MLR - PMP 3/6/14

Published : March 6 2014 at 13:24 ET

The major market averages were roughly flat yesterday on lighter volume after Tuesday's huge gains. The market's ability to hold tight and even close up as in the case of the NASDAQ following such a sharp upside day on Tuesday is constructive. Meanwhile, bullishness among newsletter editors climbed to 54.6% while bears are at 15.1%, near a five-year low of 14.1%. While that could be considered bearish from a contrarian viewpoint, markets have defied conventional metrics since January 2013 as quantitative easing continues to provide a most shallow floor for any market correction. As we know, overbought can become more overbought and optimism can reach extremes beyond the norm especially during highly unusual environments such as the one in which we have been since quantitative easing was ratcheted up to even higher levels starting in January 2013. And we all are aware that QE which started in early 2009 rendered ineffective many tried-and-true indicators that had worked for a number of years if not decades. Thus this bull may have longer legs than most expected.

We continue to see pocket pivots in leading stocks:

Intrexon (XON) flashed a bottom-fishing pocket pivot as it tries to reverse course along the lows of a potential new base. XON is a biotech company that develops DNA gene programs for a variety of end markets. Group rank 2. XON announces earnings after the close.

Big-stock social-networking leader Facebook (FB) has issued another buy signal in the form of its second continuation pocket pivot along the 10-day moving average since its January buyable gap-up move.

Computer software/security company Barracuda Networks (CUDA) is trying to come up the right side of a new base as it flashed its second bottom-fishing pocket pivot in two weeks along its 10-day moving average.

Airline Wi-Fi provider Gogo (GOGO) flashed a big bottom-fishing pocket pivot as it launched more than 10% higher yesterday up through its 50-day moving average. This pocket pivot came on the heels of a more subtle pocket pivot off the 10-day line on Tuesday. GOGO is expected to announce earnings next week.

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