STTG Market Recap February 1, 2013

The market remains in full bull phase as just about any sort of news – good, bad, or indifferent – is views as good news.  Friday the January monthly employment data was reported and while the job increase came in below expectactions and the unemployment rate rose, viewers looked favorably on it since it meant no end of unlimited quantitative easing anytime soon.  Recall, Bernanke has a target now of at minimum sub 6.5% unemployment before the Fed would consider a change in policy so today’s rise from 7.8% to 7.9% was considered “good” by the trading community.  ISM Manufacturing did come in ahead of expectations but by that point the market had already gapped up and was well on its way to another big day.  The S&P 500 added 1.01% and the NASDAQ 1.18%.  The DJIA did cross 14,000 which gets a lot of news coverage but most people now focus on the other two indexes.

After a few days of resting we had wondered if the market was setting its sights on a more meaningful correction (of at least a few %) or simply resting a few days before the next leg up.  It was the latter.  The S&P 500 is again making a run to the top of its channel.

The NASDAQ finally broke out of its trading range of the past few weeks.

One area that was particularly strong were the telecom companies led by giants Verizon (VZ) and AT &T (T).  The former was upgraded.

 Verizon’s superior wireless network should let it continue to outperform other carriers and produce cash for shareholders, a Piper Jaffray analyst said Friday as he upgraded the stock to “Outperform” from “Neutral.”  Verizon Wireless manages to pull in more customers than other carriers even though it charges more, analyst Christopher Larsen wrote. He raised his price target on the shares of parent company Verizon Communications Inc. from $45 to $50. They last traded at that level in early 2002, as the telecom and Internet boom was winding down.

With Apple (AAPL) in a ditch, Google (GOOG) has attracted traders attention of late and broke out nicely today.

Financials were a strong sector, we can see a bull flag breakout today in Morgan Stanley (MS).

One area of weakness was some of the high end retail names – Coach (COH) for example.

Also in this sphere is Michael Kors (KORS) but for those looking for an IBD cup and handle formation, here is one to watch in the coming week.

In the commodities space oil remained over the $97 level but it’s a quite slow bull run here.

Silver and gold remain where they have been for a long while – no man’s land.

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