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Date: Thursday, 17 Apr 2014 22:53

Blain here: Final reminder to take our quarterly reader satisfaction survey. Results will be posted next week. Thanks!

With markets closed for Good Friday, stocks finished off a very good week, retracting a decent portion of the losses we had seen in the previous few weeks.  The coast is still not clear thought for major risk taking - but we are seeing some rebounds in the hardest hit areas, specifically internet, biotech, and momentum stocks.  Today the S&P 500 gained 0.14% and NASDAQ 0.23% after both opened in the red with Google and IBM pressured.  Stocks came off their lows after a gauge of manufacturing activity in the Philadelphia region rose to 16.6 in April from 9.0 in March - this was ahead of expectations.  For the week, the S&P 500 added 2.7% and the NASDAQ advanced 2.4%.

The S&P 500 continues to look in better shape than the NASDAQ; with the latter index we really won't know what new pattern it is headed for until we see it break over the blue downtrend line.

spx

nasdaq

We noted the NYSE McClellan Oscillator was in the very phase of oversold last week - today it has rallied all the way back to a positive reading.

nymo

We'll use MarketSmith charts today to look at individual names:

Chinese microblogger Weibo made its market debut on the Nasdaq, with shares of the Twitter rival lately trading well above its initial public offering at $17 per share.  Here is a 5 minute chart for the name:

WB

Its parent company Sina (SINA) had a very good day after a dreadful month.

sina

In the earning sphere we had a significant drop in Chipotle Mexican Grill (CMG) but not because of a bad quarter.  Overall revenue rose 24% vs. a year earlier to $904.2 million, above consensus estimates for $873 million. It was the biggest sales gain in two years and continued a long run of double-digit increases.Chipotle's same-store sales surged 13.4% — even better than the prior quarter's 9.3% gain.  The stock was hurt due to a proposed price hike coming to offset rising costs:

The Denver-based burrito restaurateur will begin hiking prices in the mid-single digits by the end of the current quarter, CFO Jack Hartung said on a conference call following Chipotle's Q1 earnings release Thursday.  However, rising costs for beef, avocados and cheese tamped down Chipotle's Q1 earnings, which came in at $2.64 a share. That was up from $2.35 a year earlier but below views for $2.86. The restaurant-level operating margin fell 40 basis points from the prior year to 25.9%.

cmg

Morgan Stanley (MS) rose after the financial services company reported a rise in first-quarter earnings.

ms

General Electric (GE) posted a 12 percent rise in overall industrial profits and its stock gained.

ge

During the correction we mentioned some stocks that held in very well - one was Taiwan Semiconductor (TSM).  Usually stocks that do well during a correction have strong performances once the market stabilizes, so today we saw a nice launch.

tsm

Another name that held up well was Southwestern Energy (SWN) which likewise had nice action today.

SWN

Have a good long weekend and Happy Easter.

Original post: STTG Market Recap April 17, 2014

Author: "Mark Hanna" Tags: "Market Recaps, MarketSmith, SINA, GE, CM..."
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Date: Wednesday, 16 Apr 2014 23:02

Blain here: If you have not yet taken our 30 second reader survey, we'd really appreciate your feedback. Thank you in advance.

We missed an interesting session yesterday with our quarterly survey so it is worth mentioning it today.   The market was very volatile yesterday but sometimes that can cause a shakeout of sorts when it comes at the end of a correction.  Also the NASDAQ hit a key moving average - the 200 day - which if nothing else is usually a place for momentum to reverse in the near term.  Was that the end of the correction?  Of course we never know until after the fact but creating a new low and then surging off it can sometimes signal a key reversal.  As for today, the Federal Reserve continues to try to massage the market's nerves and Janet Yellen helped lift spirits, pushing the S&P500 up 1.05% and the NASDAQ 1.29%.

In her second public speech since taking the Fed's helm, Yellen was careful not to predict when interest rates would rise from near zero. Instead, she stressed the decision would hinge on healing in the labor market and on how briskly inflation rises toward the Fed's 2 percent goal.  Yellen reiterated her intention to support the recovery even as the labor market improves, with the 6.7 percent unemployment rate in March still a percentage point higher than the central bank's projection of full employment.

Outside of Yellen there was some supportive economic data:

Economic data had U.S. manufacturing output rising for a second straight month in March, with factory production up 0.5 percent last month and overall industrial production climbing 0.7 percent, beating expectations.  The Fed's Beige Book, a report of anecdotal information on business activity, showed that activity picked up in most regions in recent weeks.

Looking at the longer term indexes the NASDAQ chart shows you exactly why we bounced where we bounced yesterday.  It wasn't a random event like those who don't follow technicals might think; instead it was a perfect kiss off the 200 day moving average.  While it is too soon to call any sort of bottom for this index, clearing the downtrending line in blue would help.

nasdaq

The S&P 500 continues to be in far better shape throughout this correction.

spx

After hours we had reports tonight from both IBM (IBM) and Google (GOOG) - both are being hit in after hours as we you see below in the charts from thinkorswim by TD Ameritrade.  Hence there might be some pressure tomorrow at the open, at least in tech stocks.  That said buyers have been coming in for Google so it is well off its lows as you can see in the chart.

