Weekly Market Assessment
Its a record on multiple fronts! The S&P 500 has reached another new high and also achieved another record not seen since 1995! The S&P 500 has gone now 45 straight days without a 1% change either to the upside or downside. This sleeping giant continues to slowly creep to 2000 points while at the same time wiping out those who have bet short in the market. Where is the correction? On Wednesday, we heard from Chairwomen Janet Yellen, who continued to express that rates would remain low for the foreseeable future, while also reducing the purchasing program by another $10 billion. The Federal Reserve now buys $35 billion in assets a month. She also shared that "their" data showed no signs of inflation which contradicted the recent pickup in the May CPI report. "The consumer price index climbed 0.4% in May from a month earlier, higher than expected and the biggest increase since February 2013."
If there was no pickup in inflation as Mrs.Yellen explained, then why such the jump in gold? Following her comments, gold closed on Thursday up over $48 or 3% to end the day above $1300 an ounce. This directly goes against her inflation comments as people flee to hard assets instead on soft money. I am more inclined to believe the market as opposed to the government interpretation of inflation! Either way, easy money is here to stay. However, easy money has been here for years! How can the IMF (International Monetary Fund) lower its GDP growth forecast for the U.S. almost a full percent when things are 'supposed' to be good. Following this up, we got more weak housing data where "applications to refinance a loan fell 13% on week, while applications to purchase a home fell 5% on week and are now 15% below the volume seen a year ago." No wonder we still need this type of monetary policy from the Federal Reserve!
Making the Watchlist: Below are the stocks that I will be looking at 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.
Zillow (Z) $131.05- This was put on the watchlist back in February with a ~$78 price. Zillow currently trades at ~$134, giving a return of 71% since mentioned.
GW Pharmaceuticals (GWPH) $88.02- This is a biopharmaceutical company, together with its subsidiaries, is engaged in discovering, developing, and commercializing cannabinoid prescription medicines. "In the efficacy group comprising 27 patients, those taking the drug showed a 44% median overall reduction in seizure frequency over 12 weeks, with 22% showing a 90% reduction and 15% having no seizures at all." (IBD.com) I will be looking for any pullback and look to add this to portfolios after more work is done on it.
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk
S&P 500 (SPX) - No trades
GW Pharmaceuticals- I bought a straight Weekly "CALL" after their test results came out Wednesday and saw volume explode to the upside with more than 5X its average volume. I bought the $90 "CALLS" and sold it on Friday for a 29% gain. GW finished the week at ~$93.