Jan 302016
 

Faithful blog readers may be wondering why I posted so little this month. Many readers may know that I am also a commercial pilot. I recently was offered the opportunity to assist our local community college in establishing an FAA-approved Part 141 flight school. This has been a monumental task and has commanded virtually all of my free time. As a result, I have had little time to research trades and even less time to write about what trades I have made. I have managed to keep the Portfolio and Trade Results pages updated in nearly real-time. I apologize to my readers for the inability to post more actively. Once things settle down a bit, I hope to get back to weekly posts.

Market Conditions

The market certainly started off 2016 with a blow, but appears to be stabilizing somewhat. Even though we have seen wide swings in the S&P 500, this week did end on a huge positive note with the SPX up 46.88 points on Friday. Market activity this week was driven both by earnings and the central banks. The Federal Reserve released its January statement on Wednesday, leaving the door open to the potential of four rate hikes taking place before the end of 2016. Meanwhile, the Bank of Japan took a step in the opposite direction by announcing the introduction of negative interest rates. The SPX opened Monday at 1,906.28 and closed Friday at the high of the week at 1,940.24, up 33.96 or 1.78% for the week.

Chart_013016_SPX

The chart show strong support at the 1820 level. Despite excursions to these levels twice in 2014 (April and October) as well as earlier in January of this year, the declines have halted at that level. If we are to see a breach of the 1820 level, that would be a strong indication that we are headed into bear market territory.
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Jul 252015
 

Market Conditions

The market giveth and the market taketh away. Last week the market posted solid gains, up 46.77 points (or 2.25%). This week the market gave it all back with the S&P 500 Index ($SPX) opening Monday at 2126.85 and closing Friday at 2079.65, down 47.2 or 2.22%. The yo-yo action has been the norm this year as the SPX has bounced between 2040 and 2135 for most of the year. With earnings season now in full swing and no major crisis on the horizon, the market gyrations are being ruled primarily by corporate earnings reports. This week the declines were the result of a series of earnings reports from widely-held companies that were deemed either not good enough, disappointing, or really disappointing. Apple ($AAPL) started off the week on Monday with its quarterly results exceeding expectations for both revenue and earnings per share. However, the margin by which they beat was not as large as quarters in the past resulting in a 7% drop in the stock. IBM ($IBM), Caterpillar ($CAT), and 3M ($MMM), which are also DOW components, also posted disappointing earnings setting the stage for the selloff. Biogen ($BIIB), a leading biotech, posted poor results and sold off 22% on Friday pulling down the biotech sector along with the rest of the market. Some stocks did post good results, such as Amazon ($AMZN), Startbucks ($SBUX), Juniper Networks ($JNPR) and Visa ($V), but it was too little, too late.

Chart_072415_SPX

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Jul 182015
 

Market Conditions

The major indexes posted solid gains this week as a result of both global events and higher-than-expected earnings results. Overseas, Greece capitulated and agreed to the austerity program offered by its creditors. In China, the stock market has pulled out of a three-week tailspin and their markets rebounded this week. The Nasdaq Composite ($COMP) received a boost from Google ($GOOGL) after the jumbotron stock reported better than expected earnings. The stock soared over 16% to a new record high which, in turn, lifted the COMP to a new record close of 5,210.14. The S&P 500 Index ($SPX) opened the week on Monday at 2080.03 and closed Friday at 2126.8, up 46.77 or 2.25%.

Chart_071715_SPX

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May 232015
 

Market Conditions

It was a pretty quiet week in the markets leading into the Memorial Day Weekend. The S&P 500 remained range-bound opening on Monday at 2122.73 and closing Friday at 2126.06, up 3.33 points or 0.2%. On Wednesday, the FOMC released the meeting minutes revealing that some participants believe that the weakness observed in the first quarter could extend into the second quarter with many officials characterizing a rate hike in June as “unlikely.” However, the minutes did not rule out a near-term rate hike in its entirety. Ms. Yellen stated that in order to begin normalizing policy, the Fed needs to see continued improvements in labor market conditions and there needs to be reasonable confidence that inflation will move back toward the 2.0% target over the medium term.

Chart_052315_SPX

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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 »