Google delivered quarterly earnings and revenue that fell short of analysts' expectations on Wednesday, as ad pricing continued to weaken. The company posted first-quarter earnings excluding items of $6.27 per share, up from $6 a share in the year-earlier period. Revenue increased by 19 percent to $15.42 billion from $12.95 billion a year ago.  Analysts had expected the company to report earnings excluding items of $6.40 a share on $15.52 billion in revenue, according to a consensus estimate from Thomson Reuters.  The number of "paid clicks'' climbed by 26 percent year-on-year in the first quarter, while the average "cost per click'' generated from the ads dropped 9 percent from a year ago.

goog

IBM Corp reported its lowest quarterly revenue in five years as the company struggles with falling demand for its storage and server products. Total revenue fell 4 percent to $22.5 billion in the first quarter, below analysts' average estimate of $22.91 billion.   Revenue from the hardware business, which includes servers and systems storage, plunged 23 percent to $2.4 billion.

ibm

 

Yahoo (YHOO) surged after the company gave a tepid revenue outlook; however revenue growth accelerated in the last quarter of 2013 for Alibaba, in which Yahoo holds a 24 percent stake.

yhoo

Intel (INTC) shares briefly hit their highest since June 2012 a day after the chipmaker posted a quarterly net profit that exceeded Wall Street's estimates.  This was a very strong chart going into earnings - almost with no dip during the correction!

intc

 

Just a heads up - tomorrow along with a raft of earning reports comes the widely anticipated IPO of Weibo, which is the "Twitter of China".

Original post: STTG Market Recap April 16, 2014

Author: "Mark Hanna" Tags: "Market Recaps, GOOG, ibm, INTC, YHOO, YH..."
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Date: Tuesday, 15 Apr 2014 15:00

With the 1st Quarter of 2014 now behind us, it is time to take a break from our daily market recaps to conduct our next StockTradingToGo (STTG) Reader Satisfaction Survey.

For newer readers, our quarterly surveys are only three questions and it is extremely important to participate.

Your feedback ensures we continue to deliver the best possible commentary and analysis each evening, so please help us keep our free blog great and take the survey now,

Thank you in advance for sharing your opinion. Market Recaps will resume tomorrow.

Original post: STTG Q1 2014 Reader Survey

Author: "Blain Reinkensmeyer" Tags: "Surveys, STTG"
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Date: Monday, 14 Apr 2014 23:14

Blain here:  Hi everyone, just wanted to give you a notice that we will be doing our quarterly STTG reader survey tomorrow so there will be no market recap. As always, it is just a few questions and we really appreciate hearing from you on how we are doing. See you then!

Indexes bounced back from oversold levels but until proven otherwise this is just the natural ebb and flow of a downturn.   The S&P 500 gained 0.82% and the NASDAQ continues to lag, gaining 0.57%.  There was a key retail sales report which lifted spirits but truthfully generally when a market gets too extreme short term one way or the other any excuse to move in the other direction for a short period of time will do.

The Commerce Department said retail sales increased 1.1 percent last month, the biggest gain since September 2012, with receipts rising in nearly all categories.  February's increase was raised to 0.7 percent from a previously reported 0.3 percent. Economists had expected retail sales, which account for a third of consumer spending, to advance only 0.8 percent last month.

With the indexes there is not much change here despite the bounce.  Until a change in trend appears, patience is a virtue.

spx

nasdaq

It is worth pointing out the 10 year Treasury yield - we are near the 2.60% level that has provided a floor repeatedly in 2014.  Yields tend to dive when people rush into bonds during periods of market turmoil... or if they think the economy is slowing down.  If we see this 2.60% level broken for any period of time it would be a cautionary signal.  If we see a bounce from here, it would just be business as usual.

tnx

There will be a lot of interesting earnings later this week so we'll highlight some key ones.  For today, the main one was Citigroup (C) which reported quarterly earnings that beat expectations, aided by a smaller loss on its troubled assets even as its revenue declined.   However, not a very nice chart for now.

c

There are not that many places where we can see strength outside of consumer staples and utilities but here are a few - Kodiak Oil & Gas (KOG) and Steel Dynamics (STLD) - these are both resource stocks obviously.

kog

stld

Taiwan Semiconductor (TSM) is another - as we highlighted Friday with the Brazilian stocks and charts of the emerging markets ETF over the past few weeks, we have seen buyers rotate out to these type of markets.

tsm

Bespoke Investment Group had an interesting blurb today about Tuesdays in 2014 - while this is not a long term trend of any sort it is an interesting observation:

If it weren’t for Tuesdays this year, the S&P 500 would be doing a whole lot worse than it already is. Below is a look at the average change of the S&P 500 by weekday this year. As shown, Tuesday is the only trading day of the week that has averaged gains, and the Tuesday gain has been significant at +0.55%. And it’s not just one big up Tuesday that is causing the average Tuesday return to be so high this year. As shown in the table below, there have been 14 Tuesdays so far this year, and the S&P has been up on 12 of them. Since March 18th, in the face of a very weak tape, the last four Tuesdays have all been higher. Hopefully for market bulls, the Tuesday trade holds up again tomorrow.

Original post: STTG Market Recap April 14, 2014

Author: "Mark Hanna" Tags: "Bespoke, Market Recaps, C, KOG, STLD, TN..."
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Date: Friday, 11 Apr 2014 23:14

The selloff continued Friday as we hit short term oversold levels.   The S&P 500 fell 0.95% and the NASDAQ 1.34%.  For the week, the S&P 500 fell 2.6% and the Nasdaq lost 3.1%, the biggest weekly decline for both indexes since June 2012.  The market ignored a U.S. consumer sentiment reading that was a nine month high, with the Thomson Reuters/University of Michigan's preliminary April read on confidence coming in at 82.6 versus 80.0 in March.

