Market Lab Report - Premarket Pulse 3/31/16
Major averages rose yesterday on lower volume ahead of tomorrow's employment report.
Yesterday's market correlated strongly once again with the price of oil. Should this strong correlation persist, the current minor correction in oil could pressure the stock market lower in the coming days. Indeed, while a few new names have registered actionable buy points over the last several days, the overall action of leading stocks remains weak. Thus the market could have another mini-correction of a few percent as it has done many times before, only to have QE/central banks come to the rescue. Indeed, another straw onto the camel's back came as the S&P overnight lowered its rating outlook for China to AA- Negative from AA- Stable.
Our buying and selling strategies as noted in the recent March monthly wrap up report is key to keeping risks to a minimum while taking profits when you have them. An example would be Silicon Motion (SIMO), which is up about 15% from the time we first reported on the stock as a real-time pocket pivot.
Of course, despite all central banks blowing the QE trumpet, further evidence of a sagging global economy could further diminish investor confidence which could result in a steeper correction.
All that said, these market rallies can go longer than expected given that central banks are in alignment with respect to low rates. Thus, as always, keep a close eye on your stocks and also on your leading stocks list for early clues as to market direction.
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.