STTG Market Recap March 31, 2014

Stocks ended a volatile first quarter with gains, to push the first quarter for the S&P 500 into the green.  The S&P 500 gained 0.79% and the NASDAQ 1.04%.   Stocks jumped right at the outset as Janet Yellen goosed the market with dovish comments that offset her hawkish commentary after the last Federal Reserve meeting.    We have a lot of economic activity this week including ISM Manufacturing Tuesday, ISM Non Manufacturing Thursday, and the monthly employment data Friday.

The job market in some ways is tougher now than in any recession, Yellen said at a speech in Chicago. She added the Fed’s “extraordinary commitment,” in the form of massive bond-buying and ultra-low interest rates, is “still needed, and will be for some time.”

We have quite a dichotomy happening in the indexes – the S&P 500 looks very solid and barely gave anything back during this recent dip while the biotech and momentum stocks were smacked around quite a bit in the past week, hurting the NASDAQ.   Generally the two indexes will move more in concert.

spx

nasdaq

Biogen (BIIB) – one of those hard hit biotech companies – climbed after the company won U.S. approval for its long-acting hemophilia B treatment Alprolix, according to the FDA.  Friday was not a bad area to take a stab at this sort of company for a shorter term bounce as it was near term oversold and fallen down to its 100 day moving average.

biib

Gold has come in a bit the past few weeks after a great start to 2014.  With that the always volatile gold mining stocks have been hit quite hard; here is the ETF for their sector: GDX.

gdx

One big cap technology stock that has completely ignored the pullback in the NASDAQ is Oracle (ORCL).   Today the company announced it was unveiling the new MySQL Development Milestone 5.7.4 for the popular open source relational database management system (RDMS) MySQL.

orcl

Alcoa (AA) is not usually a name to take much note of but this aluminum producer has an interesting pattern – a very long narrow base and then we saw a breakout on good volume last Thursday.  After a reversal Friday that did not puncture the breakout area, we saw nice follow through today.

aa

Bespoke Premium has an interesting piece out stating that March/April is the best 2 month period in the market, so with a not so great March maybe the market will do some catching up in April if history is any precedent.

Historically, March and April have been the best two-month combo for the market. But after a March that saw the market go nowhere, bulls are hoping April makes up for the sideways action.

Over the last 100 years, the Dow has averaged a gain of 1.29% in April with positive returns 57% of the time. Over the last 50 and 20 years is where the April returns really stand out. As shown below, the Dow has averaged a gain of 2.21% in April over the last 50 years, and the index has averaged an April gain of 2.71% over the last 20 years. Over both time periods, April has been by far the best month of the year for the market. Heading into April, seasonality couldn’t be more on the bulls’ side.
  Bespoke

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