It is worth showing the longer term charts for the indexes for the second time this week to show where we are, and why it matters.   As we noted this very long term trend on the NASDAQ finally broke a pattern it has been repeating last week.  With that change in pattern we are quickly looking at the 200 day moving average which the index has not sniffed in a long time.

nasdaq

With the S&P 500 the two purple trend line are easier to comprehend on the long term chart - the one that is higher on the page now connected the major lows of last summer/fall.  That was where the market rallied to Wednesday on an oversold bounce before being stymied.    The lower trend line (which is more horizontal) connects the highs of the summer/early fall.  It was punctured briefly in early February but a sharp V shaped rally happened right after.  A retest of this level is just above 1800.

spx

Here is the NYSE McClellan Oscillator which is in oversold stage.  However there are really two levels of oversold - the main one in the -40 to -60 range which hits a handful of times in a year.  But if that level breaks, usually you have a flush of panic selling which can take it down to the -90 range.  That might happen just a few times a year - the last time was summer 2013.

nymo

The volatility index is creeping back into the upper teens - lately a reading around 20+ indicates a near term bottom.

vix

Bellweather financial JPMorgan (JPM) posted lousy results this morning which turned the mood sour.

jpm

Shares of Herbalife (HLF) fell 1after the Financial Times creporterd the U.S. Department of Justice and the FBI were investigating the multi-level marketing company that hedge fund manager Bill Ackman has alleged is a pyramid scheme.  After burning short sellers last year who followed Ackman into the stock, we see a clear downtrend in 2014 with a series of lower highs.

hlf

Scanning the stocks holding up well today - aside from the type of names we have been discussing this week such as consumer staples and large cap oil such as Conoco, quite a few Brazilian stocks are moving well - there are not that many on U.S. exchanges but their main energy company Petrobras (PBR) and banks such as Banco Bradesco (BBD) are doing well.  We have noted that emerging markets changed their pattern a few weeks ago so if you want to take on risk, and like buying relative strength it seems you have to go outside the U.S. right now.  That said these particular names have had big runs in a short amount of time.

bbd pbr

Have a good weekend and we'll see you next week.

Original post: STTG Market Recap April 11, 2014

Author: "Mark Hanna" Tags: "Market Recaps, BBD, HLF, JPM, PBR, VIX, ..."
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Date: Thursday, 10 Apr 2014 22:04

While many in the financial media were cheering yesterday's gains, we told readers last week that there had been a major trend change, specifically in the NASDAQ and the recent volatility just meant random movement day to day.  In fact our quote yesterday was:

We are seeing an increase in day to day volatility and random movement based on headlines so it remains a time to be cautious until we settle into a new pattern.

Hopefully this cautious stance since last week has helped you look at the market at a different light which is certainly difficult to do when all it seems to do nowadays is go up or sideways.   There will be down periods eventually no matter what the Federal Reserve wants or does, and that is a time to raise cash and reduce your risk exposure.  This is one of those times.   Today the S&P 500 sunk 2.09% and the NASDAQ cratered 3.10%.   This was the worst day for the NASDAQ since late 2011.  Now with this type of drop we will eventually see some sharp rally, perhaps for 2-3 days, and perhaps as early as next week but until a new pattern emerges it won't mean it's a time to go guns blazing back into the market.

The S&P 500 continues to hold up better then the NASDAQ because some of the type of stocks people are hiding in - consumer staples and utilities are the type found in the S&P 500.  Meanwhile massive damage continues to hit the biotech space which has caused the NASDAQ to perform much worse lately.   The S&P 500 yesterday rallied back to the upper trend line but obviously was rejected from that level today....and is quickly back to its 100 day moving average.

spx

nasdaq

Here is that biotech index - as mentioned the past few days, on up days in a volatile market these type of stocks can rally the best but unless you are a short term trader who is great at catching a falling knife (which is almost no one) it is best to wait for these stocks to return to good looking charts or at least make a change in trend like emerging markets have lately.  The biotetch ETF (IBB) is now down to its 200 day moving average.

ibb

Meanwhile a lot of hot sectors such as 3D printing stocks and internet stocks were horrid today but have been bad for quite a while now.  For example Yelp (YELP) had been bouncing off its 200 day moving average a few times but today closed below it for the first time in ages.

yelp

3D Systems (DDD) broke below its 200 day moving average back in mid March - you can see why some people like to short against that level.  It has been a great spot in this particular name to utilize as a stop out for a trade.... usually it does not work out this easy but you can see the stock has been so weak it has been rejected by the downward trending 50 day moving average the past month on each bounce attempt.

ddd

A lot of usual suspects - Amazon, Facebook, Netflix, Baidu took serious hits but we have been warning on these momentum names for weeks - they have been weak.

On the plus side, congrats to anyone holding McDonalds (MCD) which ... wait for it... had a nice chart going into today.

mcd

And as we showed with Kellogg (K) yesterday, Colgate (COL) had a good day - these are the definition of safety stocks.

cl

So larger picture there are small pockets of strength but they are the "wrong" type of stocks for one to be short term bullish... we want to see a return to "growth" type of stocks, not "bunker mentality" stocks.

Original post: STTG Market Recap April 10, 2014

Author: "Mark Hanna" Tags: "Market Recaps, CL, DDD, MCD, YELP, DDD, ..."
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Date: Wednesday, 09 Apr 2014 23:36

Dovish commentary in the Federal Reserve minutes encouraged buyers to show up in droves as worries that the Fed might tighten in early 2015 were pushed off the table.   The S&P 500 jumped 1.09% and the NASDAQ 1.72%.  We are seeing an increase in day to day volatility and random movement based on headlines so it remains a time to be cautious until we settle into a new pattern.

The members of the Federal Open Market Committee agreed unanimously in March that a 6.5 percent unemployment target for raising interest rates was "outdated" and should be removed, according to meeting minutes.  Previously, the Fed had indicated that a drop in the unemployment rate could trigger the beginning of rate increases, provided it accompanied a 2.5 percent inflation rate. But with the jobless number nearing the target and inflation well short, the Fed decided to change gears.  Overall, the minutes portray a committee set on keeping interest rates low for the foreseeable future, despite some market rumblings after the meeting.

