Morning Market Thoughts

Good morning. Just a few thoughts this morning.

Futures are up slightly, as General Motors (GM) posted an earnings beat for Q4. Good news for the market, but it is not impacting the stock in a positive manner. The strong earnings were obviously expected, and traders are taking profits (down about 1% pre-market).

The indexes remain range bound with an upside bias. Seems to be just a matter of time before the market breaks out. But for now,

After a month where politics has dominated the headlines and worn most people out, it would be nice to see an attack on new highs so that traders have something to do that makes money. Don’t let the controversial headlines take your attention away from the market. This is a bull market and climbing a Wall of Worry. It’s healthy when stocks climb higher in the face of negative and controversial headlines. Some would say that such bullish action signals complacency. I say that bull markets always climb in an atmosphere of complacency. Isn’t that an apt conclusion when wondering what “Wall of Worry” actually means? “So much to worry about, yet stocks are climbing? Wonder why that is. Traders just don’t seem to understand how much there is to worry about. They are complacent. Sigh. I’ll wait for a pullback.” [The pullback never comes, and ultimately the doubting Thomas buys at higher levels, thus pushing the market a bit higher on the Wall of Worry].

As noted last night, gold and silver are breaking out of consolidation and are certainly worth a look. Technically, many stocks are still below their 200-day moving averages, but there are a couple that are working very well. Barrick Gold (ABX) and Newmont Mining (NEM), both due to report earnings soon, are breaking out above their 200-day moving averages. There are a few others that are popping out of volatility squeezes, and we’ll be looking more closely at those in the member forum today.

Twitter (TWTR) reports earnings on Thursday after the close. No predictions…but the stock is about one year into a wide base, which can be a significant source of support, thus cushioning any downside move on disappointing earnings. Check the 200-day moving average. It flattened out in August and has been moving sideways (with a slight upward slope) ever since. Any position held over earnings is, by definition, speculative. I’m just pointing it out as a possibility. (Random Musing: Twitter seems to be getting a lot of free promotion these days as one widely-followed “tweeter” generates news on a daily basis. No telling whether he is having an impact on the bottom line, or even if my query is even relevant.)

See you in the forum.

–Dan

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