INTO THE TRADING WEEK, 13.04.15 via YPT PREMIUM http://www.yourpersonaltrader.com/
Last week was a tale of two U. S equity markets, YPT’s growth linked QNET-SHADOWLIST stocks that began a steath flight on Tuesday and roared for 3 days and the ‘BIG BLACK SHEEP’, which meandered on the 2015 flat line for those 3 days till finally making a move on Friday. At the end of the week, YPT’s QNET market gauge gained 3.2% outperforming the SPX ~2% and everyone’s favorite market ‘strength’ indicator, but not ours, RUT Small Caps, which gained a paltry <1%. Recall, it’s been the $RUT all have been fixated on as a barometer of overall market strength, unfortunately the market majority watching this index missed a big rip in YPT small caps (SMID’s) this past week.
Part of YPT’s trading methodology is anticipating moves in broad markets, sectors and single stocks, this premise was in effect as of Monday when we began anticipating a change in market behaviour turning away from the latest dominating theme of dovish/hawkish market direction and to a reversal in thinking an upside risk trade to SPX 2100 was on the table. It definitely worked and if you were anticipating, you saw early this growth beta play was in effect. The idea centered into Tuesday’s ITTD and a list of top YPT plays for a possible ‘growth’ binge buying was given, a bid notably in CUDA QLYS CMCM NFLX (all +7-14% on week) ensued. At Wednesday’s close QNET had made a ‘stealth’ 52wk high, just under 2014 Momentum stock top.
Considering QNET is YPT’s market barometer and did not give up any gains by Friday’s close, it is not a surprise SPX finally caught a tailwind into 2100+. It’s quite humorous this weekend seeing FDN INTERNET INDEX charts and comments its near a downtrend line breakout. As said last week, this index lags in our books, we already had the rip many are looking for now in conjunction with a move higher for the Black Sheep of Global Markets. Simply, the Black Sheep (U.S equities) stopped sitting and idling in jealousy and caught a tailwind finally off the Asian/European markets with the help of “bustling M&A activity” to close off the week. Other then ‘drafting’ behind Global Markets and a flurry of M&A activity this market has little reason to break out of the 2000-2100 range with vigor (to SPX 2150) unless this Global wave continues and/or we see a break of the QNET 2014 top. To be honest, don’t think it happens just yet unless a massive pile on into stocks comes beginning of the week from those watching, not playing last week (‘institutional chasers’). In all, prefer to see a market dip from here or from a little higher back to mid range (2050) before firing on all cylinders higher. A real rip of 100 SP handles later!
At this point we really don’t care what the broad market tells us or shows us, it’s earnings season and we’ll concentrate on single stocks going forward. These stocks won’t care what the broad market is doing day to day. If a stock deserves a bid off a good report, it will get it even if the market is down 200 points to open the day. Our niche stocks didn’t care last week the SPX and RUT was meandering to move to the upside, they won’t give a hoot going forward.
If we do get an early market continuation this week, we have many stocks, a 2nd tier of plays at the cusp of putting up more points. On Friday this list included,“..yet other crawlers start poking their heads up looking good for the day ahead(s), FLT. GWRE, LXFT (USD benefactor) NEU, TYL“. Or stocks in NCH (New Closing High) or near such levels list with a preference to ie. if cyber, look to FTNT, FEYE break DT line vs. a CUDA QLYS, which already ran. URI, DDS, FTNT, CSGP are a few more to put on top for a possible play after Friday’s action, if market gets an early week bid.
In all, a little patience for new earnings plays won’t hurt…