We continue to see a market not ready for the prime time. Some good news from economic data this morning as both mortgage applications and Markit’s Manufacturing PMI data came in better than expected. Mortgage applications for the week jumped more than 13.9% and PMI came in at 53.0 when most expected a reading for 52.8. For the most part the lack of volume created a little volatility intraday, but remained contained within yesterday’s high and low. The Dow on the other hand was the weakest of the bunch piercing yesterday’s low. This market is not ready to push higher and produce some huge winners. While anything is possible it is whether or not it is probable. Given our current state it is not probable we can rally.
We are going to keep things simple here. No need to overcomplicate a market where the risk/reward picture is not in our favor. One surefire way of losing money is risking capital when the odds are against you. At this point in time we do not have the odds in our favor.
Two large stocks holding up nicely happen to be FB and AMZN. Keep an eye on these two as this market moves along. UA is another stock holding up nicely. NFLX while below the 50 day is certainly a candidate to watch for a potential pocket pivot play.
Keep it simple and cash continues to reign supreme.
