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Showing posts from July, 2014

July 26, 2014 – Weekend Market Comment

July 26, 2014 – The Dow closed below 17,000 in its biggest weekly decline in 7 weeks after Visa fell more than 4 percent on its lowered full-year revenue forecast. U.S. stocks finished lower on Friday weighed by Amazon's weak earnings and Visa's disappointing outlook, in addition to ongoing worries over geopolitical unrest. In the final hour of trading, markets briefly ticked lower after Goldman Sachs released a note saying they are "neutral" on equities over three months as it sees a slide in bonds leading to a temporary sell-off in stocks.
OK so lets see how bad the damage is, first off, as I have said for a while, we are in a very strong bull market. That has been true for a long time, and lets face it, the bull has run more than five years and no bull market goes ten years with out a correction, so the best days for making money were the prior five, and risk will be higher in the next few years.
If you look at the long-term bull and bear lines we are still seein…

July 19, 2014 – Weekend Market Comment

July 19, 2014 – A strong rebound on Friday helped U.S. large cap stock indexes end the week higher. The Bull Bear lines are still intact and so we are still in a bull market. The week's strongest gainers were the Dow Industrials (+0.92%). The Dow also remains above its January high near 16,600. Friday's up volume was slightly less that Thursday's down volume. But the week's volume flow was generally positive. The same is true for the Nasdaq and S&P 500. The Nasdaq gained +0.38% on the week. A long hoped for improvement in the economy appears to be manifesting itself in second-quarter U.S. earnings, but the next two weeks could be the real test. Companies such as General Electric and Intel have reported solid results. In addition, GE believes now is a ripe moment to spin off its private label credit card division in the hopes growing consumer demand will make it more attractive.
In addition, 68 percent of S&P 500 companies so far are beating analysts' profi…

July 12, 2014 – Weekend Market Comment

July 12, 2014 – The Dow in the past week declined 0.7 percent to 16,943, and the S&P 500 was off 0.9 percent at 1,967. The Nasdaq fell 1.6 percent, to 4,415. The worst performer, however, was the Russell 2000, off about 4 percent, to 1,159, in its worst weekly decline in two years.
Stocks were higher on the Fed release Wednesday but retreated Thursday on global growth concerns and worries about a Portuguese banks. But that overreaction was no doubt the result of a market that has become too complacent

The VIX, meanwhile, rose 22 percent in the past week to 12.59, still a relatively low level, but a sign that more market participants are hedging. The VIX is the CBOE's Volatility Index, a measure of market expectations of near term volatility based on stock index options prices. Here is the VIX buy sell Chart. 

Speaking of the VIX. If you followed me in to VXX and did not loose your nerve, you were rewarded this week. 

As we have been seeing the not only is the Primary Sell gra…

July 5, 2014 – Weekend Market Comment

July 5, 2014 – This week the Dow broke through 17,000 for the first time, helped by strong US jobs figures and reassurance that the Federal Reserve will not raise rates to pop asset price bubbles.

Many fresh economic indicators reported last week and they were very positive. Positive numbers a good for a long-term up trend in the stock market. The S&P 500 hit new highs in late February, early March, early April, late May, June and early July. In other words, the S&P 500 has pretty much been marching forward the entire year. ISM Manufacturing and ISM Services were both above 55. Anything above 50 is supports economic growth and readings above 55 are quite strong. Second, auto sales hit 16.98 million units (annualized), which was the highest reading since July 2006. Also the employment numbers were strong. The unemployment rate, at 6.1 percent, is the lowest since September 2008. A year ago, it was a whopping 7.5 percent. This fits in perfectly with the gradually expanding econ…