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February 23, 2014 – Weekend Market Comment

February 23, 2014 – Stock continue their climb upward as economic conditions continue to improve and there are few problems on the horizon. 

Stocks were mixed in a holiday-shortened trading week, as investors weighed weak economic signals against some good earnings reports as well as encouraging merger and acquisition activity. The broad large-cap indexes were modestly lower, while the technology-heavy Nasdaq Composite and the smaller-cap indexes enjoyed gains. Bull markets have a maximum shelf life of five years, and Wall Street may soon approach the end of this one. It's a little bit of catch-up for 2013, We've gone for an awfully long time without a correction. Bull markets tend to have a maximum life of five years. We're getting awfully close to that.

Heightened concerns over emerging market currencies and liquidity flows have made for a jittery Friday on Wall Street, as the Dow dropped 231 points during the morning trading session before halving its losses. If the S&P 500 drops below 1,770 the markets could see a wave of secondary selling. The S&P has held above that level and had regained some traction by noon.

That said the market has changed, with strength in industrial, healthcare and technology taking over as the economy grows less reliant on the American consumer equities like consumer discretionary and retail. In short the “New Momentum” is in full swing.

As you can see over 60% of NYSE stocks are now trading above the 50 day moving average. 

(as always click any graphic to enlarge)

The new high lows is returning to normal.

The fear index or VIX is working its way back down. In the latest sell off this indicator when it hit overconfidence was one of the best early warnings we had.

The Primary sell indicator shows the smart money on wall street is back in the game.

We even painted a green arrow on the Green Arrow graph, indicating a buying opportunity.

What Works Now
I hope you were able to follow me in on some previous buy recommendations:

NETSUITE - N                         up 9.4%
NUVISTA ENERGY - NVA    up 19.8%
TRIPADVISOR - TRIP:            up  11.44%
WYNN RESORTS - WYNN:   up 9.7% 

Nice returns, up your stop loss limit to lock in profits.

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