Since the mid day reversal last Tuesday we’ve seen a V shaped rally, so we’ll see if “that” was the correction pretty soon here. The NASDAQ still has a ways to go before hitting key resistance while the S&P 500 should be back to the top of the range it has been in all year soon if this continues. As stated last Wednesday those intraday reversals where you probe down, make a new low and then reverse sharply and close at or near the highs sometimes mark a bottom, and usually at least provide a short term bounce. Of course we have no idea which one it is yet! Today was a quiet session with a mid morning drop but a rally the rest of the session – the S&P 500 gained 0.38% and the NASDAQ 0.64%. We have another heavy slate of earnings Tuesday-Thursday this week so buckle up.
The S&P 500 continues to look better than the NASDAQ; in about 20 point it will be approaching year highs.
The NYSE McClellan Oscillator is now back firmly in the positive after this week long rally – staying positive would be a good sign for the bulls; it hasn’t been able to do so since early March and the whip saw nature of the market since then reflects that.
We have not touched on oil in a while but it has been slowly creeping up – it is trying to build off yet another bull flag but this pattern has been relatively useless for the commodity of late.
Let’s keep an eye on these biotechs – they have been in a very steep descent but today the ETF for the group poked its head over the downtrend line. This was similar to the pattern of the emerging markets ETF a month ago when it reversed so if we see this hold, it could mean good things for the broader market. Gilead Sciences (GILD) which reports mid week should be the tell here.
Halliburton (HAL) gained after the oilfield services company reported better-than-expected results. This was one of those names that held up very well during the correction (we mentioned the energy patch a few times during the correction as showing relative strength) and today popped.
After the bell Netflix (NFLX) reported and zoomed up nearly 7% in after hours. This is another stock / ETF in a deep downturn as it was part of the momentum stock group that was demolished during this past correction. It is amazing what a difference a few years can make – the investors community embraces today’s news of a price hike whereas the last one in 2011 caused the stock to tumble.
Video streaming service Netflix Inc said it intends to raise the monthly subscription price for new customers by $1 or $2 a month to help the company buy more movies and TV shows and improve service for its 48 million global subscribers. Investors welcomed the announcement by Netflix, which had suffered from a consumer exodus and stock plunge after it announced an unpopular price increase in July 2011.
The company said in its earnings report it added 2.25 million customers to its U.S. streaming business during the quarter that ended in March, in line with the company’s earlier guidance, for a total of 35.7 million. In international markets, its customer base reached 12.7 million, a gain of 1.8 million during the quarter. Net income for the quarter reached $53 million, an increase from $3 million a year earlier. Earnings-per-share came in at 86 cents, topping the average forecast of 83 cents, according to analysts.