After trading relatively flat for the last few days, major averages moved higher though on lower volume. The NASDAQ Composite moved above its handle formation and the S&P 500 made new all-time highs. Complacency is high as the percentage of bulls vs bears remains high across many of these types of surveys and the VIX is pushing to multi-year lows. That said, despite such sentiment indicators, the market can run higher for months on end before it finally peaks. And in this age of QE which has turned many indicators on their heads, it would not be surprising for this aging bull market to persist. As always, it is best to focus on price/volume action on major indices and leading stocks to guide the way.
Cavium (CAVM) had a continuation pocket pivot after we reported on its buyable gap up on May 27. This is constructive and strong follow-through to the original BGU.
Solar stock Sunpower (SPWR) had a buyable gap up and also traded enough volume for a pocket pivot as it breaks out of its base on news that the U.S. Department of Commerce will close a loophole for Chinese solar imports. SPWR is increasing its exposure in India which is taking steps to solve their electricity needs on the residential level through solar power. Earnings have been stellar though estimates appear poor. But their expansion into India could be the wildcard. Institutional sponsorship has grown 5 quarters in a row. After the bell yesterday, SPWR announced a $400 million senior convertible bond offering which caused the stock to sell off slightly, but as of this morning it remains well above the 33.27 intraday low of yesterday's BGU range.
UnderArmour (UA) had a bottom-fishing pocket pivot coming up through its 50-day moving average yesterday as it tries to round out a new base.