Major averages fell yesterday on higher volume after a Fed report accompanying Chairwoman's Janet Yellen testimony warned that "equity valuations of smaller firms as well as social media and biotechnology firms appear to be stretched." Stocks did manage a bounce after reaching their midday lows to close roughly midbar. Despite the bearish Fed report on stock valuations, Yellen did note that stock, real estate and corporate bond values are not stretched. She also sees the economy growing at "a moderate pace over the next several years" which implies the Fed will stay on track with regard to keeping interest rates unusually low for a prolonged period.
Nevertheless, over the last 7 trading days, there have been 4 days of distribution on the S&P 500 and 3 days of distribution on the NASDAQ Composite. Watch your stops closely as the correction that began several trading days ago may not yet be over. U.S. futures are up sharply this morning after Europe and Asia both rallied on positive economic news coming out of both regions. Intel (INTC) also beat on earnings last night and it is contributing to the outperformance in the NASDAQ futures.
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. ©2019 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.