A lot of eyes were watching the Slovakian Parliament around the closing bell today as they voted on the European Financial Stability Fund (EFSF). The first vote failed to pass the pending legislation, but members of the opposition party have indicated that they will vote for the bill in a second scheduled vote.
Frequented Asked Questions:
There is nothing more fun than a new year. As the calendar flips over to a new year I always feel like I am turning the page and looking forward to what is to come. And with the stock market we had a nice long weekend and time spent with families over the holidays to take a bit of a break from it to get us even more ready.
But now it is time to get back to work.
Hey this is Kevin. If you are new to the site I work with Mike and Andy - we all share an office together and share trading ideas together. I post my thoughts on the site too.
I did this video after the close for you. You might have to turn up the volume on it, had some trouble with my microphone:
I just put together this video for you...some points
1)Market sentiment now is WILDLY bullish.
2)Market likely to peak out in the next few weeks - probably around mid-January earnings season - and pullback 10% or so and bottom in February/March.
3)Gold stocks currently lagging market, but will likely bottom out ahead of the next bottom in the market and perform well again after wards.
Last week the stock market fell in the beginning of the week and then bounced in the last few days of the week going into this holiday weekend and rumors of a deal to bail out Ireland. Over the weekend details of an IMF and European Union bailout of Ireland were released, helping to fuel a pre-morning gap up in the US markets. European markets gapped up hard on the news, but appear to be selling it.
Today the S&P shed 1.7%, the DOW fell over 175 points, and the Nasdaq dropped over 45 points as the market continued to decline in what has now became a six day correction. The drop was led by selling in commodities and gold stocks as those stocks and sectors had been among the strongest in the stock market for the past several months and are experiencing profit taking.
Bonds ended up having a strong day as the TLT 20-year treasury ETF gained 2.4%. The dollar also managed to rally 0.90% in today’s trading action.
I am still out of town and without my normal laptop so can't post charts - but yesterday we saw reversals everywhere in the market - in gold, commodities such as agriculture, oil, and in stocks I'm looking to buy such as YONG. By reversals I mean stocks that opened up, went up sharply, and then came down to close on lows. You can see this clearly with DBA and GDX for example. There also was weakness in the S&P 500 and DOW - all of this came with a nice move higher in the dollar - the only thing that didn't move in the opposite way it has been the past few weeks are bonds.
Yesterday the S&P 500 fell 18 points while the DOW dropped 165 points. The sell-off was led by big cap tech stocks and IBM and Apple in particular as traders dumped those two stocks after they announced earnings. Looking at the news stories this morning the financial press is focusing on this "bad news" as a reason the market fell.
Last week we had the first week of third quarter earnings. Most of the stocks that reported earnings that beat estimates - such as Intel - gapped up on their earnings news and fell. There were some bad spots too especially in banking and finance stocks as mortgage write-offs continue. GE for instance rallied into its earnings release and then got smashed on Friday when it announced an eighteen percent drop in profits. GE ending up gapping down and closed the day down 5%.
However, Google shares went up on its Friday earnings news thanks to a massive morning gap up.