[su_heading style=”modern-2-dark” size=”20″] Market Update [/su_heading]
The action over the past week has been nothing short of “sloppy.” Typically, sloppy action in an aging bull market (present bull market is old by any normal measure and is getting ready to turn 7 in March 2016) is not healthy and precedes a big decline. Furthermore, we don’t like the fact that leadership remains very narrow and only a handful of stocks are acting well while the vast majority continue to be in outright downtrends or in private bear markets.
[su_heading style=”modern-2-dark” size=”20″] The Tale of Two Tapes [/su_heading]
Finally, the Russell 2000, NYSE composite and Transports (IYT) continue to look awful leaving only the Nasdaq and S&P 500 in decent shape. That leads us to the tale of two tapes (Nasdaq and other big caps are outperforming while “most” of the market continues to lag)., Oil prices plunged to the lowest level since 2009 and nearly every other major commodity in the world remains in a bear market. That bodes poorly for global economic growth and we find the timing of the so-called Fed hike very odd. We would not be surprised to see the Fed kick the can and not raise rates until the “data” improves.
[su_heading style=”modern-2-dark” size=”20″] Bullish Argument [/su_heading]
The bulls are happy to see the major indices hold up rather well and continue to argue that it won’t take much to see the market vault out of this trading range and hit new record highs. The one major wildcard remains the easy money from global central banks. We have not seen a bull market top out when rates are at/near zero. That doesn’t mean a bull market can’t end with rates at/near zero just that it hasn’t happened before. Even if the Fed raises by a quarter point it will barely move the needle and based on historical precedent the Fed will still be in a less “easy” (but still easy) stance. Of course, we’ll let the market decide and remain flexible for whatever outcome occurs in 2016.
[su_heading style=”modern-2-dark” size=”20″] Portfolio Update [/su_heading]
FLS is happy with its current exposure and is ready to buy if stocks rally from here. If not, the stops are in and we will be out and very comfortable having enjoyed another solid year.
[su_heading style=”modern-1-dark” size=”18″] Positions [/su_heading]
A. The service owns: AMZN +26.01%, MSFT +1.29%
B. The service will exit: AMZN @ 620.31, MSFT @ 52.47
[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 |
| Open | Buy | FB | 107.98 | 98.62 | -8.67% |
| Open | Buy | SPY | 211.72 | 201.93 | -4.62% |
| Open | Buy | AAPL | 119.93 | 114.12 | -4.84% |
[/su_table]
