Rallying markets in Asia and Europe, as well as confidence that the Fed will have no reason to end QE any time soon, are sending the U.S. futures sharply higher this morning. While Friday's actions was relatively mild going into the long Memorial Holiday weekend, markets are set to gap higher this morning. The resilience of the market as we start the week on assurances of continued QE, combined with the sharp, high-volume reversal seen last Wednesday when it was hinted by the Fed that QE could soon begin to be tapered off, shows how sensitive to and dependent upon QE the market actually is. This could lead to increased volatility going forward as economic news could drive an "on again, off again" view of QE from the market.
Valeant Pharmaceuticals (VRX) surged on news that it is near a deal to buy Bausch & Lomb. We reported on VRX's pocket pivot of March 17, so if you bought a position, Friday's action is another pocket pivot that technically offers another buy point, but the move was due entirely to news and the stock is now fairly extended, thus presents increased risk for those buying at current price levels.
Infoblox (BLOX) had a buyable gap up after a strong earnings report on Friday. Earnings and sales are accelerating and institutional sponsorship has increased every quarter since the company went public, but the company has never had a strong uptrend even after two prior gap ups on strong earnings. However, its group rank is low at #173.
Tesla Motors (TSLA) is gapping up through the $100 price level at the time of this writing pre-open, which brings into play Jesse Livermore's "Century Mark" rule. Livermore's rule was based on the idea that the first time a stock goes through a "century mark" level, such as 100, it should continue to move several percent higher in rapid fashion. This may be the case for TSLA, but if it holds above the 100 level by the opening then the 100 level should also provide an area of downside support.