Major market indexes mostly remain in choppy sideways ranges as earnings news keeps things lively, but trendless on an overall basis as the indexes moved sideways throughout the month of April. A month-end rally that saw the NASDAQ Composite bounce off its 50-day moving average was helped along by the continued movement into long-term, established big-cap tech juggernauts Alphabet (GOOG), Microsoft (MSFT), and Meta Platforms (META) after they reported earnings that were certainly not inspiring on an absolute basis (both GOOG and META reported negative earnings growth) but were not as bad as analysts' previously lowered expectations. On Friday, weakness in Amazon.com (AMZN) was offset by strength in Intel (INTC). Both reported earnings Thursday after the close. A rebound in deeply oversold semiconductors courtesy of the INTC report also contributed to the buoyant atmosphere heading into month-end.
The FDIC on the verge of seizing First Republic Bank of San Francisco (FRC) which traded as low as $1.62 a share in the Friday after-hours session kept a bid in gold and silver. The VanEck Merk Gold Trust (OUNZ) continues to find support along its 20-day exponential moving average as gold prices cling to the $2,000/oz. level. Technically this presents a lower-risk entry using the 20-dema as a selling guide. As an alternative reference we see solid price support along the $1950 level for gold.
Silver remains a minor outperformer in the near-term as it remains above its recent breakout point and holds 20-dema support. The Aberdeen Silver Trust (SIVR) showed strong-volume support along the 20-dema on Thursday and Friday. Thursday's move can also be viewed as a moving average undercut & rally (MAU&R) long entry at the 20-dema which is then used as a tight selling guide.
Alamos Gold (AGI) is a gold miner we have reported on previously. The high-quality junior gold miner reported earnings on Wednesday and beat estimates. This led to a shakeout and MAU&R along the 20-dema on Thursday that also qualified as a pocket pivot. AGI is potentially buyable along the 20-dema which is then used as a selling guide.
We also note a pair of pocket pivots along the 10-day moving average in Gold Fields Ltd. (GFI) on Thursday and Friday. While the company has not announced its next earnings report date for the first quarter, we can extrapolate from the date of the last earnings report in late February and come up with an earnings report date sometime in the fourth week of May. This pocket pivot would function as a continuation pocket pivot using the 10-dma as a selling guide.
Bitcoin ($BTCUSD) has also found support along its 50-day moving average, posting a pocket pivot at the line on Wednesday and then following up with another pocket pivot off the 20-day exponential moving average. This is playable using any Bitcoin ETF/ETN such as the Grayscale Bitcoin Trust (GBTC) or the ProShares Bitcoin Strategy ETF (BITO). In either case the 20-dema serves as a reasonable selling guide.
We reported on Alphabet (GOOG), Microsoft (MSFT), and Spotify (SPOT) as potential short-sale targets on Wednesday, but a continued market rally kept big-stock NASDAQ names GOOG and MSFT buoyant to the upside as might be expected. GOOG broke below its 20-dema on Wednesday, confirming our view of the stock as a short-sale target, but was able to recover the 20-dema in a pocket pivot move on Thursday following META earnings while MSFT continued to make progress following Wednesday's gap higher. SPOT did not benefit from any status as a big index stock so worked well as a short-sale target, breaking below its 20-dema on Thursday before finding support at its 50-day moving average on Friday. SPOT is now in a secondary short-sale entry as it moves up into the underside of the 10-dma where a short can be initiated using the 10-day line as a covering guide. We would hope, however, that one began working this on the short side as it traded up to the $140 level on Tuesday when we first issued our Short-Sale Set-Up report on the stock.
We also reported on Juniper Networks (JNPR) as it rallied back into its 200-day moving average after gapping below the line on Wednesday following earnings. This stock was touted as a market leader just a month ago as it was breaking out, but trouble in the telecom sector brought the stock down hard in mid-April along with a number of other big-stock telecoms such as Cisco Systems (CSCO) and Ciena (CIEN). Admittedly, JNPR is extended on the downside but is in a short-sale position as it rallies into the 200-day moving average, using the line as a covering guide. Otherwise, if it can regain the 200-day watch for any rally into the declining 10-day or 20-day moving averages as potential short-sale entry references.
This remains a difficult market, and try as we might we do not see anything that strikes us as compelling on the long side with respect to potential intermediate-trends. The choppy action may continue heading into Wednesday's Fed policy announcement which is considered to be the big reveal as to whether the Fed intends to continue raising rates or pause. For now, expectations are for a 25-basis point increase on Wednesday, with a smaller possibility of another 25-basis points in June, data dependent of course.A number of Fed members continue to state much work needs to be done in terms of inflation thus imply rates may stay elevated for some time. Sticky inflation components such as food due to supply chain issues which keep the cost of fertilizer elevated are likely to remain in place longer than expected. The core PCE matched estimates at 0.3% MoM but on a three-month annualized basis, core PCE goods inflation has risen while shelter PCE is moderating.
Wages and salaries for private sector workers excluding incentive paid occupations also showed no meaningful deceleration in Q1 +1.5% QoQ (the highest reading on record after the 1.6% gain in Q1 '22).
The Market Direction Model (MDM) remains on a CASH signal.