Here are the longer term charts for the indexes - let's watch this NASDAQ chart in particular as we have had a change in pattern for the first time in a year and a half.

spx

nasdaq

Today was a second day a lot of beaten down stocks bounced - see for example Celgene (CELG) in the biotech space, and Facebook (FB).

celg

fb

Meanwhile conservative stocks such as Kellogg (K) continue to do well.

k

Oil stocks have held up well of late as well as we noted the past 2 weeks; see oil giant Conoco (COP).

cop

Original post: STTG Market Recap April 9, 2014

Author: "Mark Hanna" Tags: "Market Recaps, CELG, COP, FB, K, FB, COP..."
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Date: Tuesday, 08 Apr 2014 23:25

The very oversold NASDAQ led stocks up Tuesday but the S&P 500 lagged in a relative sense; this makes sense as the NASDAQ has taken much more damage in the past few weeks.   In fact the NASDAQ had its worst 3 day performance since 2011 coming into the day. The S&P 500 gained 0.38% and NASDAQ 0.81%.

Right now it remains a time for cautious outlook on the market.  The NASDAQ has broken a roughly 1.5 year pattern so we have to let a new pattern develop.  At the current time that index is creating a series of lower highs on each bounce so that is the first step in reversing the near term downtrend.   The damage is certainly less severe as more conservative parts of the market have held up but with damage in momentum stocks, biotech stocks, and small caps lately it is not a market for being aggressive.

spx

nasdaq

We have been highlighting the emerging markets the past few weeks and it remains an area where money seems to be rotating into - here is the ETF which is acting quite well after month of pounding.

eem

Meanwhile in the U.S. the two most conservative sectors - consumer staples and utilities are where money is flowing.

xlp

xlu

A lot of the stocks bouncing today were those who had been hit the hardest so if you like to buy companies whose charts are strong these are not the names - but if you are a short term trader trying to catch a falling knife names like LinkedIn (LNKD) or Baidu.com (BIDU) represents what was strongest today.  Of course catching a falling knife is never easy because unless your timing is perfect you can lose a lot quickly.

lnkd bidu

Original post: STTG Market Recap April 8, 2014

Author: "Mark Hanna" Tags: "Market Recaps, BIDU, EEM, LNKD, XLP, XLU..."
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Date: Monday, 07 Apr 2014 22:49

Stocks continued recent weakness Monday as the S&P 500 fell 1.08% and the NASDAQ 1.16%.   This pushed the S&P 500 into the red for the year.   Things looked much brighter a week ago at this time but please note how we highlighted a weird situation where the utility stocks (which are safety stocks) were rallying at the same time as some high growth areas such as industrials and technology.

We mentioned Friday that it was important to note the change in the NASDAQ pattern.  We have said repeatedly the past year as rally after rally started right after the NASDAQ broke the lower trend line for a few days that eventually this obvious pattern would break.  But no one knew when eventually would be.  Well Friday was "eventually".  For the first time after breaking the lower trendline in the index chart we did not see a V shaped rally to take the NASDAQ back near or to the upper trendline.  So it is very important to note these changes.   The failure of said rally has now led to a follow through day to the downside so the caution was warranted.

spx

nasdaq

Usually we post the NYSE McClellan Oscillator but since we have seen such a divergence between the NASDAQ and S&P 500 we will post the NASDAQ McClellan Oscillator to show we are now deeply oversold.

namo

After falling through the fall on Yellen's "nice words" early last week, we've seen a spike in volatility.

vix

Let's take a look at some charts from Dan Zanger's weekend newsletter.  (Will not reflect today's prices)  Please note he uses a different ETF for the biotech stocks (a levered ETF) than we do, but same idea of very bad action for 3 weeks.    There have been momentum stock breakdowns all over the place which he notes, just as we have.

amzn   fb  nflx

biib

 

And here is his view on the S&P 500 - a false breakout.  Now this sometimes leads to brutal reversals and sometimes it doesn't lead to much but you have to be consistent in your approach.  Either respect all of them and raise cash when they happen or respect none of them and open yourself up to the times they manifest in much larger selloffs.

spx

Original post: STTG Market Recap April 7, 2014

Author: "Mark Hanna" Tags: "Dan Zanger, Market Recaps, AMZN, BIB, FB..."
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Date: Friday, 04 Apr 2014 22:37

Friday was a reversal of fortune session.   A solid jobs report initially had people pleased, but biotech / momentum stock selling led to selling that did not relent.  Indexes finished near sessions lows as the NASDAQ continues to be the weak sister, down a whopping 2.6% to the S&P 500's 1.25% drop.   If you want an interesting stat, this is the first jobs report Friday the market has been down in a year.

The U.S. created 192,000 new jobs in March after a gain of 197,000 in February, according to the Labor Department. The unemployment rate was unchanged at 6.7 percent. Economists polled by Reuters had expected employment to increase 200,000 last month and the unemployment rate to dip to 6.6 percent.  The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, hit a six-month high of 63.2 percent.

The S&P 500 fell right back to this upper trend line in purple - almost perfectly.  The NASDAQ - let us note - has finally done something new for the first time in a year and a half.  Each time we broke this purple trend line at the bottom part of its channel we've immediately seen a V shaped rally over the ensuing weeks.  This is the first time that did not happen so this could be very important.

spx

nasdaq

We mentioned Wednesday that Tesla (TSLA), *if* it could hold this breakout could be ready for a new leg up.  Obviously today was a failure of that breakout so for short term traders, it was a day to stop out near $220 and re-assess.

tsla

Biotech continued its very bad action of the past month+.

ibb

 

 

Other momentum names such as Facebook (FB) and Priceline (PCLN) took bit hits.

fb

pcln

If you have been following the high frequency trading story this week, with Michael Lewis and his new book here is an infographic on what happens to your order when you hit "buy".

info

Next week we will begin a new earnings season and all the volatility that comes with that.  Have a good weekend.

