The major market averages traded lower on higher volume though they managed to claw back part of their losses. Futures are trading lower by just under 0.5% at the time of this writing as a surprise contraction in China’s manufacturing sector spurred worries about a possible spillover to the rest of the global economy. China's financial sector has also come under concern.
Further, the Argentine peso suffered its biggest fall since 2002 on Thursday after the central bank reportedly ran out of reserves to support its currency which caused stocks in Spain which are closely tied to Latin America to tumble more than 3%.
Buying the right stocks on pullbacks, given the rhythm of this QE manipulated market, can work well, though care must be taken to see the market find its footing before steppiing in and buying. And buying index-tracked ETFs on pullbacks have been a good strategy as well, since major averages have yet to correct more than 5-6% since January 2, 2013. At present, major averages are off 1-2% assuming markets open at current levels, so they may have a few more percent to fall before the market finds its floor.
We will keep our screens running and an eye out for possible opportunities in stocks as we see them in the coming days should this market pullback provide buying opportunities.
Microsoft (MSFT) and Starbucks (SBUX) are trading higher in the premarket after reporting earnings.
United Rentals (URI) had a pocket pivot after reporting strong earnings. Group rank 24,
The SPDR Gold Shares (GLD) had a pocket pivot in Thursday's trade. It may therefore trade up into its next level of resistance at its 200-day moving average. Keep in mind that at these bottom fishing levels there are a number of cross currents that can serve to derail the pocket pivot from working. That said, its current base recently retested then undercut the prior lows of June 2013 and is rounding out the bottom of a potential new base nicely.