Major averages rose yesterday on lower volume with the NASDAQ hitting a new 13 year high. The more speculative small cap Russell 2000 also hit new highs. Meanwhile, precious metals got hit hard as investors believe the government shutdown will not hurt the stock market thus the idea of precious metals as a safe haven was observed. As well, the government shutdown and the position of the House majority may be a precursor to an even more tenacious fight over the debt-ceiling come October 17th. That said, precious metals are bouncing in premarket trade this morning.
Futures are down more than half a percent as fears mount that the shutdown could last longer than expected. However, history has shown that the stock market tends to act ok, even during periods where the shutdown lasted more than 10 days. We would continue to keep an eye on leading stocks and viewing pullbacks into logical areas of support as buying opportunities.
Silica Holdings (SLCA) had another pocket pivot as it begins to emerge from a long, multi-month base. While earnings have been slowing to flat levels, earnings growth is expected to reaccelerate in coming quarters as fracking begins to gain traction on an international scale. Sponsorship has grown since the company went public nearly seven quarters ago, an d the company exhibits strong profitability in the form of a 24.8% pretax margin a 44.8% return-on-equity. SLCA has had several pocket pivots over the past few weeks which we have previously reported on.
Among big-stock NASDAQ names, both Amazon.com (AMZN) and Priceline.com (PCLN) exhibited continuation pocket pivot buy points as both stocks moved into all-time high price ground.
This morning TSLA is down about 3% after a downgrade to neutral with a price target of 187 from an analyst firm. We would continue to view pullbacks in TSLA as buying opportunities, and would watch the 10-day moving average at 184.21 as a potential area of support.