• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

A Market That Can't Rally on Great News Requires a High Level of Caution

The fact that the strong stocks are mainly index heavy weights is what is preventing an absolute rout of the indices at this point.
By JAMES "REV SHARK" DEPORRE
Apr 25, 2019 | 10:48 AM EDT
Stocks quotes in this article: MSFT, AMZN, LRCX, MMM, GLD, GDX, KL, AEM, SPY

In a market that wasn't so technically extended, very good earnings news from Microsoft (MSFT) , Amazon (AMZN) , Lam Research (LRCX) and several others would have all the indices trading sharply higher, but market conditions are not conducive to chasing at this point and a surprisingly weak earnings report from 3M (MMM)  has given the bears ammunition. The bears have been growling about slowing economic growth for a while and 3M, which sells a broad array of industrial and consumer goods, is giving them what they wanted.

What is most worrisome about the action so far is how the broad market simply doesn't care about the good earnings. Breadth is running about 1850 gainers to 4700 decliners. That is all you need to know to understand that this is a very narrow rally. The fact that the strong stocks are mainly index heavy weights is what is preventing an absolute rout of the indices at this point.

Action in the individual stocks on my screens are poor and I'm not doing any major buying, but one group that does look interesting to me is Gold (GLD) and Gold Miners (GDX) .

Gold has been a laggard for a while but seems to be finding some support recently. Currencies tend to drive gold more than any other factor and I have typically found that traditional technical analysis doesn't work that well with the group in the short term. Nonetheless I am seeing some signs of interest in the group and am inclined to start position.

My two favorite gold miners are Kirkland Lake Gold (KL) and Agnico Eagle Mines (AEM) . Both companies have some of the best EPS growth in the sector and KL has demonstrated good relative strength for a while. I'll be looking to add to both.

The S&P 500 (SPY) has rolled over again as I write and this action is looking poor. A market that can't rally on great news is one that requires a high level of caution.

(Microsoft, Amazon and Lam Research are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells MSFT, AMZN or LRCX? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, James DePorre was Long KL, AEM, GLD.

TAGS: Earnings | Investing | Markets | Stocks | Trading

More from Investing

Rotation Is No Reason to Turn Away from the Markets

James "Rev Shark" DePorre
Jan 21, 2021 4:45 PM EST

Bears may fuss over the routine consolidation combined with rotational action, but here's how I look at the moves.

Jim Cramer: Housing Is Our Bridge

Jim Cramer
Jan 21, 2021 3:59 PM EST

Do not fear the housing sales boom -- this is good news and I'll tell you why.

Cord-Cutting FuboTV and Advertising Platform PubMatic Are Not Buys Here

Bruce Kamich
Jan 21, 2021 2:59 PM EST

Our look at the stocks of both FUBO and PUBM.

Jim Cramer: You Just Won Powerball, Now What?

Jim Cramer
Jan 21, 2021 2:24 PM EST

Remember, you only need to get rich once.

Here's the Beast and Beauty of Investing in Disney Now

Bruce Kamich
Jan 21, 2021 1:54 PM EST

DIS might suffer a pullback in the next several weeks, but longer-term a rally is possible, according to the charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • 08:35 AM EST GARY BERMAN

    Thursday Morning Fibocall for 1/21/2021

    SPX (Long-Term View) The 1/20/21 NEW high @ 3859...
  • 11:38 AM EST CHRIS VERSACE

    Best Stocks to Buy for the Biden Presidency

    President-elect Biden's massive stimulus plan, int...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login