The Gilmo Report

February 5, 2017

February 4, 2017

Friday’s jobs number came in at a “blistering” 227,000 jobs vs. estimates of 177,000, sending the market blasting back to the upside. The Dow Jones Industrials Index regained the magical 20,000 level and the NASDAQ Composite logged a new all-time closing high.

Despite the strong index action on Friday, the action among individual stocks has been mixed. Unless something is gapping up on earnings or staging some sort of wild upside reversal after selling off, most stocks appear to be moving to and fro without making any substantial upside. There are a few exceptions, but only a very few. Friday’s rally was led by financials, many of which were looking quite negative on Thursday. One example would be Charles Schwab Co. (SCHW), which gapped down through its 50-day moving average on Thursday on heavy selling volume.

It then rebounded on Friday on news regarding the peeling back of Dodd-Frank, along with other financials. However, note the stalling action at the 50-day line. In my view, this thing is a short right here using the high of Friday at 40.68 as a guide for a tight upside stop.

 

GR020517-SCHW

 

Goldman Sachs (GS), on the other hand, blasted through its 50-day moving average on a strong-volume gap-up move on Friday. This would qualify as a pocket pivot coming up through the confluence of the 10-day, 20-day, and 50-day moving averages on big buying interest.

The rest of this report is available for Gilmo Report Members only.
The full report will be available 45 days after it is posted. For immediate access: login or subscribe

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2017 Gil Morales & Company, LLC. All rights reserved.