As you all know, the retail stocks have been trading lower since April 2015. At that time, the SPDR S&P Retail (ETF)(NYSEARCA:XRT) was trading around $51.00 a share. Today, the XRT is trading at $40.44 a share. Clearly, traders and investors can see that the trend is now down for the retail sector. The growth and business model of Amazon.com, Inc.(NASDAQ:AMZN) has been the leading catalyst for the decline in most of the leading retail stocks. Amazon stock has soared higher since April 2015. The retail giant has gained over $500.00 in share price since that time. Currently, AMZN stock is trading at $974.00 a share. So far, most leading retail companies have not found a way to combat the Amazon retail invasion.
So does the retail sector have a bottom in place? Believe it or not it does. Traders and investors should continue to look for near term weakness in the XRT until the $38.75 level. This is a level on the charts that is signaling major support and institutional sponsorship. Remember, the market is survival of the fittest, eventually these retail companies must start to adapt to the Amazon business model or face further demise. Traders like myself will now look closer at most of the leading retail stocks when the XRT trades down to the $38.75 level. This should be a good time to look for a bounce in many of these beaten down equities in the retail sector.
Nicholas Santiago
InTheMoneyStocks
The psychology of people involved in the stock market never ceases to amaze me. On February 11, 2016 crude oil traded as low as $26.00 a barrel, but people in the stock market were terrified to buy it at that level. In fact, many of the financial talking heads on television were saying that oil would go down to $10.00 a barrel. These types of remarks caused people in the public to avoid investing in crude despite the commodity trading at new yearly lows and being severely oversold. Now crude is trading above $50.00 a barrel and people are afraid to sell it short despite crude rallying higher by nearly 100 percent since February.
Many of the financial talking heads are now saying that oil will go to $75.00 a barrel before peaking out. Isn’t it funny how these so called experts come up with these levels? What are they using to say these statements. The truth is that they are probably hoping it comes back to that level so their investments can work out or recover from the 2016 decline earlier this year. If anyone looks at a chart of crude oil they could clearly see oil has major resistance around the $50 to $55.00 dollar area. Today, crude oil is trading around $51.00 a barrel.
There are many factors that affect the price of crude oil. Some of these factors include oil production output, weather, geopolitical events, and the U.S. Dollar. Out of all of these factors the strength and weakness in the U.S. Dollar seems to be most important. Please understand, most of the oil in the world is traded in U.S. Dollars. So if the U.S. Dollar is strong against most other currencies in the world the oil price will likely decline. That was certainly the primary reason for the decline in crude throughout the past two years.
There are many ways to trade oil despite using oil futures these days. ETF's and ETN's such as the United States Oil Fund LP (ETF)(NYSEARCA:USO), iPath S&P GSCI Crude Oil Total Return(NYSEARCA:OIL), and the ProShares Ultra DJ-UBS Crude Oil(NYSEARCA:UCO) are just a few different vehicles that can be used to trade oil on the long side. Some short side trading equities for crude include the ProShares UltraShort Bloomberg Crude Oil ETF(NYSEARCA:SCO), and the DB Crude Oil Double Short ETN (NYSEARCA
TO).
Full disclosure: I currently own SCO shares.
Nicholas Santiago
Inthemoneystocks
Yes, I said it. Markets look like they want to go higher, even as they sit lower by around 1% on the day. Why? Simply put, there are a lot of negatives out there and the markets are overbought, even with that, the stock market is holding up relatively well. Let's look at what is going on...
First, JPMorgan (NYSE:JPM) said today they had more exposure in the energy sector to bad loans. These were very negative comments for the entire banking sector as JPMorgan is known as one of the best banks. If they have more exposure, you can bet other banks are worse off. Next, oil fell sharply, dropping almost 5%. We have seen it in the past and now is no different. Falling crude prices hurt the stock market. Lastly, the markets have surged almost 150 points on the S&P 500 in the last two weeks.
Think about it like this. JPMorgan said they have more exposure to bad loans from the energy collapse. This means everyone does. Oil fell sharply, always a negative for stocks at these levels and the market has soared lately. With all these factors the indexes have only fallen by approximately 1% today. This is a very modest sell off and likely a signal the stock market wants to go higher.
What is the upside target for the S&P 500? The technical chart level is 2005.
Gareth Soloway
InTheMoneyStocks
Today, the big news report in the financial media is that Goldman Sachs Group Inc (NYSE:GS) has fired a junior employee and a supervisor for leaking confidential information from the Federal Reserve Bank of New York. Is anyone surprised .... Continue reading on [link]
As we all know, the major stock indexes have been making new all time highs. The leading financial stocks have been surging higher driving the stock market into uncharted territory. Recently, leading financial stocks such as J.P. Morgan Chase & Co (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Bank of America Corp (NYSE:BAC) have been making new 52-week highs, but Goldman Sachs Group Inc (NYSE:GS) has not made new 52-week highs. In fact, GS stock looks to have peaked on January 6th, 2014 at $181.13 a share. Today, the stock is trading around $173.13 a share.
What is wrong with Goldman Sachs stock? At this time, GS stock is trading into a lot of daily chart resistance around the $174.00 level. The stock looks vulnerable to a pullback from this resistance area. Just the fact that Goldman Sachs stock price is not leading the financial stocks higher is somewhat alarming. Swing traders must be on guard for any decline below the $172.00 level on a closing basis, this could signal a larger decline down to the $157.00 area which would be weekly chart support and an area where the stock would likely see institutional sponsorship.
Some other market leading financial stocks that are not yet making new highs on the daily chart include Morgan Stanley (NYSE:MS), BlackRock, Inc. (NYSE:BLK), and Deutsche Bank AG (NYSEB). When the large broker/dealer stocks lag the other large financial stocks it is often a sign weakness to come in the overall stock market.
Nicholas Santiago
InTheMoneyStocks