Another Day Above 20K

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The S&P tried to finish with its own bit of history on Thursday, but it couldn't hold onto the 2300 mark that it momentarily hit intraday. By the closing bell, the index had slipped by 0.07% to 2296.7, while the NASDAQ was off 0.02% to 5655.18. But the Dow kept moving higher and spent its second straight day above 20,000. The index climbed 0.16% to another new record of 20100.9.

We're in the heat of earnings season now, and so far its "one of steady improvement in the overall corporate earnings picture, with growth on track to reach its highest level in 8 quarters," according to Zacks Equity Research manager Sheraz Mian. (Make sure you read his entire, in-depth Earnings Trends article titled: "3 Takeaways from the Q4 Earnings Season".)

So if earnings season is solid, why were the markets so mixed on Thursday? Some of the editors think the market is overheated right now, while others just think it was nerves at taking out another milestone so quickly after the Dow. In the portfolios, we saw Insider Trader sell a position for a double digit return and Zacks Counterstrike short sell a name that looks to drop along with the price of gold . Read about these moves and some overall commentary on this market in the highlights section below:

Insider has a 26%+ Winner

→ Analysts were "not super enthusiastic" with the recent earnings report from Cree (Cree), though shares did advance after the announcement due primarily to a legal settlement. With insider opportunities bound to be coming up shortly, Tracey thought this would be a good time to take a big gain in CREE and then sit on the cash until new opportunities arise. The sell brought a nice gain of 26.1% to the Insider Trader.

Today's Portfolio Highlights:

• Gold has seen a bounce off of December lows, but Jeremy doesn't think it will last long. In fact, he believes the precious metal will break below $1100. Given this backdrop, the editor sees a great short opportunity with Barrick Gold (ABX), a Zacks Rank #5 (Strong Sell) that missed expectations last time and is likely to so again as gold drops. Technically speaking, he sees a "perfect setup" with a 200- day moving average test and a Fibonacci short setup. Therefore, he short sold ABX in Zacks Counterstrike on Thursday with a 6% allocation. Learn a lot more about this move in the complete commentary.

• "Stocks did flirt above 2300 a couple times on Thursday. In the end, investors were uncomfortable at the new height leading to a close just below mark.

"It is fair to say that investors are pausing to reflect on things. Such as whether conditions are truly good enough to breakout to new highs…or are there too many question marks???

"The economic data supports a breakout higher. (Including an impressive increase from 53.4 to 55.1 for PMI Services Flash report today).

"The earnings season results support a breakout higher.

"What is happening in DC is a mixed bag. And that is where the question marks need to be answered," said Steve in Reitmeister Trading Alert.

• "Back at home, metrics remain robust across the board in a number of key areas. The leading economic indicator index beat out expectations and was far higher than the month ago, while PMI Services were ahead of last month's, and the Kansas City Fed Manufacturing Index gave some great numbers on the orders and backlogs front.

"As I was saying yesterday, the recent surge appears to be built on fundamentals, and the latest data only further confirms that belief. The main issue looks to be on the labor and inflation front now, so look for concerns over wages and broad market price increases to be the focus in the near term, as worries over the economy shouldn't be front and center these days," said Eric in Surprise Trader.

All the Best,

Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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