Market Monitor

In Monday’s Goldman Guide we offered seven key insights to playing the market in September.  One of our points was the discussion centered around stock indices and weighting, and the fact that if a narrow segment of tech is weighted heavily in the NASDAQ Composite, and that group is on fire, it does not necessarily translate to all or even related tech stocks.  Our play is to follow the volume leaders.

The US department of labor released the monthly job report for August this morning, and let’s just say that any signs of a boom economy are nowhere in sight. The labor participation rate is just shy of 63%, which is the worst since the summer of 1978 and the height of stagflation. However, all indications are that the market will trade up at the opening.

With the last trading day of the unofficial summer season today, we thought we would lighten the mood.

Why read fiction when truth is far more interesting and strange? Since we are on the other side of the pond, we really don’t pay much attention to what goes on in Europe, but we should. After all, if you are a follower of mega-caps or mysteries, you have got to be at least a little intrigued by the recent goings-on in Switzerland.  The stories sound just like a mystery novel. 

In Monday’s Goldman Guide we mentioned possibly looking at European stocks as it seems that the region is finally on course for a rebound.  What may seem crazy is that there is a lot of activity in stocks in the Greek shipping industry.  Does investment or trade in the financial circus that is Greece make sense?

In Monday’s Goldman Guide we mentioned possibly looking at defense stocks as a short-term play related to the ongoing turmoil in the Middle East.  While “Troubles in The Middle East” is almost a cliché headline there are a couple of reasons to believe that the U.S. may get involved. 

After the close yesterday, Hewlett-Packard Company (NASDAQ – HPQ - $25.38) announced quarterly financial results and updated its 2014 revenue outlook.  By all accounts, the news was bad and the stock got hammered in the after-market. But, let's not be too hasty here...

As a bull, it was nice to have an up day after what seemed to be an intolerable losing streak.  It’s funny how I did not see one new article mention 1987, 2001, or 2008 yesterday in cyberspace.  The real question is this temporary set-back a sign of a bear turn, or just the normal summer sale finally happening coupled in with some minor fear about Big Bad Uncle Ben?

With 2Q13 earnings season coming to an end and the recent slump with another down day yesterday, we thought we would take a look at some of our previous picks from the Market Monitor.  It may be time to add to your position.

Rubicon Technology, Inc. (NASDAQ – RBCN - $9.58) was discussed in the Market Monitor back in mid April.  The stock is up nearly 53% since then and has been a bull among bears since August, 5^th, the market high, up nearly 1%.  RBCN skyrocketed up to the $9 level in mid June; plummeted back the $7 range, made a steady climb back to $8 by the end of July, and now appears to be one of the few hot stocks in a slumping market.

The Company makes a wide variety of electronics products that include monocrystalline sapphire and other crystalline products used in the LED space, which is still growing rapidly due to the smartphone industry continuing to add new customers. 

With bullish technical analysis in the short and intermediate term combined with analysts’ consensus estimates that in 2014 Rubicon will rebound with a 70% increase in revenue from 2013, the stock looks poised to keep running.

Have a great day.

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

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Internet websites dedicated to the market are plentiful and can be overwhelming for the average retail investor/trader as he or she tries to find useful knowledge and information for financial purposes.  In this week’s Goldman Guide we discussed both the issues of relative lack of experience in some of the supposed ‘experts’ as well as alleged independent analyst recommendations to short sub $1.00 penny stocks (such as INSCOR, Inc. – OTCQB – IOGA - $0.72 – Spec Buy).   While there is no doubt the retail consumer should value independent research, ulterior motives and legitimacy should be part of the thought process when pouring over the vast stock market commentary universe.