Over the past few weeks, the Euro Zone and in particular Greece has re-ignited fears in the marketplace and now JPMorgan’s (NYSE: JPM) $2 billion dollar trading loss disclosed on Thursday, just might be enough for the bears to take charge of the markets. The Dow Jones Industrial Average (chart) finished the week down 1.67%, the Nasdaq (chart) -0.76%, the S&P 500 (chart) -1.15% and the Russell 2000 (chart) -0.23%.

One confirmation I look for as it pertains to market sentiment is volatility and whether or not it’s on the rise. The most widely followed index that tracks market vol is the (VIX) (chart), also know as the fear gauge . Even though the value of the VIX (chart) is below 20 which historically represents a calm market environment, the VIX has spiked 25% since May 1st. I will be paying closer attention to this index over the coming weeks.

The week ahead promises to be yet another action packed week. A number of economic reports will hit the tape on Tuesday including the closely watched retail sales report and Empire state manufacturing survey. Also this week, earnings will be announced from Home Depot (NYSE: HD), Deere (NYSE: DE) and WalMart (NYSE: WMT)  just to name a few. Closing out the week is one of the most widely anticipated IPO’s in recent memory and that is the listing of Facebook on Friday. Facebook will be trading under the symbol (FB) and is reported to launch with a market cap of almost $100 billion dollars. Good luck to all.

Have a great week 🙂

~George

The financial markets suffered sharp declines this week capped by a disappointing Jobs Report. The Dow Jones Industrial Average (chart) fell 1.44%, the Nasdaq (chart) -3.68%, the S&P 500 (chart) -2.44% and the Russell 2000 (chart) -4.07%. Both the S&P 500 and Nasdaq experienced their worst weekly performance this year.

So what now? As I review the technicals of how these key indices are setting up, three of the four are trading below their 20 and 50 day moving averages with the sole exception being the Dow. Certain market technicians look at these key moving averages as support and resistance markers with the most closely watched 200-day as the main barometer. Now one day or for that matter a few days trading below this popular technical indicator doesn’t necessarily make a trend, however, if these indexes remain below their shorter term moving averages for an extended period of time, I will be looking for the 200-day to be tested at some point and time. If that were to occur, we could be looking at a near term healthy correction for equities. Good luck to all.

Have a great week 🙂

~George

April proved to be a tepid month for the markets with the Dow Jones Industrial Average (chart) barely eking out a gain and both the Nasdaq (chart) and S&P 500 (chart) closed the month slightly in the red. However, I believe that May will be far from languid for stocks. A key barometer as to how equities will fair in May is the release of the April Jobs Report, which will be issued before the open tomorrow. Most economists are expecting a gain of 160,000 new jobs and the jobless rate to remain at 8.2%. A report out this morning indicated a sharp drop in weekly jobless claims which should bode well for tomorrow’s report.

Once the markets digest the employment numbers, the question then is, will the old adage “sell in May and go away” apply this year? Historically speaking, May is one of the most favorable months for the bulls to take profits in and for the bears to sell. However, we are in an election year and we have one of the most highly anticipated tech IPO’s later this month with the listing of Facebook, which looks to be priced at a potential valuation of up to $95 billion. One thing I think we can all look forward to is an increase in volatilty in the month of May, which means if you are a trader, an increase in opportunites.

Good luck to all 🙂

~George

With the way the week started you might of thought that the bears might of got the upper hand on stocks. However, strong earnings continue to bode well for the markets. For the week, the Dow Jones Industrial Average (chart) gained 1.53%, the Nasdaq (chart) +2.29%, the S&P 500 (chart) +1.8% and the Russell 2000 (chart) notched a gain of 2.66%.

I believe that the markets can thank Apple (NasdaqGS: AAPL) which once again blew out earnings in their most recent quarter. Apple earned a staggering $12.30 per share while netting $11.6 billion. This propelled stocks on Wednesday, especially tech stocks. Now if Apple wasn’t enough, Amazon.con (NasdaqGS: AMZN) reported their earnings after the close on Thursday and also blew out estimates by earning $130 million or 28 cents a share compared to the projected 7 cents a share that most analysts expected.

One other factor that certainly didn’t hurt equities was the Federal Reserve’s reiteration of their accommodative monetary policy by indicating that rates will continue to remain low well into 2014. So with a strong earnings reporting season continuing and a friendly Fed, we might just witness new highs in the coming weeks?

Good luck to all 🙂

~George

Stocks held their own this week thanks to a good start to Q1 corporate earnings. The Dow Jones Industrial Average (chart) finished up 1.4%, the S&P 500 (chart) +0.60%, the Russell 2000 (chart) +0.96% and the Nasdaq (chart) actually lost a bit of ground falling a modest 0.36%. This however was the third straight weekly decline for the tech heavy Nasdaq.

Next week hundreds of companies will be reporting their first quarter results, but all eyes will most certainly be on everyone’s favorite stock, Apple Inc. (NasdaqGS: AAPL). Apple reports their earnings on Tuesday after the close and needless to say, this will be a market mover, at least for the Nasdaq. After surging an astonishing 77% since late November, the seemingly untouchable Apple has lost over 10% of it’s value over the past two weeks. So the question now is “is this a normal and heathy correction in Apple’s stock?” or a preview of more downside to come? If you are a technician and long the stock, you were very pleased that on Friday the stock held and closed above its 50-day moving average. However, with Tuesday’s earnings report on the horizon, I think for now you can throw all of the technical analysis out and wait to see how their quarterly results look.

If I were to take a side and as I continue to see all of the metrics point to a bullish quarter, this should be yet another earnings blowout for the company. But as I have learned over the years, it is always best to have a wait and see approach, listen to the conference call, see how the stock trades and then make a decision. Good luck to all.

