Posts Tagged ‘DOW’
Biotechnology stocks and the Russell 2000 began rolling over at the beginning of July, followed by transportation stocks at the end of the month.
It’s definitely a signal that the stock market is tired, but after such a strong breakout performance in 2013, the market still hasn’t experienced a material price correction in quite some time.
Second-quarter earnings came in mostly as expected and many blue-chip stocks sold off on good results, while companies backed existing full-year guidance. This happens often, as management teams try to make it easier for the company to “outperform” Street consensus. In a lot of cases, the only reason earnings per share advanced comparatively was increased share repurchases.
But it was mostly a decent earnings season and corporate balance sheets remain strong.
There’s not a lot of action to take in this market. Stocks have gone up tremendously and earnings are playing catch-up with valuations.
A little extra cash isn’t a bad thing with equities at their highs; however, finding good value with the prospect of growth in this market is becoming difficult.
I still think the domestic energy sector has a lot to offer investors, particularly those who are looking for income. Pipelines are a good business to be in as they throw off lots of cash and in many cases, revenues are not tied to the spot price of the underlying commodity.
With speculative fervor now reduced as evidenced by the trading action in biotechnology stocks, initial public offerings (IPOs), and select technology companies, it’s reasonable to expect the next couple of months to be pretty lackluster in terms of trading action. (September … Read More
The market appears to have another bull leg with the DOW and S&P 500 closing higher in seven of the last nine sessions to March 6. The blue chip stocks have been especially strong, with the DOW hitting a record close of 14,296.24 and intraday at 14,320 last Wednesday. The S&P 500 is also approaching its historical high.
With the advance, there are now questions regarding the sustainability, which you can read about in “Why Near-Term Prospects in the Stock Market May Be Limited.”
While the global economy is improving, the catalyst for the upward move in stocks has largely been the easy monetary policy worldwide that has resulted in a low-interest-rate environment and the search for alternative investments other than low-yield bonds.
So while all is fine now, I still sense a correction could be in the works, especially if the S&P 500 stalls.
You need to think about a viable investment strategy as a defensive posture. I firmly believe in having an investment strategy in place and adopting strong risk management to protect your investments.
One investment strategy would be to take some profits off the table, but then you may miss out on a potential stock rally.
A popular investment strategy to protect gains is the use of put options as a defensive hedge against market weakness. This strategy is called a protective hedge.
Under this investment strategy, investors may be somewhat bearish or uncertain and want to protect the current gains against additional downside moves in the stock or the market with the use of index put options.
For those of you not familiar … Read More
The six-day losing streak finally came to an end on Thursday, but I sense that the buying was likely more to do with oversold buying than a change in market sentiment.
The charts continue to show fragility and exhaustion, with the near-term view being bearish on weak Relative Strength (RS). My investment advice is that stocks could move lower in the near term.
All four of the key indices remain below their respective key 50-day moving average (MA)—a bearish sign. Watch for buying support due to an oversold technical condition.
April was a record for stocks. Unfortunately, the same cannot be said for May, which has been characterized by uncertainty and a lean towards the downside.
Since May 2, stocks have closed lower in 11 of the 20 sessions to May 27. And to make matters worse, the buying was normally accompanied by light volume.
It has been a great few weeks for stocks. The major indices have edged higher in nine of the last 11 sessions to April 28. The upward moves to the highest levels since June 2008 are impressive and indicate what appears to be a potential breakout on the price charts after the multiple tops. The DOW and Russell 2000 are up over 10% this year.
Stocks continue to edge higher following the recent breakouts by the DOW and S&P 500, which are at their highest levels since June 2008. The bias continues to be bullish. There is some hesitancy on the charts, but stocks are powering higher. The DOW, NASDAQ, and S&P 500 are all up over five percent this year, with blue-chip stocks leading the pack.
Profit Confidential — IT'S FREE!
"A Golden Opportunity for Stock Market Investors"