STTG Market Recap January 10, 2013

Stocks gapped up to start the day as positive export data out of China encouraged the bulls, but filled that gap by mid morning.  As the day progressed buyers returned and markets rallied, eventually finishing near the highs of the session.  The S&P 500 gained 0.76% and the NASDAQ 0.51%, the former is now testing the intraday highs of September 2012.

Trade data released on Thursday showed the value of China’s exports grew 14.1% last month compared with a year earlier, racing past forecasts of analysts polled by Reuters, who had expected annual growth of 4%.  Economists said the pick-up in exports growth from November’s 2.9% rise was likely accentuated by lower comparison figures a year ago and exporters clearing year-end orders, factors that do not suggest a sustainable turnaround.

The S&P 500 continues to travel along the upper end of its ascending channel during 2013, and is within sight of the intraday high from Sept 2012.   It is now at its highest closing price in 5 years. The “bull flag” created over the past five sessions was resolved in a positive direction as it is apt to do.

The NASDAQ is still a laggard; 3134 was the April 2012 high so unlike the S&P 500 chart above this index is not even at April 2012 highs not to mention September levels.

Our NYSE McClellan Oscillator is back to a quite overbought level so any significant rally in the next sessions or two would push this to a more extreme level.

It’s a good level to point out crude oil as the $94 level that has been holding it back was once again tested.  It looked like today was going to be the day it had a chance to close above this key technical level, but instead it was pushed back below.

Facebook (FB) continues to plow ahead in constructive fashion ahead of a “mystery announcement” set for next week.  If you are in this name, just be aware that unless this news is Facebook taking over another planet there is a good chance of a “sell the news” reaction as the stock has run up tremendously ahead of the announcement.  I’d also note that this stock has seemed to replace Apple as the “face of the NASDAQ” for now.

As earnings season begins, investors should be aware of when the companies they own report.  These are very volatile days and in the weeks preceding the earnings date, companies that are having issues will usually warn.  One example today was high end jeweler Tiffany & Co (TIF), and you can see it can make for a tough day for the portfolio.

The luxury retailer said sales during the holiday season rose just 4% worldwide, at the low-end of the company’s expectations. Tiffany said it now expects its full-year profit to be at the lower end of its prior forecast. The company also said earnings growth in 2013 will be subdued due to uncertainty about the economy in all of its major markets.

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