Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Action Driven by Headlines; Investors Should Be Nervous

Stock-Markets / Stock Markets 2013 Mar 30, 2013 - 06:25 PM GMT

By: Profit_Confidential


The current market action continues to be headline-driven, according to my stock analysis. Stocks moved lower on the initial banking concerns in Cyprus, but rallied after the Federal Reserve reaffirmed its program of low interest rates and monthly bond buying. Stocks then bounced on the Cyprus resolution.

This headline-driven market makes it difficult, based on my stock analysis. The fear is that the surfacing of major bad news could rock the stock market rally. The situation in Cyprus was relatively insignificant on its own, as the country’s gross domestic product (GDP) was a mere $25.0 billion in 2011, below that of Wyoming. However, the fear was that a banking failure in Cyprus would have created a confidence issue in the eurozone, based on my stock analysis. (Read “Markets Looking Higher, but Eurozone’s Looking More Dangerous: Which Will Win Out.”) My stock analysis suggests the eurozone continues to be in a financial crisis that could take years to resolve.

Over the next month, traders will turn their focus to the upcoming first-quarter earnings season. The weak results from bellwether shipping companyFedEx Corporation (NYSE/FDX) and farm equipment–seller Caterpillar Inc. (NYSE/CAT) will not help,as my stock analysis indicates. Both companies are viewed as barometers for the global economy, so their weakness flashed a red flag. We will see if there was any impact from the sequestration and fiscal cliff concerns in the first quarter, according to my stock analysis.

According to FactSet, first-quarter earnings are expected to contract by 0.7%, but growth is estimated to return to 10.3% in the third quarter and 15.6% for the fourth quarter; clearly, there are some optimistic estimates. So far, 84 S&P 500 companies have warned of lower-than-expected earnings, while 24 companies have provided positive guidance. The sectors issuing the worst forecasts include the materials, health care, consumer staples, and consumer discretionary sectors, so you may want to stay away from these areas.

And as we move toward the end of the first quarter, the S&P 500 and the Dow may be topping, as we near the end of the best six months of the year for returns, based on the Stock Trader’s Almanac. This is why you should take some profits.

My stock analysis indicates that traders are looking for reasons to take some profits, given the recent advance. Whether it’s Cyprus, earnings risk, or the sequestration, traders want to take some money off the table.

While I’m not convinced a rally is in the works, I feel stocks will hold as long as the news is positive. I still feel a correction is coming—I’m just not sure when or how significant it might be. However, I suggest you have some cash ready to buy on the market dips, based on my stock analysis.

Don’t focus too much on the headlines. Hang tight and wait. You also need to think about a viable investment strategy, including taking some profits off the table and the use of put options as a defensive hedge against weakness.


George Leong, B.Comm.

We publish Profit Confidential daily for our Lombardi Financial customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! What you read in the popular news services, be it the daily newspapers, on the internet or TV, is the news from a “reporter’s opinion.” And there’s the big difference.

With Profit Confidential you are receiving the news with the opinions, commentaries and interpretations of seasoned financial analysts and economists. We analyze the actions of the stock market, precious metals, interest rates, real estate and other investments so we can tell you what we believe today’s financial news will mean for you tomorrow!

© 2013 Copyright Profit Confidential - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in