Original post: STTG Market Recap April 4, 2014

Author: "Mark Hanna" Tags: "Market Recaps, FB, IBB, PCLN, TSLA, TSLA..."
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Date: Thursday, 03 Apr 2014 22:37

Indexes sold off a bit Thursday after a four day rally, ahead of Friday's labor data from the government.  The S&P 500 fell 0.11% and the NASDAQ 0.91% as weak biotech stocks hit again.   They key economic report of the day was the Institute for Supply Management's service sector index rising to 53.1 in March, slightly below expectations for a reading of 53.5 but ahead of the February read of 51.6.  This continued the "slowdown in economic data past few months was weather related" theme.  Overseas, the European Central Bank President Mario Draghi said the central bank discussed a series of unconventional policy measures, including quantitative easing, at its latest policy meeting.

spx nasdaq

Let's take a quick look at some major sectors.  First and foremost are the energy stocks which are really moving; you can see this as expressed in the ETF for the group which is quite overbought (XLE).

xle

We have two growth sectors acting quite well - industrials (XLI) and technology (XLK)...

xli

xlk

... usually very conservative groups like consumer staples (XLP) are not rallying at the same time, but that is the current situation.

xlp

The strength in technology is helping offset the continued weakness in biotech which was a leading cause for NASDAQ's large under performance today.

ibb

Original post: STTG Market Recap April 3, 2014

Author: "Mark Hanna" Tags: "Market Recaps, IBB, XLE, XLI, XLK, XLP, ..."
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Date: Wednesday, 02 Apr 2014 21:17

Stocks continued to chug along with a 4th day of gains after Janet Yellen fired the cannons Monday over the market saying easy money will continue longer than the market read into her post meeting comments.  The S&P 500 added 0.29% and the NASDAQ 0.20%.   In economic news:

U.S. private employers added 191,000 workers in March, according to the ADP National Employment Report. Economists surveyed by Reuters likely showed a gain of 195,000 jobs.  The ADP report came ahead of the monthly government jobs report, due Friday. Economists polled by Reuters expect a gain of 197,000 new jobs in March.

We'll look at the longer term charts today - right now the NASDAQ appears ready to pull off the same stunt it has been doing for a year and a half... break the bottom of its long term trendline for 2-5 sessions than a strong bounce.   The S&P 500 held up very well while the NASDAQ was correcting and is at all time highs.

spx

nasdaq

We've seen the volatility index drop substantially the last few sessions - quite a drop from last Thursday to today.

vix

Tesla Motors (TSLA) had a nice breakout session, from a downtrend that lasted about a month.   If it can hold this breakout in the next few days it could be ready to start a new leg up.

tsla

Also a very nice breakout in Caterpillar (CAT) today - note how it barely gave anything back during the weakness we saw of late.

cat

Macy's (M) is very similar to CAT; almost no pullback during recent weakness and now off to the races.

m

Yelp (YELP) continues its recent weakness.  It had a nice rebound session yesterday but gave it all up today as the Federal Trade Commission revealed that it had received over 2,000 complaints about the company over the last five years.

yelp

FYI:  Internet giant Google split its stock Wednesday. Class A shares will trade under a new ticker symbol "GOOGL" and the other, Class C, will trade under "GOOG." This now means the S&P 500 will technically have 501 components (though it will still have only 500 companies).

Here is an interesting tidbit about yesterday's 52 week high in the S&P 500 from SentimenTrader:

The S&P 500 closed at a new 52-week high on Tuesday, but only 36 of the index's components (fewer than 8%) did so according to Bloomberg data. When the S&P reached a 52-week high in May 2013, nearly 40% of components went along for the ride. In the past decade, of the 10 times we've seen fewer than 8% of components reaching a 52-week high along with the S&P, only 2 managed to hold onto any further gains over the ensuing days, weeks and months (in September 2006 and January 2013).

Original post: STTG Market Recap April 2, 2014

Author: "Mark Hanna" Tags: "Market Recaps, SentimenTrader, CAT, M, T..."
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Date: Wednesday, 02 Apr 2014 15:41

In my never ending quest to find the best investor tools and services, a fellow STTG'r (thanks Max!) recently brought Briefing.com to my attention.

I've always been aware of Briefing because the service is integrating into numerous online stock broker news feeds. What I didn't realize was that the service is far more in depth than what the brokers offered.

The Service

Briefing.com is all about live market analysis, plain and simple. Their goal is to provide the most important and impactful pieces of news you need to know each day. The service has been around for over 20 years and includes a team of over 30 financial analysts providing 24/7 market coverage.

Originally when I was setup with access to conduct this review, I was overwhelmed by the vast depth of analysis. I had Mark Strelzin, Director of Institutional Sales, give me a walk through of the client area, and the site quickly came together thereafter (I highly recommend doing the same if you are considering the service or are a new client).

Real-Time Analysis

The backbone of the service is the Dual in Play window which displays two live analysis streams, both of which are completely customizable.

Each column is independent of the other and streams real-time stories. You filter each stream by either a custom portfolio / watch list you create or by a variety of topics such as Earnings, IPOs, News, Options, Technical Analysis, Top Events, and more.

Briefing dual in play

For my setup, I made a custom portfolio of just the Biotech sector to monitor on the left column, and on the right column I filtered to just see the Trading Calls, ie stock picks, provided by Briefing trading staff (Trading Calls available only with the Trader service, more info below).

The yellow highlighted rows denote a Trader service story. Hover over any story to quickly read the full notes, or click the "P" park button to save it for later.

I quickly found myself leaving the Dual In Play window open on one of my six monitors throughout the day, keeping an eye on the market action that mattered most to me.

To see a story stream for a specific stock, you click the ticker symbol or search the ticker in the upper right corner. For example, Intuitive Surgical (ISRG) had a new product, the da Vinci Xi Surgical System, receive FDA approval. I saw the news in the pre hours in my Briefing Live in Play stream, pulled up the ticker in my trading platform, watched it closely then traded the stock long, grabbing some shares at $478 after the stock pulled back in the morning.

The rest of the day, I simply monitored the ticker for any other news. If it weren't for Briefing, I could have missed the story completely or caught it later on in the day through another service, thus missing my buy opportunity.

Briefing ISRG quote

 

Research and Analysis

Real-time analysis aside, Briefing also offers idea generation research based on fundamental and technical analysis. For example, the Emerging Growth Stocks screen, "Combines fundamental analysis and quantitative screens to uncover small, fast-growing companies that have the potential to become market leaders."

