Financial Markets Summary
Tuesday, September 1, 2015
- The stock market provided plenty of fireworks last week. A massive decline on Monday morning was followed by a reversal that retraced about half of the morning’s decline. Tuesday began with a strong rally that reversed, erasing the day’s gains and dropping solidly for the day. Even though the market declined on Tuesday, it remained above Monday’s lows providing a positive catalyst for the market. This led to gains for the next three days. Yesterday marked the end of August. The market, as represented by the performance of the S&P 500, had the worst August since 2001.
- The extreme selling in the stock market on Monday and Tuesday were accompanied by huge volume indicating the possibility of capitulation. If so, it doesn’t mean the market will shoot higher from here, but the likelihood of a further large selloff to much lower lows becomes less likely. The next couple of weeks could be volatile with strong up and down days as the market attempts to carve out a base. The intermediate and long term trends remain higher.
- One market that generated excitement with its huge rally was oil. The price of oil jumped 25% in three days moving crude oil from being down 18% month to date to a gain of nearly 4% month to date. The strength of the rally shifted the short term trend higher, while the intermediate and long term trends remain lower.
- Gold remains lackluster. It has been four years since gold recorded its high. Gold remains in a short, intermediate and long term downtrend.
- Corn and soybeans moved sideways during the past week, while wheat broke to new lows. None of these markets show any inclination to move higher for now.
- The U.S. dollar had broken sharply lower a week ago Friday and last Monday in reaction to a shift back to the Euro and Yen. Since then the dollar has rallied back four of the last five trading days. The recent trading has put the dollar back into a sideways base providing little hint of which direction it is heading next.
- A slew of economic reports will be reported this week with the employment data for August due on Friday.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com 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.