MLR - PMP 8/7/14
After attempting to claw their way back throughout the day yesterday, the major market averages finished about break even on lower volume. A number of leading stocks have managed to buck market weakness including TSLA and PCRX both on which we reported recently when both had pocket pivots after strong earnings reports, AAPL, YY which we reported on July 25, and REGN and ANET on which we reported both on July 30.
A number of other leaders, however, are struggling, so while the market may find its footing with the help of QE sooner than later, we continue to monitor selling pressure which has put the major averages under their respective 50-day moving average and 200-day moving average lines.
In non-QE markets, this would be an indication of more downside to come, but QE helps major indices such as S&P 500 find their lows within 6% since January 2013. Nevertheless, the market lives to surprise and signs show a tired bull with QE growing long in the tooth. Of course, the market could deliver two surprises: a nastier than expected downside correction then resumption of this bull market which goes far longer than anyone's guess. Regardless, it's important not to get wedded to either a bullish or bearish mindset but maintain fluidity and flexibility as the market provides new information in real-time.
The S&P 500 currently sits 3.6% under its all time high.
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