Morning Market Thoughts

by DAN Good morning. We are looking at a slightly higher open, and it looks like stocks are going to move right back up into the battle zone, where resistance lives. We’ve got some key earnings releases this week, including:

Alibaba (BABA) — Wednesday
Fitbit (FIT) – Thursday
Tesla (TSLA) – Thursday
GoPro (GPRO) – Thursday
Priceline (PCLN) – Wednesday
Halliburton (HAL) – Tomorrow (deal with BHI called off)
CVS Health (CVS) — Tomorrow.
Whole Foods (WFM) — Wednesay
JC Penney (JCP) reports earnings a week from Thursday (May 12th)

WFM and CVS will tell us a lot about the retail sector, though several more companies report the following week, including Dean Foods (DF), Lumber Liquidators (LL), WhiteWave Foods (WWAV), SodaStream (SODA), Macy’s (M), Wendys (WEN), Kohl’s Corp (KSS), Ralph Lauren (RL), and Vista Outdoor (VSTO).

All of these earnings reports will combine to have a pretty big influence on the broader market because the health of our economy (as represented by the GDP) is largely dependent on the consumer. If you want to do your part to help the US economy, then spend that money rather than save it. C’mon, do your part! Go buy a car…or that new flat-panel that you’ve been eying. 🙂

From a technical perspective, the market is breaking down, with key breaks of trendlines occurring in the major averages. That’s not to say that the direction this week will be decidedly down. This market definitely has an ebb and flow to it, and we’re likely to see a move right back to test the bottom of the channel in the Nasdaq. Where is that level? Right where the 200- and 50-day moving averages are clustered. The 4,450 on the NDX is an important level to watch.

With the current rally going on about 3 months, don’t be fooled into thinking that it’s just going to keep running. Everyone needs a rest….including trends.

Have a good day.

–Dan

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