STTG Market Recap March 25, 2014

Indexes bounced a bit Tuesday with the S&P 500 up 0.44% and the NASDAQ 0.19%.   The Conference Board reported consumer confidence rose to 82.3 in March, up from 78.3 the month before – this was a 6 year high.  Another report from the Commerce Department had new-home sales slipping 3.3 percent in February.

The NASDAQ remains near the lower trend line it has been bouncing off of for now nearly 1.5 years.  Each time it hits or slightly breaks it, we’ve seen enormous rallies.

nasdaq

spx

For those who follow precious metals things were looking pretty interesting a month ago but we’ve seen some selling as of late.  Silver looks relatively ominous while gold if it can hold this current area might still have a chance for further gains.

silver

gold

Walgreen’s (WAG) rallied today on news that it would close 76 stores.

wag

A reader had asked to take a look at the Russell 1000 Financial Services index ($RIFIN) versus the ETFs of FAS and FAZ.  The latter two are leveraged ETFs that essentially bet on the direction of an index by a degree of 3.  So if said index goes up 1, these in theory go up 3.  But they are not good long term instruments as they don’t follow that 3:1 ratio well over time.  You can google countess articles on this concept – frankly they decay much like a shorter term dated option.  So only use them for very specific short term trades.   One would also not want to chart them long term due to this reason – chart the underlying index; in this case $RIFIN which is actually a very strong chart right now.

RIFIN

Said reader also asked for $BKX which is a more narrower group of financial stocks; RIFIN includes brokers, insurance companies, REITs, etc. – banks have overall been strong in this leg of the market.

bkx

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