Market Update
Stocks are falling again this week as last week’s end of month window dressing trade is being unwound. We saw this happen at the end of Dec/into early Jan as well. Right now, the market remains VERY weak and instead of bouncing it is moving sideways as it pauses and tries to digest last month’s severe sell off and then end of month “bounce.”
Oil prices imploded again and are now down over 11% in the last two trading days! That’s not an insignificant sum. Remember, the fact that oil and other major commodities are trading like penny stocks (3-10% daily moves) bodes poorly for U.S. stocks. Stepping back the inability for the market to bounce from deeply oversold levels (or barely bounce) is not a healthy sign for the bulls. So far, Facebook (FB) and Alphabet (GOOG) are the two strongest stocks to emerge out of earnings season. Everything else is blah at best (or not acting well). That tells you everything you need to know about this market intermediate and longer term.
A Bullish Scenario
On a bullish note, it would be healthy for stocks to open lower this week (which is what is happening so far) and then turn higher and rally into Friday’s close. That would be a bullish positive reversal on a weekly basis. It’s still early and a lot can happen by Friday’s close. Intermediate and longer term the action still remains lackluster at best and we are operating with the notion that we are in the early stages of a new bear market.
FLS Portfolio:
Alphabet gapped up above our buy stop this morning which means the buy stop becomes a market order (mentioned in our weekend email). For tracking purposes the service is long GOOGL at 801 and will move our exit up to 776.
A. The service owns: IWM -0.82%, GOOGL +0.69%
B. The service will exit: IWM @ 98.75, GOOGL @776
B. The service will exit: IWM @ 98.75, GOOGL @776
Working Orders:
There are no working orders today
Disclaimer:
This analysis contains information from resources believed to be reliable but are not guaranteed as to accuracy or wholeness as of the date of this publication. Past performance is not necessarily indicative of future results. There is always a risk of loss in trading and investing. Opinions articulated are subject to change without notice. This analysis and any opinions expressed are intended for educational purposes only and should NOT BE interpreted as a call for engagement in any transaction involving the purchase or sale of any security or investment product or service. The risk of loss in investing and or trading can be substantial, and traders/investors should carefully consider the inherent risks of such an investment in light of their financial condition. The author, firm, associates, or the firm’s clients may have a position in any of the investments mentioned and their positions are subject to change without notice. Any reproduction or retransmission of any portion of this report without the express written consent of Sarhan Capital is strictly prohibited.
This analysis contains information from resources believed to be reliable but are not guaranteed as to accuracy or wholeness as of the date of this publication. Past performance is not necessarily indicative of future results. There is always a risk of loss in trading and investing. Opinions articulated are subject to change without notice. This analysis and any opinions expressed are intended for educational purposes only and should NOT BE interpreted as a call for engagement in any transaction involving the purchase or sale of any security or investment product or service. The risk of loss in investing and or trading can be substantial, and traders/investors should carefully consider the inherent risks of such an investment in light of their financial condition. The author, firm, associates, or the firm’s clients may have a position in any of the investments mentioned and their positions are subject to change without notice. Any reproduction or retransmission of any portion of this report without the express written consent of Sarhan Capital is strictly prohibited.
