Market Lab Report – Premarket Pulse 9/18/15

By | September 18, 2015

Scalper1 News

Major averages churned and and stalled yesterday on higher volume. The NASDAQ Composite blew through its 200-day moving average on the upside and kissed its 50-day moving average which then served as resistance, sending the index back below its 200-day line to close near break even. The S&P 500 closed in the red, near the low end of its trading range, in contrast to the last four Fed meetings where it closed near the top of its trading range. The reaction was a function of uncertainty on behalf of the markets to the Federal Reserve’s decision to leave rates unchanged by a 9-to-1 vote as they felt the global economy remains fragile. Nevertheless, the Fed’s dot plot forecast an interest rate of 0.4% by the end of the year, suggesting they would hike either in October or December. That said, they lowered their interest-rate forecast for the longer run which implies they think the U.S. economy is less capable of withstanding monetary policy tightening. The Fed is forecasting a federal funds rate of 0.4% for 2015, 1.4% in 2016, 2.6% in 2017 and 3.4% in 2018, which all are lower than the central bank saw in June. They are also predicting less inflation. and do not see it reaching their 2% target until 2018. On unemployment, the Fed got more optimistic, lowering its projections for 2015, 2016, 2017 and the longer term. European markets are down 1-2+% at the time of this writing on growing concerns about the problematic global economy as it was a big reason why the Fed decided to hold off on hiking rates. CME FedWatch now puts the odds of a rate hike when the Fed meets again in October at just 16%. Small-molecule therapeutic developer Anacor Pharmaceuticals (ANAC) had a pocket pivot off its 50dma. Sales are soaring over the last 2 quarters, group rank 25. Arthritic disease drug maker Horizon Pharma (HZNP had a pocket pivot after a constructive consolidation. Earnings and sales are soaring, pretax margin 27.5%, ROE 35.7%, group rank 26. Healthcare staffing company AMN Healthcare Services (AHS) had a pocket pivot. Earnings and sales are strongly accelerating, group rank 64. AHS gapped higher after its recent earnings report. Caution is advised on the long side of this market given yesterday’s index reaction to the Fed policy announcement and the fact that the NASDAQ reached a logical point of overhead resistance after an extended rally from the lows of late August. Scalper1 News

Scalper1 News