Wednesday was the third day in a row we had a morning selloff that was bought aggressively by the dip buyers. We have now done an excellent job working off a short term oversold condition that existed late last week. Tomorrow morning investors will await to see the European Bank decision; usually not much happening there but many expect a major move by the bank in easing at this meeting; Friday is the employment data. The S&P 500 gained 0.19% and the NASDAQ 0.41% after both were in the red earlier. As for economic reports today – there were 2; a private sector employment report which was soft and the ISM non manufacturing index which was solid:
The ISM non-manufacturing index rose to 56.3 in May, versus a 55.5 estimate, partially offsetting the latest reading from ADP and Moody’s Analytics, which found companies added 179,000 positions last month, versus expectations of 215,000 job additions.
Here are the longer term index charts – while the NASDAQ has a lot of headroom above to make a run, the S&P 500 is butting its head against a very long term resistance area. So maybe we’ll see some more rotation into NASDAQ if there is to be a move up from here.
This biotech ETF (IBB) continues to be a very easy trade setup – above dotted line hold, stop out below; it is acting pretty well here. If the NASDAQ is going to take the reigns from the S&P 500 in the near future this group should be a key one.
Like many growth stocks, Under Armour (UA) broke a key downtrend in the past 2 weeks; today it rose after Jefferies Group upgraded the sportswear retailer to buy from hold.
We mentioned the strength in Walgreens (WAG) in a recent recap; usually those which lead during a downtrend are good movers in the next upswing – and here was that move.
Often strong charts, signal good news – so that was the case here.
Foot traffic may have been down, but bigger baskets and pharmacy revenue helped to step up Walgreen May sales by 6% to $6.57 billion, sending shares to a new high. The nationwide drugstore’s comparable-store sales increased 4.4%, up from analyst estimates of 4.1%, according to Retail Metrics. Total front-end revenue rose 3% and pharmacy sales increased 7.9% for the month, said the company.
General Motors (GM) also soared today; this is a case of a lot of bad news was in the stock and right now investors believe the news is in the stock.
GM’s (GM) internal investigation into the recall of faulty ignition switches isn’t expected to implicate CEO Mary Barra, according to The New York Times. The paper reported that officials at General Motors believe the internal investigation, headed by former U.S. attorney Anton Valukas, will clear Barra in the inquiry that’s looking into how the company handled the recall of ignition switches that has been linked to 13 deaths.