Courtesy of Blain.
While the indexes had a nice 2 day rally Fri/Mon, it was difficult to really trust it because some secondary indicators (such as the NYSE McClellan Oscillator we cite often) have been trending in the wrong way. Today was a good example of why you want those secondary indicators to be in our favor before going all in, on a short term basis, in a market. The rug was pulled out from under bulls and those 2 days of gains were quickly wiped out – the S&P 500 fell 1.18% and the NASDAQ 1.55%. There was more drama in Europe as stocks and bonds sold off in Athens on news the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns, the Financial Times reported. Germany’s finance minister later rebuffed the report . If you have followed Europe (or the world for that matter) since 2009 – you know how this works… a lot of huffing and puffing and then central banks or governments kicking the can down the road.
In economic news:
A report today showed the U.S. trade deficit widened in March to the highest level in more than six years, fueled by a record surge in imports as commercial activity resumed at West Coast ports following a resolution to labor disputes. The jump probably means the U.S. economy contracted in the first quarter when the Commerce Department issues revisions later this month.
Both indexes are struggling some here.
After a bounce the first time the Russell 2000 sunk to support, the index is right back there – often the second time you revisit support in short order is not as positive.
The NYSE McClellan remains in red and is nearing oversold.
Oil continues to act well; this breakout out of a bull flag continues.
We’ll look at some individual stocks tonight with charts from Marketsmith:
It was suggested a few days ago that Salesforce.com (CRM) was in play to be taken over. Today that suitor was announced as potentially Microsoft (MSFT).
Herbalife (HLF) is surging 15% in after hours to $46 after reporting earnings.
Herbalife reported first quarter earnings per share of $1.29 per share, beating expectations for EPS to come in at $1.01. Revenue in the quarter totaled $1.11 billion, topping expectations for $1.08 billion. In a release, Herbalife said the Venezuelan bolivar impacted earnings per share by $0.30.  The company also raised its full-year outlook, saying it sees earnings per share in 2015 coming in at $4.30-$4.60, better than the $4.24 that was expected. Herbalife previously forecast full-year earnings per share of $4.10-$4.50.
Walt Disney (DIS) closed mildly lower after jumping to an all-time high on quarterly earnings and revenue that topped analysts’ expectations on Tuesday.
This day in random speculation in biotech goes to Plasma Tech Pharma (PTBI) which famed hedge fund manager George Soros was disclosed as having a position in. This is a company with 7 employees, 20M shares outstanding, and only 2.7M shares in the float (the # of shares that could be traded). It averages 110K or so shares traded a day – today it had 61M shares traded. Meaning the entire float turned over 23x today.
Some earning reports of note for Wednesday include Tesla Motors, Transocean, TripAdvisor, Occidental Petroleum, 3D Systems, Soda Stream, Keurig Green Mountain, and Whole Foods.
