Connect with us


Finance: Runts rally amid mixed earnings season

Legacy Phuket Gazette



PHUKET: As of the beginning of May, earnings season was in full swing, with the markets sending mixed messages to investors. So far, some big names like Facebook Inc (NASDAQ: FB) and (NASDAQ: AM- ZN), with the latter sometimes being a difficult stock to own given its ups and downs, have put in good earnings reports and have pretty decent technical charts.

On the other hand, Netflix, Inc (NASDAQ: NF- LX) has a chart so choppy that it’s not even close to being ready to own, while Apple Inc (NASDAQ: AAPL) is running into mounting troubles in China.

Somewhat ironically, it’s beaten-down sectors (gold, materials, silver, oil and commodities) and stocks (Exxon Mobil) that have been leading the latest two to three month rally, with nimble risk-tolerant investors capturing some nice gains from bounces by sectors or stocks that have otherwise been in the garbage can.

However, the S&P 500 moved back up above the 2,100 resistance level in mid April, only to begin retreating again over the past few weeks, as the technology sector still lacks leadership stocks with biotech coming under pressure. This explains why the multi-year range the S&P 500 has been stuck in continue to hold.

That range is preventing the S&P 500 from hitting all-time highs, as breaking above the 2,150 level is of primary importance for the index. The failure to take out that resistant level has the index remaining in a choppy range or potentially rolling back over to February lows, or even lower.

Meanwhile, the technical chart for the tech-laden NASDAQ market is more worrisome, as it’s showing three lower highs and two lower lows. This is not what you want to see in a healthy market.

There were also a couple of NASDAQ listed semiconductor stocks that were looking good, only to get whacked again. This makes me a little concerned about the technical chart for the Market Vectors Semiconductor ETF (NYSE-ARCA: SMH), as it’s been showing lower highs and is now pulling back from a late April rally.

This also doesn’t bode well for tech stocks, as semiconductors are their ‘canary in the coal mine.’ A look at the technical chart for the Technology Select Sector SPDR ETF (NYSEA- RCA: XLK) shows the index is in a tightly-bound range, and falling back down towards a support level.

Over in biotech, the SPDR S&P Biotech ETF (NYSE-ARCA: XBI) did break out to a new base rather than a new high only to start falling off again to below a potential support level. Ideally, I want to see the chart breaking above that support zone before I start jumping back into biotech stocks.

Moving on to the global market, we need to see all of them start firing on all cylinders, but we just aren’t seeing that yet. The iShares FTSE/Xinhua China 25 Index ETF (NYSE-ARCA: FXI) representing the China market was actually looking good, with a bottom in January/February followed by a rally that only rolled back over again. A technical chart for the iShares MSCI Emerging Markets Index ETF (NYSE-ARCA: EEM) also looks similar to that of China.

Europe has been a basket case for years, but a few weeks ago, a technical chart for the SPDR STOXX Europe 50 ETF (NYSEARCA: FEU) was looking good with a solid base, bottoming formation and a breakout. Unfortunately, Europe is now retesting a support level, and is still not out of the woods yet – especially with the UK getting ready to vote on Brexit.

Finally, I should mention that when I start to lose one, two, or three stocks (or even sector/market ETFs), it means it’s time to pause and just watch the market, as it’s usually not a good sign for the overall market or a sector (from my past 20 years of experience) to see something suddenly start to get pummeled.

Don Freeman, BSME is president of Freeman Capital Management, a registered investment advisor with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expat- riates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. Call for a free portfolio review. Don can be reached at 089-970 5795 or email: freeman

— Don Freeman


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Best of9 hours ago

Top 5 Wine Bars in Bangkok with Delivery

Best of10 hours ago

The Best Bakeries in Bangkok with Delivery

Coronavirus (Covid-19)10 hours ago

More Pattaya people arrested drinking alcohol, violating Covid measures

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Best of10 hours ago

5 of the most appealing Phang Nga hotels

Phuket11 hours ago

“Phuket Sandbox” still on, provincial restrictions set after uptick in Covid-19

Thailand12 hours ago

Thailand News Today | Boss indictment, Pattaya arrests, bubble burst | July 27

Join the conversation on the Thaiger Talk forums today!
Best of12 hours ago

Top 5 bars in Pattaya

Thailand12 hours ago

UPDATE: Dying Samut Prakan mother tells daughters to go to orphanage

Best of12 hours ago

Top 5 Thai restaurants in Krabi

Drugs12 hours ago

Hong Kong officials seize 61 kilograms of heroin shipped from Bangkok

Best of12 hours ago

Koh Pha Ngan’s 5 best resorts

North East13 hours ago

Couple “drops off” Covid infected 80 year old father at Korat temple, drive off

Coronavirus (Covid-19)13 hours ago

Phuket officials add new layers of restrictions, Central closed for 7 days

Thailand14 hours ago

Korat construction camp closed following Covid outbreak

Coronavirus (Covid-19)15 hours ago

Tuesday Covid Update: 14,150 new cases; provincial totals

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand6 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand6 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand7 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand7 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand7 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8