MLR - PMP 5/31/13

Published : May 31 2013 at 8:52 ET

Major averages were up on lower volume. Economic numbers released yesterday, which included Initial jobless claims, the revised first-quarter GDP, and pending home sales, were all weaker than expected. While this would normally be bad for the market, economic weakness means the Federal Reserve is more likely to keep the quantitative easing spigot on full. So for now, bad news is good news for QE, and this was reflected in the sharp move by gold back above the $1400 price level. Stock futures are down this morning pre-open, but have recovered somewhat off of their overnight lows. The Market Direction Model remains in a neutral signal given that, from a strict technical standpoint, the indexes have not broken down in any meaningful way as they remain within 1% of their recent highs.

Despite the market's uneven action, some strength was evident in a select number of leading stocks. 3-D printing company Three D Systems (DDD) just barely hit the required volume for a pocket pivot, less than a minute before the closing bell. We have reported on DDD in prior reports. Institutional sponsorship has increased last 5 quarters. Caveats: earnings and sales have slowed. DDD also tends to routinely violate its 50-day moving average.

Pharmacyclics (PCYC) also had a pocket pivot buy point coming up off of its 10-day moving average. This comes on the heels of last week's "bottom-fishing" pocket pivot off the 50-day moving average as we reported on that day, May 23.

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