Each screen not only provides in depth analysis on individual names, breaking down the stories and fundamentals of each company, but also includes rankings as well. Full archives allow you quick access to past research you might have missed.

Briefing emerging growth archives

One of my favorite screens quickly became The Next Big Thing which provides "Analysis of upcoming IPOs and spin-offs, as well as secondary plays on highly-anticipated new issues."

Each stock featured here includes deep analysis into the company, providing you everything you need to know to prepare for IPO day. Here is the overview info for Grubhub (GRUB), which is getting ready for its debut on April 4th.

Briefing next big thing GRUB

Along with this, several thousand words of research accompanied by a Financials & Valuation chart alongside a IPO Grading Category summary chart.

All in all, for those who are not active traders, these screens serve as a great resource for potential long term picks. Each screen can also be subscribed to by email, so anytime there is an update, you are automatically notified.

Other Features

Alongside the variety of live analysis tools and screens, Briefing also includes research via its perspective columns. Subscribers can read commentary based on the broader market, individual stocks, or the economy. There are 14 in total with most being updated once per week.

If this isn't enough to keep you busy, Briefing also includes up to date calenders of everything you need to know, from earnings to upgrades/downgrades, splits, economic events, and more.

Briefing economic calender

Subscriptions

Briefing.com offers three subscription services: Briefing In Play, Briefing In Play Plus, and Briefing Trader.

The pricing is as of follows:

  • Briefing In Play: $50 per month or $480 per year
  • Briefing In Play Plus: $75 per month or $720 per year
  • Briefing Trader: $300 per month or $3300 per year

The comparison chart below does a good job of explaining the differences (click to view the full comparison chart). The key reason why there is such a jump in price between In Play Plus and Trader is Trader includes all the live stock picks from the staff traders.

Subscriptions comparison

Final Thoughts

Having used Briefing.com now for close to a month, I can see why the service has been around over 20 years and holds such a strong reputation.

The quality, depth, and variety of information is excellent. The real-time analysis is an invaluable asset for any active trader, and the screens alongside research columns offer longer term investors quality idea generation.

There is a lot of bang for the buck, and I certainly recommend the service. That said, to justify the Briefing Trader subscription, you really need to be a in tune with the markets and trading professionally. I wouldn't recommend it for the casual investor, and instead would recommend the Briefing In Play Plus subscription.

To sign up for a free trial, use this link. If you'd like a walk through of the site like I had, email me and I will have one set one up for you.

Review Disclosure: Briefing.com provided me a Briefing Trader account so I could conduct this Review. I was not compensated in any way, and as of the time of publishing, I am not being compensated for any new subscriptions I refer. As always, these are my honest thoughts and opinion.

 

Original post: Briefing.com Market Analysis Subscriptions Review

Author: "Blain Reinkensmeyer" Tags: "Reviews, ISRG, GRUB"
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Date: Tuesday, 01 Apr 2014 23:58

The S&P 500 gained 0.70% and the NASDAQ 1.64% as the market tries to put behind ta first quarter where stocks did not go anywhere.  Positive manufacturing data helped lift spirits even though it missed expectations.  Some after effects from yesterday's dovish Janet Yellen remarks also were probably responsible.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.7 in March, which was up slightly from February's read of 53.2 but below the expected 54.0 reading in a Reuters poll.

As we mentioned yesterday we are at an interesting spot as the S&P 500 remains in great shape but the NASDAQ actually broke the bottom of a year and a half channel.  For bulls, the positive is whenever the NASDAQ breaks said channel it tends to reverse 180 degrees  and surge higher so if this is about to happen again the next few weeks should be positive.

spx nasdaq

We highlighted emerging markets via the ETF EEM last Friday, they continue to surge.

eem

Ford (F) rallied sharply today on good monthly sales data; it might also be helped near term by the recalls at General Motors (GM).

f

Intuitive Surgical Inc (ISRG) jumped after the U.S. Food and Drug Administration gave marketing clearance for the company's da Vinci Xi Surgical System.

isrg

Netflix (NFLX) - which has dropped some $100+ in a month bounced from very oversold conditions.

nflx

Original post: STTG Market Recap April 1, 2014

Author: "Mark Hanna" Tags: "Market Recaps, EEM, F, ISRG, NFLX, NFLX,..."
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Date: Monday, 31 Mar 2014 23:19

Stocks ended a volatile first quarter with gains, to push the first quarter for the S&P 500 into the green.  The S&P 500 gained 0.79% and the NASDAQ 1.04%.   Stocks jumped right at the outset as Janet Yellen goosed the market with dovish comments that offset her hawkish commentary after the last Federal Reserve meeting.    We have a lot of economic activity this week including ISM Manufacturing Tuesday, ISM Non Manufacturing Thursday, and the monthly employment data Friday.

The job market in some ways is tougher now than in any recession, Yellen said at a speech in Chicago. She added the Fed's "extraordinary commitment," in the form of massive bond-buying and ultra-low interest rates, is "still needed, and will be for some time."

We have quite a dichotomy happening in the indexes - the S&P 500 looks very solid and barely gave anything back during this recent dip while the biotech and momentum stocks were smacked around quite a bit in the past week, hurting the NASDAQ.   Generally the two indexes will move more in concert.

spx

nasdaq

Biogen (BIIB) - one of those hard hit biotech companies - climbed after the company won U.S. approval for its long-acting hemophilia B treatment Alprolix, according to the FDA.  Friday was not a bad area to take a stab at this sort of company for a shorter term bounce as it was near term oversold and fallen down to its 100 day moving average.

biib

Gold has come in a bit the past few weeks after a great start to 2014.  With that the always volatile gold mining stocks have been hit quite hard; here is the ETF for their sector: GDX.

gdx

One big cap technology stock that has completely ignored the pullback in the NASDAQ is Oracle (ORCL).   Today the company announced it was unveiling the new MySQL Development Milestone 5.7.4 for the popular open source relational database management system (RDMS) MySQL.

orcl

Alcoa (AA) is not usually a name to take much note of but this aluminum producer has an interesting pattern - a very long narrow base and then we saw a breakout on good volume last Thursday.  After a reversal Friday that did not puncture the breakout area, we saw nice follow through today.

aa

Bespoke Premium has an interesting piece out stating that March/April is the best 2 month period in the market, so with a not so great March maybe the market will do some catching up in April if history is any precedent.

