Week in Review
DJIA +52.38 (+0.36%) to 14,578.54; S&P 500 +6.34 (+0.41%) to 1,569.19; NASDAQ +11.00 (+0.34%) to 3,267.52
Friday the markets were closed in observance of Good Friday. Below is Thursday’s update and the weekly recap.
Today the markets finished off the week higher and the idea that we will be rallying into the long weekend proved correct but not without a few attempts to take it lower. This also allowed the S&P 500 to follow the Dow in closing at a new record closing high surpassing the previous closing high of 1565.15.
In economic data, the U.S. jobless claims increased 16K from the prior week to 357K and were higher than expectations. Also on the economic front the Commerce Department revised forecasts fr Q4 growth up to 0.4% from the prior estimate of 0.1 which looks very impressive but analysts had been forecasting and expecting a 0.5% gain. While overall you might say the data was a tad light, it wasn’t enough to derail the trend in place especially on a light volume holiday trading day.
Blackberry (BBRY) found its way back into the news after reporting earnings which announced a profit and that it shipped 6M smartphones along with already shipping 1M BB10 units. BBRY initially gaped higher on the news but ultimately closed lower. While optimism waned as the day continues, to me this action all seems part of the consolidating pattern that I have been looking for and BBRY looks to have a positive tone as long as it remains above $12.55 on a closing basis.
Another big name moving Thursday was eBay (EBAY) which closed over 4% on positive news coming out of an analyst day. EBAY noted that they expect to double their active users by 2015 and that they are targeting $21.5-23B in revue for that year. Considering EBAY’s 2012 revenue is just over $14B, that would be a 50% increase. EBAY also noted that non-GAAP EPS to grow 15-19% from 2012 to ’15.
Repros Therapeutics (RPRX) gained 76.34% after announcing positive drug news and specifically that their Androxal drug reached its primary endpoints.
Week in Review:
Monday started the week off with a lower close after starting with a gap higher on positive sentiment from Cyprus having a deal but as the details came out and comments regarding how this could be a template for future troubled nations, the markets started to blink realizing there could be depositor losses going forward. Dell (DELL) was in the news as they announced two competing offers to the Michael Dell/Silverlake offer. The two other offers were from Blackstone (100% takeover) and another from Carl Icahn (for 50%). Also in the news was Apollo Group (APOL), which announced a positive earnings report. APOL was a name I was watching for a potential bottom on a washed out name. The key is to see if the pullback from this recent gap holds the lows. If so then traders have a key level to take a long trade against (the $15.98) lows.
Tuesday saw mixed economic data but could not stop the market from moving higher. Goldman Sachs (GS) amended its warrant agreement with Berkshire Hathaway (BRK.A) allowing GS to settle using shares instead of cash. This clearly also shows the desire of BRK.A to take a long term stake in GS with Warren Buffet stating ”We intend to hold a significant investment in Goldman Sachs.”
After gaping roughly 10 points lower on Wednesday’s open, the S&P 500 started its climb back higher and finally closed nearly even for the day while also spending a brief amount of time in positive territory. Cliffs Natural Resources (CLF) gaped lower on negative analyst comments and as I discussed this could be the type of event that allows the stock to bottom but needs the lows of the day to hold. I personally would likely wait for a better pattern to develop even if that meant paying higher but for someone looking at the name and wanting in the lows of Wednesday ($17.95) provides a clear level to trade against. Also moving on analyst comments were AOL (AOL) which gained 8% and Rackspace (RAX) which lost 4.4%. As a reminder that you can review the 9 @ 9 which is the top upgrades and downgrades I find posted by 9am EST in the Upgrades/Downgrades section.
As always you can visit the Event’s Calendar for the release of economic data, scheduled meetings and other news that could move the market. Also in that section are Dividends and Splits.
Major averages 5 day results:
Dow Jones Industrial:
S&P 500:
Nasdaq:
This week played out as I expected and we rallied into the holiday and the end of the quarter, but now what? Unless you think that the market has a 40-50% gain coming for the year then you have to assume that the coming quarters will not be as robust as the one we just finished and while that doesn’t mean that we have to face strong harsh declines, it can mean that we are due for some dips and consolidation. As to when I cannot give an exact date or hour but what I want to look for is the first dip that comes that isn’t bought up or is and fails which has been something that the Bears have been unable to do so far. That might signal the Bull are will to step away (or at least to a certain level) and the bears can take control until the bulls make a floor. Monday starts the beginning of the month and quarter so we could see capital fund inflows.
I am not going to put up the standard S&P 500 chart this week and instead am putting up an Apple (AAPL) chart which shows a potential inverse Head & Shoulder pattern developing. I would like AAPL to stay above 436 on this recent pullback to not violate the Left Shoulder. If we do press below then we still may be bottoming but just a different set-up. One to watch for sure.
