Market Wrap - week ending 2/28/2014

Another productive week for the market.  All in all, we spent the week consolidating (going sideways) with basically no gain or loss.  Given how elevated things are in the short term, this sideways movement is good action to see.  Especially given the fact that we have closed up 14 of the past 16 sessions … a pull-back would not be surprising and the fact that this is not occurring is definitely bullish.  Today in fact was a very good test as the market was down almost 1% intraday and it recovered to close down only 0.25%

As you can see above, we move back into the market on Monday afternoon on ‘the One’ strategy, which was the last strategy still out of the market.  So … we are fully invested at this stage.

The market is looking fairly ‘clean’ right now, my only concern is today’s high volume, volatile drop.  Ideally we don’t want to see steady rising and then a sharper than normal drop on heavy volume.  It shows that investors are quick to exit the second something skittish happens, which isn’t a healthy environment.  But given the complete reversal of the 7% drop in January, some of this is normal.  The short term traders have come out and are exerting influence on the market.  With that said, the fact that we did drop so much today and buyers came in and stabilized the market is definitely a good sign.   There’s no question that there is support for the market when tests occur during intraday drops.

Year to Date, the Nasdaq is the only real performer with a gain of approximately 3%.  The S&P, NYSE are barely above breakeven for the past 2 months and the Dow is still showing a loss.

Hope you have a wonderful and safe weekend.

Respectfully,

Randall Mauro

Resnn Investments, LLC

http://resnnInvestments.com

Market Wrap - week ending 2/21/2014

The market had a productive week.  Although it basically ended flat to slightly down for the week, volatility seems to be calming down and the major indexes have regained important levels and seem to be holding above them with decent support.

We are still getting some strong intraday moves, but significantly less than we have had since the start of the year.  All the major indexes are still in the red for the year (except the Nasdaq, which is showing a slight gain), but if this stabilization continues, I would assume the general market will start making gains very soon.

Last week, I expressed my concern that the market recovered a bit too quickly, but with this week’s sideways consolidation I am less concerned about the quick drop and subsequent rise from the past few weeks.  If the market is being supported by buyers at this level, then we have little to be concerned about moving forward.

I really don’t have much concern at this stage.  If I were forced to name something that isn’t ideal, I would say that the smaller companies are less favored right now than the midsized … which just implies that the large institutional investors are putting their money in larger (i.e. more stable) positions.  Given the large run up last year, this doesn’t surprise me that some caution is occurring.

All seems good in the market, given its’ protective nature our flagship strategy just needs a little more time for the volatility to calm more before we get in.  I would be surprised if we are not fully invested in the market before the middle of next week.  If things progress, we will most likely be entering in our “the One” strategy in a day or two.  Our other two strategies entered  two weeks ago and are sitting on a bit of profit, but nothing significant as of yet. 

For now, we hold and wait for the market to continue its’ consolidation and hopefully its’ previous uptrend.

Hope you have a wonderful and safe weekend.

Respectfully,

Randall Mauro

Resnn Investments, LLC

http://resnnInvestments.com

Market Wrap - week ending 2/14/2014

Given that it is Valentine’s Day and the 20^th one I am celebrating with my beautiful wife … I need to make this a short recap this week, or I won’t be able to celebrate my 21^st one next year J

Another astonishing week in the market.  Looking at the charts over the past month we have a sharp ‘V’ shape showing a substantial sell off of roughly 7% that only took a few days to accomplish, and then an equally sharp rise that brings us back close to the highs of late last year.  Although the S&P500 and Dow are still down for the year (and the Nasdaq is barely above 0), they all had an amazing week with approximately 2% rises.   

It certainly seems like the market wants to keep moving higher.  Most indicators are bullish.  Leading stocks are acting well, although they haven’t had substantial moves since the first of the year, we don’t see any sharp sell offs either … they are holding strong.  Bullish sentiment has come down to reasonable levels where as late last year this was a big concern with the frothy mindset.  Advance / Decliners are looking strong as well.

