STTG Market Recap January 23, 2013

Well well well, quite an interesting after hours session Wednesday night.  On one hand we have Netflix (NFLX) up some 33% (!) as the company reported EPS of 13 cents versus expectations of a loss of 13 cents, along with some decent subscriber growth numbers.  Meanwhile, the (former) Apple (AAPL) of everyone’s eyes is being destroyed to the tune of 10%.  Obviously the latter is going to impact the markets far more tomorrow but seeing this stock demolished like this AFTER months of weakness shows what happens once a momentum stock stops being a momentum stock.  As for the greater market it was once again the morning weakness leading to a grind up in the afternoon as we have seen the same pattern day after day.  The S&P 500 gained 0.15% while the NASDAQ added .33% on the back of Google (GOOG) (+5.5%) and Apple.  There has been absolutely no real selling pressure the entire year of 2013 so seeing how the market reacts to Apple tomorrow will be interesting viewing.

The S&P 500 continues to stretch against the very top of the ascending channel, with no relent.

The NASDAQ gapped up on the Google pop, but will almost certainly gap right back down tomorrow.

This was one of those days the indexes hid what was happening under the surface – despite the gains, breadth was generally negative as shown by the NYSE advance decline line.

Here is Google’s chart – while an impressive move, it really only got back to prices it was a few weeks back as the stock has not been a leader.

Here is Apple with the current after hours price (just below $460) noted in the horizontal blue line.  You can see a very obvious gap in the chart in the $420s that looks like it has a great chance to be filled.  Also note the stock is just about where it was a YEAR ago, showing what a tremendous move it had in 2012.  But now it is making the round trip.

Netflix with the after hours print on the blue line at the very top of the chart.

 

A few comments from SentimenTrader to finish off the night:

According to the Hulbert Financial Digest, newsletter writers are recommending an 81% net long position in the Nasdaq Composite.  That’s the highest recommended exposure since July 2000.  The next highest recommendations were 79% in late December 2004 and 80% in late April 2010.  Both led to multi-month corrections.

AND

This is the 3rd time in its history that SPY closed above its open for 10 straight days (10/16/06 & 2/11/11 being the other two).

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Comments

  1. Robert Zaleski says

    As one of the lucky few who was in NFLX heavy for the last few weeks I’m holding my breadth it won’t sell off hard tomorrow. Either way I’m sure I’ll be fine though.

    As for the breadth, I have 320 and 134 new highs for the NYSE and Nasdaq to 6 and 4 new lows. So there’s quite a few names doing well.

    Best news ever from your recap :)… Greed and Fear, Greed and Fear, settle down…

  2. Fernando Pacas says

    Hey Blain,
    First of all thank you for all the recaps! They are really helpful and easy to understand.

    I was looking at a 2 year chart of the SPX and found a cup & handle formation from around April 12 – December 12. In these past days it broke out the resistance point at 1475… Do you feel it is a true breakout or is it more due to the earnings season?

    Thanks!