STTG Market Recap July 7, 2014

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Indexes had a much needed break Monday after becoming quite overheated late last week in holiday trading.    This is healthy and normal and should be embraced – it is an environment to continue to look for ideas to the long side.  The S&P 500 fell 0.39% and the NASDAQ 0.77%.   The small cap Russell 2000 did take a stronger hit at -1.77%.    Goldman Sachs  moved up its projected timing for the Fed to raise interest rates, forecasting the central bank would increase its benchmark rate in the third quarter of 2015 instead of the first three months of 2016.  Expect a lt of talk about this if the economy continues to strengthen in the second half.

We are about to enter earnings season so please make sure you know what day the stocks you own report as volatility will spike and many people like to lighten up on positions going into the report.  We’ll highlight key ones in the weeks ahead.  Profits are forecast to grow 6.2 percent for the quarter, according to Thomson Reuters data.

With the key indexes they came into today far from any serious support as they had jumped during holiday trading last week.

spx nasdaq

The same goes for the Russell 2000 which was very elevated from even the 10 day moving average so it keeps today’s sharp drop in perspective.

rut

Apple (AAPL) continues this intermediate term bullish run.  After a jump out of a flag, we saw a nice consolidation pattern out of another form of flag about 6 sessions ago and it’s been off to the races; today the stock jumped after analysts at Pacific Crest upped their price target to $100 from $93.  The upgraded outlook stems from what the firm expects will be higher than projected iPhone 6 sales during the second half of this year.

aapl

The biotech ETF (IBB) shows what happens when you get too far removed from even the 10 day moving average; it tends to eventually act as a magnet.

ibb

On the other hand a name like Tesla Motors (TSLA) has broken a short term uptrend so with something like this you want to be more cautious.

tsla

In the “blast from the past” category Blackberry (BRRY) continues a recent strong run.  BlackBerry has now gained 35 percent since reporting better-than-expected earnings less than three weeks ago.

bbry

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