MLR - Premarket Pulse September 23, 2013
Major averages finished lower on substantially higher volume which was not surprising given quadruple witching day which can greatly exaggerate trading volumes. The Fed remains on green light for full quantitative easing to the tune of $85 billion per month, and the House and Senate agreed to keep the government running through December 15th. Further, Germany's Angela Merkel was voted back in, and she has been liberal with the EU bailouts. QE should remain firing on all cylinders both here and abroad. So even though economic reports on jobs, housing, manufacturing, and leading indicators came in strong, which may give the Fed an excuse to taper sooner than later, the Fed first and foremost wants to prevent upsetting the apple cart with respect to the fragile economic recovery. Unemployment is a key indicator and the unemployment rate would still be over 10% were it not for so many people giving up trying to find work. The uptrend remains intact.
We have kept a close eye on Solar City (SCTY) despite the solar group having had some issues after sharp corrections following summer earnings announcements. The group, at one time ranked #1, has falled to #37 over the last few weeks. SPWR is attempting to correct its prior technical deficiencies and has regained its 50-day moving average, while SCTY is doing the same as it attempts to form a double bottom of sorts. While earnings and sales are poor, it is the fastest growing solar company in the world with the same CEO as Tesla Motors (TSLA), Elon Musk. Musk has proven himself as on the cutting edge of the technological curve not just with TSLA but also with space exploration, reuseable rockets, paypal, and a number of other game changing technologies. SCTY provides electric vehicle charging gear through its partnerships.
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