Month: July 2015

Nasdaq Closes At A Record High!

Posted on by George Mahfouz

Tech stocks have taken off this week due to their strong earnings results. Companies such as Netflix (NasdaqGS: NFLX) soared 18% today after the company reported better than expected subscriber growth. Also today and just after the close, Google (NasdaqGS: GOOGL)  too reported better than expected results with revenue coming in at $14.35 billion compared to $14.26 billion the street was expecting. In after hours trading Google is up over 10% or well over $70.00 per share. Thanks to Google’s earnings results, most other tech companies are also trading up in the after-hours session so it appears that the rally on the Nasdaq (chart) will continue at least through tomorrow.

On a technical note, I want to point to your attention how two of the most influential major averages held their respective 200-day moving averages recently. A little over a week ago the markets were roiled in the Greece debt drama as well as how China’s stock market was falling off a cliff. There was enormous uncertainty as to how Greece and even more so how China’s stock market would play out. This fear and uncertainty sent the Dow Jones Industrial Average (chart) and the S&P 500 (chart)  tumbling down toward and below their 200-day moving averages. It really only took a day for this key support metric to kick in and demonstrate its technical support influence. Since this brief but noticeable selloff occurred, both indices have snapped back and we now find the S&P 500 (chart) within 10 points of its all-time high. Some pundits did indeed expect that Q2 earning reporting season could be the catalyst to lift the markets out of the fears of Greece and China. And seemingly their expectations have been met. That said, there are many more companies set to report their earnings results over the next couple of weeks, with all eyes now focusing on how Apple (NasdaqGS: AAPL) will fare as they are set to report their quarterly report next Tuesday July 21st after the close. As with most earnings reporting seasons over the past few years, stocks have overall fared well and this time it appears well enough to break key index records.

Good luck to all 🙂

~George

It’s All About Greece…

Posted on by George Mahfouz

The Greece Crisis is at the forefront of the markets yet again. Greece closed its banks and stock market on Monday in an attempt to avoid on run on their financial institutions. The heightened state of Greece sent our markets into a tailspin on Monday, however the U.S. stock market did find it’s footing yesterday managing to eek out a small gain. For the month of June, the Dow Jones Industrial Average (chart) closed down 391.18 points at 17,691.51, the Nasdaq (chart) finished the month lower by 83.16 points at 4987.00, the S&P 500 (chart) -44.29 points at 2063.11 and the small-cap Russell 2000 (chart) was one of the only major averages that finished the month of June positive closing up 7.42 points on the month at 1253.95.

So what’s in store for the month of July you may ask? One word, Volatility! Since the realization that Greece is going to miss its $1.7 billion dollar debt payment it owes to the International Monetary Fund and that Greece may no longer be a part of the European Union, volatility slammed the global markets. The $VIX (chart) which trades on the Chicago Board Options Exchange is the Volatility Index. The $VIX indicates the market’s expectation of future volatility, 30 days to be exact, spiked as high as 41% since Monday. We have not seen this type of vol for months and I don’t expect it to let up anytime soon.

Although Greece continues to grab the headlines, there are other concerns that contagion can spread to other debt ridden EU countries such as Spain and Portugal. Even Puerto Rico has it’s own debt issues that are of increasing concern. I do expect that there will be a resolution of some sort to this latest crisis, but I also do believe volatility will stick around for a bit.

Another catalyst that could create additional volatility is the upcoming Q2 earnings reporting season. U.S. companies will begin to report their results after the 4th of July holiday and in earnest the week thereafter. So you can see why I believe volatility could be increasing over the next several weeks. As a trader, this is what you have been waiting on and if you are a long term investor, you have been through this before.

Both Paula and I wish everyone a very safe and Happy 4th of July Holiday 🙂

~George