MLR - PMP 4/25/14
Major markets finished higher on higher volume. An early morning sell off in the major averages was due to nervousness surrounding the Ukraine. The market then shrugged off the news and moved higher from there as favorable earnings from Apple (AAPL) helped the NASDAQ outperform the S&P 500 as AAPL weighs in at 12% of the NASDAQ-100 index. MSFT which is the second highest weighted stock in the NASDAQ-100 at 8%, jumped 3% in after-hours trading on a strong earnings report.
The S&P 500 and European bourses are a breath away from hitting new highs. This would qualify as a de facto resumption of the uptrend should it occur, but the last time the S&P 500 made a marginal new high it turned out to be nothing more than a bull trap. Action in leading stocks remains mute with only a couple of exceptions, and yesterday's rise was labored by poor breadth. Facebook's (FB) failed gap-up and reversal yesterday was typical of the pattern seen in several former leading stocks following earnings-related rallies, such as Netflix (NFLX), for example, which has also reversed and is now testing its 200-day moving average after gapping up on a "positive" earnings report on Monday.
Synaptics (SYNA) gapped up about 8% and Baidu (BIDU) have gapped up about 6% in after hours trading yesterday, both on strong earnings. Neither qualifies as a buyable gap up, however, due to lower earnings in SYNA in its most recently reported quarter, and BIDU's relatively erratic and sloppy price/volume action that led up to today's gap up. We will see whether they simply follow the pattern set by other former leaders that have gapped up following earnings. So far Amazon.com (AMZN) is following this pattern after gapping up to around 355 yesterday after its earnings report, but this morning the stock is trading at around the 320 level at the time of this writing.
Natural gas carrier operator Gaslog (GLOG) just barely traded enough volume for a pocket pivot. Earnings and sales have been skyrocketing, pretax margin 24.5%, group rank 35.
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