Sunday, August 24, 2014

* Preparation: Must Know for the Week to Come; Must Know from Last Week

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Summary of Momentum
All major indices were up for the third consecutive week after the momentum implosion four weeks ago.  Check out the index movements week-to-week for the last four weeks.

Data by Yahoo! Finance

It could get bumpy for the last week of August & earnings are a part of the risk.

What Could Move Markets this Week

  1. The first Q2 GDP Revision
  2. Consumer Stock Earnings (list below)
  3. Momentum Cyclical Pattern May Signal Reversal

Last Week: Must Know
All Stock Indices: Up for the third week in a row.

Data provided, Yahoo! Finance, Charles Schwab optionsXpress

The momentum "issue"went from a collapse, to mixed, to now markedly bullish (right?).

* As of Friday: 69% of stocks are now trading above their 20-day MA
* As of 4-weeks ago: 34% of stocks were trading above their 20-day MA

We'll get to the rest of momentum a bit later, but one odd thing to note: The violent change in momentum from bearish to bullish might actually be a sign of... another drop?

Chart of the Week: #MOMO Poster Child NFLX Hits an All-time High

Provided by Charles Schwab optionsXpress

Last Week: Phenomena We Must Know
* Twitter (TWTR) - Unprecedented: Risk Breaks All-time Lows; Stock Moves in Huge Cycles.

* Tesla (TSLA) - A Depth of Analysis Like Never Before & 10 Charts That Will Blow Your Mind

* Apple (AAPL) - All-time High & 3 Huge Risk Profile Changes Mean: Completion of a New Identity

* Tekmira (TKMR) - Ebola, Hepatitis B... Option Market: No Idea What Stock is Worth

Last Week: Stats Must Know
Momentum collapsed three weeks ago, and has recovered so violently it might actually be a bearish sign.

Provided by

Compare the numbers from 'last week' to 'today.' Everything looks 'better.'

* As of Friday: 69% of stocks are now trading above their 20-day MA
* As of 4-weeks ago: 34% of stocks were trading above their 20-day MA

* As of Friday: 51% of stocks are now trading above their 50-day MA
* As of 4-weeks ago: 46% of stocks were trading above their 50-day MA

And the longer-term view (and most important in my mind):

* As of Friday: 56% of stocks are now trading above their 200-day MA
* As of 4-weeks ago: 54% of stocks were trading above their 200-day MA

Here's a fascinating image that covers the percent of stocks above the 20-day moving average over the last year.  Note how we are stuck in a cyclical peak/trough pattern... Perhaps the peak as of right now points to a change in direction, just as the trough 4-weeks ago pointed to a bullish swing.

Here's the 20-day MA.

Provided by

Last Week: Must Know Headlines:
* US housing recovery appears to be back on track

* Fed minutes: Some want 'relatively prompt' rate hike

* US Home Construction Jumps 15.7 Percent in July

* Why irrational exuberance does not explain this stock market

This Week: Must Know
This week there is a good deal of economic data and retail is still on the radar in terms of earnings.

Below you will find all that we need to prepare for the week to come. All data and images for this report are provided by Charles Schwab optionsXpress.

This Week: Economic Calendar
This week we can focus on the consumer, both with respect to economic data and earnings.

Last week's consumer sentiment was the highest since 2000. We'll get an update on Tuesday.

The second estimate for Q2 GDP is due out on Thursday.  The initial reading was a rip roaring 4.0% all but erasing any memory of the Q1 shrinkage in GDP (the winter blues).

Partial List of Noteworthy Earnings This Week

Look how many consumer names report next week:
  • ANF
  • BBY
  • DG 
  • EXPR
  • GES
  • WSM

Combine that with sentiment data and a new GDP estimate.. it could get bumpy for the last week of August.

This is trade analysis, not a recommendation.

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