Craig Johnson’s

Market Commentary

Monday, March 31, 2014

           Financial Markets Recap for Last Week:

·       Stocks continued to feel the impact of the selling that began the previous Friday on quadruple witching expiration. The Dow Jones Industrial Average held up the best finishing slightly up for the week, while the Nasdaq Composite dropped 2.8%.

·       The market recently has rewarded defensive stock groups such as utilities, consumer staples and other groups that are thought of as more defensive in nature. Momentum stocks, growth stocks and their related sectors which drove last year’s solid gains, have struggled throughout this year with some of the group’s performance being quite negative.

·       This relation has been even more pronounced in the capitalization areas with large and mega cap stocks being fairly flat, while small and mid-cap segments have endured the brunt of the selling.

·       Another symptom of a market that is struggling are days where the market opens higher and spends the rest of the day moving lower. This has been quite common recently.

·       Gold dropped through the $1300 an ounce level.  The price of gold has dropped over 7% in the past two weeks.


Financial Markets Health and Outlook:


·       The stock market remains on solid footing with support levels available to keep more frequent pullbacks contained with little depth on the pullbacks. (Repeated from last week).

·       Stocks are oversold, especially growth stocks. A strong bounce for the stock market could occur at any time. For any sustainable advance, stocks will need to set up solid bases first.

·       On Friday, the employment data will be released for March. It seems the importance that market pundits had attached to many of the economic reports aren’t quite as important now as they were last year before the Federal Reserve was committed to tapering their bond buying program.

·       Gold will need to recover this week to keep the 2014 rally continuing. Support failed at $1300 an ounce. This leaves support at $1275. A break of that will be quite onerous for the near term direction of gold. It would make a likely retest of the $1180 an ounce low as more likely. Gold closed just under $1295.

·       The yield range on the ten year U.S. Treasury note has had a ceiling near 3.00%, while the floor has been in the area of 2.45% for the past eight months. A break of either side of the range will likely ignite a significant move further in the direction of the break. The short term range is 2.58% at support and 2.82% at resistance.(Repeated from last week). It closed Friday right in the middle near 2.71%.

Sources:,,, Dow Jones News, Financial Times,, Investor's Business Daily,,, Thomson Reuters/First Call, U.S. Dept of Treasury, and individual company web sites and press releases.

Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice.  The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness.  References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service.  Past performance is not a guarantee of future results.