I’m frequently asked: Is the Market Expensive?
US STOCKS-Wall Street flat after data 6.4.14
* ISM services report strong, but ADP report weak
* Many investors worry about low volume and volatility
* Protective Life jumps, Dai-ichi to buy
* NQ Mobile has biggest gain ever, up 28 pct
NEW YORK, June 4 (Reuters) – U.S. stocks were largely flat on Wednesday as mixed reads on the economy gave the market little direction and traders were reluctant to buy with indexes near record levels.
Wall Street initially opened lower, pressured by a disappointing read on the labor market, but it subsequently cut its losses on a bullish read on the services sector. Trading volume continued to be light, making the market more susceptible to intraday swings and suggesting that recent gains lacked conviction.
The Institute for Supply Management’s non-manufacturing index accelerated more than expected in May, rising at the fastest pace in nine months. Separately, fewer private sector jobs were added in May than had been anticipated, according to the ADP National Employment Report.
“With some data strong and other data weak, we don’t have a clear picture of the market or the economy right now,” said Adam Sarhan, chief executive of Sarhan Capital in New York. “We don’t seem to be strong enough to grow without help from the Federal Reserve, but we do seem to be trending in the right direction.”
While economic reports have largely been positive lately, investors are concerned about any data that could indicate weakness in Friday’s May jobs report.
The Dow Jones industrial average fell 28.72 points or 0.17 percent, to 16,693.62, the S&P 500 lost 1.1 points or 0.06 percent, to 1,923.14 and the Nasdaq Composite added 4.57 points or 0.11 percent, to 4,238.65.
Equities have been strong lately, with the S&P up for seven of the past nine sessions, hitting multiple records.
The CBOE Volatility index was up 2.2 percent, its third straight daily advance. Despite that, the “fear index” remains around 12, well below the historical average of 20, which has some investors concerned the market has become complacent.
In company news, Protective Life jumped 18 percent to $69.25 in heavy trading after Japan’s Dai-ichi Life Insurance Co agreed to buy the company for $5.7 billion.
Tibco Software Inc was one of the Nasdaq’s most active, slumping 8.2 percent to $19.10 a day after a second-quarter outlook sharply below expectations.
NQ Mobile Inc soared 28 percent to $9.80, its biggest one-day advance ever, moving on heavy volume after the mobile security software maker said a special committee had found no evidence of fraud, as had been alleged by short-seller Muddy Waters Research Group. (Editing by Bernadette Baum and Nick Zieminski
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An easy way to beat the market is to find and own leading stocks. Put simply, that is exactly what you get with your FindLeadingStocks Membership. We receive quite a few emails asking us what is included in a FLS Membership. So we decided to give you a glimpse of some of our work (below is an excerpt from an intra-week update, not our weekly report). In addition, to sending you how to read the tape (navigate the market in real-time), you get advanced (a.k.a early) entry points in leading stocks, new high quality trade setups each week and access to our special reports (only available here).
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FLS Sample (Intra-week update, not our weekly report)
Market Update: Bulls Are Back In Control
Path of Least Resistance Is Higher:
The S&P 500 (SPX) broke out of its 5.5 month base last week which bodes well for the bulls. It is also encouraging to see the Nasdaq 100 (QQQ) break out and hit fresh 2014 highs as well. In the very short term the market is a little extended/overbought and we’d like to see a light volume pullback before making its next move higher. The DJIA, Nasdaq Composite, Russell 2000 are still trading below their 2014 highs and the bulls would like to see these indices follow through to the upside.
Buy Weakness, Not Just Strength, in An Uptrend
In a strong bull market we like to buy weakness and not just strength since it gives us a nice (and very important) edge in the market. Earlier this year, we wrote about how the market was in the process of building a large topping pattern and noted that we needed the top to be confirmed otherwise it would be a large base within a broader uptrend. Now that the SPX broke out, the latter scenario has occurred and the bulls are back in control as long as the SPX continues trading above 1897 (resistance should now become support).
Market Update: Consolidating Recent Gains
So far the action this week is best described as a healthy consolidation ahead of a few key data points (Mainly, European Central Bank & US Jobs Report later this week). The small-cap Russell 2000 index remains the weakest index but has the look/feel that it is just a matter of time until it rallies (providing, the other averages continue moving higher).
Positions: Results Are Results. Period.
Thankfully, the FLS portfolio is doing great as every position is profitable and our stops are tightened to avoid anything turning negative. SWKS was the standout winner today, jumping a very healthy 6% today alone! This stock took some time to get going but hopefully this is the beginning of a nice long uptrend. Here is a snapshot of the portfolio as of Tuesday’s close,
A. The service owns: SPY +4.39%, AAPL +12.10%, SWKS +7.36%, XLV +2.34%, NFLX +17.79%, JAZZ +5.89%, FB +2.06%, GLL +4.11%
B. The service will exit: SPY @186.37, AAPL @596, SWKS @39.85, XLV @58.61, NFLX @392, JAZZ @135.27, FB @61.27, GLL @89.68
Working orders: (Real Orders Are Only Available For FLS Members)
|Status||Order||Ticker||Buy Stop||Protective Sell Stop||Risk From Entry|
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In Jan 2014, Adam Sarhan was invited to appear in a Danish Documentary about “The American Dream.” His appearance (7:18-11min mark) is in their New York segment: