"Doji candlesticks form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign." …Stockcharts.com
In yesterday's verbal comments that accompanied the written version of the Morning Tack, I closed by saying that we could expect to see some sideways consolidation in the session ahead as traders positioned themselves in front of today's big jobs report, and, lo and behold, sideways consolidation is exactly what we got. Neither the Bulls nor the Bears could gain much ground in either direction Thursday, as the war of attrition resulted in practically all the major U.S. indices finishing the day near where they began. It makes sense, too, considering large short-term traders probably do not want to be overly exposed heading into a major news event like the monthly employment numbers being released and subject their equity to wild, unpredictable swings . And it's that 8:30 a.m. report that everyone will likely be talking about, or rather what it might mean for the Fed's December policy rate decision since a strong report could help support pulling the trigger on that first rate increase.
It might require a total surprise in a major report like this one to really push the market down after the run it has been on the last five weeks. The S&P 500 hasn't been down three days in a row since late September, and, prior to that, the index hadn't been up three days in a row since August, so it has definitely been a rollercoaster ride that has taken us from oversold levels to overbought levels in a fairly short amount of time. And while we still believe some sort of pullback is in the cards here, the crazy flip-flop stocks have undergone over the last month actually bodes well for returns going forward if history decides to repeat itself. According to Sentimentrader.com, it is quite the rare occasion when the S&P 500 reverses from being extremely oversold (more than 5% below the 50 DMA) to extremely overbought (more than 5% above the 50 DMA) within 30 trading days, but going back to 1929 the average returns over the next three and six months have been 4.0% and 6.7%, respectively. The market has a chance to do even better than that, though, and if we do finally see a sustained period of favorable stock performance, you may do well to consider the following companies that are "quadruple winners," meaning they are rated a "Buy" by our fundamental analysts, have recently bested both consensus earnings and revenue expectations, and issued positive guidance for the future as well: Biogen (BIIB/$293.03/Strong Buy), Retail Opportunity Investments Corp. (ROIC/$18.31/Strong Buy), AAC Holdings (AAC/$24.25/Outperform), AmerisourceBergen Corp. (ABC/$97.89/Outperform), INC Research Holdings (INCR/$43.64/Outperform), Inteliquent (IQNT/$18.87/Outperform), Regency Centers Corp. (REG/$68.30/Outperform), ScanSource (SCSC/$38.87/Outperform), and Simon Property Group (SPG/$203.00/Outperform).