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Jason Cimpl
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Jason Cimpl is a Research Analyst at Wyatt Investment Research who focuses on stock analysis and active trading. His financial career also includes auditing and mutual fund research. Jason started at Wyatt Investment Research in 2007 and has been the lead researcher for several of their... More
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  • Stress Test Results Revealed

    The market finished the week ending up one percent in a strong close today. Volume was average and advancers edged the decliners by 4 to 1. Optimism in today's session stemmed from presumably better than expected results from Europe's stress tests. Only seven banks would not survive a worst case scenario. Although that may be better than expected, do the results even matter.
    You may remember when the U.S. Treasury conducted stress tests on U.S. banks. Last year the U.S. tested banks using two scenarios, growth and no growth. The conditions that Geithner & Co. laid out for the banks were absurdly easy to pass. It was pretty obvious at the time that the stress tests were not meant to really test the banks, but rather, to instill some confidence in the marketplace.  Considering the worst scenario from the U.S. tests became a reality, and no U.S. banks have failed (big banks), should Europe's results matter.
     Yes, but not for the banks.
     Today I advised readers of my
    TradeMaster Daily Stock Alerts‘  to pay closer attention to the euro's, and later, the ECB reaction to the stress tests - not the banks. The results will almost certainly impact the euro, which is trading in an bullish upward channel. The results will either crash the euro and take it out of its bullish channel, or gap the euro higher to challenge $1.36. The real move will probably come Monday once Europe opens again, but for now I remain strongly bullish the euro - and have been since early May. The rising euro is a critical factor in the rise of the U.S. market. A falling dollar (higher euro) tends to raise equities. Continued momentum for the euro argues strongly for a continued rally in the market.
     Also, President Trichet, whom I didn't like until now, is on a campaign to tighten monetary policy. He urged the European Central Bank to be prepared to reign in liquidity, like China/Australia, and battle inflation if the European economy turns out to be stronger than expected. Since "European economy" is just another term for "European banks", and the bank's stress tests results were better than experts projected, the central bank could tighten policy. While I like the EU's concern for inflation, tightening would not be the right decision this year.

    The Chart of the Day

    Central Distribution (Nasdaq: CEDC) could be on the verge of a bullish breakout.

    We have taken a look at this stock before in my weekend videos for subscribers. In June I was negative on the stock and expecting lower lows. Now, volume has increased and in early June shares made a huge pop higher to trade near $27 resistance. After breaking out of a bull flag last week, shares could be preparing to take out resistance and make a move towards $31.

    The stock certainly has volume on its side, which has increased steadily alongside price over the past two months. That shows buyers are interested in owning shares in the $24 area. More importantly, will be the volume as shares make a break past $27. If it's on high volume, the stock has very likely made a long-term bottom last month. Fundamentally, the stock is cheap at 12 times EPS estimates and operates in a recession proof and emerging industry. In the near term shares will target $31, my secondary target takes shares beyond $40.

    Watch List
    The TradeMaster watch list was mostly higher today, similar to the market.

    Leading the way higher were small cap China stocks Telestone (Nasdaq:TSTC) up 10%, Tri Tech (Nasdaq:TRIT) up 7% RINO (Nasdaq:RINO) and Netlist (Nasdaq:NLST) up 6%.  The weekend video, which is only available to subscribers will cover those charts in extensive detail. It was a great week and the portfolio is long only heading into next week trade.

    Disclosure: none
    Jul 23 4:16 PM | Link | Comment!
  • Euro Rally Takes U.S. Indices Past Resistance

    The market closed 2.3% higher on good volume. The SPX broke important resistance around 1085. Advancers beat decliners by 6 to 1, which is highly bullish behavior. We added long positions yesterday now that SPX looks ready to challenge 1130. The close was weak, but the market needed to slowdown eventually. Stocks rallied after positive economic data in both Europe and the U.S. and strong earnings results.

    I have said it before and I will say it again, earnings have been great. Although some stocks missed analysts estimates, no one is decreasing guidance. Earnings season is not close to being over, so that may change. In addition to strong corporate earnings, the euro will be another critical factor in the rise of the U.S. market. A falling dollar tends to raise equities. Continued momentum for the euro argues strongly for a continued rally in the market. Tomorrow will be a big day for the currency.

    Now that the bulls have 1085 the group will need to keep it.

    The Chart of the Day

    Portfolio Position Jazz Pharmaceuticals (Nasdaq: JAZZ) finished the day 1.7% higher.

    This tiny little biotech could be on the brink of a nice run. We began following the stock ten months ago as it ran from $6 to $13. Shares sank over the past few months, but two very bullish reversal candles in May got us interested in the long side. Members of
    TradeMaster Daily Stock Alerts' purchased shares a few weeks ago as JAZZ bounced on high volume.

    The stock is having difficulties taking out $8.79 price resistance, but it could happen any minute now. JAZZ broke a bull flag pattern a few weeks ago and is finding support above the break-out price. Additionally, RSI has been defended by bulls. Volume has increased over the past couple session and price has stabilized. This could translate into a big move to the upside. If volume picks up as shares take out resistance we should be looking at an $11 stock in the near-term.

    Watch List

    The TradeMaster watch list was mostly higher today, similar to the market.

    My subscribers were treated to fantastic gains today. Ahead of the open I urged readers to buy energy stocks because oil was going to have a great day. Crude finished 3% higher, but the stocks from this morning's alert finished

    Abraxas Corporation (NASDAQ:AXAS) -0.35%
    Warren Resources (NASDAQ:WRES) +2.36%
    Portfolio Position (XXXX) +3.81%
    ChinaWind (CWS) -3.6%
    Brigham Exploration (BEXP) +5.87%
    Portfolio Position (XXX) +7.37%
    Venoco (NYSE:VQ) +7.03%

    Disclosure: none
    Jul 23 8:42 AM | Link | Comment!
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