The markets are little-changed this morning after another push higher last week. The S&P accelerated higher out of the uptrend, held support each day, and then extended with a nice move on Friday. Volume was light for much of the week, but picked up on the breakout Friday, a positive sign.
There is no major economic news on tap Monday, but the White House is scheduled to release its budget proposal for the 2012. Overnight we saw sharp gains in the Asian markets as geopolitical risks have subsided with resolution of the situation in Egypt. Oil has also moved lower since Egyptian President Hosni Mubarak stepped down.
Last week we saw the market once again demonstrate its resilience, Thursday dipping below upper level support before reversing. The rich got richer as several already extended momentum stocks got another push higher. Netflix, Inc. (NFLX) continues to be a monster, and with another stellar quarter prompting notorious NFLX short Whitney Tilson to finally cover his disastrous positions, like Netflix CEO Reed Hastings advised him to do months ago.
For more individual stock commentary, see Scott Redler’s daily morning Price Point Sheet and watch his Morning Call video below.
Momentum mania has continued with apparel makers Under Armour, Inc. (UA) and Lululemon Athletica, inc. (LULU) keep running. Chipotle Mexican Grill, Inc. (CMG) rebounded from its post-earnings gap down to push sharply higher, a sign that higher prices are still in the cards for this stock. The cloud computing sector continues to rebound from its latest debacle with F5 Networks, Inc. (FFIV) earnings, with cloud company CEOs insisting the technology is only in its implementation infancy.
The big boys, big cap tech market leaders Apple Inc. (AAPL) and Google, Inc. (GOOG) also feel like they have higher prices in store over the next few weeks and months. Apple has been leading this market advance, continuing to make new highs despite Thurday’s mini-flash crash making some investors jittery. Google, on the flip-side, has been lagging but recently broke out of a lower wedge pattern.
The banking group also looks ripe for higher prices as it continues to work off the sludge from the financial crisis. Despite being heavily linked to the Madoff situation, current group leader JP Morgan Chase & Co. (JPM) finally got the long awaited breakout Friday. This week we will be watching close to see whether Goldman Sachs Group, Inc. (GS) can play catch-up and get back to the highs.
Lastly, the casino group remains interesting, as Wynn Resorts Limited has clearly separated itself from the pack with a stellar earnings report last week. Las Vegas Sands Corp. (LVS) had a great looking long term wedge pattern, but failed to ignite with a mediocre earnings report. MGM Resorts International (MGM) is the clear laggard in the group, posting a larger than expected loss this morning in its earnings report.
Overall this market remains strong with a firm put from the Fed seemingly in place. Friday’s breakout should lead to higher prices in the near-term before a pull-in becomes likely.
*DISCLOSURE: Scott Redler is long MGM, JPM, BAC, GOOG; Short SPY. John Darsie is JPM, GS, AAPL, GOOG, WYNN, RAX, RVBD.
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