The Week Ahead: Potholes on the Value Path

May 01, 2016   |   May 2016 Bond Updates
The stock market had its biggest one-day drop since February on Thursday as the disappointing earnings from Apple (AAPL) and a weak 1st quarter advance reading on GDP added to the overnight selling pressure. The futures had dropped in reaction to the lack of BOJ action. After the close Thursday the market got a positive surprise as Amazon.com (AMZN) and LinkedIn (LNKD) both beat earnings in impressive fashion. It appears that some traders had apparently bet heavily on more easing by the BOJ so the unwinding of these large new long positions likely accentuated the selling. The strength of the Yen has many nervous but the BOJ could change their minds quickly and decide to ease further. For many traders the failure of the S&P 500 to close above 2100 the previous week was a reason to turn more bearish. My argument from last week's column "A Bull in Sheep's Clothing?" was that the new bull market highs in the NYSE and S&P 500 A/D lines as well as the low level of public participation in the stock market were not consistent with a significant market top. One of the questions facing many investors is whether they should invest based on the basis of value or growth. The bear market in 2008 caused the ruin of many value investors as most do not use technical analysis and do not use stops on their positions.

View more at: http://www.forbes.com/sites/tomaspray/2016/04/30/the-week-ahead-potholes-on-the-value-path-3/
 
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