Against this backdrop the earnings bar has been raised this morning as stock futures traded significantly higher overnight following comments by Fed Chief Ben Bernanke after the close on Wednesday. Helicopter Ben told his audience in Cambridge, Mass., that Wall Street will continue to be flooded by QE3 and QE4 for the foreseeable future.
If market strength is sustained today, the Dow industrial average will test or exceed its monthly risky level at 15,437. If the S&P 500 trades up by 17 points its monthly risky level will be tested at 1669.0. The Nasdaq closed above its monthly pivot at 3510 on Wednesday, setting the trigger for these upside targets. The Nasdaq could set a new multi-year high above its May 22 intraday high at 3,532.04.
Stock market strength and an elevated 30-Year U.S. Treasury bond yield intensified the ValuEngine valuation warning with 74.4% of all stocks overvalued and with 39.4% of all stocks overvalued by 20% or more.
On Monday July 8 I wrote, Bank Indices Set Multi-Year Highs Pre-Earnings where I profiled seven stocks that reported or will report earnings this week. Here's a scorecard for the three that reported though Wednesday.
On Wednesday pre-market Family Dollar
After the close on Wednesday Yum! Brands
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: Price at which to enter a GTC limit order to sell on strength.
Reporting pre-market on Monday is Citigroup
Companies reporting quarterly results pre-market on Tuesday:
Johnson & Johnson
Reporting after the close next Tuesday is Yahoo!
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
- 10 Cars That Retain Their Value When You Sell in Five Years
- 10 Most American-Made Cars of 2013
- 5 Coolest 2013 Cars under $18,000
- Investment & Company Information