The major market averages closed up in tentative fashion on lower volume with the S&P 500 lagging the NASDAQ Composite. A Western strike against Syria could take place this weekend, but history shows that first strikes can be bullish for the market triggering relief rallies. Yesterday the United Kingdom voted against taking such action, while in the U.S. public support for such a strike is very low.
GDP came in ahead of expectations which prompted an initial selloff in the major markets. Evidence that the economy is turning a corner increase the odds that the Federal Reserve will scale back bond purchases sooner than later. Markets then turned back up as a tug-o-war ensues between an improving economy which is good for stocks and tapering which is bad for stocks.
Yelp (YELP) had a pocket pivot yesterday as it attempts to move out of a high, tight flag formatoin. It gapped up on a strong earnings report in July then hit its sell stop as it moved more than a 2-3 percent below the intra-day low of its gap-up day, but since then has stabilized and set up again in a base from which it is currently trying to move higher.
Stocks to keep an eye on include YELP, Yandex (YNDX), which is finding support at its 50-day/10-week moving average, Alexion Pharmaceutcals (ALXN), also finding support at its 50-day moving average, Celgene (CELG), which appears to be showing very subtle pocket pivots along its 50-day moving average, and Splunk (SPLK), which is set to gap up this morning following a strong earnings report yesterday. As any of these become more definitively actionable, we will issue reports as necessary. Futures are a bit tentative this morning, and the market does remain in a sloppy sideways correction, so caution continues to be warranted on the long side.