DOW -561 (-4.44%)
S&P -64 (-4.68%)
NASDAQ -109 (-4.76%)
RUSSELL -32 (-4.33%)
The Story:
First, I must apologize for last week's post. I was running behind and was about 8 fingers into a nice bottle of Caol Ila (review pending). I wasn't quite up to the task of analysis or too much chart review, but this week I hope to remedy that.
If you look at the chart of the DOW from last week, you will see the defined level of resistance the market was up against. It did not fail to hold. If it is the jury's pleasure, I present Exhibit A:
We came off of that high like a waterfall didn't we? Now, you may want some kind of story or analysis as to why this happened. Let me put it this way. If I need to tell you, you haven't been reading my Market Wrap posts very thoroughly and you need a review.
Congratulations to anyone who has taken the MYGN short/put trade. It has turned out nicely. You will find some thoughts on Exhibit B:
So, February (not to mention the whole year to date) has been a dog so far. I'm not planning on seeing any improvements in the near term. Jackass has put himself in quite a position. The Fed Funds Rate has pretty much been cut in half over the last six months, and he doesn't have too much more room to go before he is giving away money for free. Don't get me wrong... we will see another 50 basis point cut in March, but it is dangerous to go too far. Wall Street knows this, so future cuts may not be met with a week of frenzied buying the way they have in the last couple of months. February will most likely see some more selling followed by consolidation followed by more selling followed by et cetera, et cetera. Since we are planning on that (right or wrong) here are a few charts to watch in the coming weeks.
Click the charts if you are having a tough time reading the notes.
As always, owning gold (GLD, GDX) is a good idea (I will say it until it hits $1000/oz). If you are looking at any charts or have ideas, I would love to hear about them. I may even highlight them on next weeks Market Wrap.
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