NASDAQ Lags as S&P 500 Ends Flat as Volume Slides; European Woes continue

Overnight the Nikkei jumped 3.8% as the country remains hell bent on trashing their currency. Europe resumed moving lower as the DAX fell more than 80 points. On this side of the pond futures were lower on the moves in Europe. Just before lunch time rumors of a special dividend helped send the stock higher dragging the NASDAQ along with it. Just after noon time fortunes for the market reversed and the market headed back to the lows of the session. It appeared as if sellers were going to rule the day. At the close, buyers were able to get the market back to breakeven. Our uptrend remains. Tomorrow we’ll get a rate announcement from the ECB followed by Draghi’s press conference. The EURUSD has been on a tear as of late as the US and Japan intend to print their respective currencies to oblivion. At this point the ECB can only cut rates as it cannot monetize debt. Draghi’s comments has moved the markets before and tomorrow shouldn’t be any different from the past. Which direction shall the market respond is anyone’s guess, but given our current uptrend we are going in long. There is some bright spots out there including DDD and SSYS. Banks continue to act well lead by BAC, GS, JPM, and one of our new longs for tonight. The action in EXPE left a bit to be desired and it appears more and more stocks reacting to earnings aren’t able to hold their breakouts. AMZN is one while having a rich PE has been performing well until the most recent earnings report. Another blemish is the two leading stock indexes we follow remain underperforming the overall market. This can change in a hurry, but we are keeping an eye on our leaders. Tomorrow morning will hold some fireworks and we are looking forward to seeing how our stocks react. Cut those losses short. Short-term trends: TICKER ST TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 2/6/2013 151.16 0.07% IWM UPTREND NO CHANGE 2/6/2013 90.46 0.42% QQQ UPTREND CHANGE 2/6/2013 67.24 -0.33% USO UPTREND NO CHANGE 2/6/2013 35.04 0.03% UNG DOWNTREND NO CHANGE 2/6/2013 19.36 0.94% GLD DOWNTREND NO CHANGE 2/6/2013 162.39 0.27% SLV UPTREND NO CHANGE 2/6/2013 30.81 0.16% DBC UPTREND NO CHANGE 2/6/2013 28.55 -0.14% FXY DOWNTREND NO CHANGE 2/6/2013 104.85 0.07% FXE UPTREND NO CHANGE 2/6/2013 134.13 -0.41% TLT DOWNTREND NO CHANGE 2/6/2013 115.98 0.82% QQQ changed back to an uptrend. This is due to the short-term nature of signals generating more signals.

Stocks Close off the Highs but in the Green as AAPL and AMZN report Earnings

Another day and another rally attempt failing to hold the morning gains as stocks close just off the lows of the session. Oversold conditions can produce multi-day rallies, but today ahead of AAPL and AMZN the market was unable to hang onto gains. Jobless claims and new home sales weren’t overly inspiring, but weren’t awful either. During the session as stocks sold off a rumor surfaced Fitch was about to downgrade the United States, but was untrue. How this country will pay off this debt without making a sacrifice is beyond me. How any agency would have our debt rated AAA is baffling. At the end of the day the market as able to close in positive territory, but tomorrow’s GDP report looms over the market. During the after-hours session the two big stocks the market was looking at was AAPL and AMZN. Both stocks have taken a beating prior to their earnings report. First up was AMZN and at one point was down below 208 a share. It closed the after-hours session above 220. The move off the lows of the after-hours was quite interesting considering AMZN continues to disappoint. AAPL reported earnings and the reaction to the news was less dramatic than AMZN. Whether or not we feel the earnings was bad or good tomorrow’s reaction will be the most important piece for us. Tomorrow’s GDP report will be the highlight of CNBC’s morning. There will be no doubt an endless discussion on what it means for the market and of course the economy. Remember, one week from tomorrow we’ll get the October jobs report. Third quarter GDP is expected to be around 1.8% any number not reaching that potential will be a big disappointment. One can conclude a bad number would be bad for the market, but we know this may not be the case with the Federal Reserve printing money. How the market reacts tomorrow will be very important. As of late, earnings have not been too kind to many stocks and we continue to see a lot of Revenue misses. Earnings are easily “gamed” whereas revenues are not. There were many who were expecting big moves out of AAPL and AMZN. EXPE and PCLN made the big moves higher! Earnings continue to produce wild moves! Stay disciplined and have a great weekend.

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