MLR - PMP 7/22/14
The major market averages fell yesterday on lower volume. The S&P 500 is flatlining but contains a number of distribution days off the peak over the last 2-3 weeks. Sharp damage has been done to leading stocks, so indices and leading stocks could continue their healing process by trading sideways or in a shallow cup formation before heading higher. That would be a positive scenario. The other possibility is major averages carve out lower lows in the days ahead before finding a floor. Keep your stops tight if you are holding any long positions.
While Netflix (NFLX) is trading slightly lower this morning after missing earnings estimates yesterday after the close, Chipotle Mexican Grill (CMG) surprised investors with a 17% increase in sales and is set to gap up this morning on what would also be a breakout from a cup-with-handle base. This likely will develop into a buyable gap-up move, and we will report on this as necessary later this morning.
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