$SPY The past week was abnormally active for the
Alpha One Model Portfolio with ten trades it total. Five positions were closed as the result of
Opinion downgrades $SAVE, $SM, $TRN, $HEES and $RFMD. There were five hedging trades using the November
options on the $SPY, four Puts and one Call were traded.
All in all it was a very profitable week, but hectic to say the least.
Stocks continued to be oversold after Thursday’s
sell off but they still could not manage a bounce on Friday. It has mostly been sunny skies in the stock
market in the past two years. The Russell 2000 is now down for sixth week in a
row. The last time that happened was in 2005. Stocks are due for an oversold
bounce, but there is little reason for buyers to get in, as we have not yet seen a
capitulation. After all, the S&P 500 is only 5.2% off its record close on
September 18.
Earnings season starts in earnest next week. It
is likely to give investors a better picture in terms of how those global growth
concerns will affect companies’ bottom line in the fourth quarter. There are four names on the Watch List for
the coming week, however I doubt seriously if I will be too aggressive until
later in the month.
The market internals are very weak as can be seen
on the charts below, it will take several very positive sessions driven by
robust earnings reports or strong economic data which is abnormally reassuring, to fuel a reversal here.
For additional insight the two following pieces from FactSet warrant your reading:
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