Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Wednesday, the 17th of April.
Fear And Uncertainty Enter The Markets
It is only Wednesday, but it has been one heck of a week already! The biggest take away for me this week, was the big moves seen on Monday in equities, gold and crude oil. For the first time, we are seeing the twin elements of fear and uncertainty enter into the markets. These two elements are incredibly powerful and tend to move markets much more than fundamentals ever do. The battle lines are clearly drawn for the equity markets with the lows seen on Monday as the proverbial "line in the sand" for equity traders. Crude oil and gold are now both in clear downtrends and are set to still move lower.
S&P 500, The DOW And The NASDAQ
The dramatic collapse in the indices on Monday underscores the concern and fear that many investors have about the current markets and economic climate. The market lows seen on Monday were as follows:
S&P 500 : 1,552
The DOW : 14,598
The NASDAQ : 3,213
These areas are going to be closely watched for the rest of the week, as they are extremely important support levels for all traders.
Gold Set To Go Lower
With all of our technical indicators negative on gold, I see little reason to try to pick a bottom or "catch a falling knife". Certainly the wind has been taken out of the sails of the bulls and it's going to take a long time to get that back. We look for the price of gold to languish and be on the defensive. My downside target zone of $1,155 for gold is based on a 61.8% Fibonacci retracement as measured from the lows seen in October of 2008 and the all time highs in gold around $1,900 set back in September of 2011.
Is Crude Oil Headed For $80 A Barrel?
Diminishing demand and key chart points that were broken on the downside on Monday cast a negative shadow over the price of crude oil. The next major support area comes in at $80 a barrel, and I am going to use that level as our next price objective.
Yahoo And Bank Of America Disappoint
Both Yahoo (NASDAQ_YHOO) and Bank of America (NYSE_BAC) came in with disappointing earnings. We will be looking at both of these stocks today to see what opportunities there are and what, if anything, you should be looking at.
Was The Boston Marathon A Black Swan Event?
On Monday, we discussed a potential "black swan" event to change direction and top out this market. The "black swan" theory or theory of "black swan" events is a metaphor that describes an event that is a surprise (to the observer), has a major effect, and after the fact is often inappropriately rationalized with the benefit of hindsight. The theory was developed by Nassim Nicholas Taleb. Only time will tell if the terrible events that transpired and the collapse in the equity and other markets were the "black swan" event to change the market's momentum.
Potential Chaos Ahead
North Korea - ticking down towards ...
Japan - Kuroda will do whatever it takes ...
Europe - Cyprus, Portugal and Ireland - economic risk
The FED - Hints QE is coming to an end
May 19th – Debt ceiling suspension expire
Have a great trading day,
Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.