This week we had a myriad of negative economic reports come out, all of which were ignored by the market entirely.  This in itself is usually a strongly bullish gauge.  A market that rises with bad news is a healthy one, and one that drops with good news … obviously the opposite.

Lastly, the past two days we have strong positive reversals where the market spent the first hour dropping heavily and the rest of the day is spent reversing the decline and closing at a high for the day.  A market that can fall in the morning and close the day reversing any weakness is usually a healthy sign.

Our medium term and longer term strategies both entered the market this week, while “the One” is still being cautious due to the incredible volatile moves.  A market that drops and rises 6-7% as quickly as we have seen these past few weeks usually ends up with more downside to come.  Not enough time went by to create real fear and therefore we can experience another decline quickly.  If things stay sideways or increase, we will most likely enter in the early part of next week, we just need to give it a few more days to confirm that we are indeed not experiencing what is called a “fake-out”.  Remember “The One’s” primary objective is capital preservation, so we do not want to enter when the odds are against us.

Hope you have a wonderful and safe Valentine’s Day, and weekend.

Respectfully,

Randall Mauro

Resnn Investments, LLC

Our market wrap is published weekly, sent via email on Friday after the market close, with alerts sent occasionally mid-week in particularly volatile times.  To sign up for this free service, please visit our website at http://resnnInvestments.com

Market Wrap - week ending 2/7/2014

Amazingly the week closed with a slight gain on all the indexes.  If you watch the markets during the week, I'm sure you will join in my amazement.  We started the week with a nasty decline of 2% to 2.5%, then dropped a bit further on Tuesday and Wednesday, yet yesterday and today the market had aggressive moves up which ultimately completely reversed the entire week’s decline.  It was amazing to watch.  The markets are still down 2 – 5% from their highs set in December, but regained roughly 3% in the past two days.

Is it time to celebrate and let the bullish trend continue … I'm not so sure.  This type of aggressive bouncing around is not a healthy environment and until we see the daily price swings calm down, caution is still very much warranted.  Markets don’t just fall straight when a correction occurs, they decline, then rise a bit, then fall again, ebb and flow.  So … the market has recouped roughly half of its’ decline, with half still to recover. 

Looking over history, most corrections drop the market 8% and we dropped roughly 7% in the past few weeks, so technically we could be done, but with the aggressive down and up moves this past week, I'm not so sure.  In fact, today looked like nothing more than a short squeeze (Google this term if you have an interest in learning more about the markets).  This could be shaping up for the “kiss goodbye” that I referenced last week. 

Technically speaking, we have some heavy resistance above us.  Last week I mentioned that the major indexes all looked ‘broken’ with only the Nasdaq looking ‘better than the rest’.  Not much has changed with this picture.  We have fallen below the 17, 20 and 50 day moving averages and they are all converging together creating a tough barrier.  If we are to continue this upward trend, we will need to bounce above those with some conviction early next week.  This is a normal resistance point when markets try to right themselves after declining aggressively, and most times they fail the first few attempts.

Not surprisingly, all three of our models are in cash, with our longer term model finally going out of the market at the close yesterday.  As you know, our ‘The One’ moved to cash roughly 3 weeks ago, our medium term went to cash last week, and finally our longer term exited yesterday.  To me, this is very telling that all three are signaling to be out of the market.  In fact, our longer term strategy has been in the market for over 7 months, so the fact that this signaled an exit certainly tells me that we have a potential game changer going on here.  Does this indicate an impending larger decline?  Absolutely not, but it certainly shows that caution is warranted at this juncture.  Time will tell if the buying continues and we move up from here or decline further.

Regardless of the outcome, we will continue to monitor and act accordingly protecting your hard earned investing dollars …

Hope you have a wonderful and safe weekend.

Respectfully,

Randall Mauro

Resnn Investments, LLC

Our market wrap is published weekly, sent via email on Friday after the market close, with alerts sent occasionally mid-week in particularly volatile times.  To sign up for this free service, please visit our website at http://resnnInvestments.com