7 gut checks before the stock market's opening bell
By Shawn Langlois
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Getty Images
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Good morning.
Some 1,527 days and counting into this bull market, and breakouts are everywhere you look these days. I'm not talking about the one that just celebrated its 37th anniversary , either.
Rather, the Wilshire 5000 has broken through dual resistance . An incredible 90% of stocks on the S&P 500 have broken well above their 50-day moving averages . Home prices, for what it's worth, are breaking away from lumber prices . And, of course, heavily-shorted stocks, like Netflix and Tesla, have been breaking the backs of bears for a while.
"Once again, just nothing is standing in the way of this freight train. Shorts might as well go to Vegas and bet it all against the Miami Heat. At least they would get a free drink out of it," writes 361 Capital's Blaine Rollins .
Even Greece is breaking out after a Fitch upgrade . What to make of all these upside breakouts ? Cam Hui, blogger and portfolio manager, says "it's OK to get long, but don't forget to look over your shoulder and maintain a tight risk control profile."
Or maybe doing nothing at all could turn out to be "one of the best decisions you ever make," financial planner Carl Richards says in a blog post in which he draws a parallel between soccer and investing. (Come on, Chelsea ).
Key market gauges: The Nikkei rallied back above 15,000 for the first time in more than five years and is bearing down on the Dow's 15,215 level after jumping 2.3% to pace advances across Asia . Check out why one respected market contrarian says what's happening in Japan is "potentially very, very dangerous" for America as well as the rest of the world's markets.
Europe is holding steady this morning, with all the major indexes moving gingerly into positive territory. France's CAC 40 is even participating despite data that showed the country slipped into recession. Again .
After another big day for the U.S. markets, futures on the Dow and the S&P are signaling a pullback to start the session.
The economy: Duck and cover, we've got a data storm brewing today. The New York Fed's Empire State index and the producer price index will hit at 8:30 a.m. After that, the Fed will post industrial production for April, with an expected drop of 0.3%. An index of home builder sentiment is also on tap, with economists looking for a rise to 44 in May from 42 in the prior month, boosted by improving weather and the aforementioned lower lumber prices. Read: Spotlight on the economy .
Earnings: Not a huge day on the earnings sked, though Cisco's report will be dissected after the bell. Some unsettling words from Deere are weighing on the stock early while investors are buying into what Macy's had to say about its quarter . Dell's moved-up report is set to dominate headlines tomorrow after an early leak suggested the results could be disappointing.
The buzz: BlackBerry is still being hotly discussed after investors greeted the company's new smartphone by pushing the stock 4% lower yesterday. It's not getting any better this morning, with shares off another 1.6% in the premarket. But could this be a short-squeeze candidate ?
Speaking of short-squeezes, Tesla is still one of the top trenders on StockTwits, along with Merck , Gap and Disney , which has been one of the most active stocks on Twitter this past week.
The chart of the day: With a bearish slant on the breakout theme, Chris Vermeulen of "The Gold and Oil Guy" blog posted an array of charts that signal an imminent market top , including a graph showing more than 75% of stocks above their 150-day moving average. The same can be said for the 20-day moving average. The general rule, he explains, is any level above 75% should be taken as a red light for investors. The chart below illustrates the recent divergence between utility stocks and the S&P 500 , a bearish trend worth noting.
Some 1,527 days and counting into this bull market, and breakouts are everywhere you look these days. I'm not talking about the one that just celebrated its 37th anniversary , either.
Rather, the Wilshire 5000 has broken through dual resistance . An incredible 90% of stocks on the S&P 500 have broken well above their 50-day moving averages . Home prices, for what it's worth, are breaking away from lumber prices . And, of course, heavily-shorted stocks, like Netflix and Tesla, have been breaking the backs of bears for a while.
"Once again, just nothing is standing in the way of this freight train. Shorts might as well go to Vegas and bet it all against the Miami Heat. At least they would get a free drink out of it," writes 361 Capital's Blaine Rollins .
Even Greece is breaking out after a Fitch upgrade . What to make of all these upside breakouts ? Cam Hui, blogger and portfolio manager, says "it's OK to get long, but don't forget to look over your shoulder and maintain a tight risk control profile."
Or maybe doing nothing at all could turn out to be "one of the best decisions you ever make," financial planner Carl Richards says in a blog post in which he draws a parallel between soccer and investing. (Come on, Chelsea ).
Key market gauges: The Nikkei rallied back above 15,000 for the first time in more than five years and is bearing down on the Dow's 15,215 level after jumping 2.3% to pace advances across Asia . Check out why one respected market contrarian says what's happening in Japan is "potentially very, very dangerous" for America as well as the rest of the world's markets.
