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MLR - PMP 5/1/14

Major averages baby stepped higher on higher volume. The Fed concluded its 2-day meeting. Traders remain focused on when rates will get hiked though no hike is expected until the middle of next year at the earliest. The Fed reiterated its guidance, saying it plans to keep rates at zero “for a considerable time” after the bond buying program ends. At its current pace, asset purchases could end in either October or December, but in order to keep rates at zero, the Fed will have to use another tool in its bag of tricks, thus money printing in some form should continue well into 2015, especially since stronger growth has yet to materialize even though it's been forecast many times since the financial crisis. Today's weak first quarter GDP report adds weight to the first hike being further delayed.

The Fed also decided in March to give the market less information about what will trigger the first rate hike which is a departure from its previous pledge not to hike rates until the unemployment rate reached a certain level. In other words, the Fed may wish to keep rates at zero for longer than expected.

With this QE-friendly news, the market could start a resumption of its uptrend. Unfortunately, leading stocks still are lagging and price/volume action remains weak in the general averages, so the trend, for now, remains down.

Trinity Industries (TRN) had a buyable gap up after a strong earnings report. Earnings and sales are strongly accelerating, group rank 2.

U.S. Silica Holdings (SLCA), a leader in the oil fracking space, is having a buyable gap up after reporting strong earnings. Earnings are expected to accelerate strongly and sales have been accelerating over the past few quarters. ROE 28.7%, group rank 43.

Zillow (Z) is having a pocket pivot/breakout. Institutional sponsorship has grown over the last 3 quarters, earnings and sales are accelerating.

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