TODAY’S STOCK MARKET NEWS – Expect Short-Lived Bounce Off 50-Day Moving Average

Stocks have come off sharply since last Thursday’s close, with the SPDR S&P 500 (NYSE: SPY) marking down near 3%. The catalyst was the strong jobs report reported on Friday morning. Good news is bad news now, as the strong economic data led investors to the exits in fear of a near-term Fed rate action. Indeed, the Fed is meeting a week from today, and I expect it will remove cautious language from its monetary policy statement, thus clearing the way for a rate action at any time thereafter. Despite today’s bounce, I would take risk off for now. For regular market coverage like this, please do follow along with our Wall Street blog.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Today’s Stock Market News

Sector Security	Since 03-05-15	YTD	TTM
Vanguard S&P 500 (NYSE: VOO)	-2.6%	-0.2%	+11.8%
iShares Dow Jones (NYSE: IYY)	-2.4%	+0.3%	+11.1%
Fidelity NASDAQ  ETF (Nasdaq: ONEQ)	-2.3%	+3.6%	+14.2%
ProShares Ultra Gold (NYSE: UGL)	-6.3%	-5.1%	-28.3%
ProShares Ultra Real Estate (NYSE: URE)	-5.3%	-3.3%	+34.4%
ProShares Ultra Oil (NYSE: UCO)	-8.4%	-21.6%	-76.6%
WisdomTree US$  Bullish (NYSE: USDU)	+2.2%	+5.5%	+17.2%
iShares 20+ Yr. Treasury (NYSE: TLT)	NM	-0.4%	+22.2%

Stock News

Stocks are bouncing today off their 50-day moving average, simply due to the support found there and the importance of that trend-line to so many investors and traders. However, the bounce should be short-lived, as I expect we will break toward the 200-day moving average or lower as the market corrects.

A stock market correction is now 23 months overdue based on historical standards. Corrections of 10% or more typically occur every 18 months, and we’re now 41 months through a bullish run without one. Stocks are up a hardly disrupted 240% since March 9, 2009, the panic low of the financial crisis.

The catalyst for a correction is clear. It is pending Fed rate action. Janet Yellen, in her testimony to Congress in February indicated that cautionary language, namely the word “patient,” would soon come out of the FOMC’s monetary policy statement and that Fed Funds Rate tightening should come sometime thereafter. The FOMC statement also indicates the Fed’s recognition of dollar strength and relative concern, so I do not expect the Fed to actually tighten until September. However, too many investors are terrified that a June action is coming, and the removal of the language from the statement will exacerbate fears and I believe catalyze a correction. Take risk off for now.

Economic Reports

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
WEDNESDAY
Mortgage Activity	0.1%		-1.3%
EIA Petroleum Status
-Crude Oil Inventory	10.3 MB		4.5 MB
-Gasoline Inventory	0.0 MB		-0.2 MB
Treasury Budget	$-17.5B	$-186.5B
Quarterly Services Survey	0.8%		1.4%

Of the economic data reported today, the most important is clearly the lower build of oil inventory this week. We’re coming off last week’s record build, but the level of increase this week was enthusing. United States Oil (NYSE: USO) is up since the report release, but still down on the day on increasing concern about dollar strengthening. Ironically, next week when this data is reported again, it will be followed a few hours later by the FOMC Monetary Policy release that could do in stocks and serve the dollar, thereby harming oil. It will be a busy trading day for those of you in the oil pit.

EPS Reports

It’s a quiet day for stocks, but look for Shake Shak (Nasdaq: SHAK) later today. The stock is overvalued and should be sold ahead of the release in my view. New companies with new management tend to fail in their first few quarters of public reporting, and this one is way overvalued and set up to fail.

HIGHLIGHTED EPS REPORTS
Company	Ticker
WEDNESDAY
American Residential Properties	Nasdaq: ARPI
Aratana Therapeutics	Nasdaq: PETX
Arc Logistics	Nasdaq: ARCX
Axalta Coating Systems	Nasdaq: AXTA
Bellicum Pharmaceuticals	Nasdaq: BLCM
Blount Int’l	NYSE: BLT
Box Inc.	NYSE: BOX
Brown Shoe	NYSE: BWS
Cherry Hill Mortgage	Nasdaq: CHMI
China Techfaith Wireless	Nasdaq: CNTF
Citizens	NYSE: CIA
Comtech Telecommunications	Nasdaq: CMTL
Ctrip.com	Nasdaq: CTRP
diaDexus	Nasdaq: DDXS
Douglas Dynamics	Nasdaq: PLOW
Dyadic Int’l	Nasdaq: DYAI
Express	Nasdaq: EXPR
Ferrellgas	NYSE: FGP
FLY Leasing	NYSE: FLY
Fuel Systems	Nasdaq: FSYS
Genie Energy	NYSE: GNE
Homeinns Hotel	Nasdaq: HMIN
Inter Parfums	Nasdaq: IPAR
JP Energy Partners	Nasdaq: JPEP
KongZhong	NYSE: KZ
Krispy Kreme	NYSE: KKD
Luxfer Holdings	Nasdaq: LXFR
Mattress Firm	Nasdaq: MFRM
Memorial Resource Development	NYSE: MRD
Men’s Wearhouse	NYSE: MW
Miller Energy	Nasdaq: MILL
MYR Group	Nasdaq: MYRG
Neff	Nasdaq: NEFF
Omega Protein	NYSE: OME
Par Petroleum	Nasdaq: PARR
Patent Properties	Nasdaq: PPRO
PhotoMedex	Nasdaq: PHMD
Progenics Pharmaceuticals	Nasdaq: PGNX
Raven Industries	Nasdaq: RAVN
Repros Therapeutics	Nasdaq: RPRX
Rosetta Stone	NYSE: RST
SciClone Pharmaceuticals	Nasdaq: SCLN
Scientific Games	Nasdaq: SGMS
Shake Shak	Nasdaq: SHAK
Sientra	Nasdaq: SIEN
Superconductor Technologies	Nasdaq: SCON
UMH Properties	NYSE: UMH
Vera Bradley	NYSE: VRA
Warren Resources	Nasdaq: WRES
Workiva	NYSE: WK
XOMA	Nasdaq: XOMA
ZAIS Financial	NYSE: ZFC
Zoe’s Kitchen	Nasdaq: ZOES

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