Coffee Sipping Big Board Stocks

[EZ2]

These sorry stocks are soaring -- and that's a red flag for this rally
MARKETWATCH 8:01 AM ET 7/29/2016
Symbol Last Price Change
GPRO 12.4099 -0.6101 (-4.69%)
FIT 13.5594up -0.0206 (-0.15%)
NTDOF 204down +3.9 (+1.95%)
QUOTES AS OF 09:32:52 AM ET 07/29/2016
Critical information ahead of the U.S. market's open

The stock market looks set to coast into the weekend with yet another up month under its belt.

That's even though the Bank of Japan's latest stimulus (http://www.marketwatch.com/story/bank-of-japan-oks-more- stimulus-keeps-rate-steady-2016-07-29) disappointed overnight, boosting safety plays like the yen and helping to put U.S. stock futures slightly in the red this morning.

But you get the sense here (http://www.marketwatch.com/story/the-point-of-no-return-for-quantitative-easing-is- getting-closer-2016-07-28) and there (http://www.bloomberg.com/news/articles/2016-07-27/inflation-expectations-show- investors-losing-faith-in-fed-chart) that no one believes in central banks anymore, anyway.

And forecast-thwacking earnings late yesterday from Amazon (AMZN) and Google parent Alphabet (GOOGL)(GOOGL) are offsetting the BOJ's bitter pill. Those reports came after Apple (AAPL) and Facebook (FB) beat earlier in the week, so you could excuse tweets like this one:

(https://twitter.com/ivanhoff/status/758760102581063681)

So it's all hunky-dory? No, WTI crude has entered a bear market (http://www.marketwatch.com/story/crude-oil-enters- bear-market-after-losing-41-handle-2016-07-29), and oil has been somewhat disturbing as "it's failed to hold any kind of bid" in recent weeks, says ChessNwine.

Another "part of the bearish argument" right now is the zippy action by certain beaten-down stocks, the financial blogger adds.

That might signal this market rally has become overdone. More from him in our call of the day.

Key market gauges

Dow and S&P futures are inching lower, as crude slumps. A key dollar index is falling, while Europe gains. The Nikkei erased losses (http://www.marketwatch.com/story/asian-markets-cautious-as-investors-await-word-from-bank-of- japan-2016-07-28) and finished higher after the BOJ disappointment, but Chinese stocks lost ground. Gold is little changed.

The stat

5 -- That's how many months in a row the S&P 500 will have advanced, as long as the index manages to stay in the green for July today. The stock benchmark is up 3.4% for the month as of Thursday's close.

The call

When you see rallies by stocks like GoPro(GPRO) and Fitbit(FIT) -- "which have been so bad for so long" -- you might want to worry, says ChessNwine in his latest market recap (http://marketchess.com/2016/07/28/stock-market-recap- 07-28-16-video-1).

"Maybe that means we're close to a market top," he says. "We'll see."

GoPro (GPRO) is up nearly 18% for the week as of Thursday's close, as analysts chitchat about the camera maker returning to profitability (http://www.marketwatch.com/story/gopro-shares-soar-as-analysts-say-a-return-to-profit-is-in-sight-2016- 07-28). The stock is still in the red for the year, down 28%.

As for Fitbit(FIT), shares are up 6% for the week, but off 54% for the year.

These lousy stocks finding buyers and crude's crash are both cause for concern, ChessNwine says. But he doesn't sounds that bearish -- maybe mostly bullish, in fact. "There are arguments for both sides," he says diplomatically.

This stock market has its stars, after all. Amazon is "the quintessential market leader" with an "impeccable chart," the financial blogger says.

But don't "overtrade" this market as it holds in a narrow range, he adds. Wait for the S&P 500 to break higher or lower, as that will shed some light on how to play.

"From this compression, one would think we would get an explosion," ChessNwine says, noting there is plenty for traders to chew on, such as the U.S. GDP report and the report cards for European banks (http://www.marketwatch.com/ story/european-stocks-advance-as-bank-shares-move-higher-ahead-of-stress-tests-2016-07-29) hitting today.

Go here (http://marketchess.com/2016/07/28/stock-market-recap-07-28-16-video-1) for his full take.

And see:This is the top! No, wait. THIS is the top! (http://www.marketwatch.com/story/this-is-the-top-no-wait-this-is- the-top-2016-07-21)

The chart

It's a "Pokémon No" chart, as Zero Hedge puts it (http://www.zerohedge.com/news/2016-07-28/pokemon-no-nintendo- suffers-worst-week-27-years).

