Off your game?
Read our free, updated as of Mar 3, 2022, Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
Meet Dr K !
Chris Kacher
  • Nuclear physicist
  • Stock & crypto market wizard
  • Blockchain builder
  • Bestselling author
  • Top 40 charted musician
  • Biohacker
  • Former computer hacker
Your email will always remain private.

MLR - Premarket Pulse October 11, 2012

The major averages got hit again on heavier volume as the NASDAQ Composite logged its fifth distribution day, closing the day in short-term correction territory now 4% off of its recent price peaks. Quantitative easing kicked in minutes before close, propping the markets on big volume in the last several minutes of trade, as shown by institutional money flows. The Federal Reserve released its Beige Book which was in line with expectations, but for the most part the market remains in a "catalyst-free zone." Even a Moody's downgrade of Spain to BBB- from BBB+ had no effect on U.S. futures after a brief dip after-hours following the news. This morning the futures are up strongly as the market is in a logical area from which to stage a reaction rally and bounce as the need to sell becomes a bit obvious after four straight days of sell-off, including last Friday's higher-volume reversal.

The S&P 500 hovers just above its 50-day moving average while the Russell 2000 found support at its 50-day moving average. Meanwhile, the NASDAQ Composite bearishly traded under its 50-day moving average on increasing volume for a second day. That said, in prior market pullbacks from May through July of this year, the market would move lower on increasing volume, taking leaders with it. And just when it seemed as if the market would accelerate its downside move, it would then reverse to the upside. Sell signals issued by our Market Direction Model during those months, even though quantitative easing was less prominent, were typically met with upside reversals. As we are now in a full blown quantitative easing environment, shorting can be more challenging than normal, though there are some shortable stocks that are set up just right as we have made members aware. The model will continue to monitor any further deteriorating action in leading stocks and major indices.

AAPL meanwhile finished up on the day, though on lighter volume, as it followed up on Tuesday's logical rally and bounce off the top of its prior base formation at around the 624 level. Other big NASDAQ stocks have broken down, with weak stocks like Intuitive Surgical (ISRG) and Priceline.com (PCLN) breaking below their 50-day moving averages on above-average volume, while a leader like Amazon.com (AMZN) closed below its 50-day moving average for the first time since breaking out throug the low 230 price area during the summer.

Precious metal ETFs, the SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV) finished about break even and may be stabilizing here in an attempt to continue setting up for a new run at their recent highs. With Mitt Romney surging in the polls, the market may be considering his comments that if elected he would fire Fed Chief Ben Bernanke, throwing a wrench into current Fed policy. Still, Bernanke's term does not end until 2014, and a Romney Administration would be hard-pressed to send him packing before then. Therefore it is not clear that current Fed QE3 policy is in jeopardy, at least in the near-term, on the basis of a Romney victory in November.

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. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
Copyright ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing.
All Rights Reserved.
privacy policy