Europe is holding steady this morning, with all the major indexes moving gingerly into positive territory. France's CAC 40 is even participating despite data that showed the country slipped into recession. Again .
After another big day for the U.S. markets, futures on the Dow and the S&P are signaling a pullback to start the session.
The economy: Duck and cover, we've got a data storm brewing today. The New York Fed's Empire State index and the producer price index will hit at 8:30 a.m. After that, the Fed will post industrial production for April, with an expected drop of 0.3%. An index of home builder sentiment is also on tap, with economists looking for a rise to 44 in May from 42 in the prior month, boosted by improving weather and the aforementioned lower lumber prices. Read: Spotlight on the economy .
Earnings: Not a huge day on the earnings sked, though Cisco's report will be dissected after the bell. Some unsettling words from Deere are weighing on the stock early while investors are buying into what Macy's had to say about its quarter . Dell's moved-up report is set to dominate headlines tomorrow after an early leak suggested the results could be disappointing.
The buzz: BlackBerry is still being hotly discussed after investors greeted the company's new smartphone by pushing the stock 4% lower yesterday. It's not getting any better this morning, with shares off another 1.6% in the premarket. But could this be a short-squeeze candidate ?
Speaking of short-squeezes, Tesla is still one of the top trenders on StockTwits, along with Merck , Gap and Disney , which has been one of the most active stocks on Twitter this past week.
The chart of the day: With a bearish slant on the breakout theme, Chris Vermeulen of "The Gold and Oil Guy" blog posted an array of charts that signal an imminent market top , including a graph showing more than 75% of stocks above their 150-day moving average. The same can be said for the 20-day moving average. The general rule, he explains, is any level above 75% should be taken as a red light for investors. The chart below illustrates the recent divergence between utility stocks and the S&P 500 , a bearish trend worth noting.
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StockCharts.com
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The call of the
day: The Wall Street Journal this morning
took another look at Seth Masters's Dow 20,000 call
from last year, and it's a call worth revisiting, considering the action we've
seen lately. "We're on the path that we thought we'd be on, maybe a
little bit ahead of schedule now, if anything," Masters told MoneyBeat in
an interview. While he doesn't see stocks continuing on a straight line higher,
Masters is standing by his call. "It doesn't look as outlandish
anymore," he said. "The probability we'll see 20000 by the end of the
decade is even greater now."
I almost went with doom-and-gloomer Marc Faber's call, not for world markets to collapse, but for all able-bodied men to visit Thailand before getting hitched. He apparently has a thing for Asian women, judging from this weird interview .
Random reads: The Shooting Star and The Model, a detailed breakdown from Vanity Fair on the murder case that has rocked South Africa.
Sadly, the guy dribbling a soccer ball from Seattle to Brazil gets killed. From the did-we-really-need-that-detail department, the soccer ball survives .
Look out, Google , here comes Russian-Vietnamese startup Coc Coc .
This media-savvy Hong Kong official has a great idea to curb rising rape numbers in the city: "Young girls should not drink too much."
Taking a swipe Abercrombie & Fitch's "cool kids only" approach, this #FitchTheHomeless video has racked up more than 500,000 hits since Monday. Judging from the comments, it's being met with some mixed reviews.
"No such thing as bad publicity" might not apply to this "epic brand meltdown" we've enjoyed over the past couple days. This one will continue to be hard to watch.
Need to Know starts early and is updated as needed until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise on Twitter.
I almost went with doom-and-gloomer Marc Faber's call, not for world markets to collapse, but for all able-bodied men to visit Thailand before getting hitched. He apparently has a thing for Asian women, judging from this weird interview .
Random reads: The Shooting Star and The Model, a detailed breakdown from Vanity Fair on the murder case that has rocked South Africa.
Sadly, the guy dribbling a soccer ball from Seattle to Brazil gets killed. From the did-we-really-need-that-detail department, the soccer ball survives .
Look out, Google , here comes Russian-Vietnamese startup Coc Coc .
This media-savvy Hong Kong official has a great idea to curb rising rape numbers in the city: "Young girls should not drink too much."
Taking a swipe Abercrombie & Fitch's "cool kids only" approach, this #FitchTheHomeless video has racked up more than 500,000 hits since Monday. Judging from the comments, it's being met with some mixed reviews.
"No such thing as bad publicity" might not apply to this "epic brand meltdown" we've enjoyed over the past couple days. This one will continue to be hard to watch.
Need to Know starts early and is updated as needed until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise on Twitter.
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