Nintendo's (NTDOF) stock (7974.TO) (7974.TO) finished down 23.8% for the week in Tokyo, as shown in the chart above.

That appears to be its biggest weekly drop ever, according to FactSet data. The slide comes amid talk of "surprisingly little direct profit (http://www.marketwatch.com/story/nintendo-post-pokemon-plunge-could-go-a-lot-farther-2016-07-25)"; for Nintendo(NTDOF) from Pokémon Go, the wildly popular smartphone game.

The company also posted a quarterly loss (http://www.marketwatch.com/story/nintendo-swings-to-loss-with-pokemon-go- effect-to-come-later-2016-07-27) earlier this week. But Nintendo(NTDOF) still finished up 47.5% in July -- not too shabby.

The buzz

Amazon (AMZN) was volatile earlier, but the e-commerce king (http://blogs.marketwatch.com/thetell/2016/07/28/amazon- earnings-put-focus-on-prime-service-aws-live-blog/)and Alphabet (http://www.marketwatch.com/story/googles-alphabet- shares-up-after-company-beats-revenue-eps-expectations-2016-07-28)(GOOGL) (GOOGL) are now gaining premarket after their earnings. Baidu (BIDU) is heading in the other direction.

(https://twitter.com/howardlindzon/status/758775676296105984)

UPS (UPS) , Exxon Mobil (XOM) , Chevron (CVX) and Merck (MRK) are among the companies on the earnings docket ahead of the opening bell.

Two San Diego cops were shot late Thursday (http://www.marketwatch.com/story/two-san-diego-police-officers-shot-one- suspect-in-custody-2016-07-29).

The economy

It's a big day for fans of U.S. economic data.

Look for reports on U.S. GDP and employment costs, both due at 8:30 a.m. Eastern Time. Chicago PMI and consumer sentiment are due to hit shortly after the open, then the afternoon will bring a fresh figure for North America's oil- rig count.

The quote

"Donald Trump, you're asking Americans to trust you with their future. Let me ask you, 'Have you even read the United States Constitution? ... You have sacrificed nothing." -- Khizr Khan, a Charlottesville, Va., resident whose Army captain son was killed in Iraq in 2004, made a splash (http://www.marketwatch.com/story/father-of-muslim-us-soldier- killed-in-iraq-lays-into-trump-2016-07-28) last night at the Democratic National Convention.

Hillary Clinton accepted the Democratic nomination (http://www.marketwatch.com/story/hillary-clinton-to-stress-her- experience-leadership-in-acceptance-speech-2016-07-28), as Chelsea and Kareem also spoke (http://blogs.marketwatch.com/ capitolreport/2016/07/28/live-blog-and-video-hillary-clinton-accepts-the-democratic-presidential-nomination/), while Trump fired back via a tweetstorm (http://uk.businessinsider.com/trump-hillary-clinton-dnc-speech-2016-7).

(

Most-Tweeted moment of @HillaryClinton acceptance speech: "A man you can bait with a tweet is not a man we can trust with nuclear weapons."

— Government (@Gov) July 29, 2016

)

Random reads

North Korea may have declared war against the U.S. The internet reacts with jokes (http:// www.australianetworknews.com/north-korea-officially-declares-war-us-twitter-laughs-see-reactions/).

"Trump's connection with gold makes complete sense (http://www.bloomberg.com/view/articles/2016-07-28/how-donald- trump-changed-my-mind-about-gold)."

Shocking that employees would do this: Yahoos gorged on free food (http://uk.businessinsider.com/marissa-mayer- improved-self-esteem-at-yahoo-2016-7).

How "lunch-bucket" guys (http://summergames.ap.org/article/us-hoops-golden-partnership-forged-lunch-bucket-guys) are behind the U.S. Olympic basketball team.

Graphic T-shirt rules: Thou shalt not grab a tacky slogan tee (http://www.wsj.com/articles/the-stylish-guys-guide-to- wearing-graphic-t-shirts-1469723139) at the mall.

(

Did you know 60% of the world’s wild tiger population lives in India? #InternationalTigerDay pic.twitter.com/rwnWIKysvm

— U.S. Embassy India (@USAndIndia) July 29, 2016

)

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-Victor Reklaitis; 415-439-6400; [e-mail]


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