MLR - PMP 6/13/14
Major averages fell on higher volume as tensions rose in Iraq, sending oil prices to new 9-month highs. The market, being a touch extended on the upside, may be using the situation in Iraq as an excuse for a pullback. If one recalls, the Libyan and Syrian situations went on for a number of days, then the market recovered. The Ukrainian crisis triggered a market top in late Feb/early Mar and the correction went a bit deeper. The question will be how the market handles itself from here as to whether we are in for another haircut of a correction or something worse, perhaps on the order of several percent.
Solar leader Sunpower (SPWR) had a pocket pivot yesterday as it attempts to emerge from a multi-month base. The midbar close is not ideal but given the weight of the market on Thursday with averages down across the board, SPWR is still actionable. Note, the higher volume on 6/5/14 does not apply since the near break even close has a long lower tail so is a constructive day of accumulation rather than distribution. Earnings are stellar, institutional sponsorship has grown over the last 5 quarters, and while group rank is 111, it rocketed from 176 in its prior week.
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