MLR - PMP 5/28/14

Published : May 28 2014 at 8:35 ET

The major market averages rose yesterday on higher volume with the S&P 500 once again closing at a new all-time high. The NASDAQ Composite Index was up 1.22% on higher volume, which IBD claims is enough for a follow-through day, but the Market Direction Model has already been on a buy signal for about two weeks.

In an interview, legendary investor Jim Rogers said “It’s the first time in recorded history that we have the Japanese, British, European and Americans all printing money at the same time. So we have this artificial ocean of liquidity, which is making markets do well, but it’s not doing much for the economy worldwide. When it ends, we will all pay a terrible price,” he cautioned.

Of course, "when it ends" is anyone's guess as major market tops usually take longer to form than expected, so while QE continues en masse, the relatively tight uptrend that began January 2013 should be noted. That said, the uptrend has been just loose enough with leaders dressed down sufficiently each time the market goes into a minor correction to push market timing to cash or sell. Market Direction Model is accounting for this behavior which may remain with us for an unusually prolonged period.

Pocket pivots within bases as well as in "roundabout" formations where leading stocks are attempting to round out the lows of potential new bases continue to flourish.

Interxion (INXN) had a pocket pivot after forming a tight handle within a 1 year base. Earnings are accelerating. Group rank 37. We reported on this after the close yesterday.

Aircraft leasing and management company Air Lease (AL) had a pocket pivot after it gapped up on a strong earnings report then formed its handle over the last 2 weeks. Earnings and sales have accelerated, institutional sponsorship has increased over the last 4 quarters, pretax margin 39.4%. We reported on this after the close yesterday.

Big-stock biotech Celgene (CELG) had a pocket pivot yesterday within its base. Pretax margin 47.4%, ROE 45.4%, group rank 47. It is rounding out its base and just broke through its 200-day moving average.

Semiconductor system-on-a-chip company Cavium (CAVM) had a buyable gap up yesterday coming out of a 2 1/2-month base. Robust earnings, group rank 23.

Network security infrastructure company Palo Alto Networks (PANW) had a pocket pivot yesterday. Earnings and sales are robust, institutional sponsorship has increased 3 quarters in a row, group rank 60.

This morning Workday (WDAY) and Qihoo 360 Technology (QIHU) are gapping up after announcing favorable earnings last night after the close. Both stocks are gapping up above their 50-day moving averages on moves that will likely at least qualify as "roundabout" pocket pivots.

Online airline ticket and travel provider PCLN is having a pocket pivot as it rounds out its basing pattern, coming up firmly off its 50-day moving average. Pretax margin 38.4%, ROE 40.7%.

Medical company ANIK will have a pocket pivot if it can finish higher and trade at least 343,400 shares. Earnings and sales have skyrocketed in the last quarter, pretax margin 43.3%, institutional sponsorship has increased over the last 5 quarters, group rank 47.

JAZZ has traded enough volume for a pocket pivot as it rounds out its double bottom basing pattern and comes up through its 50-day moving average. Institutional sponsorship has increased 15 quarters in a row. Pretax margin 54.4%, ROE 32.1%, group rank 1.

ENBL is having a buyable gap up. This is an oil stock and oils tend to trade a bit sloppy so keep this in mind when setting your stops. The group rank of 2 makes this stock actionable. Earnings and sales are skyrocketing.

This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.