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Market Lab Report - Premarket Pulse 10/20/15

Major averages rose yesterday on lower volume with the NASDAQ Composite a kiss away from its 200-day moving average.

Expect a continuation of the tug-o-war between signs of economic strength which determine the future of quantitative easing (QE) and rate hikes:

Key variables that can push the market higher:

1) QE
2) Global economic strength - if it is believed this is a sign of a sustainable recovery, the onset of higher rates will be considered a bullish event
3) U.S. economic strength - if it is believed this is a sign of a sustainable recovery, the onset of higher rates will be considered a bullish event

Key variables that can push the market lower:

1) Global economic strength - if it is believed this is not sustainable, the onset of higher rates will be considered a bearish event
2) US economic strength - if it is believed this is not sustainable, the onset of higher rates will be considered a bearish event

We have been at inflection points on a number of variables this year which accounts for much of the market's trendless, sideways action. The global economic slowdown, especially in China, created the first correction exceeding -10% that the U.S. market has seen on the S&P 500, since 2011. But such economic slowdowns have central banks fueling markets with additional QE, further kicking the can down the road, and the road is a long one having started in late 2008. But this year's trendless market action in the U.S. and downtrends in global markets shows QE has a limited lifespan.

As always, keep a close eye on your stocks and watch lists. Despite this year's trendlessness, profit opportunities in stocks have been present as can be seen in this year's Pocket Pivot and Buyable Gap-Up reports. Of course, a deft hand of taking profits when you have them in context with the stock's chart relative to itself and to the general market have also been key.

Telecom infrastructure company Dycom (DY) had a pocket pivot. Earnings are skyrocketing, sales are accelerating, group rank 7.

Supply chain management software company Manhattan Associates (MANH) had a pocket pivot at near breakout point. Pretax margin 28%, ROE 48.5%, consistent and robust earnings and sales, group rank 23.

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This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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