Aug 1st 2014 – Another Volatile Day Driven By World Market Declines

Market View:

Back to cash!  But the picture above is why I love the trading system so much, we get out so many times near the top in a lot of our watchlist and quickly get the opportunity to buy back in when the market gets oversold.

What it will do now is anybody’s guess.  I was taking a look at a number of stocks I used to watch and some of them have declines of 10% or more this week.  That’s a pretty decent correction, so perhaps we will turn around from here.

It is a typical bull market correction, brutal and swift.  However I like these type of corrections as it allows me to buy everything cheaper, so let it fall!

Market News:

Several market strategists said there were few fundamental reasons driving the market lower, other than it’s been a long while since equities had a sizable pullback.

“The market is ripe for a pullback; anxieties are sufficiently high enough for that to occur,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

“The market feels like an overtired child, no matter what you do for it, it’s going to burst out crying,” said David Kelly, chief market strategist at J.P. Morgan Funds.

“If you think about it, how long has the entire world been calling for a five percent correction?” said JJ Kinahan, chief strategist at TD Ameritrade.

Ahead of Wall Street’s open, stock-index futures scaled back their drop in the wake of the data, which found nonfarm payrolls rose by a less-than-expected 209,000 last month and the jobless rate rose to 6.2 percent.

On CNBC Friday, Dallas Fed President Richard Fisher said he believes more of his colleagues on the Federal Open Market Committee are coming around to his view that the rates could start rising early next year if the data keep coming in stronger.

Wall Street offered muted reactions to other economic reports on Friday.

The ISM manufacturing index hit 57.1 in July; construction spending fell 1.8 percent in June and a gauge of consumer sentiment from the University of Michigan/Thomson Reuters declined slightly in July.

European markets fell, following the lead of the U.S on Thursday.

Germany’s Dax tumbled on concerns about the impact of escalating tensions with Russia on the region’s fragile economy. The EU turned up the heat on Moscow Thursday by including Russia’s biggest bank, Sberbank, on its list of sanctions targets.

News Sources:  CNN Money & CNBC