Mkts bounced back last week - after the Nasdaq broke and tested the longer term 200 DMA - bouncing strongly. Tuesday/Wednesday saw a strong rally as some stronger than expected earnings reports gave investors hope that the correction witnessed in early April - was completed.....Thursday saw investors non committal after the surge - unwilling to commit money or confidence to the latest rebound as the mkts awaited the 3 day holiday weekend and potential geo-political issues arising in Ukraine. Hence the very distinct lack of direction on Thursday - as most indexes put in a 'spinning candlestick topping' pattern.
So what is this spinning top pattern? - It is the type of technical pattern that denotes indecision....so - after Nasdaq's test of 3950 (200 DMA) we saw a 3 day spike rally take that index higher closing at 4095 - well below resistance at 4220 - leaving a bit more room for an upside test.
We witnessed the Dow and S&P break their 50 DMA - although not testing much lower - as we saw money move from the momentum growth names into the broader stable diversified names . As the mkt spiked higher - both of those indexes surged back above resistance at the 50 DMA and ended the week well above- suggesting that investors are moving into the 'safety trade'.
Back to the spinning top - think of it as 'indecision' - where both buyers and sellers pretty much equaled each other - with neither side taking control - thus the churn. With neither side 'in control' - the next move is anyone's guess and the recent rally could easily be challenged. It is important to understand that if the 'spinning top' is formed after a rally or longer uptrend - it just suggest that the mkt is approaching some exhaustion allowing for a reversal in trend -conversely - if it is found after a sell off or long term downtrend - that suggests that sellers are approaching exhaustion allowing for the trend to change.
This morning we wake up to a world that is grotesque and ugly - recent events in Ukraine raising international concerns.....Pro-Russian forces undermining the April 17th Geneva accord as both side accuse each other of fomenting unrest in Eastern Ukraine. Will we see further destabilization in the days ahead? If so - how do world mkts react? How do world leaders react? The increasing tensions added to the skepticism about whether the US and the EU can even hold Putin accountable for the increasing likelihood of a civil war.
This morning US futures are +3 - trading at 1860. This is a big week - as 150+ companies in the S&P will be reporting earnings and the growing sense is that many of these companies will beat the 'lowered' estimates but will also raise forward guidance. This does support the sense that 2014 will continue to be a year of improvement - but whether that is enough to cause investors to take us to new highs is still unclear.
Earnings today include NFLX, HAL and STI (Suntrust Bank)....Eco day to include - Chicago Fed and Leading Economic Indicators.
The mkts have sustained some decent technical damage and need to re-group in order to make a concerted move higher. With the FED all but committed to near zero interest rates for as far as the eye can see - the mkt will have trouble really re-pricing - for now. The nearly 10% correction in the Nasdaq did not take the broader mkt with it - so some are still expecting a re-test of the broader mkt to confirm the existence of real support.
The recent underperformance of the IPO mkt is just another signal that although these represent new opportunities for investors - those same investors are not going gangbusters. That may change this week with the expected offering prospectus from Chinese online giant - Alibaba.
Alibaba for those of you unfamiliar is the Chinese version of Amazon - an E-commerce giant which is set to file for their IPO later this week - with an expected listing sometime in early summer 2014. We can certainly expect that this will excite and intrigue the mkts and investors -as it will be a great way to get some Chinese exposure in a portfolio..... estimates value Alibaba at some $200 bil - with the expected IPO set to raise upwards of $15 billion. Who will be home to this expected summer blockbuster? The NYSE? Nasdaq? BATS?.....
Overnight in Asia - mkts are quiet on this Easter Monday. Mkts in Australia, New Zealand and Hong Kong all closed and with the long weekend here in the US - most mkts lacked direction. Geo-political risks seemed to dominate the mood overnight. Japan flat, China fell by 1.5% extending its losses ahead of more macro data due on Wednesday - Flash PMI is not expected to show much improvement remaining in contraction mode.
