All-time Highs with Huge Snapchat IPO on the Way

Wall Street gave out a roar yesterday, on the 8th year anniversary of the second longest bullish market in history. Stocks opened at a gap up and didn’t look back, the market churning out new highs at full force. Trading, though, over the rest of the month, is not expected to be smooth sailing, and there are significant macro risks at bay, with a number of catalysts now driving movement.

The Dow Jones soared over 300 points yesterday, crossing past the 21,000 point level for the first time in history and mounting a huge comeback after things turned sour briefly on Tuesday when the index cut its 12-day winning streak. The sentiment in the air on Wall Street is so high that it’s hard to pause for breath, stocks continuing to move higher and higher despite the political uncertainty, the rising chances of a rate hike, and stretched valuations and extreme sentiments. It’s almost hard to believe!

In summary for the day, the Dow Jones rallied 1.5% and the S&P 500 soared 1.4%, with the NASDAQ jumping 1.4% and the Russell 2000 leaping 1.9%. Positive movement was seen in the dollar. Gold and crude fell 0.3%.

Financial stocks, which had been the main engine behind the uptrend after the elections, recorded the best performance on the market yesterday as well with gains of 2.85% on the XLF Exchange Traded Fund (ETF). The stock of Weight Watchers (WTW) soared 27.5%, players who had gone short on the stock fleeing for their lives. The company reported better than expected Q4 2016 earnings results thanks to a surge of almost 10% in subscribers, while likewise raising its guidance.

Intel (INTC), though, ended the day in the red, shedding 0.8% after being slashed to “underperform” by Bernstein analysts who pointed to the fading dominancy of the company’s datacenters and the stock’s high valuation. The cybersecurity stock, Palo Alto (PANW), fell 24.2% on the background of its weak results and disappointing guidance.

Best Buy (BBY) fell 4.5% after crushing analysts’ forecasts but releasing weak guidance. The stock of Ambarella (AMBA), producer of HD/4K camera chips, plunged 4.4% on the background of weak guidance and concern about excess supply on the part of its largest client, GoPro (GPRO).

It seems that the bulls are changing tacks mid-course, yesterday’s buying coming on the background of the lack of detail laid out in Trump’s speech. Just 24 hours ago the concern was that Wall Street would come out disappointed if policy details weren’t laid out. Perhaps more than anything, it’s important to understand that it doesn’t matter why the bulls want to head for higher ground. Their main motivation is two-fold – the injection of new moneys into funds on the first day of the month, and likewise, aggressive short-coverage. With that said, headwinds are growing. At this point, it’s been already over 90 days on the S&P 500 since we’ve seen a normative correction of over 1%. Likewise, the Dow Jones, hasn’t fallen by 1% since October ’16.

The Fed’s tough line on a rate hike – bankers pointing to growing chances of tightening, come March 15th – is only shoring up more and more. Future interest rate contracts are now pricing in 80% chances of a rate hike in the next policy meeting. The rate hikes on the part of the Fed will, when push comes to shove, signify the end of the current bull market, as was the case with all of the previous bull markets and historically so, in regards to all periods of economic expansion. The main dates to mark off in your calendars are Fed Chairwoman, Janet Yellen’s speech this Friday, and in two weeks’ time, Wednesday March 15th, when the FOMC will announce its rate hike decision and release the Fed’s economic forecast.

On the S&P 500, 140 stocks rose to new 52-week highs, 5 dipping to new yearly lows; on the NASDAQ, 218 stocks recorded new 52-week highs, 38 falling to new yearly lows. About 8.1 billion shares changed hands on U.S. exchanges, compared to the 6.9 billion average over the last 20 trading days.

Thursday: Wall Street is fine-tuning itself, players positioning themselves in advance of the world’s largest IPO ever. All eyes on Wall Street are now turned to the biggest tech issue the market’s seen since Alibaba (BABA) went public in 2014, in essence, the technology that’s smitten more young people in the 15-24 age range than any other technology, in other words, Snapchat! The issue, yesterday, was incredibly successful, demand outpacing supply by more than 10-fold. The company raised $3.4 billion yesterday, giving it a huge market cap of $24 billion; this is a company that refused just 3 years ago to be purchased by Facebook’s Zuckerberg for $3 billion. Snapchat’s underwriting price closed at $17 per share, above the original range that stood at $14-$16. The issue of Snapchat, which starts trading today under the symbol, SNAP, is bursting forth with the stock market at an all-time high. Many an investor had been left behind and there’s a lot of capital lying around, itching to be invested. All of that comes to say, that we’re talking about very fertile grounds for the IPO. The pipeline of new IPOs in now full – and that’s after an earlier dry spell. If the SNAP issue is crowned successful, we’ll get a green light for other tech issues.

