Stocks Advance as Volume Swells

The lone economic piece of data for the US was Mortgage Applications showing a 7% gain. Economic data will be light for the rest of the week excluding tomorrow initial jobless claims figure. Commodities pushed higher as gold and crude led the way higher. The dollar index fell on the day and still trying to find a way to move above its 50 day moving average. Earnings season continues to stroll and we continue to see positive action. Volume rose on the session giving us an odd feeling as we normal see volume tail off when the market rises. This uptrend remains intact and unflappable. You know it is a bull market when you have a stock like DDD offer up a secondary share offering and have the stock rally and close higher. A 3D printing stock is certainly a hot sector with tremendous long-term potential. Usually a secondary will sink a stock, but not for DDD. It would be nice for the stock to put in a handle for 3 weeks breaking out from a cup with handle chart pattern. One can dream and we’ll just stick to our trading rules. Today’s action in DDD certainly shows the strength of this market and the stock itself. The II sentiment survey is out showing a jump in both bulls and bears. Bears remain below 20% of survey respondents. Bulls on the other hand jumped back above 50% with 52.1% of respondents indicating they are bullish. Both bulls and bears are near extreme levels. However, neither are at extremes. Tomorrow we’ll get a read on the individual crowd from the AAII survey and the “pros” at NAAIM. AAII has been quite bearish and it will be interesting given the move in the market if they have pushed the bulls back in control. Today’s after-hours session certainly had fireworks. GMCR and TSLA responded well after reporting earnings. Both stocks have had nice runs and will look to add to those gains tomorrow. On the downside RAX continues to struggle with their earnings report. FIO had its co-founder and CEO leave sending the stock lower. We want to get after stocks rising in a good market and GMCR as well as TSLA are a great example of stocks moving in the right direction. Cut those losses and ride your winners.

The Market Hits Stall Speed as the market Digests the State of the Union

Stocks enjoyed buying through the early morning session as Europe rebounded from its recent pullback. By 10:30 the market changed behavior as it simply could not maintain its high of the day. Thirty minutes prior to the European close the market took a nose dive and hit the lows of the session. Volume was running higher throughout the session and indicating the market had begun hitting stall speed. A late day push from CSCO and AAPL assisted the market lifting from the lows of the session, but the Dow Jones Industrial Average did not escape a day of distribution. Tough to call a stall day on the NASDAQ, but for back to back days the index has been unable to hold the highs of the day. The market is having a tough time with the highs up here. We remain in an uptrend and while there are subtle signs of cracks we haven’t had an all out sell signal. CSCO reported earnings after the bell and they beat their numbers. However, the initial pop the stock enjoyed was short lived with the stock pulling back. The stock has been on a heck of a run since November contributing to the success of the NASDAQ. Given the action now it appears all is well with the stock, but tomorrow is a new day and anything is possible. If you are long the stock, just know where your exit is. It appears the past few sessions earnings have not been kind to the majority of stocks. PRLB is an exception after earnings. The stock blasted higher with volume to boot. A very good sign for those who are long the stock. PCYC was another earnings winner. CMCSA started the day off right, but like the market was unable to sustain the high. The loss of the day came from a growth stock RAX. RAX clearly disappointed the street as the stock fell hard in massive trade. This is not what you want to see out of a growth name. BWLD was another loser on the day. Earnings season has created quite the volatility in stock movements. INVN and KORS continued their slumps. There are positive and negatives to the current market rally. Everyone and their mother are expecting a pullback. When and how this market correction unfolds is anyone’s guess. It is tough to really say we have hit a market top without major distribution following these stall days. Know your exits and wait for your price signals to hit.

NASDAQ Stalls as Volume Finishes Higher

NASDAQ Composite continues to lag behind the Dow Jones Industrial Average and the S&P 500. Volume rose across the board, but remained below average. The NASDAQ notched a stall day and although it failed to register a day of distribution. Stalling days are nothing new and all it will take is for the NASDAQ to eclipse today’s high. Two star industries on the day were XLF and XHB as both groups appear to be ready to run higher again potentially in a blow off move. End of day action took the market off its highs, but the S&P 500 and Dow were able to escape too much damage. AAPL weighed on the NASDAQ once again as the stock continues to prove it is a laggard. One question would be is the stock the canary in the coal mine? There is no question AAPL’s products are great, but is the action in the stock foreshadowing something in the overall market? Or is it simply a laggard stock and should be completely ignored? Time will tell where this stock will end up. However, we know the stock is in a downtrend and is all we need to know. Wednesday we’ll see the market react to the State of the Union. President Obama’s speech is pretty much known as he will revert to ideas he trumped on the campaign trail. More taxes and more spending (disguised as “investments”) will be proposed. The President has a way of delivering a great speech and this should not be any different. Democrats will praise the president while Republicans will detest it. After the speech all eyes in the political world will pay attention to the Sequester on March 1st. A few disappoints in earnings this morning with KORS and INVN reversing gains. While KORS was a viable gap its inability to hold onto its opening price certainly puts a blemish on the stock. INVN was just terrible. In the after-hours session we had a few leading stocks have a tough time. RAX for one has been a stalwart for this market. Unfortunately, the stock fell 10% in the after-hours session. PCYC a thin name jumped 2% after reporting earnings. A stock to watch for a potential gap move at tomorrow’s open. NTGR and BWLD were on the negative side as well with both stocks falling hard. Not a pretty picture for the majority of earnings with only a few bright spots this afternoon. Regardless of your opinion of the market we remain in an uptrend. This may or may not change tomorrow, but if it does we are prepared.

4 Stocks Moving Higher Post Earnings

4 Stocks Moving Higher Post Earnings

Stocks Reverse Morning Gains on Increased Volume

Disappointing jobless claim and existing home sales put a damper on the market at the open. Buyers did show up pushing the market higher with volume on the rise. However, buyers were exhausted and it was sellers who took over and dominated for the remainder of the session. AAPL dropped below the $600 mark a key psychology area ahead of OPEX. There were plenty of stocks like RAX who had a great morning only to see sellers take over reversing gains. Volume rose on the day and given the close there isn’t much question institutions continue to dump stock on the market. Big Wave Trading market model is once again in SELL mode.

Removing the second half of the session and this market would have been sitting pretty to push higher. Strong reversals like we saw today are indicative of a very weak market. Of course when AAPL takes a dive on big volume is never helpful for the entire market. Sure, you have outliers like MLNX on the day and certainly saw great gains. On balance, unfortunately, majority of the market saw weakness and is foreshadowing things ahead.

There isn’t any economic news ahead of tomorrow’s OPEX session. Volume should pick up due to the options expiry, but it isn’t a guarantee. We have joked in the chat room we’ll more than likely see a positive day just to confuse the masses. This is not something we would trade off of, but it would be quite entertaining to see the market push higher despite today’s sell-off.

Sentiment isn’t really telling us much here as the two sentiment survey’s we track is a bit mixed. AAII survey has bulls and bears about dead even. 31% of survey respondents are bullish while 34% are bearish. It appears neutral is where many want to be right now. II survey remains tilted towards the bulls, but with only 21% of bears being recorded it doesn’t feel like we have had a big enough correction. Bottom line it appears we aren’t near a turning point according to sentiment. If anything sentiment shows confusion.

Get out and enjoy the weekend!