I enjoy writing my monthly volatility updates. A few readers during the last article took my comments on volatility to mean that I believe the market is all butterflies and rainbows. In my updates I am specifically focusing on the month ahead. I don't get to talk much about the economy during those updates. I wanted to summarize my thoughts on the market and economy here.
Over the past year a recurring question has emerged. Has the market factored in rising interest rates or not? I believe the market is expecting a rate increase into 2015. I do not think the market will temporarily respond positively if rates are increased sooner. What I do not think has been factored in is the effect of higher rates on the average to lower income consumer. I also do not think, as investors, we have discussed the debt levels of the
Although the stock market displayed weakness last week as I suggested it would, bulls aren't going down easily. In fact, they're going down swinging, absorbing most of the blows delivered by hesitant bears. Despite holding up admirably when weakness was both expected and warranted, and although I still see higher highs ahead, I am still not convinced that we have seen the ultimate lows for this pullback. A number of signs point to more weakness ahead.
In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.
The Dow Jones Industrials, S&P 500, and NASDAQ all broke their string