Market Intelligence

Equity Market Insight from Nasdaq MID - February 15, 2017

Wednesday, February 15, 2017, 11:15 AM, EST

  • NASDAQ Composite +0.2% Dow +0.4% S&P 500 -0.15% Russell 2000 -0.03%
  • NASDAQ Advancers: 1075 / Decliners: 1061
  • Today’s Volume (100day avg): +26%

  • U.S. Retail Sales for January were strong, showing growth of 0.4% vs expectations of 0.1%. Ex-auto’s was even stronger reporting 0.8% growth vs expectations of only 0.4% increase. December’s sales were also revised up to healthy 1.0% vs a previously reported growth of 0.6%. This print and the upward revision are important as they show that the U.S. consumer is alive and well. Consumer spending plays a major part in the U.S. GDP, as two-thirds of U.S. economic activity is related to consumer spend.
  • U.S. Consumer Price Index rose more than expected in January as the cost of living in the U.S. has increased the most since February, 2013. The Labor Department said CPI increased 0.6% vs expectations of a 0.3% increase month-over-month. Weekly hourly waged fell for the week by -0.5% and January hourly wages were reported as unchanged year-over-year.
  • Last night API reported another huge build of 9.9M barrels, and this morning DOE reports a build of 9.5M barrels. The DOE has consistently reported weekly inventory builds this year, making the second largest string of builds in the past decade. Gasoline also saw a large increase while distillates decline in line with expectations. However crude exports rose to a record 1 million barrels/day last week and that kept prices stable. WTI +0.3%.
  • According to Michael Block, Chief Strategist for Rhino Partners, “As for the data, it backs up Yellen this morning. Holy hawkish, Batman. CPI came in up 0.6% MoM vs. +0.3% consensus and prior. The core rate was up 0.3% vs. +0.2%, and YoY, the headline was +2.5% vs. +2.4% and +2.3% vs. +2.1% on the core. The MoM gain is the biggest since February 2013 and the YoY gain is the biggest since March 2012. One issue – price adjusted average hourly wages fell 0.5%. So that’s troubling…”

Technical Take:

In 2016 the solar industry was one of the worst performing industries with the Guggenheim Solar ETF, ticker TAN, declining 46% over the calendar year. The TAN ETF has now realized annual declines in six of its eight years in existence with an average annual return of negative (6.1%). That number does not do justice to the annual volatility. In absolute terms the average move over the prior eight years is 41.6%, meaning whether or up or down, the annual percentage moves tends to be big. There are signs however that 2017 could reverse the prior three year down trend. YTD the TAN ETF has gained 11.7%. Just this past Friday, February 10th the TAN ETF broke above a 12-month declining resistance on volume 1.7x its 50-day average. This week’s volume has been robust to say the least. Yesterday’s volume was 5x the 50-day average and today it is on pace to exceed that. Also today the TAN is testing the key $18.56 resistance line which represents the top of the gap range created three months ago in early November. This resistance first proved itself in early December before TAN then rolled over to new lows. Since early November the price action resembles an inverse head & shoulders bottoming pattern. Momentum is strong with the daily RSI reaching the 70 level today for the first time in 15 months. Meanwhile the longer term weekly RSI (not shown) has this week broken above the 45 level which has been resistance for the prior ten months. Fundamentally GTM Research and SEIA just reported that the solar power installations grew 95% YoY from 2015 to 2016, marking the first time solar has formed the largest group of electricity generating capacity of any energy source. After three straight years of declines culminating in 2016 with its wort performance in five years, solar stocks are again heating up.

Nasdaq's Market Intelligence Desk (MID) Team includes:

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.

Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.

Annie O'Callaghan is Director on the Market Intelligence Desk (MID) at Nasdaq. Annie has worked for NASDAQ in a variety of roles including support of Nasdaq C-level management in client retention and customer service. Annie also served as a Sales Director in Nasdaq’s Transactions Services business. Prior to joining Nasdaq, Annie worked at AX Trading, managing accounts for its Alternative Trading System and served on Credit Suisse's trading desk as an Electronic & Algorithmic Sales Trading Analyst.

Brian Joyce, CMT has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.

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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