Historically, March and April have been the best two-month combo for the market. But after a March that saw the market go nowhere, bulls are hoping April makes up for the sideways action.

Over the last 100 years, the Dow has averaged a gain of 1.29% in April with positive returns 57% of the time. Over the last 50 and 20 years is where the April returns really stand out. As shown below, the Dow has averaged a gain of 2.21% in April over the last 50 years, and the index has averaged an April gain of 2.71% over the last 20 years. Over both time periods, April has been by far the best month of the year for the market. Heading into April, seasonality couldn’t be more on the bulls’ side.
  Bespoke

Original post: STTG Market Recap March 31, 2014

Author: "Mark Hanna" Tags: "Bespoke, Market Recaps, AA, BIIB, GDX, O..."
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Date: Friday, 28 Mar 2014 21:44

Stocks shot out of the cannon early Friday on some positive economic data plus hopes there would be more economic stimulus coming out of China and Europe, but gave back much of those gains later in the day as the NASDAQ continues to be a source of weakness.   The S&P 500 added 0.46% while the NASDAQ gained 0.11%.

A report Friday had consumer spending rising 0.3 percent in February after climbing by a revised 0.2 percent in January. Income rose 0.3 percent last month after rising by the same margin in January.  The Thomson Reuters/University of Michigan index found consumer sentiment hit 80 in March, just below an 80.5 estimate.

Overseas:

In a speech reported by state media on Friday, China's premier indicated the Beijing government was prepared to take action to bolster the world's second biggest economy, saying the government would gradually roll out targeted measures to help economic activity.

This is day 3 the NASDAQ is below its long term lower trend line.  The S&P 500 on the other hand came back over its upper intermediate term trend line after a 1 day break.

spx

nasdaq

One group work pointing out is the troubled emerging markets.  This group has been under pressure for most of 2014 but earlier this week broke a longer term downtrend.  If we can continue to see this sort of follow through we might have a change in trend, although in the near term we've seen quite a strong pop. Here is the ETF for the group.

eem

Tesla Motors (TSLA) jumped after the National Highway Traffic Safety Administration said it had closed its investigation into fire accidents of the electric-car maker's Model S vehicles, but the agency added its move did not mean it had found a safety-related defect did not exist.  Tesla has already had an amazing year, rallying 100% before this recent pullback; we are currently in a channel downward; usually moves out of this sort of channel/flag can be powerful to the upside.

tsla

As mentioned yesterday we are seeing a rotation into energy stocks - large cap Halliburton (HAL) is an example.

hal

Biotechs continue to be in a world of hurt however - see Gilead Sciences (GILD) which has yet to find a floor.

gild

Per SentimenTrader the bullish outlook continues to be extreme:

Active investment managers have continued their extreme exposure to stocks. Even the most bearish manager is net long stocks, according to the National Association of Active Investment Managers. This week's data show the average exposure, spread between most bullish and most bearish managers and confidence among all managers is at extremes seen only two other times in the 8-year history of the survey. Those were early January 2007 and early January 2014. Both times proved to be somewhat troublesome for the most bullish managers in the weeks ahead.

Have a good weekend and we'll see you here Monday.

Original post: STTG Market Recap March 28, 2014

Author: "Mark Hanna" Tags: "Market Recaps, SentimenTrader, EEM, GILD..."
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Date: Thursday, 27 Mar 2014 22:24

Stocks continue to lag and we are now back to flat on the S&P 500 for the year as we come close to finishing out the first quarter of 2014.  It is no surprise considering how bullish everyone was entering the year, and how extended the indexes had become late in 2013.  Today the S&P 500 fell 0.19% and the NASDAQ continues to underperform falling 0.54%.   We had our final revision to fourth quarter 2013 GDP with the Commerce Department reporting gross domestic product grew 2.6 percent, better than the 2.4 percent rate projected in February, but just below the 2.7 percent estimated by economists.    On the housing side, the National Association of Realtors reported pending home sales fell for an eighth month in February, with sales down 10.5 percent from a year ago.

Again on the NASDAQ chart, we showed the longer term chart yesterday to help understand why the lower trend line is important - the pattern has been a break of this line for a few sessions (usually 3-5) and then a V shaped bounce right after.  At some point what we will see, which the bears want, is a weak bounce rather than a V shaped bounce, most likely back to the trend line in purple and then the index rolls over.  When that happens, it will be the first time in nearly 18 months we've seen the pattern truly change short term.   The S&P 500 also has broken its upper trend line for the first time in about 6 weeks with today's close.

spx nasdaq

We usually share the NYSE McClellan Oscillator with you but with the extreme weakness in the NASDAQ of late it is worth looking at its sister measure the NASDAQ McClellan Oscillator today - you can see it is at a level of extreme oversold.

namo

Taking a look at sectors we have 2 sectors we'd expect to see money rotating in during "risk off" periods - utilities and consumers staples (we had mentioned utilities as an area of strength last week... and that it usually is not a great sign for risky assets).

xlp

xlu

But we also see one of the more growth oriented sectors holding up: energy.  Now this may be very specific to the turmoil in Ukraine but it is worth noting.

xle

Speaking of housing, we had a high level flag a few weeks back but that has failed, and much like the indexes in general we have seen gains for the year evaporate in this sector.

itb

Original post: STTG Market Recap March 27, 2014

Author: "Mark Hanna" Tags: "Market Recaps, itb, NAMO, XLE, XLP, XLU"
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Date: Wednesday, 26 Mar 2014 22:35

It was a rough session for stock as they jumped higher premarket on some economic data but slowly unwound through the day to finish at the lows of the session.  The S&P 500 fell 0.70% and the NASDAQ 1.43%; it is worth noting today that the Russell 2000 of small cap stocks fell nearly 2% - a sign of "risk off".  We have seen other warning signs lately - the biotech stocks had an awful week, and we saw some momentum stocks take some big hits the last few days as well.  That continued today.  There were some negative comments from the West towards Russia mid day, plus there was a bad IPO which soured the mood.