Most European mkts closed in observance of the Easter Monday holiday .
Today is the Boston Marathon - and as a Boston Boy by birth - I along with so many of us - hope and pray for peace and reconcilation for those who suffered in last year's event. Our thoughts and prayers are with you on this day.
This begins with a basic white risotto that should be a staple in any food repertoire - so here it is:
You will need: Arborio rice, onion, Olive oil, butter, garlic, celery, Vegetable stock, dry white wine, s&p and parmegiana cheese.
In a pot - heat up the veggie stock....about 32 oz or so....
Chop 1 lg Onion and mince 2 Garlic cloves, rinse 2 celery stalks and mince that too.
In a pot - add olive oil and heat...now add the celery and onions and cook on low heat for 10 or 15 mins....they should be soft but not browned. Now add the garlic...stir.
Turn heat up to med and add the rice...(1 1/2 cups). stir and cook for 3 or 4 mins....you want to coat the rice..now add the white wine and continue to stir...maybe 1/4 cup....or so...reduce heat - let it absorb
- now add one ladle of heated veggie stock - you must keep stirring until it is absorbed....As it absorbs - add another ladle and keep stirring - repeat this process until the rice becomes soft yet still a bit firm....(not mush). now season with s&p and taste....adjust if need be....(should be about 30mins).....
Now add cut up butter - like 1/4 stick - and two handfuls of Parmegiana cheese - stir quickly to melt the butter and cheese into the risotto. Take off the heat and add the pesto***- stirring until you get the color that you want.....more pesto then more color (and taste), less pesto - then less color and taste....Serve immediately in warmed bowls.
**Basil Pesto sauce - you will need: fresh basil, garlic, s&p, olive oil, garlic, pine nuts and parmegiana cheese. On the stove toast the pine nuts in a frying pan...no oil just heat the nuts slowly - careful not to burn....set aside. Now in the food processor - add, 3 handfuls of basil, 2 cloves garlic, olive oil, s&p and blend - do not be stingy with the oil....next add 2 handfuls of parmegiana cheese and the pine nuts...blend again....You ultimately want a thick, kind of creamy consistency...if you need to add more oil - go for it. Repeat this process until you have enough pesto sauce.
Buon Appetito.
So what is this spinning top pattern? - It is the type of technical pattern that denotes indecision....so - after Nasdaq's test of 3950 (200 DMA) we saw a 3 day spike rally take that index higher closing at 4095 - well below resistance at 4220 - leaving a bit more room for an upside test.
We witnessed the Dow and S&P break their 50 DMA - although not testing much lower - as we saw money move from the momentum growth names into the broader stable diversified names . As the mkt spiked higher - both of those indexes surged back above resistance at the 50 DMA and ended the week well above- suggesting that investors are moving into the 'safety trade'.
Back to the spinning top - think of it as 'indecision' - where both buyers and sellers pretty much equaled each other - with neither side taking control - thus the churn. With neither side 'in control' - the next move is anyone's guess and the recent rally could easily be challenged. It is important to understand that if the 'spinning top' is formed after a rally or longer uptrend - it just suggest that the mkt is approaching some exhaustion allowing for a reversal in trend -conversely - if it is found after a sell off or long term downtrend - that suggests that sellers are approaching exhaustion allowing for the trend to change.
This morning we wake up to a world that is grotesque and ugly - recent events in Ukraine raising international concerns.....Pro-Russian forces undermining the April 17th Geneva accord as both side accuse each other of fomenting unrest in Eastern Ukraine. Will we see further destabilization in the days ahead? If so - how do world mkts react? How do world leaders react? The increasing tensions added to the skepticism about whether the US and the EU can even hold Putin accountable for the increasing likelihood of a civil war.
This morning US futures are +3 - trading at 1860. This is a big week - as 150+ companies in the S&P will be reporting earnings and the growing sense is that many of these companies will beat the 'lowered' estimates but will also raise forward guidance. This does support the sense that 2014 will continue to be a year of improvement - but whether that is enough to cause investors to take us to new highs is still unclear.
