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The tame core PPI data helped, but the real market driver
on Friday is MRK.
MRK's new pain killer got a big fat reject from the FDA, but
they guided numbers higher and with that the stock jumped well
over 5% on the open. MRK is adding over 29 points to a Dow that
is up only 25 points. Yes, the PPI was benign, but MRK is
making a very flat day look a little better than it really is.
And, despite a tame core PPI, the bond market has not responded
as rates continue to inch higher.
With the thrust higher the Dow is above the short-term down
trend line and the action is consistent with the historical
pattern referenced last night. The one that was so rudely
interrupted in late February. Closing above 12,600 clears the
way for higher prices, but with a solid overbought condition
still in place, significant upward progress is more likely to
be driven by stock specific events (read: earnings.) I am being
a bit stubborn here but prefer seeing a bit more correction
during a correction. Note: the Dow did turn its 3-day trend up on Friday.
Total breadth is a little positive at about +250 while
directional volume is only slightly to the upside. Overall it
is shaping up to be a slow Friday. While Thursday's rally
eliminated the idea of downside follow through, Friday's action
isn't doing much in the way of upside follow through either.
Failure to see a upside thrust by the end of the day will
reflect very poorly on the bulls. 12,500 - 12,530 remains
initial support and a break there will indicate a test of
Thursday's lows, but at this time a significant break from
there seems less likely.
Note: AAPL delayed their new OS by four months. Despite
several analysts reiterating their positive ratings on the
stock, AAPL is off close to 2% on the day. Seeing AAPL break
below and close below $90.50 support will target support near
the $86 level.
The Best of the Best
I got some positive feedback after running this table earlier
in the week. The turnover is not very high, but I will include
this as a regular feature going forward.
The stocks listed below have 3, 6, and 12 month Patterson
Relative Strength Rankings of 96 or higher making them the best
performing stocks over the past 3, 6, and 12 months, and are
all trading above $8, and trade more than 100K shares on
average.
Last Prices are as of Friday AM:
Extra-Stuff:
The chart below shows what an average week looks like for the
market, based on 10-minute data from the Dow, over the past
four years. Note the large upsurge that takes place on Friday
afternoons.
Click here to read the full Intra-day trading analysis report.
Keep in mind, this is a composite average. The turning points
are the most relevant aspect to focus on while direction is
secondary. The Magnitude of the moves is relative and the
scaling should probably be ignored.
The rest of the day is expected to be slow...
See ya Sunday Morning
Jim Patterson
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