Daily Issues

The Line in the Sand

February 5, 2016

Investors were like Keystone Kops the past month: running around in circles, tripping over each other, bopping each other on the head and then running away. It's one of the most juvenile market environments ever – but, at the same time, one of the most deadly serious.

Today, the market drew a line in the sand when the S&P 500 came back to the 1,875 level again and lightly bounced. Based on recent history, from here, expect a robust rebound. But if one doesn't come, we're likely looking at a meltdown.

The seismic swings have made stop-losses tough, and we lost two trades today in the shuffle. But today's action provides one of two possibilities for the market's next move, and there should be a clear sense of which way to turn as soon as Monday. I talk about that in more detail in my latest podcast, so be sure to listen before reviewing our trades.

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Bulls Not Out of the Woods Yet

February 4, 2016

Stocks walked, ran, drove, swam, jumped, wriggled, log-rolled and spun their way higher on Thursday, taking a most circuitous route but ending right-side up. It wasn't pretty, and it wasn't neat, but it got the job done for bulls.

Or is that what they want you to think? Hmm?

No doubt investors are happy to see a 79 point gain on the Dow Jones Industrials line of their favorite finance website.

But if they check below the surface, or their own portfolios, they will see a much different picture. The S&P 500 was basically flat, up just 2 points. And the Nasdaq 100, star of last year, was down a good 0.75% most of the day, and only at the very end of the contest did it rise up to finish with a 4-point loss, or -0.1%.

Breadth was very mediocre, only around 3-2 favoring advancers, and there were still just 123 new one-year highs vs. 154 new lows.

In today's Trader's Advantage, we'll discuss a new trade and review two short positions to cover.

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Volatility Keeps Investors on Edge

February 3, 2016

Stocks were mostly higher, reversing steep early losses, in very volatile Wednesday trading.

Some dovish comments by a Fed official, a sharp rally in crude oil, a weaker-than-expected ISM services index report and another round of unexceptional Q4 earnings reports received attention.

Energy and materials topped gains, while consumer discretionary and tech lagged. Crude oil and gold were both higher.

The S&P 500 Volatility Index (VIX) was up as much as 26% earlier in the day but settled back to a 1.2% decline. Yes, even volatility can be volatile.

In today's Trader's Advantage, we'll go over some new additions to the open position portfolio and much more.

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Which of the following sectors of the market do you think will outperform for the balance of 2015?

  • Utilities
  • Energy
  • Healthcare
  • Technology
  • Financials
  • Industrials