Earnings today include NFLX, HAL and STI (Suntrust Bank)....Eco day to include - Chicago Fed and Leading Economic Indicators.
The mkts have sustained some decent technical damage and need to re-group in order to make a concerted move higher. With the FED all but committed to near zero interest rates for as far as the eye can see - the mkt will have trouble really re-pricing - for now. The nearly 10% correction in the Nasdaq did not take the broader mkt with it - so some are still expecting a re-test of the broader mkt to confirm the existence of real support.
The recent underperformance of the IPO mkt is just another signal that although these represent new opportunities for investors - those same investors are not going gangbusters. That may change this week with the expected offering prospectus from Chinese online giant - Alibaba.
Alibaba for those of you unfamiliar is the Chinese version of Amazon - an E-commerce giant which is set to file for their IPO later this week - with an expected listing sometime in early summer 2014. We can certainly expect that this will excite and intrigue the mkts and investors -as it will be a great way to get some Chinese exposure in a portfolio..... estimates value Alibaba at some $200 bil - with the expected IPO set to raise upwards of $15 billion. Who will be home to this expected summer blockbuster? The NYSE? Nasdaq? BATS?.....
Overnight in Asia - mkts are quiet on this Easter Monday. Mkts in Australia, New Zealand and Hong Kong all closed and with the long weekend here in the US - most mkts lacked direction. Geo-political risks seemed to dominate the mood overnight. Japan flat, China fell by 1.5% extending its losses ahead of more macro data due on Wednesday - Flash PMI is not expected to show much improvement remaining in contraction mode.
Most European mkts closed in observance of the Easter Monday holiday .
Today is the Boston Marathon - and as a Boston Boy by birth - I along with so many of us - hope and pray for peace and reconcilation for those who suffered in last year's event. Our thoughts and prayers are with you on this day.
Basil Pesto Risotto
This begins with a basic white risotto that should be a staple in any food repertoire - so here it is:You will need: Arborio rice, onion, Olive oil, butter, garlic, celery, Vegetable stock, dry white wine, s&p and parmegiana cheese.
In a pot - heat up the veggie stock....about 32 oz or so....
Chop 1 lg Onion and mince 2 Garlic cloves, rinse 2 celery stalks and mince that too.
In a pot - add olive oil and heat...now add the celery and onions and cook on low heat for 10 or 15 mins....they should be soft but not browned. Now add the garlic...stir.
Turn heat up to med and add the rice...(1 1/2 cups). stir and cook for 3 or 4 mins....you want to coat the rice..now add the white wine and continue to stir...maybe 1/4 cup....or so...reduce heat - let it absorb
- now add one ladle of heated veggie stock - you must keep stirring until it is absorbed....As it absorbs - add another ladle and keep stirring - repeat this process until the rice becomes soft yet still a bit firm....(not mush). now season with s&p and taste....adjust if need be....(should be about 30mins).....
Now add cut up butter - like 1/4 stick - and two handfuls of Parmegiana cheese - stir quickly to melt the butter and cheese into the risotto. Take off the heat and add the pesto***- stirring until you get the color that you want.....more pesto then more color (and taste), less pesto - then less color and taste....Serve immediately in warmed bowls.
**Basil Pesto sauce - you will need: fresh basil, garlic, s&p, olive oil, garlic, pine nuts and parmegiana cheese. On the stove toast the pine nuts in a frying pan...no oil just heat the nuts slowly - careful not to burn....set aside. Now in the food processor - add, 3 handfuls of basil, 2 cloves garlic, olive oil, s&p and blend - do not be stingy with the oil....next add 2 handfuls of parmegiana cheese and the pine nuts...blend again....You ultimately want a thick, kind of creamy consistency...if you need to add more oil - go for it. Repeat this process until you have enough pesto sauce.
Buon Appetito.
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