S&P 500 and other indices like Dow are showing weakness on high volume.
S&P 500 is back to where it was in wk 1 of November 2014.....
Lately TAPE goes UP 1 day and collapses next day, this is a sign of more weakness to come.
S&P 500 is currently @ 2053.40 after testing lows in the last 4 days and there is no real resolution.
There is a very good chance that we may see S&P 500 @ 2003.46 which is 200 DMA.......
Fed is all set to give their verdict on Wednesday @ 2 PM, what they say may give some stability temporarily, but then guessing game for next Fed meeting will start...
What most traders have to understand that interest rates are going UP well before Fed gives official signal in next 30 days.
US$ is reflecting higher rate scenario, this will keep US stock market on a negative tone until Fed says YES we are raising interest rate by .25 basis......
IF S&P 500 going to test 200 DMA support then Nasdaq will test 50 DMA and fail that test in a hurry....
SO....then it becomes a test of 200 DMA for all indices........including Nasdaq
It is important to relate to this weaker US stock market environment and not have high hopes for next 30 days......
A defensive portfolio or patience is required to deal with interest rate going higher.....
Higher interest rate are good for Financials and Insurance companies......
SO..it is a wait and see until Wednesday 2 PM......but real decision is going to be in next Fed meeting in April...
Market does not like uncertainty which will emerge from this fed meeting......
Hopefully, visitors of this BLOG are prepared for a tough 30 days going forward....
It takes time to come to grips with higher interest rates.......
Be ready for more turbulence until its all sorted out.....
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hey Saleem,
A decent week for my portfolio, gaining 0.90% vs -0.86% for the S&P. I found it very interesting that the $RUT was *up* 1.20%--a sign of good things to come? Big winners included TASR (+8.2%), NXPI (+7.0%), GM (+4.1%), with losers Z (-3.5%), ETN (-2.8% when sold), FB (-2.4%).
The portfolio is now: GM SPLK FB NXPI AAL M CF HUN TASR Z SGMO YELP AEMD. I am trying to stay diversified and follow strength. In these volatile times, the strong charts are working.
I can't figure out why people are so afraid of a 0.25% rise when it comes in the context of a stronger economy (not inflationary pressures). Didn't we want this eventually?? Although the first part of the week might be choppy ahead of the Fed, I expect a strong late week move as people go back to focusing on great companies. The sentiment numbers tell us the bullishness has finally pared back also, another good sign for post-Fed.
I am sticking with full allocation, trading around the edges and trying to capitalize on both buy and sell opportunities. If I look out a week, I am comfortable, and hope the market follows too.
Stocktrader
Hey Saleem,
Sold HUN @ 21.40.
Despite my faith in the management to deliver in tough times, the price action just isn't enough to stick with this for now. I wanted to free up some cash for opportunities, and so HUN was cut.
I'm also looking to sell YELP and Z for similar price action reasons. In YELP's case, it needs more ways to monetize in order to gain earnings power, and Z is already facing challenges with its acquisition that makes the future unclear. They are both great stories and have captured their respective online markets, but future earnings power seems questioned.
Stocktrader
Hey Saleem,
Sold YELP @ 46.113 and Z @ 104.66.
I'm going on a week long vacation starting tomorrow and can't afford any question marks. I had all three of these stocks targeted for sale anyways this weekend--I wish I had sold first thing at better prices. It's probably another sign that the strong market isn't even helping these guys...
Stocktrader
Hi Stocktrader,
I am glad that you are all set for your 1 week vacation.....good to be away from Wall & Broad.....
Selling non performers always frees up cash for better stocks.
Saleem
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