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Market Lab Report - Premarket Pulse 8/16/17

Major averages finished roughly flat on lower volume after trading is fairly tight intraday ranges. With the North Korean situation simmering down, at least for now, QE will continue to do what it's been doing all year as central banks print at record levels and governments continue to be the major holders in some of the largest cap names. Print money, buy stock, repeat. As we have said, it is no surprise major indices continue to baby-step higher though with a fair bit of consistency, especially this year, as the largest correction this year has been just a few percent.

The Fed's minutes from the July 25-26 FOMC meeting are due at 14:00 ET today. Investors will be looking for clues as to when the Fed might begin reducing its massive balance sheet. In addition, any language surrounding inflation will be of interest as its stubbornness to pick up may force the U.S. central bank to settle for just two rate hikes this year instead of the three that it had originally planned for. If the Fed hikes rates again this year, it will almost certainly be at the December FOMC meeting. The fed funds futures market currently assigns an implied probability of 46.7% to a December rate hike.

  • Meanwhile, the ECB has hinted at no hawkish shift in their QE program. No surprise there as global central banks maintain record levels of QE.

Focus List Notes:

Only two stocks can be considered to be anywhere near potential lower-risk entry points, although their current action makes them at least somewhat questionable.

APPN is holding along its 20-dema after failing on a breakout attempt last week. While this could be considered a lower-risk entry point, the fact that the stock failed on a prior breakout attempt makes this a bit more risky, and buying here would certainly necessitate using the 20-dema as a very tight selling guide.

NFLX keeps pulling down towards its 50-dma as it continues to slump after failing on its prior buyable gap-up move of mid-July following earnings. It may very well turn out that the stock eventually ends up breaking below the 50-dma, and its sluggish behavior makes us view the stock with caution.

On another note, BABA is expected to report earnings tomorrow before the open.

Short-Sale Notes: TSLA again reversed slightly after approaching the 170 resistance level yesterday early in the day. We continue to view the stock as being in a shortable position using the 170 price level, about 2% higher, as a guide for a tight upside stop.

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. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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