Index Last Daily change R2 R1 PP S1 S2
DJX 21,116 1.46% Up          
SPX 2,396 1.37% Up 241.44 240.61 239.49 238.66 237.54
Nasdaq 5,904 1.35% Up 132.32 131.88 131.24 130.80 130.16

 

Thursday’s Hot Stocks: AVGO, MNST, SHAK, PSTG, KR, JD

Today’s IPOS: SNAP

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Monday 8:30 Durable Orders 1.8% Medium
Monday 10:00 Pending Home Sales 0.9% Medium
Tuesday 8:30 GDP – Second Estimate 2.1% High
Tuesday 8:30 Wholesale Inventories Medium
Tuesday 9:45 Chicago PMI 53.0% Medium
Tuesday 10:00 Consumer Confidence 111.5 High
Wednesday 8:30 Personal Income 0.4% Medium
Wednesday 8:30 Personal Spending 0.3% Medium
Wednesday 10:00 Construction Spending 0.6% Medium
Wednesday 10:00 ISM Index 56.1 High
Wednesday 10:30 Crude Inventories Low
Wednesday 14:00 Auto Sales Low
Wednesday 14:00 Fed’s Beige Book   High
Thursday 8:30 Initial Claims 244K High
Friday 10:00 ISM Services 56.5% Medium

  

Earning Calendar

 

Symbol Company AM/PM Day
AMT American Tower Corporation AM Monday
PCLN The Priceline Group Inc. PM Monday
OKS ONEOK Partners, L.P. PM Monday
WDAY Workday, Inc. PM Monday
OKE ONEOK, Inc. PM Monday
PRGO Perrigo Company plc PM Monday
SBAC SBA Communications Corporation PM Monday
CNP CenterPoint Energy, Inc. AM Tuesday
LNG Cheniere Energy, Inc. AM Tuesday
BMO Bank of Montreal AM Tuesday
TGT Target Corporation AM Tuesday
SRE Sempra Energy AM Tuesday
PANW Palo Alto Networks, Inc. PM Tuesday
ROST Ross Stores, Inc. PM Tuesday
CRM salesforce.com, inc. PM Tuesday
BBY Best Buy Co., Inc. AM Wednesday
DLTR Dollar Tree, Inc. AM Wednesday
LOW Lowe’s Companies, Inc. AM Wednesday
AVGO Broadcom Limited PM Wednesday
MNST Monster Beverage Corporation PM Wednesday
JD JD.com, Inc. AM Thursday
KR The Kroger Co. AM Thursday
CNQ Canadian Natural Resources Limited AM Thursday
COST Costco Wholesale Corporation PM Thursday
ADSK Autodesk, Inc. PM Thursday

 

2.3.2017

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
SWKS 97.51   TXT PANW
AVGO 216   WTW AMBA
CAT 99.50   KITE FSLR
EA 88.28   CME  
VOYA 43   ATVI  

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.2.2017 AKAO Long Close 16.2.2017 +11.29%
2 2.2.2017 DATA Long Close 6.2.2017 +13.09%
3 7.2.2017 GNC Short Close 9.2.2017 +3.26%
4 9.2.2017 PG Long Close 13.2.2017 -0.63%
5 9.2.2017 ATI Long Close 14.2.2017 +2.42%
6 13.2.2017 STX Long Close 16.2.2017 +1.26%
7 14.2.2017 CXW Long Close 23.2.2017 +4.53%
8 15.2.2017 ZEN Long Close 23.2.2017 +1.60%
9 21.2.2017 AA Long Close 23.2.2017 -1.17%
10 22.2.2017 SCOR Short Close 24.2.2017 +0.78%
11 23.2.2017 NTAP Long Open   +3.32%
12 27.2.2017 DATA Long Close 1.3.2017 -2.14%
13            
14            
15            
16            

Today’s Picks – Swing “New-York Strategy

No.1 –    HAIN

Company Name The Hain Celestial Group
Entry Point 35.24
Stop Area 36.05
1st Target 34.70
Swing Target 32.87
Avg. Volume 1.43M
Sector Services | Food Wholesale
Earning Date
Risk Rate Normal
Risk\Reward Ratio 2.93:1