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Market Lab Report - Premarket Pulse 7/20/17

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.

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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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