Major averages rose on higher volume. Strong earnings continue to help the markets higher as new all-time highs are achieved.
Central banks made no changes to their respective monetary policies. The Bank of Japan made no changes to its policy stance, but did acknowledge that reaching its 2.0% inflation target will take at least until fiscal year 2019 while inflation during fiscal year 2017/18 is now expected to hit 1.1% vs. est 1.4%. The European Central Bank decided to leave its monetary policy unchanged, as expected. ECB President Mario Draghi mentioned that the economy has continued to see economic expansion, but underlying inflation remains subdued and a substantial degree of accommodation is needed.
Inflation remains stubbornly low as lack of demand in these sluggish economies remains. Hiking rates, ie, reducing QE, seems further off, thus the record levels of QE may remain for a longer period than expected. The US market will continue to benefit from this as the sovereign debt bubble grows.
Focus List Notes:
A large number of names on the Focus List are currently in extended positions and out of buying range. This is logical since it reflects the strong general market action that has seen the NASDAQ Composite rally for nine straight days.
AAOI is now over 20% extended beyond its 10-dma. In most cases this can represent a climactic type of move, at least on a short-term basis. Swing-traders or those wishing to lock in at least a partial profit could consider selling into this move.
LITE posted a pocket pivot at its 10-dma yesterday on volume that was also 18% above average.
NFLX lost some momentum yesterday as it stalled to closed in the lower part of its daily trading range. The stock has a history (see October 2016 and January 2017) of doing very little following post-earnings buyable gap-up moves, and it remains to be seen whether this time will be different.
NTNX has become extended following last Friday's buyable gap-up move and ran into its newly-appeared 200-day moving average yesterday as volume starts to decline. We would certainly not be buying the stock here in an extended position and await some sort of pullback.
VEEV is holding tight along its 10-dma as volume declined to -43% below average yesterday.
YNDX posted an outside reversal to the downside yesterday after attempting to move higher. It remains in a tight four-day range following last Friday's BGU, but so far has been unableto sustain any further upside momentum.
Market Lab Report - Premarket Pulse 7/20/17
|Published:||20 Jul 2017 09:10 ET|
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