Here are the longer term charts for the indexes; we are a familiar spot for the NASDAQ -it breaks the lower trendline for a few sessions and just as everyone gets bearish we get a V shaped rally to rip the face off bears.  This has happened repeatedly the past 18 months.  As we said the last few times the index was in a similar place, at *some* point it will no longer work as a pattern, but until it stops working you have to respect it.

nasdaq

spx

Here is a shorter term chart of the Russell 2000 to show today's damage.

rut

In terms of the NYSE McClellan Oscillator it is not quite at the oversold level but getting there.

nymo

Facebook (FB) was one of the biggest decliners a day after the social networking company said it would acquire two-year-old Oculus VR Inc, a maker of virtual-reality glasses for gaming, for $2 billion.

fb

Other momentum type stocks like Twitter (TWTR) were hit...

twtr

King Digital Entertainment Plc (KING), the maker of the wildly popular "Candy Crush Saga" game acted poorly on its first day of trading.  King's stock fell 15.6 percent to close at $19 in its trading debut after the initial public offering valued the company at about $6 billion.

king

After the bell, the U.S. Federal Reserve objected to plans by Citigroup (C) to return capital to shareholders, saying it had uncovered deficiencies during an annual test of their financial robustness.   Citi fell nearly 6% in after hours to the mid $47s.

c

Original post: STTG Market Recap March 26, 2014

Author: "Mark Hanna" Tags: "Ramblings, C, FB, KING, NYMO, TWTR, FB, ..."
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Date: Tuesday, 25 Mar 2014 23:53

Indexes bounced a bit Tuesday with the S&P 500 up 0.44% and the NASDAQ 0.19%.   The Conference Board reported consumer confidence rose to 82.3 in March, up from 78.3 the month before - this was a 6 year high.  Another report from the Commerce Department had new-home sales slipping 3.3 percent in February.

The NASDAQ remains near the lower trend line it has been bouncing off of for now nearly 1.5 years.  Each time it hits or slightly breaks it, we've seen enormous rallies.

nasdaq

spx

For those who follow precious metals things were looking pretty interesting a month ago but we've seen some selling as of late.  Silver looks relatively ominous while gold if it can hold this current area might still have a chance for further gains.

silver

gold

Walgreen's (WAG) rallied today on news that it would close 76 stores.

wag

A reader had asked to take a look at the Russell 1000 Financial Services index ($RIFIN) versus the ETFs of FAS and FAZ.  The latter two are leveraged ETFs that essentially bet on the direction of an index by a degree of 3.  So if said index goes up 1, these in theory go up 3.  But they are not good long term instruments as they don't follow that 3:1 ratio well over time.  You can google countess articles on this concept - frankly they decay much like a shorter term dated option.  So only use them for very specific short term trades.   One would also not want to chart them long term due to this reason - chart the underlying index; in this case $RIFIN which is actually a very strong chart right now.

RIFIN

Said reader also asked for $BKX which is a more narrower group of financial stocks; RIFIN includes brokers, insurance companies, REITs, etc. - banks have overall been strong in this leg of the market.

bkx

Original post: STTG Market Recap March 25, 2014

Author: "Mark Hanna" Tags: "Market Recaps, BKX, gold, RIFIN, silver,..."
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Date: Monday, 24 Mar 2014 22:48

As we have mentioned the past week or so, NASDAQ has been the weaker index of late after leading early in 2014, and that continued today.  Some of it was due to specific news events and continued weakness in biotech- the S&P 500 fell 0.49% and the NASDAQ 1.18%.   A lot of typical momentum names were hurt today.   Earlier in the day China reported another weak report; its "flash" (initial) purchasing managers index remained below 50, which is a level indicating expansion.

The NASDAQ fell below the 50 day moving average intraday before dip buyers showed up; in the end it closed right at that level.  The S&P 500 continues to act better.  Note how the S&P 500 fell exactly to the support line we have in purple for the second time in a week.

spx

nasdaq

Netflix (NFLX) took the brunt of the damage today as it was reported in the Wall Street Journal that Apple (AAPL) held discussions with cable-operator Comcast for a deal for a streaming-TV service.

nflx

Meanwhile, Apple investors liked the news.

aapl

Weakness spread to other names such as Facebook (FB), Twitter (TWTR) and LinkedIn (LNKD).

lnkd

fb

twtr

Last week's weakness in biotech continued.

ibb

A good article here last week from Mark Hulbert on a heavy exodus of stocks by corporate insiders.  It uses a specific measure that strictly defines "insiders" from a much broader definition that is often used, and it is showing extreme readings.

Currently that adjusted figure shows a record level of insider bearishness. According to this measure, corporate officers and directors in recent weeks have sold an average of six shares of their company’s stock for every one that they bought. That is more than double the average adjusted ratio since 1990, which is when Seyhun’s data begin. One year ago, Seyhun’s adjusted ratio was solidly in the bullish zone, he says. And in late 2003, the ratio was more bullish still.  The current message of the insider data “is as pessimistic as I’ve ever seen over the last 25 years,” he says.

Original post: STTG Market Recap March 24, 2014

Author: "Mark Hanna" Tags: "Market Recaps, AAPL, FB, IBB, LNKD, NFLX..."
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