Apr 252015
 

Market Conditions

The markets were strong this week with both the S&P 500 (SPX) and Nasdaq Composite (COMP) hitting new all-time highs. The SPX opened Monday at 2084.11 and closed on Friday at 2117.69, up 33.58 or 1.6%. Volume was mixed on the NYSE, but quite a bit stronger on the Nasdaq towards the end of the week. All of the major indices are back above their 50-day moving average. The VIX closed down at 12.29 on Friday and hit its lowest point in 2015 on Thursday at 12.12.

Chart_042415_SPX

Global equity markets enjoyed a strong start to the week after the People’s Bank of China lowered the reserve requirement for the country’s banks by 100 basis points in hopes of avoiding a slowdown in their economic growth. This news overshadowed the continued problems in Greece as their government scrambles for funds ahead of the next IMF payment deadline. U.S. economic news this week was fairly light, however it was a busy week for quarterly corporate earnings.  Continue reading »

Apr 182015
 

Market Conditions

The markets were relatively quiet this week with the indexes quietly attempting to reclaim their recent highs until Friday where fast selling clobbered the major equity indexes. The SPX opened the week at 2102.03 and closed on Friday at 2081.18, down 20.85 or 0.9%. Volume was light most of the week, although it did increase on Friday fueled partially by options expiration. The SPX is now, once again, just below the 50-day moving average after Friday’s liquidation break.

Chart_041715_SPX

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Apr 132015
 

Today I entered two new trades, a credit put spread in SPX and an earnings trades in Johnson & Johnson (JNJ). In the Weekend Portfolio Analysis I indicated that I would be looking at several earnings trades this week. JNJ reports earnings before the bell tomorrow morning and offered favorable risk/reward potential.

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Apr 112015
 

Market Conditions

This past week the market retraced the past two weeks of declines with the SPX opening on Monday at 2064.87 and closing on Friday at 2102.06 up 37.19 or 1.8% on the week. Despite the dismal Non-Farm Payrolls report last Friday, the market opened strong on Monday. The major indexes are all, once again, poised to set new highs, having solidly broken above their moving averages and resistance levels. How the market continues to perform near-term will be greatly influenced by last quarter’s corporate earnings as earnings season gets fully underway next week. Analysts are forecasting a drop of -6% from first quarter 2014 results, which would make this the first negative quarter since 2012 and the worst quarterly results since 2009.

Chart_041015_SPX

The oil slump also continues to put considerable pressure on the energy sector and US earnings as a whole.  In fact, if you were to exclude energy earnings results, overall earnings would forecast to rise 2%. Additionally, the strong US dollar continues to create significant headwinds for US corporations. About 40% of total earnings for the S&P 500 comes from international buyers. Not only are American goods more expensive overseas now with a stronger dollar, but US corporations are losing money every time they convert sales to US dollars.

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Apr 032015
 

Market Conditions

This past week the market traded in a fairly narrow 40-point range with the SPX opening on Monday at 2064.11 and closing the holiday week on Thursday at 2066.96 up just 2.85 or 0.14% on the week. Mixed economic data during the week created some intraday volatility as speculation increased regarding the initial Fed rate hike. Friday, the stock market was closed for the Good Friday holiday, however the futures market traded an abbreviated session. Non-Farm Payrolls were announced Friday morning and missed the target by 50% adding only 126,000 jobs vs. the expected 245,000. The S&P futures plunged nearly 1% on the disappointing news ending the session down 19.75. Bonds rallied on the news with the yield 10-year Treasury notes falling as low as 1.829 percent before finally closing at 1.904 percent.

Chart_040315_SPX

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