Market Lab Report - Premarket Pulse 12/17/15
Markets jumped higher yesterday on mixed volume. Both the S&P 500 and NASDAQ Composite closed above resistance levels at their 50-day moving averages. The Fed hiked rates 25 basis points for the first time in nearly a decade, but the move was expected. Their dot plot projects four rate hikes in 2016. This telegraphs to the market that they believe the economy is resilient enough to withstand such rate hikes. The bullish reaction came as no surprise, and the market appears set to rally into Christmas Eve, just as it did last December 2014 following a sharp sell-off early in the month.
This rate hike does not imply the Fed will necessarily hike rates again soon. CME FedWatch projects a rate hike when the Fed meets next in January at just 10%. On the other hand, odds rise to 55% when the Fed meets April 27, 2016.
Pharmaceutical maker Ligand Pharmaceuticals (LGND) had a pocket pivot breakout. Earnings are strongly accelerating, institutional sponsorship has grown over the last 11 quarters, pretax margin 49.4%, ROE 85.8%, group rank 54.
Workforce management software company Ultimate Software Group (ULTI) had a pocket pivot through its 50-day moving average. Earnings and sales are accelerating, ROE 26.9%, group rank 13.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.