Scott Burrill - Market Notes

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Market Note

Room to Run

Jan 30, 2019

Another of my Trend Models tipped decidedly UP after today's close in the SP500, along with the Weekly Magnet converting to support at 2650 after providing resistance all week. Traditionally, this has led to a risk-on rally and certainly could target 2812 in the intermediate term.

Of course, we need to clear the 100SMA just beyond the edge of the weekly implied move at 2719 and the 200SMA at 2751. With many more catalysts to come this week and a favorable Fed backdrop, it is conceivable and highly probable short-covering and the risk-on posture will rocket us past the edge of the option implied move and beyond.

Pivoting to Amazon, they report after the close and have an option implied move of 7% or + /- 117 points. Given their weight in many indices and ETFs, this coupled with a favorable Employment Situation Report and other anticipated geo-political news, fading any expected broad-based momentum could be precisely why a violent rally will likely ensue.

Finally, I ran a scan of several dispersion models to find the best stocks. The interest was more in terms of their Sector membership. Interestingly, the TMT, Industrials/Materials, and Health Care groupings dominated the scan.

All the best,

Scott

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