Market Montage
Stock Market, Economics, Equity Analysis
Feb28
Valeant Pharmaceuticals (VRX) is an interesting roll up company in the pharma space; the entity was formed by a mega merger of of Valeant and Biovail in late 2010 to form this $16B player. The stock has been quite weak of late, dropping from $51 early in the month, all the way down to its 200 day moving average 5 sessions ago. Yesterday in a wild and woolly post earnings session the stock traded as low as its 200 day at $46 and as high as nearly $51. A fun day for the electronic market makers and no one else. On the positive side, it held its highs and is consolidating nicely today. …
Feb28
All the strength remains in large caps, while the broader market is weak yet again. This has been the pattern for the better part of 2+ weeks now. Russell 2000 is down 0.7% as the S&P 500 is flat (and NASDAQ up 0.3%!). The RSI on the Russell 2000 is nearing 50, while we're still seeing readings in the 70(+) range for major indexes – a massive divergence. …
Feb28
Priceline.com (PCLN) has been one of the momentum stocks of the past few years which has not participated as much in 2012. Until the past few weeks it has been range bound in a massive area of $440 to $560 for much of latter 2011 and early 2012. That changed a few weeks ago, and last night's earnings report soothed the concerns over the business, which is heavily focused on Europe. The stock has gapped up and like just about every stock this quarter, reducing exposure ahead of earnings has been an exercise in lost opportunity. …
Feb27
Ummm… for those playing along at home, yes the S&P 500 bounced off that 10 day moving average. After spending 30 minutes below it, Pavlov and his dogs could not resist. Once more they are rewarded. Usually the market does not reward the same behavior repeatedly like this, but as with the lack of volume, I guess a lot of the old rules are not applying.
Feb27
While Warren Buffet's annual letter received all the attention this weekend, I am one more likely to be trying to catch what GMO's Jeremy Grantham is espousing. Both of course are quite brilliant men. As the title indicates it's a bit on the long side but Grantham starts with a Shakespearean angle (Hamlet!), giving us his 10 points of investing advice. The next portion is titled "Your Grandchildren Have No Value (and Other Deficiencies of Capitalism", and then he finishes the quarterly letter off with his market outlook – which is not actually that bearish. Anyhow, always a sharp read. …
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