After several days of market weakness, the bulls were inspired by overnight comments by European Central Bank President Mario Draghi. Draghi is the European equivalent to Ben Bernanke and he said that the ECB would do whatever it took to preserve the Euro. This is much the same language that the Fed has used with regards to propping up the US economy. The European markets reveled in the comments as most European indices were up 2% or more. In the US, the markets opened up strongly but have since given back some of the early gains. We will be very interested to see how the market closes today and whether or not the rally has legs into tomorrow and early next week. The market was a tad oversold and was due for a rally of some sort.
The markets remain in the broad trading range bound by S&P 1375 and 1325. Though it is a 4% gap between these levels, much of the movements in between are mostly noise until either the bulls or bears make a break one way or another. Caution is still warranted. The GDP report tomorrow morning could provide fuel for a move either way as well as the continued earnings parade. Facebook will post earnings after the close today but that will be more interesting than it is market moving. Earnings have been largely mixed with Apple's recent miss spooking the technology sector. To this point today, telecoms are a shining star with gains nearing 4% at last check. Our low volatility portfolios continue to slowly move their way upward largely avoiding the day to day gyrations. Until we get a break one way or another, it is not a bad place to be. We will have more thoughts (and maybe a little more clarity) when we send out our newsletter in the next few days.
Welcome to the extended version of the BAM Market Note. We are not bloggers by nature but have had clients and friends inquire about our thoughts on the market in between our newsletters. The number and content of posts will likely be determined by the conditions of the markets and the interests of our readers. We would greatly appreciate your feedback and comments.
Thursday, July 26, 2012
Monday, July 16, 2012
CALM BEFORE THE STORM?
Today has mostly been a quiet and very typical summer Monday. The market has been down from the outset but has tried to get positive all day. Volume has been very light. That could all change as we move into the rest of the trading week. Fed Chairman begins two days of questioning before Congress tomorrow for his semi-annual report. Traders will be parsing his words carefully to catch any hints of any further monetary easing (QE3). There are also a number of economic reports and options expiring on Friday (which leads to much heavier volume and volatility). Companies will also start reporting earnings in droves with many big names reporting this week - Bank of America, Goldman Sachs, Google, Microsoft, Intel, Yahoo, Qualcom and IBM to name just a few. The S&P (currently at 1352) is bound by 1344 on the downside and 1374 on the upside. A breakout either way would provide the near term direction of this market. There will be lots for the market to digest this week so hopefully we will get some clarity. However, we may be in this range bound market through the summer but time will tell.
Monday, July 9, 2012
Friday, June 29, 2012
SUNNY SKIES WITH CONTINUED RISK OF TORNADOES
Markets surged to end a rough second quarter with the S&P closing at its highs for the day. For the quarter, the S&P was down a little over 3% but it could have been much worse if not for today's rally. After drifting lower yesterday with the ObamaCare ruling and disappointing economic news, the market's surged in the last hour of trading as news of positive developments at the European Summit leaked out. The strength carried into today with the markets gapping up at the open and adding to their gains throughout the day. While the Europeans still have a host of issues to contend with, the Summit produced a level of cooperation and agreement not seen in several months and gave hope that the contending governments will work together to find solutions to the enormous issues that confront the region. Talk is cheap and now Europe will need to implement the agreements that were reached but there is room to be optimistic.
In the US, the S&P closed today at a couple of significant technical levels - the highs of 2 weeks ago and for those that are interested in Fibonacci numbers right at the 61.8% retracement level. Oftentimes, the markets strengthen at the end and beginning of months (particularly at quarter end), with money coming in from retirement plans and end of quarter window dressing from portfolio managers. We will be watching closely early next week to see if the market can follow through on today's gains. With the 4th of July falling in the middle of the week, trading will likely be skewed with many traders taking some time off. We are not ready to give the all clear but the skies are certainly a lot brighter today than they were last week. Hopefully there will be a little more clarity with the next issue of the BAM Market Wrap. We hope you have a wonderful 4th of July with friends and family. Stay cool...
In the US, the S&P closed today at a couple of significant technical levels - the highs of 2 weeks ago and for those that are interested in Fibonacci numbers right at the 61.8% retracement level. Oftentimes, the markets strengthen at the end and beginning of months (particularly at quarter end), with money coming in from retirement plans and end of quarter window dressing from portfolio managers. We will be watching closely early next week to see if the market can follow through on today's gains. With the 4th of July falling in the middle of the week, trading will likely be skewed with many traders taking some time off. We are not ready to give the all clear but the skies are certainly a lot brighter today than they were last week. Hopefully there will be a little more clarity with the next issue of the BAM Market Wrap. We hope you have a wonderful 4th of July with friends and family. Stay cool...
Tuesday, June 26, 2012
TRADING RANGE BOUND
The market has been in a trading range over the last month. With 20 minutes left until the close today, the S&P is almost exactly where it was a month ago. Yesterday's losses nearly wiped out all of the market's June gains. The bulls needed a strong showing today and to this point they are getting a healthy rebound. We'll see if they can carry that momentum through the rest of the week. Volatility should continue as there will be lots of data points over the coming days. There are significant economic reports (durable goods, pending home sales, weekly jobless claims, revised GDP, personal
income and spending, Chicago PMI and Michigan sentiment) over the next 3 days as well as the Supreme Court's ruling on ObamaCare on Thursday. News out of Europe will continue to drive the US markets and the June 28-29 European Summit will surely create some increased nervousness. Germany has muted expectations of any new substantive initiatives, however, the tone of the meetings and any surprises will likely move the markets. It remains a very tenuous investing environment. We are content to be defensively positioned until we get a definitive breakout one way or the other. I will have much to write about in next week's newsletter!
income and spending, Chicago PMI and Michigan sentiment) over the next 3 days as well as the Supreme Court's ruling on ObamaCare on Thursday. News out of Europe will continue to drive the US markets and the June 28-29 European Summit will surely create some increased nervousness. Germany has muted expectations of any new substantive initiatives, however, the tone of the meetings and any surprises will likely move the markets. It remains a very tenuous investing environment. We are content to be defensively positioned until we get a definitive breakout one way or the other. I will have much to write about in next week's newsletter!
Sunday, June 24, 2012
Tuesday, June 19, 2012
Subscribe to:
Posts (Atom)