Tag Archives: market lab report

Market Lab Report – Premarket Pulse 5/23/16

Major averages shot higher Friday morning before giving back some of their gains on higher, triple witching options-expiration volume. The S&P 500 came up near to its 50-day moving average before heading back down as it stalled on lighter volume. A number of Fed members have spoken including: – Eric Rosengren who said the U.S. is “on the verge” of meriting a June interest-rate hike. – John Williams who recently reiterated his prior view that two to three rate hikes could be appropriate in 2016 with three to four being possible in 2017. – James Bullard, who questioned market expectations for future hikes. Bullard also voiced his confidence in recent employment figures, stating that the U.S. labor market is “at or beyond full employment.” Despite the hawkish commentary, the UK Brexit vote takes place about a week after the June Fed meeting, so it’s unlikely the Fed will raise rates at that meeting. Fed futures put the odds at 26%. Weekend updates on both the short and long side of individual stocks were sent out to members this weekend. Members should be prepared to move with the market in either direction as the indexes sit at near-term support. A strong move back up through their 50-day moving averages by the S&P 500 and the NASDAQ Composite could signal the start of a new upside move, while a significant breach of support would indicate that downside risk is increasing.

Market Lab Report – Premarket Pulse 5/16/16

Major averages closed near their lows Friday with the S&P 500 and Dow Jones Industrials both finishing under their respective 50-day moving averages. Even though volume was lower for both averages, this is the first time they have broken below this moving average since last December. In addition, even though University of Michigan’s Preliminary Consumer Sentiment came in much stronger than expected along with strong April retail sales and business inventories, markets were unable to stage a rally. This suggests markets are vulnerable to more downside. Keep a close eye on short-sale set ups in the days ahead. Indeed, the number of distribution days continues to be substantial so the question remains whether QE can create another shallow floor and push markets higher, or will the market correct further as it did in last August and earlier this year. Given the number of headwinds, the odds seem to favor a deeper correction. Futures are up after Goldman Sachs raised its forecast for crude oil prices after previously forecasting lower prices. Warren Buffet also disclosed a 9.8 million share stake in APPL, which makes us wonder where he was the entire time the stock was on an epic upside price run that began back in 2004. We question such news events as legitimate catalysts for a market rally, however, and would watch a gap-up open this morning closely for signs of failure.

Market Lab Report – Premarket Pulse 5/9/16

Major averages rose on lower volume with the S&P 500 getting support at its 50-day moving average. Real support usually is accompanied by higher trading volumes which was not the case on Friday. In addition, as an aggregate, defensive names continue to outshine leading stocks. Utility stocks have been on a tear and gold has come to life as the loss of confidence in central banks and governments continue to rise. Despite the Federal Reserve’s William Dudley saying he expects two rate hikes later this year, fed futures shows the odds of the first hike only rise above 50% when they meet on December 21, thus should the global economy remain in a quagmire or continue their decelerating trend, any rate hikes may be put off until 2017. It is also possible the Fed reverses its prior rate hike and begins to adopt negative rates as Yellen has kept the door open to that possibility. While the market is in a logical position from which to launch a reaction rally and bounce, it may be short-lived. Such a rally might bring short-sale targets back into shortable range which we discuss in our SSS report.Â