STTG Market Recap Jan 15, 2015 – Stock Trading To Go

STTG Market Recap Jan 15, 2015 – Stock Trading To Go

Thursday was the third day this week they tried to “gap up” the market in premarket, and instead sellers came in hot and heavy once the actual session started.   These gap ups are making it difficult for the market to “flush out” and create a near term oversold condition.  The S&P 500 fell 0.92% and NASDAQ 1.48%.  A measure of manufacturing in the new York region climbed to 9.95, above estimates – but U.S. economic news really was not the story of the day as focus on central bank actions were.  The Swiss National Bank abandoned its three-year euro cap on the franc, with the move coming ahead of anticipated purchases of government bonds by the ECB.  This came as a bit of a shock to quite a few.

The Swiss National Bank unexpectedly gave up its minimum exchange rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign debt crisis. The latest move marks an attempt by the SNB to reinforce defenses before government bond purchases by the European Central Bank. The change comes just one week before ECB policy makers meet to discuss introducing new stimulus, including quantitative easing, a move that may add to pressure on the franc against the euro.

Fun fact: after going through all of 2014 without a losing streak of more than three days, the S&P 500 today completed its second slide of five straight days.

Both the NASDAQ and S&P 500 are testing recent lows from December and early in January.  We have been cautious for about 2 weeks now and there is no reason to change that posture.  Higher than usual cash levels and smaller positions are key during these times to preserver your portfolio.

The NYSE McClellan Oscillator is oversold but needs some more selling to get to a level where we usually see a bounce.

A very interesting day in oil as the commodity tried to surge above this extreme downtrend line, but failed miserably.

It seems like almost daily now we are seeing new lows in 10 year treasury yields.  We were just in the 1.9% range, then yesterday the 1.8% range, and now today the 1.7% range.  We’ll keep repeating what we have been saying the past 2 weeks; this sort of bad action in the bond market usually means (a) bonds are forecasting slower economy in the coming months/quarters and (b) a flight to safety.

Gold rallied today as the Swiss made an interesting move to unlock the floor of their currency.

Bank of America (BAC) dropped after the bank reported a 14% fall in quarterly profit.

Citigroup (C) also declined as it posted a slim fourth-quarter profit.

Best Buy (BBY) was crushed as the largest electronics retailer warned that price pressure and sluggish demand may hamper results in the coming year.

BlackBerry (BBRY) plunged after saying it hasn’t engaged in takeover talks with Samsung Electronics Co. The stock soared 30%yesterday after Reuters reported that Samsung had recently made a bid valuing the Canadian smartphone maker at as much as $7.5 billion.

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STTG Market Recap Jan 15, 2015 – Stock Trading To Go

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