Friday, March 23, 2012

Nazz Looks To Keep Its Streak Alive

The markets are slightly lower in morning trade. For the week, the SPX is on pace for a decline of less than 1%. This would mark the first weekly loss in six weeks, and only the 2nd weekly decline in the last 12. As for the Nasdaq 100, it is on pace for its 12th consecutive weekly gain. That is quite a feat. I know than AAPL has had a lot to do with it, but it also shows how well large-cap growth stocks have bounced back so far this year after being out of favor in 2011.

There were a handful of earnings reports last night and this morning. Accenture (ACN) is seeing a positive reaction, but the others (KB Homes, Micron, Darden Restaurants, and Nike (NKE)) are all trading lower in reaction to earnings.

Asian markets were lower across the board last night, with widespread selloffs of 1% of greater. The dollar is selling off today, and that is helping commodities bounce.

Oil prices are higher at $107, and natural gas prices are bouncing from record low levels. Gold prices have also bounced to $1662, and silver and copper prices are higher as well.

The 10-year yield is fading a bit more, to 2.23%. And the VIX has really not had much of a bounce, even with yesterday's selloff. The VIX is down another 1% this morning back to 15.30.

Trading comment: Large-cap leading growth stocks have really led this rally lately. I know that most people thinks its all Apple all the time, but look at a stock like Priceline (PCLN), which has also been a monster. Look at the recent rebound in Google (GOOG), the cloud stocks like FFIV, CRM, and VMW; look at the old generals like MSFT, QCOM, and INTC. Look at new growth stocks like MNST, SCSS, ALXN, and ULTA. Predicting the remainder of any year from the early action is fraught with risk, but I tend to think that this strong action is a prelude to the rest of the year and that even though there will be corrections along the way I think growth stocks are going to continue to lead rallies.

KAM Advisors has long positions in ALXN, AAPL, GOOG, MNST, PCLN, SCSS, and ULTA

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