Stock Market Early Morning Insights – August 15, 2016

As of Friday’s close, the NASDAQ composite looks like it is setting up to go higher. The indexes been for me a consolidation area, and had Friday it closed at 97.47% of its intraday high. The other indexes that I track in this report, the S&P 400 mid-cap and the S&P 600 small-cap indexes have been in a relatively tight trading range for the past month, and if the NASDAQ composite does break higher, I expect the other indexes to follow.

The strength recently has been in the high tech stocks, and we have seen a strong rebound in oil over the past few days. Semiconductor Devices are the dominant group in the Top 50 GIR once again.

If you take a close look at the Top 50 in the body of this report, you will see that most of the dominant groups are in the tech sector: Communication Equipment, Application Software, and E-Commerce. This is confirmation that the risk trade is still on. I know that a lot of traders are looking for a top, but we have to wait until we see some deterioration before we can consider a change in market direction. I just don’t see it yet; in fact, I see the opposite.

Volume has been light, but we are in August, and are winding down the vacation season. School starts here on Monday, and I assume that that is the case in many parts of the country. After school begins, we should see more normal trading volume in the indexes, or at least that is my assumption.

Earnings season is winding down, but there are some interesting names out there that have yet to report. Today, two stocks that I will be watching are VIPS and FN; both have made strong moves recently. CTRP was supposed report today, but that is been moved to the 17th.

Crude light futures are up once again this morning, up .45% as I write this. This is the third positive day in a row, but the chart still remains in a downtrend for both the medium and long terms. The short-term trend is up.

I am only looking for potential trades whose earnings are out, but that is the majority of the stocks. After earnings are out-of-the-way, it is much easier to concentrate on the technical attributes of a stock and its group, and see how it is continuing to respond to earnings. Nine of the 50 stocks in the top 50 GIR still have to report earnings, so be careful if you use it as your prospecting list. These stocks still are to report.

STOCK MARKET EARLY MORNING INSIGHTS

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