[su_heading style=”modern-2-dark” size=”20″] Market Update [/su_heading]
Stocks fell hard on Monday after it became clear that Greece would default on its debt and literally shut down their entire banking system for the week. Greece missed its latest payment to the IMF and became the first developed nation to default on their debt in modern history. In an effort to move forward, the tiny nation-state will hold a referendum on Sunday (07/05/15) to see if they will keep the euro currency and stay in the eurozone or revert back to their old currency, the drachma. The “big” story here is not just Greece – it is the precedent that will be set and the broader ramifications for the entire Eurozone. If Greece is allowed to get away with defaulting and missing payments, then other troubled countries in the Eurozone (Spain, Italy, Portugal, etc) will quickly follow and that could threaten the continent and the entire global economy. U.S. stocks remain under pressure as all the major averages continue to fall. The bulls showed up and defended the 200 DMA line last week for the S&P 500 and the Dow Industrials, it is very important to see last week’s levels hold. Otherwise, we are in for a much deeper pullback. The “good” news is that even with all the selling, the benchmark S&P 500 is only down ~3% below its record high. We’ll see how this plays out but definetely want to urge caution because there are a lot of areas beneath the surface that are acting poorly (Transports -$IYT, Utilities $XLU, Materials $XLB, Some Retail $XRT, Solar stocks $TAN, Oil services $OIH and the $XLE, just to name a few). Keep in mind, earnings season is right around the corner and the market’s attention will shift to earnings unless the situation in Europe gets worse.
[su_heading style=”modern-2-dark” size=”20″] Portfolio Update [/su_heading]
The FLS portfolio continues acting well. Remember, there is a time to buy and a time not to buy. To protect our positions we are moving our stops up wherever possible. For our newer members, we have not been buying adding exposure over the past two weeks and that turned out to be the right decision. Patience in this business is vital. Here is a snapshot of the FLS portfolio as of Friday’s close,
[su_heading style=”modern-1-dark” size=”18″] Positions [/su_heading]
- The service owns: TSLA +36.80%, NFLX +14.26%, XLF -0.92%, HACK +2.43%, DPZ +2.20%, MTH +2.54% AMZN -0.29%
- The service will exit: TSLA @ 245.77, NFLX @ 611.67, XLF @24.03, HACK @ 30.47, DPZ @ 111.14, MTH @ 46.05, AMZN @414.55
[su_heading style=”modern-1-dark” size=”18″] Working Buy Orders [/su_heading]
[su_table]
| Status | Order | Ticker | Buy Stop | Protective Sell Stop | Risk from Entry |
| Working | Buy | FEYE | 49.91 | 46.53 | -6.77% |
| Working | Buy | REGN | 521 | 503 | -3.45% |
[/su_table]
[su_heading style=”modern-2-dark” size=”20″] Analyzing The S&P 500’s Latest Moves (Up & Down) [/su_heading]
Nearly every pullback has been shallow in both size (small percent decline) and scope (short in duration) which is bullish for this ongoing and very powerful rally.
[su_table]
| Pullback | Rally | |||||
| High | Low | % Change | Low | High | % Change | |
| SPX | 2129.9 | 2056.32 | -3.45% | 2039.7 | 2134.72 | 4.00% |
| SPX | 2134.7 | 2085.67 | -2.30% | 1980.9 | 2119.59 | 7.00% |
| SPX | 2119.6 | 2039.69 | -3.77% | 1972.6 | 2093.55 | 6.13% |
| SPX | 2093.6 | 1980 | -5.42% | 1820 | 2079.47 | 14.26% |
| SPX | 2079.5 | 1972.56 | -5.14% | 1904 | 2019.26 | 6.05% |
| SPX | 2019 | 1820 | -9.86% | 1814 | 1991 | 9.76% |
| SPX | 1991 | 1904 | -4.37% | 1737 | 1897 | 9.21% |
| SPX | 1897 | 1814 | -4.38% | 1646 | 1850 | 12.39% |
| SPX | 1850 | 1737 | -6.11% | |||
| SPX | 1729 | 1646 | -4.80% | |||
| Avg Pullback | -4.96% | Avg Gain | 8.68% | |||
[/su_table]
[su_heading style=”modern-2-dark” size=”20″] Chart of the Week [/su_heading]
[su_heading style=”modern-2-dark” size=”20″] 2015 Scorecard [/su_heading]
Nasdaq Comp +5.8% YTD, Russell 2k +3.6%, S&P 500 +0.8% YTD, DJ Industrials -0.5%
[su_heading style=”modern-1-dark” size=”18″] Key Points [/su_heading]
- Uptrend: Short-Term Pulling Back, Intermediate & Long Term Remain Strong
- SPX Support: 2054, 2039, 1980, 1972, 1904, 1820
- SPX Resistance: 2104, 2134.72
- Sarhan’s Crowd Behavior Index: Neutral
(Proprietary market indicator that measures crowd sentiment: Bullish Bearish or Neutral)
[su_heading style=”modern-1-dark” size=”18″] Global Macro Update [/su_heading]
[su_row]
[su_column size=”1/2″]
- Stocks: Uptrend
- Bonds: Downtrend
- Currencies (Euro/USD): Sideways
- Softs: Sideways
[/su_column]
[su_column size=”1/2″]
- Energy: Sideways
- Metals: Sideways
- Grains: Sideways
[/su_column]
[/su_row]
