Weekly Stock Market Update: Going With The Trends

Monday, 23/02/2015 | 15:25 GMT by Michael Venezia
  • With the broader indices making multi-year highs it seems that international concerns have eased.
Weekly Stock Market Update: Going With The Trends

With the broader indices making multi-year highs, sans the Dow (blame CAT/CVX/IBM) in the middle of last week's shortened trading week, it seems that international concerns have eased and thus temporarily removing some of the anxiety that has hung over the world markets.

With traders using any weakness and/or news geo-politically, Greek news and the Ukraine ceasefire to buy dips in the markets and with the fourth quarter earnings season in the US winding down, we at TradeviewMarkets are left to disseminate the information on a micro and macro view to get a better gauge of market direction, while always rotating out of our stock holdings predicated on relative strength and price action.

The Nasdaq (QQQ) broke out of a 10-week trading range and the Russell (IWM) continues to go higher, so with the Fed minutes out of the way in the US and little economic news coming out in the near future, we see continued Volatility and most of these moves have come with the decline and instability of crude oil. Consolidation in the online travel sector (EXPE buying Orbitz) and never forgetting that AAPL takes on a life of its own to eclipse $700bln in market cap, investor confidence seems to be complacent.

We do keep in mind that AAPL takes up roughly 15% of the QQQs, but until the trend changes we stay long. We are all aware that as we continue to go higher as the SPX trades at a 17X multiple that there are more experts and opinions who try to pick a top in the markets, but one day doesn’t change a trend so we raise out stops on our indexes and play price moves in individual names (FOSL/GRMN/USO/GLD/CYBR) or whatever’s in play.

Last week was a quiet week and although the volatility is welcome, the volume is particularly muted, even on a relative scale, so we can’t help but use the old cliché, “never short a dull market,” and as the indices break out of a range the path of least resistance is up. We don’t encourage this type of trading, but look at it this way, the up moves on weak stocks have been more “painful” than the pullbacks on strong stocks on any particular day. There are many broken stocks that lead traders to think that a pullback or correction is inevitable ...and it is.

But we are willing to give back some of our gains until the trend changes realizing that the markets might be a touch overbought on a short-term basis. Our traders aren’t trying to top tick the market because we all know how that goes, so we have our buy lists and our short lists, none of them being index related.

With the broader indices making multi-year highs, sans the Dow (blame CAT/CVX/IBM) in the middle of last week's shortened trading week, it seems that international concerns have eased and thus temporarily removing some of the anxiety that has hung over the world markets.

With traders using any weakness and/or news geo-politically, Greek news and the Ukraine ceasefire to buy dips in the markets and with the fourth quarter earnings season in the US winding down, we at TradeviewMarkets are left to disseminate the information on a micro and macro view to get a better gauge of market direction, while always rotating out of our stock holdings predicated on relative strength and price action.

The Nasdaq (QQQ) broke out of a 10-week trading range and the Russell (IWM) continues to go higher, so with the Fed minutes out of the way in the US and little economic news coming out in the near future, we see continued Volatility and most of these moves have come with the decline and instability of crude oil. Consolidation in the online travel sector (EXPE buying Orbitz) and never forgetting that AAPL takes on a life of its own to eclipse $700bln in market cap, investor confidence seems to be complacent.

We do keep in mind that AAPL takes up roughly 15% of the QQQs, but until the trend changes we stay long. We are all aware that as we continue to go higher as the SPX trades at a 17X multiple that there are more experts and opinions who try to pick a top in the markets, but one day doesn’t change a trend so we raise out stops on our indexes and play price moves in individual names (FOSL/GRMN/USO/GLD/CYBR) or whatever’s in play.

Last week was a quiet week and although the volatility is welcome, the volume is particularly muted, even on a relative scale, so we can’t help but use the old cliché, “never short a dull market,” and as the indices break out of a range the path of least resistance is up. We don’t encourage this type of trading, but look at it this way, the up moves on weak stocks have been more “painful” than the pullbacks on strong stocks on any particular day. There are many broken stocks that lead traders to think that a pullback or correction is inevitable ...and it is.

But we are willing to give back some of our gains until the trend changes realizing that the markets might be a touch overbought on a short-term basis. Our traders aren’t trying to top tick the market because we all know how that goes, so we have our buy lists and our short lists, none of them being index related.

About the Author: Michael Venezia
Michael Venezia
  • 15 Articles
  • 7 Followers
About the Author: Michael Venezia
Mr. Venezia found his way to Wall Street in 1993 where he was hired by Prudential Securities in New York City as a financial advisor. While working side by side by one of the firm’s top producers, Michael completed all the mandatory classes and necessary benchmarks that allowed Michael to go out on his own. After spending two years at Prudential, Mr.Venezia was recruited by a proprietary trading firm known as Schonfeld Securities. After realizing that the volumes and interest in the US equity markets were exploding he was hired, starting off trading 100 shares and $10k in “buying power”. Over his 17 years at Schonfeld Securities, a firm that was rotating more daily volume in the NYSE and NASDAQ markets than any other in the world, Michael was consistently a top producer, in the firm that employed over 2000 traders. Over which time it is estimated that Mr.Venezia put Mr. Venezia found his way to Wall Street in 1993 where he was hired by Prudential Securities in New York City as a financial advisor. While working side by side by one of the firm’s top producers, Michael completed all the mandatory classes and necessary benchmarks that allowed Michael to go out on his own. After spending two years at Prudential, Mr.Venezia was recruited by a proprietary trading firm known as Schonfeld Securities. After realizing that the volumes and interest in the US equity markets were exploding he was hired, starting off trading 100 shares and $10k in “buying power”. Over his 17 years at Schonfeld Securities, a firm that was rotating more daily volume in the NYSE and NASDAQ markets than any other in the world, Michael was consistently a top producer, in the firm that employed over 2000 traders. Over which time it is estimated that Mr.Venezia put over $3 billion to work and was one of the firm’s primary mentors of traders, both novice and experienced.
  • 15 Articles
  • 7 Followers

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