The major market averages managed to finish up on the day yesterday after an initially weak opening due to poor retail data. Volume was mixed, but the market successfully endured a test yesterday as it consolidates the sharp gains off of last week's lows. Leading stocks continue to progress higher, and it is their message that has kept investors on the right track as we have reported on numerous buyable gap-ups and pocket pivots during the market correction.
The Market Vectors Gold Miners ETF (GDX) managed to close once again above its 200-day moving average and on higher volume than the pullback the day before. Meanwhile, precious metal ETFs GLD and SLV are nearing their 200-day resistance. This morning gold is pushing past its 200-day moving average on the upside as it begins to show a shift in its longer-term trend. The state of quantitative easing favors higher hard asset prices including precious metals. Of course, a global economy that takes longer to recover, especially in China, will slow the price progress of hard assets including precious metals. Gold being less subject to economic factors when compared to silver which is also an industrial metal, is the better of the two precious metals to participate in as it potentially moves higher.
After our February 7 report on Tesla Motors' (TSLA) pocket pivot, it briefly activated the century mark rule as it crossed over the $200 price level yesterday. However, since it closed just below 200, the century mark may serve as short-term resistance going into next week's earnings announcement. TSLA is trading at 197.5 at the time of this writing in pre-market trading after an article appeared yesterday concerning a TSLA Model S catching fire in a Toronto residential garage. This story is getting old, frankly, and the fact is that the Model S experiences far less in the way of vehicle fires that regular gasoline-powered vehicles.
Solar name Sunpower (SPWR) had a massive-volume pocket pivot reversal after initially opening down following a strong earnings report Wednesday after the close. The solar group is still ranked #1 in this market, and SPWR's soaring earnings growth makes it a fundamental leader.
Biotech Seattle Genetics (SGEN) had a pocket pivot breakout yesterday. It is currently pulling back on constructive volume after a big move yesterday. The bio-techs are another group taking the driver's seat in this market as an area of strong and broad leadership with a group ranking of #2.