Have a great weekend 🙂

~George

For the second straight week the major averages closed in the red. However, this past week the selling expanded and accelerated. The Dow Jones Industrial Average (chart) closed the week down 1.61%, the Nasdaq (chart) -2.25%, the S&P 500 (chart) -1.99% and the small-cap barometer Russell 2000 (chart) -2.68%. This week’s market declines occurred despite aluminum producer Alcoa (NYSE: AA) kicking off first quarter earnings reporting season with a solid earnings report.

Speaking of earnings reporting season, next week a slew of earnings reports are scheduled to be issued from the likes of Citigroup (NYSE: C), The Coca-Cola Company (NYSE: KO), Goldman Sachs (NYSE: GS), International Business Machines (NYSE: IBM), Intel (NasdaqGS: INTC), Bank of America (NYSE: BAC), Microsoft (NasdaqGS: MSFT) and General Electric (NYSE: GE) just to name a few.

Needless to say, first quarter earnings reporting season should confirm whether or not the bears will be coming out of hibernation. Good luck to all.

Have a great weekend 🙂

~George

The four key indices lost ground this holiday shortened trading week which seemingly was spawned by the Federal Reserve’s indication the further quantitative easing may no longer be in the cards. The Dow Jones Industrial Average (chart) lost 1.15%, the Nasdaq (chart) -0.36%, the S&P 500 (chart) -0.74% and the Russell 2000 (chart) on the week pulled back the most declining 1.46%. The markets were closed yesterday in recognition of Good Friday, however, the March jobs report was released as scheduled and hiring for the month of March came in far less than economists expected. The economy added 120,000 jobs compared to the 200,000 plus expected by most.

I am expecting a knee jerk reaction to the downside from the markets on Monday and it will be interesting to see if stocks can shrug this economic report off? At the very least, volatility should pick up in earnest this month from not only this report, but from the highly anticipated first quarter earnings reporting season. To me this will be the key catalyst to determine wheter or not this bull keeps running.

Happy Easter 🙂

~George

Simply put, stocks in the first quarter were on fire! This was the best Q1 for stocks in over a decade. The Dow Jones Industrial Average (chart) gained over 8%, the Nasdaq (chart) climbed a whopping 18+%, the S&P 500 (chart) +12% and the Russell 2000 (chart) finished the quarter up 12.06%.

These are the best first quarter gains for the key indices since the 90’s. Who would of thought as 2011 ended with the European crises at a breaking point, that our markets here and markets abroad would behave in the manner that they did? I think for the most part we can thank the federal reserve and central banks from around the world for their incessant accommodative monetary policies. One thing for sure is when interest rates are near or at zero,  you are going to be in a bull market regardless of whether or not the economy is expanding. I have got to believe that the short sellers are crying foul from the standpoint that a rising tide lifts all boats and certain stocks or sectors don’t belong elevated the way they are. Nonetheless, there is massive liquidity in the system which certainly bodes well for equities.

The million dollar question now is can this bull keep running? Look no further for that answer other than the upcoming first quarter earnings reporting season. If corporate America can pull off yet another solid earnings reporting season, then we could indeed see the markets continue their march north. However, if top line revenues do not begin to show growth, and companies continue rely on cost cutting measures and other efficiencies to improve their bottom lines, this could be the one catalyst that provides the correction in the markets that most pundits have been anticipating. Good luck to all.

Have a great week 🙂

~George

They are calling it the worst weekly performance this year! For the week the Dow Jones Industrial Average (chart) fell a modest 1.15%, the Nasdaq (chart) -0.41%, the S&P 500 (chart) -0.50% and the Russell 2000 (chart) basically closed the week unchanged. If this was the sharpest decline of the key indicies in 2012, I think the bulls will take it and the bears must be scratching their heads.

Coming into the new year, I don’t think anyone would of projected that the worst declines of the year for the major indexes would be a paltry 1% or so in a given week. Especially when you considered the enormous volatility that occurred in 2011. The week ahead may be back to the status quo for stocks as we will be in the final week of the first quarter of the trading year which should initiate the proverbial window dressing methods implemented by certain fund managers. Window dressing is a strategy used by institutional investors and mutual fund managers as the end of the quarter or year approaches to augment the performance of their respective funds or portfolios. In most instances these managers may sell the stocks in their portfolio that are at a loss and purchase high beta momentum stocks to improve the overall appearance and return on their portfolios. We will see if this strategy rings true by weeks end. Good luck to all.

Have a great weekend 🙂

~George

Stocks continue to lift this week as the nations top banks passed their respective stress tests and strong economic data continues to stream in. For the first time in years the S&P 500 (chart) closes above the 1400 level. Also, the Nasdaq (chart) on Tuesday closed over 3000,  a level not seen in over a decade. The Dow Jones Industrial Average (chart) continues its march north of 13,000 and the small-cap bellwether Russell 2000 (chart) closed in the 830 area. This 830 zone for the Russell has provided significant resistance as of late, so we will see if the this index can breakout like the other key indices have.

There is one other average I am watching to see if this incessant market run can continue, and that is the Dow Jones Transportation Average (chart). Market pundits have argued that during this bull market the transports have lagged and have not really participated in the rally. In fact, this is what the short side has relied on in part to support their short thesis. Historically speaking, when equities are rallying and the transports are not, this is an indication of an imminent reversal for equities. Well in today’s session the Dow Jones Transportation Average (chart) had one of its strongest days of the year. I am looking now for a a meaningful break above the 5400 level in the transports. If this occurs and if the transports can remain above 5400, this could be yet another powerful indicator that supports this bull market.

Good luck to all.

~George