MLR - PMP 2/20/14

Published : February 20 2014 at 8:56 ET

The major market averages ran into their first distribution day since their rally off the lows of over two weeks ago as all fell on higher volume. After the straight-up-from-bottom price action on the part of major indices, a consolidation of sorts is to be expected. The Jan. 28-29 Federal Reserve meeting minutes showed a few governors saying it may be appropriate to raise short-term interest rates soon. Of course, this view has been held a number of times over the last couple of years, which seems like lip service rather than action as the fate of the economy will determine the Fed's actions. So far, global recovery is mixed with questions raised about the veracity of the government induced reports.

The market pullback gives investors an opportunity to see how leading stocks, many of which are extended after moving higher with the market over the past two weeks, handle themselves as they potentially pull back and consolidate recent gains with the market.

Tesla Motors (TSLA) is gapping up this morning in pre-open trade after beating on earnings last night after the close. This may set up a buyable gap-up situation which we will report on as appropriate once the market has opened.

Facebook (FB) is trading down in pre-open action after announcing a $16 billion cash and stock buyout of WhatsApp. This brings the stock closer to its 10-day moving average which it has remained above throughout its move higher since the buyable gap-up of late January following FB's earnings announcement.

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