Weekly Market Assessment
"The conditions for a bad market just don't exist," stated the legendary investor, Bill Miller, this past Wednesday and was followed by another statement, "I think after this correction you can throw a dart at the market and about anything you hit is gonna go up the next six months." Investing has become that easy now! Quite a statement and vote of confidence of the current and future market outlook. The S&P 500 has fallen more than 3% since its highs from last week. Looking to anther tech sector, the NASDAQ 100, 60% of the index is now down more than 20%, which is considered bear territory.
I now turn to Marc Faber, editor and publisher of the Gloom, Boom & Doom Report where he contradicts Miller's outlook in an interview stating, "This year, for sure—maybe from a higher diving board—the S&P will drop 20 percent," and "I think, rather, 30 percent." Wow! Here you have two extremely well rounded individuals with extensive market knowledge, and two completely different views. When asked why he believes in this huge correction, he replies, "I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization." It doesn't get any better than that! The markets are currently off ~3% as some stocks are now considered in bear territory. Another chance to buy stocks at a discount or is this the beginning stages of a much bigger correction? This is what makes investing much harder than throwing a dart!
Through the Looking Glass: My Perspective on Stocks Reactions to Market Conditions
Next week I'll be looking at the earnings release from Netflix and Apple. NFLX recently received an upgrade up $500 and has now traded below and back above its 200 day moving average. AAPL has also traded down to its 200 day and looks to have found support at this major average. Ill be looking for a beat on NFLX's earnings and APPL's earnings.
Making the Watchlist: Below are the stocks that I will be watching over the coming months. I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them. You will be able to see and follow their growth and/or decline. Chart links may be attached.
Ebay $54.97- Ebay is reporting earning in the next 2 weeks and looks to have found support at its 200 day moving average. At this level a huge hammer candlestick, which expresses a change in trend, while also breaking up through its 100 and 10 day moving average and breaking a major downtrend line. Carl Icahn has taken a position in Ebay and is looking to add board seats shortly. A beat on earnings and a confirmation above its 50 day average will confirm a move higher.
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk
S&P 500 (SPX)- No S&P 500 trades this past week.
Citigroup (C)- Reported Monday. I purchased $47.00 weekly "CALLS". This has been beaten down due to the recent bank stress tests and am looking for a relief rally after earnings are confirmed. C beat on its earnings and jumped over 4.5% after opening up to 47.80! Captured a 43% gain on C which now trades at $48.22 and made my watchlist on March 28th.
EBay (EBAY)- Bought MAY $55 "CALLS", as earning are approaching and also found support at its 200 day after bouncing off this level. Carl Icahn has taken a small stake in this company and any short term bounce this position will be exited.