Market Lab Report - Premarket Pulse 6/11/15

Published : June 11 2015 at 8:46 ET
Major averages vaulted yesterday on higher volume with the S&P 500 closing above its 50-day moving average for the first time in a week, while the NASDAQ Composite is a mere 1% or so away from its all-time high of 5132.50. The Russell 2000 had a strong showing as well yesterday, closing back above its 50-day moving average and a higher-high as it again challenges its prior highs. The American Association of Individual Investors reports that pessimism among individual investors is at a 9-month high, while optimism is at a 2-year low, which could be a contrarian positive for the markets.

Oil and other commodities also moved higher as they may have established a significant floor back in March especially if the global economy is turning the corner. But this remains a big IF. That said, bond yields have been on the rise since February so are telegraphing a potential rate hike in the months ahead. The first rate hike is often a bullish event, but the months leading up to the first hike can be bearish as "taper tantrum" fears about higher rates sets in. This sideways market is a sign that the market is reluctant to move higher in a trending manner, so as always, keep stops tight and take profits where you have them in context with the stock chart and overall market.

Electronic mortage originator Ellie Mae (ELLI) had a pocket pivot Tuesday. It showed weakness in today's market but is one to keep an eye on. This is a market where buying on weakness is often a better strategy as the market wends sideways. Earnings and sales are soaring, pretax margin 25.3%, group rank 21. It gapped up on its prior earnings report.

Semiconductor Qorvo (QRVO) had a pocket pivot. Earnings and sales are soaring, pretax margin 27.5%, group rank 36.

Commercial building construction products manufacturer Apogee Enterprises (APOG) had a pocket pivot. It gapped up on its prior earnings report. Earnings are accelerating, institutional sponsorship has grown over the last 3 quarters, group rank 15.

Big-cap credit card companies MasterCard (MA) and Visa (V) also both had pocket pivots yesterday. While these are slower names, their action as big-cap "market" stocks is constructive for the general market.

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