Weekly Market Assessment
The fear of the unknown! On Thursday we had a 300+ point sell off that came just one day before the all important jobs report. Was this panic selling due to Argentina who had officially defaulted on their debt (for the 2nd time), the recent sanctions on Russia or the unrest on the Gaza strip? Could this be the beginning of a correction? Thankfully what looked to be the beginning of a more lengthier sell-off, was the decent jobs report, which for the 6th month in a row, over 200,000 jobs were created in the U.S. We saw little craze in regards to the VIX (Volatility Index), where future month VIX prices traded below the current VIX price. When this occurs its called backwardation. This is expressing that investors who did not have protection for their long positions rushed into the VIX to do so, which caused a spike in price that was well above future prices.
We are now down ~3% from the highs in the market that were attained last month. The S&P 500 and the DOW have broken down through their 20 and 50 day moving averages on decent volume, however not panic volume. Support looks to have been found around the 100 day average as buyers have stepped in today and brought the market back up almost into positive territory after being down 100+ points. Was this a small correction giving those who didn't panic and sell another opportunity to pick up companies at a discount? Another interesting move was seen in the bond market where the 10 Year Treasury Bond Yield moved up - the exact opposite of what should happen when a market takes a nose dive of 300+ points. Looking at specific areas in the market provides some light of the unknown, however fear has an unbelievable way of blocking out the obvious!
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.
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:
S&P 500 (SPX) -No trades
General Motors (GM)-I bought common shares at $34. This has been in a downward spiral after numerous recalls.
Halcon Resources (HK)-Just reported on Wednesday and beat on both the top and bottom line. Revenues grew 52.6% year-over-year to $327.1 million for the quarter, where analysts expected revenues of $303.63 million for the quarter. On EPS the expectation was .05 and it came in at .07 for the quarter. I have added to my original position.
Amazon (AMZN)- Got washed out of this trade after the huge sell off on Thursday.