stock market correction - What We're Reading - StockBuz2024-03-28T10:08:02Zhttp://stockbuz.ning.com/articles/feed/tag/stock+market+correctionDanger Will Robinsonhttp://stockbuz.ning.com/articles/danger-will-robinson2014-05-15T14:07:08.000Z2014-05-15T14:07:08.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>No bueno<a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290697?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290697?profile=RESIZE_1024x1024" width="750"></a>....but it's great if you've been scaling into shorts. (<em>wink)</em></p></div>Red Flags Waving, Mr. Market May Need a Summer Breatherhttp://stockbuz.ning.com/articles/red-flags-waving-mr-market-may-need-a-summer-breather2014-04-26T17:53:35.000Z2014-04-26T17:53:35.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Reasons the market looks ready to pull back May-July:</p>
<ol>
<li>Treasuries have a relentless bid recently, and as I have discussed recently there was major accumulation of 80,000 Treasury (TLT) July $113 calls. Although this is just one large position, action in the TLT has tended to be right, and can see my call from 2013 to short the TLT in the 120's before it crashed to below 105.</li>
<li>Sector flows showing a flight to safety. The consumer staple names and large caps are starting to outperform, a risk-off market, and options action dictating the same with most of the sizable call buying occurring in boring large cap names like McDonald's, Wal-Mart, Pepsi, along with Energy.</li>
<li>Seasonality - The market tends to struggle in the May-July period, and although I do not have the numbers on me, @RyanDetrick is always posting great data, and also aligns with the Presidential cycle.</li>
<li>Price-Action in Momentum - I am watching a premiere growth name like Under Armour (UA) post a fantastic quarter and trade down 10%, and it is happening with plenty of other names as well. VMware (VMW) was crushed on solid numbers and F-5 (FFIV) gave up its earnings gains quickly and closed lower, just a few examples.</li>
<li>The anti-Apple trade - The market has been on a strong run with Apple not participating, but now Apple is starting to lead relative strength, and now being a big, old dividend Co. buying back stock, it's just another example of the style-rotation to large caps from small caps.</li>
<li>The Large vs. Small Cap Divergence - The S&P traded right near record highs this week, yet the Russell 2000 (IWM) remains 5% off the highs and still below its 50 day moving average.</li>
<li>Ukraine - This crisis will simply not go away, and appears to be escalating with Russia sovereign debt showing a reason for caution</li>
<li>Volatility Depressed - We have seen brief rallies in the VIX, but overall have been in an extended period of depressed volatility, and with some uncertainty regarding how the market will react once the Fed tapering ends, and also other Macro factors, it seems the market is under-pricing risk</li>
<li>S&P Weekly RSI Divergence Due to Play Out - The channel up pattern I have been highlighting for a long time now remains intact and the 20 week EMA has been very supportive, but there is a notable divergence in RSI in a downtrend (see below). The downside levels of interest in the S&P are 1,818/1,775/1,750, but if we take out1,800 again the channel will break and can look for a move back to the 38.2% Fibonacci from the start of the November 2012 low at 1,685, this would align with a 10% correction</li>
</ol>
<p><a target="_blank" href="http://www.optionshawk.com/optionshawk/uploads/SPX%2874%29.png"><img class="align-center" src="http://www.optionshawk.com/optionshawk/uploads/SPX%2874%29.png?width=365" height="327" width="502" /></a></p>
<p></p>
<p>There are probably 5-10 more factors I could come up with, and may add at a later time, but this is a start. Into the second half of 2014 I expect growth to really pick-up and earnings have been coming in very strong this quarter. Stocks will likely close the year with the S&P above 2,000, but for the current 3 month outlook the reward-risk is not that great at this level. Furthermore, it's Summer, enjoy the weather, spend time with family/friends, take vacations, go camping, enjoy nature, and take a break. The market will be here when you get back, and opportunities will be greater. Work to live, don't live to work.</p>
<p>Courtesy of <a href="http://www.optionshawk.com/blog_detail.php?blog_id=418" target="_blank">OptionsHawk</a> hat tip to member Sadiq</p>
</div>Easter Weekend Readshttp://stockbuz.ning.com/articles/easter-weekend-reads2014-04-20T23:35:32.000Z2014-04-20T23:35:32.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><ul>
<li>Energy is better than technology <a href="http://allstarcharts.com/energy-better-technology/" target="_blank">Stocktwits</a><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290590?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290590?profile=RESIZE_320x320" width="275"></a></li>
<li>State Department indefinitely postpones the Keystone pipeline (obviously waiting for November mid-terms or if all else fails, a new, hopefully more persuasive President in 2016) <a href="http://ecowatch.com/2014/04/18/state-department-delays-keystone-xl-pipeline/" target="_blank">Ecowatch</a></li>
<li>General Mills pulls a fast one (I'm sure more will follow) using the fine print when you "like" a page on Facebook ($FB) thereby agreeing to forced arbitration. In simple terms, you won't sue them for product recalls, mis-labeling, you name it. Pretty slick, I must say. <a href="http://www.rawstory.com/rs/2014/04/17/liking-companies-on-facebook-could-give-away-your-right-to-sue-them/#.U1GEGBbiWf8.google_plusone_share" target="_blank">Rawstory</a> </li>
<li>Money rotation into late cycle names continues <a href="http://allstarcharts.com/money-rotates-late-cycle-names/" target="_blank">Stocktwits</a></li>
</ul></div>Good Friday Readinghttp://stockbuz.ning.com/articles/good-friday-reading2014-04-18T14:01:37.000Z2014-04-18T14:01:37.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><ul>
<li><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290621?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290621?profile=RESIZE_320x320" width="277"></a>"<em>We're obviously in the throes of what feels like a correction for the small-cap and growth-equity companies</em>," said David Golden. (ya think?! LOL)<em> </em> Not good news for start ups such as BOX who has filed for IPO and will begin their road show shortly seeking (they hope) high end of the range valuation. Good news for the investor however as we'll be able to scoop up names at lower (not peak) levels. Full story at <a href="http://online.wsj.com/news/article_email/SB10001424052702304626304579505911294879066-lMyQjAxMTA0MDEwNjExNDYyWj" target="_blank">WSJ</a></li>
<li>Due to tighter regulation, banks have reverted back to the use of block trades. There were 48 such deals in the U.S. ust <span style="text-decoration: underline;">in the first three months of this year, more than in any first quarter since 1998</span>, according to Dealogic. Full story at <a href="http://online.wsj.com/news/articles/SB10001424052702303887804579501922083507360?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303887804579501922083507360.html" target="_blank">WSJ</a></li>
<li><em>Markets are instrumental, not intrinsic, for human flourishing. As with any tool, wielding capitalism for good requires deep moral awareness. Only activities motivated by a concern for others’ well-being, he declared, could be truly “constructive.”"Washington needs to be more like the Dalai Lama. Without abandoning principles, we need practical policies based on moral empathy."</em> so say the Dalai Lama on Capitalism. Morals in politics. Long since dead in the U.S. <a href="http://www.nytimes.com/2014/04/18/opinion/capitalism-and-the-dalai-lama.html?hp&rref=opinion&_r=0" target="_blank">NYTimes</a></li>
</ul></div>