Monday, June 6, 2016

Bulls Are Out of Breath


Last week I had a bullish bias towards the market because $SPY had surged +2.31% the previous week and all the 9 SPDR sectors were trading above their 50 day sma. I had a watch list of 9 growth stocks that were trending along the 8 day ema. Four of those stocks triggered a buy order earlier in the week. Five of the remaining stocks just took off on Tuesday and never got filled. $MAS got filled at $32.85 (.27 cents below buy target) earlier in the week only to be stopped out the next day for -3% loss. Major indexes were fumbling after Wednesday and by the end of the week, $SPY never managed to punch through the ceiling of 211 and finished at 210.28. This is pretty much where the index was with its bullish run just a week prior. Market just couldn't keep the momentum and all because We had a pathetic jobs report.


For the last 5 months, job increases have been slowing down. In Dec it was 281,000 jobs and in May it was down to 107,00.  June report showed only 38,000 This is a troubling sign of a slowing economy. I view this as a mild business recession. Most S&P 500 companies are hoarding cash and buying back their shares instead of investing in their inventories or technology to improve productivity. Businesses have not been able to take advantage of the low price of oil. What all this reflects to me is that there is an overall lack of demand from the US consumers.


My Stock Watch List


  1. $BGS   ($44 entry) Plan 8% profit/-4% loss
  2. $DG    ($88.64 entry) Plan 8% profit/-4% loss
  3. $AVGO ($159.75 entry) Plan 8% profit/-4% loss
  4. $OKE   ($43.88 entry) Plan 8% profit/-4% loss

There were 3 stocks - $EDU, $MXL, $AYI - that did not trigger a buy order last week but they are still on my watch list this week as well. The trade plans have not been altered from last week either. I would suggest to my readers to practice VIRTUAL trade at this time with some of these stocks. It will help sharpen your trading skills.


GOLD! GOLD! GOLD!


It is 8.30 am Monday morning as I am writing this blog. Market in Asia has been mixed and Europe is halfway through their session with no clear sign of where it will end. It seems very unlikely that the FEDS will raise rates in June. On Friday $DXY (US $ currency) dropped against all the major currencies of the world and major gold mining stocks all gapped up in very high volume. $XLV (Health Care Sector) is one of the few sector that has been up trending the last two weeks. This is a defensive play by the institutions. It is worth while to have some positions in the following names to protect against currency and stock market uncertainties. I have identifiied appropriate entry prices for each of those names.

  • $AU  ($15.96)
  • $ABX ($19.73)
  • $AEM ($48.47)
  • $NEM ($34.99)
  • $SLW ($19.50)
  • $GDX ($25.13)

Once again, I caution my readers not to chase trades and to do their own due diligence before taking any position. Don't take this blog as my recommendations. It is for educational purposes only.

Happy Trading!

Amin



DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.