Month: July 2018

Momentum Monday – Google At New All-Time Highs

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Google is trading at new all-time highs after hours after crushing earnings estimates and now it’s only 15% away from the one-trillion-dollar mark. A follow-through tomorrow would be a major vote of confidence which will likely spread to the rest of tech stocks.

In the meantime, long-term interest rates are finally rising, which is a big boost for financials. It doesn’t make sense to bet against a market led by both, finance and tech.

Disclaimer: everything on this show is for informational and educational purposes only. The ideas presented are not recommendations to buy or sell stocks. The material presented here might not take into account your specific investment objectives. I may or I may not own some of the securities mentioned. Consult your investment advisor before acting on any of the information provided here.

78 Stocks Doubled Year-to-date

All stock charts in this post are powered by MarketSmith and I am an IBD Partner.

I ran a MarketSmith screen to see how many stocks priced above $5 and trading at least 100k shares a day, doubled year-to-date. The result: 78.

One can easily assume that most of those stocks probably belong to very profitable companies. I applied an earnings quality filter. It turns out that only 6 out of the 78 stocks are in the top 20% in earnings quality. This should challenge the common-held belief that earnings growth is the driving force behind strong price performance. The market is a lot more nuanced and complicated in a one to twelve months perspective. Expectations for future price gains drive demand and supply in the short-term and nothing impacts those expectations more than recent price action. Price momentum continues to be one of the least understood and most powerful characteristics behind many of the best-performing stocks every single year.

Momentum Monday – Nasdaq at All-Time Highs, Netflix Under Pressure

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The Nasdaq 100 reached new all-time highs a few days before earnings season began. Amazon, Facebook, Google, and Microsoft rallied in anticipation of another set of strong earnings. Market expectations are certainly running high, so it’ll be interesting to see if the numbers justify them.

Netflix reported earnings after the close on Monday and so far, the reaction is not stellar. Netflix is down more than 10%. Reactions to earnings matter because they reflect the current market sentiment. Bad news is usually ignored in strong bull markets.

Disclaimer: everything on this show is for informational and educational purposes only. The ideas presented are not recommendations to buy or sell stocks. The material presented here might not take into account your specific investment objectives. I may or I may not own some of the securities mentioned. Consult your investment advisor before acting on any of the information provided here.