US Stocks: Small Upside, Big Downside
$DIA, $SPY, $QQQ, $VXX
The Standard & Poor’s 500 Index (NYSEArca:SPY) has about 2% on the Northside and 20% to the Southside, making for a bad risk-reward bet.
Betting on stocks is a losing proposition,” money manager Jeff Gundlach said this week. The recent rebound is a Bear market rally,” he said.
The S&P 500 Index, a benchmark for U.S. stocks, fell the most in 2 weeks Tuesday, led by a selloff in energy shares, after worsening economic data from Asia reignited concern over the outlook for global growth.
Reports showed Japan’s economy and Chinese exports are shrinking, reviving anxiety that monetary policy will not be enough to support the global economy.
The declines also come after the S&P 500’s best 3-week run since Y 2014, as investors reined in risk-taking before gatherings of central bankers in Europe and the US.
Mr. Gundlach believes that even with the high likelihood of domestic stock markets facing losses, the chances of a Us recession is low in the near term.
World Crude Oil inventories are at record highs, and demand is too weak to fuel a recovery in energy markets.
Bankruptcies are likely to increase in the energy sector, with more corporate debt facing downgrades, a trend that is also hurting the regional banks. When the defaults come, recovery rates are going to be very disappointing because borrowers are so heavily levered.
Gold up 20% this year to 1,271.20 oz, will continue to climb toward 1,400. Bullish, long, if you are long.
Negative interest rates in Europe and Japan have had the opposite of the anticipated effect on currencies, with both the Euro and Yen gaining Vs the USD since central bankers moved rates to below Zero.
The US Fed is likely to forgo a new round of QE (quantitative easing) and negative interest rates.
Thursday, the US major stock market indexes finished a volatile session at: DJIA -5.23 at 16995.13, NAS Comp -12.22 at 4662.15, S&P 500 +0.31 at 1989.57
Volume: Trade was heavy with more than 1.02-B/shares changing hands on the NYSE
- NAS Comp -6.9% YTD
- Russell 2000 -6.4% YTD
- S&P 500 -2.7% YTD
- DJIA -2.5% YTD
| HeffX-LTN Analysis for DIA: | Overall | Short | Intermediate | Long |
| Neutral (0.17) | Neutral (0.19) | Neutral (0.23) | Neutral (0.10) |
| HeffX-LTN Analysis for SPY: | Overall | Short | Intermediate | Long |
| Neutral (0.20) | Neutral (0.21) | Neutral (0.17) | Neutral (0.22) |
| HeffX-LTN Analysis for QQQ: | Overall | Short | Intermediate | Long |
| Neutral (0.15) | Bullish (0.38) | Neutral (-0.04) | Neutral (0.11) |
| HeffX-LTN Analysis for VXX: | Overall | Short | Intermediate | Long |
| Neutral (-0.23) | Bearish (-0.46) | Neutral (-0.17) | Neutral (-0.06) |
Stay tuned…
Paul Ebeling
HeffX-LTN
The post US Stocks: Small Upside, Big Downside appeared first on Live Trading News.