MLR - Premarket Pulse August 6, 2012

Published : August 6 2012 at 8:17 ET

Friday's Bureau of Labor Statistics jobs report came in at a better-than-expected 163,000 new jobs, but this falls far short of the 250,000 required just to keep pace with new entrants into the labor force. Investors should keep in mind, however, that the BLS number is mostly statistical fluff, and is helped by the fact that July has the second highest positive seasonal adjustment (after January) all year.The allegedly positive jobs number was tempered somewhat by a rise in the unemployment rate by 1/10 of a percent to 8.3%. The Fed continues to remain mum on QE3 implementation, as expected, though its language has switched to acknowledging a "decelerating" US economy currently compared to the first quarter. Both the Fed and European Central Bank have said they will intervene if things should get much worse, and the markets continue to respond to the lip-service solutions offered by "Eurocrats" such as ECB Chief Mario Draghi. The markets rose on Friday but on lighter volume as the big money largely remained on the sidelines, and the current market rally appears more index-based as leadership among individual stocks remains spotty, at best, giving the market less a feel of instiutional money steadily accumulating leading stocks and more a feel of algorithmic and high-frequency trading programs simply batting the market indexes about based on the latest lip-service coming out of Europe.


Very little shows up in the form of a new leadership despite a market that is moving to higher-highs in this rally off of the early June lows. Among the few relatively "decently" acting stocks, we note that sporting goods retailer Dicks Sporting Goods (DKS) broke out to new highs on Friday and is expected to report earnings before the open on August 14. Earnings and sales have accelerated over the most recent quarter with earnings coming in at 45 cents a share in the most recent quarter, a 50% absolute earnings increase over the same quarter a year ago, while sales grew at 15% on actual sales of $1281.7 million. DKS is in the Retail - Leisure Products industry group, which is currently ranked #43. The stock is buyable here as long as it remains above the 49-50 price level, though in this challenging environment, cash may be king, so keep stops tights and position sizes small, letting price prove itself before adding to your position.

Meanwhile, Apple (AAPL) is trying to bump up against its 118.97 breakout level but would neeed to see some strong buying volume on any move up through that level to make such a breakout technically valid. (AMZN) continues to hold its most recent breakout while LinkedIn (LNKD), up over 15% on Friday thanks to a strong earnings report, will need to clear its own 109.90 breakout point in order to confirm its buyability on this latest show of strength. Given Facebook's (FB) recent 30%-plus downside burst over the past week or so, expectations for LNKD were likely not that high, and it remains to be seen whether Friday's move in LNKD was merely a short-squeeze.

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