The Quant View: Market Flip-flops on Mixed News

There's a whole lot of flip-flopping going on in the market right now.  Today it went nowhere on no news at all, but if you'd told me the economic indicators for last week were going to report bad-to-not-so-bad numbers and corporate earnings would be split between disappointing and just okay, I would have said that the market would tank.  But no . . .  last week the market reacted like Popeye with a can of spinach. It flexed its muscles and roared ahead, finishing up with the second consecutive positive week in a row. The S&P 500 moved toward its high of six weeks ago, falling about 3% short. 

After today's lackluster performance, perhaps the market is pausing for breath while it awaits the important economic releases on tap for this week. Tuesday will see the S&P Case-Shiller home price index and the Consumer Confidence Report (an improvement over the expected -3% would be most welcome).  On Wednesday, we'll have New Home Sales (increase expected) and on Thursday, Durable Goods and Initial Jobless Claims (expectations mixed for both).  Friday brings the second estimate of GDP (no change expected), the Chicago PMI (should be positive), Existing Home Sales (expected to be positive), and Consumer Sentiment (no change expected).

How the market will react to all this is anybody's guess.  All we can do is look to the past for guidance.  

All cap/styles were positive last week, but Small Caps have been the place to be for many months now.  Mid Caps have had their fair share of positive months as well, so if you're shy about the risk usually associated with Small-caps, you can opt for the Mid Caps.  Large caps have shown lower returns than the other cap/styles for the past 12 months, but they're still in the black and probably a safe haven if you're squeamish about the current environment.  It's a toss-up between Growth and Value, as these styles have been flip-flopping along with the market; Growth led the way two weeks ago and Value led the way this past week.  Take your pick.     

With regard to sectors, Financials and Information Technology have been the favored sectors of late, and the Sabrient forward-looking Outlook rankings continue to favor these two sectors, along with Energy and Healthcare.

Stocks to consider are below the tables.

Cap/Style Overview

Current Sector Performance

Best & Worst Industries

The Sabrient SectorCast

4 Stocks Ideas for this Market

This week, I started with the Undervalued Large Cap Growth preset search on MyStockFinder (http://MyStockFinder.com). However, I also added Small and Mid Caps to the search parameters, included both Buys and Strong Buys, and up-weighted Technicals a bit. Here are 4 intriguing stock ideas from 4 different sectors:

EZCORP, Inc. (Nasdaq: EZPW) - Financials

Cephalon (Nasdaq: CEPH) - Healthcare

Sanderson Farms (Nasdaq: SAFM) - Consumer Staples

Corinthian Colleges (Nasdaq: COCO) - Consumer Discretionary