MLR - PMP 4/29/14

Published : April 29 2014 at 8:33 ET

Major averages finished mixed yesterday on higher volume. The S&P 500 was up 0.32% though the Russell 2000 finished mid-range, down 0.62%, and the NASDAQ Composite had a long lower tail as it was down 1.5% intraday but managed to finish nearly breakeven, a sign of support. On the other hand, additional damage was done to leaders, thus the long side remains treacherous. Breadth was also relatively weak, with losers outpacing advancers on the NASDAQ by 17 to 10 and advancers barely exceeding losers on the NYSE. With a number of leading stocks down several days in a row, a short reaction bounce is a possibility here, but we would continue to watch for potential short-sale opportunities as broken down leaders rally into potential resistance.

Today marks the start of a 2-day Fed meeting so further assurance of low interest rates for a prolonged period would not be surprising. This could mean a continuation of the uptrend as S&P 500 and European bourses are near new highs. Price/volume in leading stocks, however, is bearish.

Three-D Systems (DDD) met expectations when it announced earnings this morning, but the stock is trading down in pre-open trade. Our short-sale target in the group, Stratasys (SSYS) is looking roughly flat following DDD's earnings. Optimally, we would consider SSYS a short on any rally up to resistance at around 101-102.

After-hours Twitter (TWTR) is expected to announce earnings, and this could have an effect on the other social-networking stocks, including LinkedIn (LNKD) and Facebook (FB), both of which have been down several days in a row.

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