Market Update:
So far, very pullback since Feb 11th 2016 has been extremely shallow and has been met with a very strong underlying bid in the market (buy the dip crowd shows up). Oil prices bottomed on Feb 11th and soared 63% until their recent top on 3/18. Since then, oil prices have been steadily falling and have erased their gains for the year. Meanwhile, the major indices have steadily edged higher. So far, this still appears to be a normal pullback but we are going to monitor the situation closely to see if it turns into something worse.
We are already seeing signs of weakness emerge in certain commodities and in Japan and European equity markets. If the selling spills over to our markets- we can easily see the major indices fall substantially from here. Moreover, the S&P 500 has formed a series of lower highs (attached) since hitting a record high last May (2,134). If this latest high fails, it will be the 5th consecutive lower high and further build the case for a large topping pattern/early stages of a new bear market.
If we remove easy money from the equation there will is no question in our mind that we are in the early stages of a near bear market and we are headed lower. But the Central Banks are relentless and love to print money – and, for now, that needs to be respected. At this point, earnings season is front and center and we want to see how stocks and the overall market reacts to earnings. We do want to note that Q1 2016 was the worst quarter -EVER for active stock pickers. Thankfully, we beat our peers once again and navigated a difficult environment rather gracefully. We like trending markets (up or down) and are very well positioned for a strong 2016 and beyond.
FLS Portfolio
We recently raised our protective stop and are comfortable with our exposure.
As of this writing, 2:37 pm EST,
A. The service owns: QQQ +9.72%
B. The service will exit: QQQ @ 106.37
B. The service will exit: QQQ @ 106.37
Working Orders:
There are no new working orders today
There are no new 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 fture 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.
