Stock Market Tips from Marc Chaikin

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Market Insights
Stock Market Tips from Marc Chaikin June 28,
2014 Rally Stalls as Sector Rotation
Continues The SP 500 Index closed at 1,960.96,
down 0.1 on the week. The stock market reversed
from a new all-time high on Tuesday at 1,968 on
the SP 500 Index and finished down 0.6,
breaking a short-term support pivot at 1,952.
While this bearish price action usually results
in 2-3 follow through selling, this is a
resilient market indeed, and stocks regrouped to
finish the week on relatively solid footing. As
shown by the Power Bars below, large cap and blue
chip stocks continue to lead the way as investors
look for stability and yield, while the spread
between bullish and bearish power gauge ratings
in the Nasdaq 100 remains slightly negative.
(Power Bars from ) While there has been a decent
rally in The Nasdaq 100 and something less but
still positive in the Russell 2000, there is
nothing likely to change in the upcoming holiday
shortened week. With traders and investors taking
a long weekend, we should expect more of the
same, with the markets unlikely to make upside
progress. With earnings season due to begin on
July 8th when Alcoa (AA) reports, the stock
market will take its cue from company guidance
regarding the 2nd half of 2014. A 6 rally in the
1st half of 2014, after a 5 year bull market, is
decent enough and there is nothing that I see
which would derail the stock market short of some
very disappointing 2nd quarter earnings reports
and negative company guidance. Stay tuned.
6/29/14
2014 Chaikin Analytics, LLC. All rights
reserved.
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Nike (NKE) - Another High Flier to Sell on
Strength Nike reported earnings after the close
on Thursday which exceeded Wall Street estimates
and the stock gapped up over 2 points on Friday.
A funny thing happened to NKE as it closed at its
low for the day in a generally neutral market.
This strikes me as bearish behavior for this
perennial favorite and gives investors and
traders a chance to sell this bearish Power Gauge
rated stock as it makes a triple top. While we
respect positive earnings surprises, the markets
response was underwhelming and with Nike now
overbought selling on strength makes sense.
(NKE Chart from showing Overbought Sell
signal) ETF Sector Update The strongest sectors
in terms of Power Gauge ratings are Utilities
(XLU), Financial (XLF), Health Care (XLV),
Energy (XLE) and Technology (XLK). There have,
however, been lots of cross-currents as investors
fled from high yield utilities and oil refiners
effected by the limited lifting of a longstanding
ban on U.S. exports of crude oil.
6/29/14
2014 Chaikin Analytics, LLC. All rights
reserved.
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(SPDR Sector Chaikin Power Bars from ) The
Retail stocks continue to drag down the Consumer
Discretionary Sector (XLY). Update on the Oil
Refining Stocks Oil Refiners which have been
stellar performers with bullish Chaikin Power
Gauge ratings were blindsided last week by a Wall
Street Journal story about a Commerce Department
decision to allow 2 Texas oil companies, Pioneer
Natural Resources (PXD) and Enterprise Products
Partners (EPD) to export extra-light crude oil
condensate overseas. There has been a ban on U.S.
exports of unrefined crude oil since 1975. In the
past 3 years as the price of Brent (overseas)
Crude Oil has spiked higher vs. domestic crude
oil (WTI) companies like Valero (VLO), Tesoro
(TSO) and Holly Frontier have benefited. These
stocks dropped 8-10 on Wednesday and have
struggled to regain their footing.
6/29/14
2014 Chaikin Analytics, LLC. All rights
reserved.
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(VLO chart from ) Both VLO and TSO still have
bullish Chaikin Power Gauge ratings but it will
take some time for the market to decide if this
exception to the export ban will result in a
trickle or a flood of crude oil exports. Politics
will play a part in this discussion as U.S.
energy independence is a major plus for the U.S.
economy, and the Obama administration may not
want to appear to be jeopardizing that very
positive state of affairs. Professionals for
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Analytics does not recommend the purchase of any
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The information presented is generic in nature
and is not to be construed as an endorsement,
recommendation, advice or any offer or
solicitation to buy or sell securities of any
kind, but solely as information requiring further
research as to suitability, accuracy and
appropriateness. Users bear sole responsibility
for their own stock research and ecisions.
6/29/14
2014 Chaikin Analytics, LLC. All rights
reserved.
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