and allows FDX to become more competitive in Europe. In other news, Australia’s Central kept its main rate at 2.25% which is there way of erring on the side of “easy money.” In other central bank news, NY Fed President William Dudley said that when the Fed raises rates, the rate hikes will be very slow and that he expects economic growth to continue in the second half of the year. He also stressed that rates will remain low on an absolute basis once the Fed begins raising rates.
Stocks edged higher on Wednesday as Crude oil plunged nearly -6% and the Fed released the minutes from its March 17-18 meeting. The Fed remains divided on when to raise rates. Some FOMC members want to raise rates in June while others want to wait for September (or even longer) and stressed that their decision is based on the “data.” The big news on Wednesday came from China, when the Shanghai Composite ($FXI) surged over +6%. Earnings season officially began after Wed’s close when Alcoa (AA) reported better than-expected first-quarter earnings. It was healthy for the global economy to see the company raise its 2015 global aluminum demand growth forecast to 9% from 7%. [/su_spoiler]
[su_spoiler title=”Thursday-Friday’s Action: Earnings Season Begins” style=”fancy”]
Stocks rallied on Thursday and Friday as investors digested the first round of corporate earnings. In more central bank news, South Korea’s central bank kept interest rates unchanged but cut its growth and inflation forecasts to 3.1% and 0.9%, respectively. Weekly jobless claims were about inline with estimates while wholesale inventories beat estimates. Stocks rallied on Friday after General Electric (GE) sold its real estate portfolio to Blackstone Group (BX) and Wells Fargo (WFC) for $30 billion. General Electric also announced a $50 billion share buy back and the shares rallied nicely on the news. In other news, the Dow Industrials topped 18k and the S&P 500 also broke above 2100.
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[su_spoiler title=”Market Outlook: The Central Bank Put Is Alive And Well” style=”fancy”]
Remember, in bull markets surprises happen to the upside. This has been our primary thesis since the end of 2012. We would be remiss not to note that this very strong bull market is aging (celebrated its 6th anniversary in March 2015) and the last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007). To be clear, the central bank put is very strong and until material damage occurs, the stock market deserves the longer-term bullish benefit of the doubt. As always, keep your losses small and never argue with the tape.
65.6% Of Stocks in the S&P 500 Are Above Their Respective 50 DMA (Market Tends To Turn When This Reading Gets Above 70% or Below 40%) Observation: Readings above 70% usually (not always) correspond with a short term pullback Conversely, reads below 40% usually (not always) correspond with a short term bounce
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[su_spoiler title=”Big Stock List” style=”fancy”]
- AAPL – Bouncing after near perfect pullback into its 50 DMA line as it digests its very strong rally. Itlooks great and looks exactly how it looked in late Oct 2014 or late Jan – right before it blasted off
- EA – Very nice pullback in to its 50 DMA line ahead of earnings.
- FB – Rallied last week after 2-week decline into its 50 DMA line
- FLT – Perfect bounce off 50 DMA line as it setups up perfectly to breakout!
- GOOGL – Positively reversed last week (opened lower but closed higher). Would be healthy to see itbreak above its 50 and 200 DMA lines…
- ILMN – Weak action as sits above its 200 DMA line. A lot of “down” weekly bars which is not ideal
- LNKD – HUGE rally last week helping it jump back above its 50 DMA line ahead of earnings
- SBUX – Perfect bounce right off its 50 DMA line
- TSLA – Very healthy action as this stock “gapped up” last week and closed above its 50 DMA line anddownward trendline
- UA – Huge rally last week as the stock broke out to new highs.
- V – Forming nice little handle ahead of earnings as it consolidates its recent gain. Sitting below 50DMA line
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[su_spoiler title=”19 New Setups” style=”fancy”]
These hand-picked stocks are carefully selected to help with your idea generation and offer you additional setups each week. The setups are based on our proprietary criteria and offer advanced (dotted line) & classic long and short entry points (solid line). Short patterns are typically mirror images of long patterns.
Note: Please Verify All Earnings Dates/Data from Multiple Sources for Every Stock in all our report(s).
Charts Courtesy of Stockcharts.com
AAPL Working Order & Setup: New Early Entry Forming Ahead of Earnings
GDX Working Order & Setup: New Early Entry Forming Ahead of Earnings
OUT Setup: Nice Secondary Buy Point Off 50 DMA Ahead of Earnings
DPS Setup: Nice Early Entry Forming In Flat Base Ahead of Earnings
V Setup – New Early Entry Forming Ahead of Earnings
MA Setup – Early Entry Ahead of Earnings
CMG Setup – New Early Entry Forming Ahead of Earnings
HUBS Setup: Early Entry Forming In Bullish Base-on-Base Pattern
MRKT: IPO Head & Shoulders Bottom Pattern
WIX Setup: Very Nice Accumulation Ahead of Earnings
CDK Setup – New Early Entry In New Base-on-Base Pattern
FSLR Setup: New Early Entry Forming In Cup-with-Handle Pattern
LVS Setup: Nice Early Entry B/O- Watch 200 DMA Line
WYNN Setup: Early Entry Forming In Double Bottom Base
BIDU Setup: Early Entry In Flat Base
YHOO: Early Entry Forming
GMCR: Advanced Entry Forming
EARS: Perched Below Resistance
XLF: Early Entry In Flat Base
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[su_heading style=”modern-1-dark” size=”18″]Strongest Sectors [/su_heading]
[su_heading style=”modern-1-dark” size=”18″]Strongest Groups [/su_heading]
[su_heading style=”modern-1-dark” size=”18″]Strongest Performing Names This Year[/su_heading]
These are the top 20 strongest performing tickers on a year-to-date basis that are trading over $5, average daily volume over 500k and have a market cap >300M (Small cap-Mega Cap)
