It is getting frothy out there. We are in the midst of yet another V shaped rally off a bottom, similar to so many during the quantitative easing era. Earnings from Google (GOOG) yesterday seemed to light a fire under all the momentum type of stocks, especially the technology type today. The NASDAQ surged 1.32% and the NASDAQ gained 0.65%, as we have seen an almost straight up move since a week ago Wednesday. We don't show the 5 day moving average on our charts since it is a very short term indicator but the indexes are as far above their 5 day moving average than they have been at any point in 2013. So we are at a bit of an extreme level.
It was yet another quiet session on Wall Street as a very similar pattern has played out the past few days. A modest gap down to start the day followed by light buying all day with the indexes closing near the highs of the day. But there has been almost no movement at all in the closing price the past week. The S&P 500 has finished within a 2 point range in this five day period. This lack of progress is however helping work off the overbought condition the market has been in for most of January. The S&P 500 gained 0.02% and the NASDAQ added 0.22% mostly on the back of a big rebound by Apple.
While it didn't show in the headline numbers, Thursday was one of the more interesting sessions in a long while for markets. A relatively quiet morning was followed by fireworks midday when Google's (GOOG) earning release was published (still in draft form) about four hours too early. The data was poor, and sent the stock spiraling down some 8 to 10% before the stock was halted for a few hours.
Back from traveling Europe for close to two weeks and feeling re-energized. To kick start this week I wanted to share an updated list of 50 stocks that are currently on my close watch list alongside technical analysis.
While these stocks have good looking charts and fundamentals we cannot forget that the market is still in a stimulus rumor, european headline driven state and is completely unpredictable. Proceed with caution.