The Week Ahead: Time Again To Stuff Your Stockings With Stocks?

December 06, 2015   |   December 2015 Bond Updates
It was certainly a roller coaster week for the stock market as after dropping last Monday the S&P 500 ended over 1% higher on Tuesday. Last week I was very cautious about new buying as the ECB and jobs report in my opinion made the market more vulnerable to a correction. Strong action in the futures early Tuesday pointed to a higher opening but subscribers to the Viper ETF Report were advised to close out their IWM call spread for a 30% profit as selling into strength is always preferred. The strong close Tuesday was followed by consecutive declines of 1% and 1.4% as traders dumped stocks after the ECB announcement. After these two down days the IWM option position had dropped 50% from Tuesday's opening. The weak action on Thursday's encouraged some to go short heading into Friday's jobs report. The fact that the major averages were below the daily starc- bands indicated it was a high risk time to sell. The wide swings last week has probably caused further confusion amongst investors as to which way the market is heading. Many are wondering after a reviewing their 2015 performance if they should be buying or selling stocks as the approach the New Year. Aggressive buying was the correct strategy in December 2012 when the new high in the NSYE A/D line on the 12th made me quite bullish as I wrote in "Stuff Those Stockings with Stocks". At the time the fear over the "fiscal cliff" had kept many out of stocks The Spyder Trust (SPY) gained 32.3% in 2013 as it was the best year in the last ten. Will 2016 be like 2013?

View more at: http://www.forbes.com/sites/tomaspray/2015/12/05/the-week-ahead-time-again-to-stuff-your-stockings-with-stocks-2/
 
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