It was yet another quiet session on Wall Street as a very similar pattern has played out the past few days. A modest gap down to start the day followed by light buying all day with the indexes closing near the highs of the day. But there has been almost no movement at all in the closing price the past week. The S&P 500 has finished within a 2 point range in this five day period. This lack of progress is however helping work off the overbought condition the market has been in for most of January. The S&P 500 gained 0.02% and the NASDAQ added 0.22% mostly on the back of a big rebound by Apple. As we wrote yesterday, noted market timer Tom DeMark said Apple had bottomed for the intermediate term either yesterday or would today which led to buyers stepping in.
Let's look at the indexes on a longer term time frame this evening.
The S&P 500 has a generally better condition than the NASDAQ, matching the highs of September 2012. This area has proven to be a tough nut to crack though as we've seen the past week.
The NASDAQ still has a "head and shoulders" (bearish) risk to it, although if the S&P 500 goes on a new leg up, one would imagine the NASDAQ would follow suit - especially if Apple can put in an oversold bounce.
Speaking of Apple here is the bounce we were talking about today.
This sideways action has also worked off most of the overbought condition as the NYSE McClellan Oscillator is back in the teens.
Some key names for the day were JPMorgan (JPM) and Goldman Sachs (GS) - two of the TBTF (Too Big to Fail) banks our country enjoys. Both had earnings this morning and were sufficient enough to please investors.
After the bell, Ebay (EBAY) reported a decent quarter but lowered revenue and EPS guidance for the next quarter. This is usually bad for a stock, but EBAY is actually up 1% in the after hours. A lucky break for its investors.
EBay Inc. reported a 17% jump in adjusted earnings for the fourth quarter on Wednesday afternoon, narrowly beating Wall Street’s estimates, thanks to strength in both its Marketplace and PayPal businesses. The company’s forecast for the current period was slightly below analysts estimates. The stock has surged more than 70% over the last 12 months. In a conference call to discuss the results, eBay CEO John Donahoe pointed to strong growth in mobile commerce, which he said delivered “exceptional volume growth” during the period.
On the negative side we had Chipotle Mexican Grill (CMG) - one of the hottest growth stocks of the past 3+ years - which warned yet again on food costs hurting margins. The stock was down significantly but off the worst levels of the day.